<div class="phx-topic abstract-wrapper">But Yang Ming said significant uncertainties continue to affect the global trade outlook, saying “key risk factors” include US tariff developments that could lead to inflationary pressures due to rising operational costs.</div>

But Yang Ming said significant uncertainties continue to affect the global trade outlook, saying “key risk factors” include US tariff developments that could lead to inflationary pressures due to rising operational costs.

Feature image

<div class="phx-topic">Evergreen Marine, the largest of Taiwan’s Big Three carriers, said in a filing Thursday to the country’s stock exchange that its net profit last year jumped to $4.2 billion, an almost four-fold increase over 2023. Revenue rose about 60% to $14 billion amid higher freight rates and strong demand.Evergreen’s filing said it would spend $187 million this year to buy 66,500 containers from Dong Fang International Container (Hong Kong) and Singamas Container. The carrier, meanwhile, has also increased its stake in Egypt’s Abu Qir Container Terminal Company after paying $13 million to acquire an additional 5% interest from Hutchison Ports North Africa and Shibaya Marine, it said in a separate filing Thursday. Evergreen’s results came a day after fellow Taiwanese carrier Yang Ming reported a big jump in 2024 net profits to $2 billion from $153 million a year earlier. Revenue rose 56% to $7 billion. The carrier, in a results announcement, said its plans for the year include “strengthening its core business, enhancing existing alliances and exploring new collaborative opportunities … [while] accelerating its regional route strategy and penetrating emerging markets to refine its global service network.” Yang Ming said it will also accelerate the deployment of up to 13 new ships following an internal review of environmental regulations and the development of alternative energy technologies. The carrier announced plans to order the ships, comprised of six 8,000-TEU dual-fuel vessels and seven 15,000-TEU LNG dual-fuel ships, last December; it now says the ships will enter service sooner than planned. “This deployment is expected to strengthen Yang Ming’s core business, mitigating energy risks across the fleet, and maintain flexibility in future vessel types and fuel options,” the carrier said. Still, Yang Ming said significant uncertainties continue to affect the global trade outlook. “Key risk factors include US tariff developments, which may lead to potential inflationary pressures due to rising operational costs and impact economic growth and trade activities,” it said. Taiwan’s Wan Hai Lines, meanwhile, reported on Tuesday net profit of $1.4 billion for 2024, up from a $184 million net loss the year prior. The recovery is mainly due to the carrier deriving an increased share of revenue from longer-haul North and South America trades and Middle East and India services. Revenue increased 53% to $4.9 billion last year, Wan Hai said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Evergreen Marine, the largest of Taiwan’s Big Three carriers, said in a filing Thursday to the country’s stock exchange that its net profit last year jumped to $4.2 billion, an almost four-fold increase over 2023. Revenue rose about 60% to $14 billion amid higher freight rates and strong demand. Evergreen’s filing said it would spend $187 million this year to buy 66,500 containers from Dong Fang International Container (Hong Kong) and Singamas Container. The carrier, meanwhile, has also increased its stake in Egypt’s Abu Qir Container Terminal Company after paying $13 million to acquire an additional 5% interest from Hutchison Ports North Africa and Shibaya Marine, it said in a separate filing Thursday. Evergreen’s results came a day after fellow Taiwanese carrier Yang Ming reported a big jump in 2024 net profits to $2 billion from $153 million a year earlier. Revenue rose 56% to $7 billion. The carrier, in a results announcement, said its plans for the year include “strengthening its core business, enhancing existing alliances and exploring new collaborative opportunities … [while] accelerating its regional route strategy and penetrating emerging markets to refine its global service network.” Yang Ming said it will also accelerate the deployment of up to 13 new ships following an internal review of environmental regulations and the development of alternative energy technologies. The carrier announced plans to order the ships, comprised of six 8,000-TEU dual-fuel vessels and seven 15,000-TEU LNG dual-fuel ships, last December; it now says the ships will enter service sooner than planned. “This deployment is expected to strengthen Yang Ming’s core business, mitigating energy risks across the fleet, and maintain flexibility in future vessel types and fuel options,” the carrier said. Still, Yang Ming said significant uncertainties continue to affect the global trade outlook. “Key risk factors include US tariff developments, which may lead to potential inflationary pressures due to rising operational costs and impact economic growth and trade activities,” it said. Taiwan’s Wan Hai Lines, meanwhile, reported on Tuesday net profit of $1.4 billion for 2024, up from a $184 million net loss the year prior. The recovery is mainly due to the carrier deriving an increased share of revenue from longer-haul North and South America trades and Middle East and India services. Revenue increased 53% to $4.9 billion last year, Wan Hai said. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

Maritime

Taiwan’s Big Three carriers report robust profit, revenue gains for 2024

<div class="phx-topic abstract-wrapper">Executives from CSX and Norfolk Southern say that while the market is no longer as strongly pro-shipper as it was a year ago, conditions have yet to shift in favor of rail carriers.</div>

Executives from CSX and Norfolk Southern say that while the market is no longer as strongly pro-shipper as it was a year ago, conditions have yet to shift in favor of rail carriers.

<div class="phx-topic">Two Class I railroads acknowledged this week they have been unable to raise rates on shippers as much as they had hoped, citing a persistently weak market in the competing truckload sector. Executives from CSX Transportation and Norfolk Southern Railway (NS), speaking at the J.P. Morgan Industrials Conference, said that while the market is no longer as strongly pro-shipper as it was a year ago, conditions have yet to shift in favor of rail carriers. “It’s less bad than it’s been in the last couple of years,” CSX CFO Sean Pelkey said. “We’re seeing pricing flat to up a little bit, which is encouraging. We have not seen that for a couple of years now … [but it’s] probably not what many had hoped going into the year.” Intermodal contract rates averaged $1.48 per mile in February, according to the Journal of Commerce Intermodal Savings Index, down from $1.54 per mile a year earlier. But when fuel surcharges were excluded, average contract rates remained flat year over year. Diesel prices in February were 36 cents per gallon lower than in the same month of 2024. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ea6d4c62-90a1-4a5f-8fb1-9f00b53850b0"></dynamic-object></div>Industry analysts are growing <a href="https://www.joc.com/article/tariff-uncertainty-casts-shadow-on-us-trucking-demand-pricing-5962283">less optimistic</a> that the trucking market will strengthen in the second quarter, citing concerns that geopolitical tensions could lead to an economic downturn. Those concerns have also led to US retailers <a href="https://www.joc.com/article/tariff-uncertainty-prompts-us-retailers-to-downgrade-spring-import-forecast-5961648">downgrading</a> their forecasts for import volume this spring. CSX and Norfolk Southern face challenges in attracting business when trucking rates are depressed because they operate short-haul lanes where the cost difference between truck and rail is much narrower. “[When] you talk about truck pricing, we’re not really expecting a big rebound there anytime soon. That’s not in our base scenario,” NS CFO Jason Zampi said at the J.P. Morgan event. To win business, Zampi said Norfolk Southern must “provide consistent, reliable service that the customer can trust to be more truck-like.” <h3>New wave of annual bids coming </h3>It will soon become clear whether intermodal providers can secure rate increases across the US. After intermodal marketing companies were <a href="https://www.joc.com/article/intermodal-providers-navigate-tough-pricing-environment-at-start-of-year-5922679">disappointed</a> that first wave of contract bids fell short of expectations in January and February, a second group of shippers will negotiate and finalize annual agreements with carriers <a href="https://www.joc.com/article/jb-hunt-preparing-customers-for-boost-in-contract-rail-rates-in-2025-5925181">between April and June</a>. So far, intermodal carriers have proposed rate increases but have largely retreated following pushback during the bid process, according to several shippers who attended the Retail Industry Leaders Association conference in February and spoke with the Journal of Commerce at TPM25. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Two Class I railroads acknowledged this week they have been unable to raise rates on shippers as much as they had hoped, citing a persistently weak market in the competing truckload sector. Executives from CSX Transportation and Norfolk Southern Railway (NS), speaking at the J.P. Morgan Industrials Conference, said that while the market is no longer as strongly pro-shipper as it was a year ago, conditions have yet to shift in favor of rail carriers. “It’s less bad than it’s been in the last couple of years,” CSX CFO Sean Pelkey said. “We’re seeing pricing flat to up a little bit, which is encouraging. We have not seen that for a couple of years now … [but it’s] probably not what many had hoped going into the year.” Intermodal contract rates averaged $1.48 per mile in February, according to the Journal of Commerce Intermodal Savings Index, down from $1.54 per mile a year earlier. But when fuel surcharges were excluded, average contract rates remained flat year over year. Diesel prices in February were 36 cents per gallon lower than in the same month of 2024. Industry analysts are growing less optimistic that the trucking market will strengthen in the second quarter, citing concerns that geopolitical tensions could lead to an economic downturn. Those concerns have also led to US retailers downgrading their forecasts for import volume this spring. CSX and Norfolk Southern face challenges in attracting business when trucking rates are depressed because they operate short-haul lanes where the cost difference between truck and rail is much narrower. “[When] you talk about truck pricing, we’re not really expecting a big rebound there anytime soon. That’s not in our base scenario,” NS CFO Jason Zampi said at the J.P. Morgan event. To win business, Zampi said Norfolk Southern must “provide consistent, reliable service that the customer can trust to be more truck-like.” New wave of annual bids coming It will soon become clear whether intermodal providers can secure rate increases across the US. After intermodal marketing companies were disappointed that first wave of contract bids fell short of expectations in January and February, a second group of shippers will negotiate and finalize annual agreements with carriers between April and June . So far, intermodal carriers have proposed rate increases but have largely retreated following pushback during the bid process, according to several shippers who attended the Retail Industry Leaders Association conference in February and spoke with the Journal of Commerce at TPM25. Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Railroads acknowledge little movement on intermodal contract rates

<div class="phx-topic abstract-wrapper">Some analysts see green shoots that could signal higher US freight demand, but those encouraging signs remain fragile in an uncertain economy.</div>

Some analysts see green shoots that could signal higher US freight demand, but those encouraging signs remain fragile in an uncertain economy.

<div class="phx-topic">After a nearly three-year downcycle, the US trucking industry is on a slow road to recovery in terms of rates. But that road is getting harder to see through economic headwinds. The potential impact of US tariffs on businesses and consumers and even renewed concerns about a possible recession are shaking recent freight market optimism. Truckload rates may be rising on a year-over-year basis, but not quickly. And freight demand remains weak for both truckload and less-than-truckload (LTL) carriers. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="dedbcf3e-8b82-4428-b33b-3fce22dd27e0"></dynamic-object></div>Some analysts believe demand could rise and rate gains could accelerate as early as the second quarter, while others expect improvements will be delayed until the second half, or even 2026. “We were pretty optimistic going into 2025, but we’ve become less optimistic,” said Lee Klaskow, senior analyst for transportation and logistics at Bloomberg Intelligence. “The sky isn’t falling, but there is hail out there,” Klaskow said during the Journal of Commerce’s TPM25 conference in Long Beach last week as the Trump administration began implementing tariffs on Mexico, Canada and China. “What’s going on in Washington will have significant effects on consumers because it is going to be inflationary, assuming the tariffs are implemented,” he said. Since last week, the White House has implemented tariffs while postponing import taxes on some commodities and industries. The list of prospective tariffs is still expanding. The tariffs, even when postponed, <a href="https://www.joc.com/article/tpm25-chaos-erupts-as-us-tariffs-disrupt-cross-border-trucking-with-mexico-canada-5957555">are creating supply chain disruption</a> as US importers try to pull goods, including manufacturing inputs, into the US ahead of tariff deadlines. Avery Vise, vice president of trucking at FTR Transportation Intelligence, calls those tariff-related disruptions “distortions” that must be considered when forecasting. “We do expect the market to improve over the next year, but we have to take out all the potential distortions until we can get more data,” Vise said Wednesday. Rapidly increasing spot truckload rates in lanes <a href="https://www.joc.com/article/cross-border-spot-truck-rates-rise-as-shippers-ride-tariff-rollercoaster-5959754">between the US and Canada</a> are among those distortions, as are delays in getting imports from Mexico into the US. FTR has forecast that truckload rates will rise 3% in 2025, after falling 2.5% last year, with spot rates rising 6% and contract rates 2%. “It’s not a bad market for carriers, but it’s not improving yet,” Vise said. “I would venture it’s not likely to accelerate unless we see some stronger data than we’re seeing.” Even Norfolk Southern Railway (NS), which must compete against truckload rates to capture intermodal business, has acknowledged the stubbornly tepid market for carriers. “The intermodal side is so truck competitive and we don’t have any kind of significant rebound built into our plan,” NS CFO Jason Zampi said Wednesday at the J.P. Morgan Industrials Conference. <h3>Searching for demand triggers </h3>The pace and extent of trucking’s recovery is important to shippers trying to plan their transportation budgets for 2025 and beyond in an uncertain market. Shippers tell the Journal of Commerce they approached 2025 expecting an inflection in demand and pricing — one they thought would take place in 2024. Now many shippers are pushing expectations for higher demand and transportation costs to 2026. Logistics provider RXO is confident the truckload market is heading upward, despite any disruptions caused by US tariffs. Spot rates in the fourth quarter were up 11.6% on average year over year, according to the most recent RXO Curve forecast. That double-digit jump followed a 5.8% increase in the third quarter. RXO expects mid-single-digit percentage growth in pricing in 2025, although spot rates could break higher, Corey Klujsza, vice president of pricing and procurement at RXO, said in an interview this week. Year over year, spot pricing was up about 12% in February, he said. Truckload spot rates dropped in seasonal fashion in February, but truckload capacity continues to tighten, with more small carriers leaving the market, he said. That should drive spot rates higher, eventually pulling up contract rates, according to RXO. “It’s still a challenging environment without a doubt, but I believe we’re pretty close to what I would call a supply-demand equilibrium,” Klujsza said. He sees signs that freight demand is set to grow, perhaps spurred by several separate demand triggers rather than just one. “The consumer remains relatively resilient, and we think we’re in the early innings of [inventory] restocking,” Klujsza said. “That can be part of a demand trigger as we go into the second quarter.” Others are more skeptical. “You need some sort of a shock [to spark demand],” Klaskow said at TPM25. Consumer confidence has been shaken. The Conference Board in February reported the largest monthly decline in its consumer confidence index since August 2021. “When I think of past capacity crunches, they’ve been man-made,” Jeff Tucker, president and CEO of logistics provider Tucker Company Worldwide, said at TPM25. He cited changes in truck driver hours-of-service rules in 2004 and the electronic logging device mandate in 2017 as examples of actions that helped tighten capacity. This year, “I don’t see anything from a regulatory or legislative standpoint that would change things in a dramatic fashion,” Tucker said. <h3>PMIs rising</h3>Beyond inventory restocking and consumer spending, Klujsza pointed to rising industrial production and new orders as potential demand triggers. The Purchasing Managers’ Indexes (PMIs) published by the Institute for Supply Management (ISM) and S&amp;P Global Market Intelligence both were positive in February, the second straight month of expansion. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="69ef0622-ac2e-40dd-b820-01f070762262"></dynamic-object></div>The PMIs are important as industrial production represents about 58% of total US truck tonnage, according to the Commodity Flow Census from the US Census Bureau. Klaskow called the PMI a leading indicator of LTL demand. “That’s important to us, as 60% of our shipments are industrial freight,” Adam Satterfield, CFO of LTL provider Old Dominion Freight Line (ODFL), said in an interview Wednesday. ODFL’s tonnage and shipment count dropped year over year in the first two months of the first quarter, but both measures increased sequentially from January to February. “[The increases were] higher than our 10-year average increase for those months,” Satterfield said. US manufacturing expansion in February was supported by increases in both production and new orders, said S&amp;P Global, parent company of the Journal of Commerce. Some of the order activity may have been driven by advanced purchases ahead of likely price increases and supply disruption related to potential US tariffs, S&amp;P Global said. The S&amp;P Global PMI rose to 52.7% in February from 52.1% in January, while the ISM PMI fell slightly from 50.9% to 50.3%. Any PMI reading higher than 50 represents expansion. Manufacturing improvements, however welcome, may only be “skin deep,” Chris Williamson, chief business economist at S&amp;P Global Market Intelligence, said in a statement in early March. “Production and purchasing were often buoyed by companies and their customers building inventory to beat price hikes and supply issues caused by tariffs,” said Williamson, adding that higher factory input costs are being passed onto consumers. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.Senior Editor Ari Ashe contributed to this report. </div>

After a nearly three-year downcycle, the US trucking industry is on a slow road to recovery in terms of rates. But that road is getting harder to see through economic headwinds. The potential impact of US tariffs on businesses and consumers and even renewed concerns about a possible recession are shaking recent freight market optimism. Truckload rates may be rising on a year-over-year basis, but not quickly. And freight demand remains weak for both truckload and less-than-truckload (LTL) carriers. Some analysts believe demand could rise and rate gains could accelerate as early as the second quarter, while others expect improvements will be delayed until the second half, or even 2026. “We were pretty optimistic going into 2025, but we’ve become less optimistic,” said Lee Klaskow, senior analyst for transportation and logistics at Bloomberg Intelligence. “The sky isn’t falling, but there is hail out there,” Klaskow said during the Journal of Commerce’s TPM25 conference in Long Beach last week as the Trump administration began implementing tariffs on Mexico, Canada and China. “What’s going on in Washington will have significant effects on consumers because it is going to be inflationary, assuming the tariffs are implemented,” he said. Since last week, the White House has implemented tariffs while postponing import taxes on some commodities and industries. The list of prospective tariffs is still expanding. The tariffs, even when postponed, are creating supply chain disruption as US importers try to pull goods, including manufacturing inputs, into the US ahead of tariff deadlines. Avery Vise, vice president of trucking at FTR Transportation Intelligence, calls those tariff-related disruptions “distortions” that must be considered when forecasting. “We do expect the market to improve over the next year, but we have to take out all the potential distortions until we can get more data,” Vise said Wednesday. Rapidly increasing spot truckload rates in lanes between the US and Canada are among those distortions, as are delays in getting imports from Mexico into the US. FTR has forecast that truckload rates will rise 3% in 2025, after falling 2.5% last year, with spot rates rising 6% and contract rates 2%. “It’s not a bad market for carriers, but it’s not improving yet,” Vise said. “I would venture it’s not likely to accelerate unless we see some stronger data than we’re seeing.” Even Norfolk Southern Railway (NS), which must compete against truckload rates to capture intermodal business, has acknowledged the stubbornly tepid market for carriers. “The intermodal side is so truck competitive and we don’t have any kind of significant rebound built into our plan,” NS CFO Jason Zampi said Wednesday at the J.P. Morgan Industrials Conference. Searching for demand triggers The pace and extent of trucking’s recovery is important to shippers trying to plan their transportation budgets for 2025 and beyond in an uncertain market. Shippers tell the Journal of Commerce they approached 2025 expecting an inflection in demand and pricing — one they thought would take place in 2024. Now many shippers are pushing expectations for higher demand and transportation costs to 2026. Logistics provider RXO is confident the truckload market is heading upward, despite any disruptions caused by US tariffs. Spot rates in the fourth quarter were up 11.6% on average year over year, according to the most recent RXO Curve forecast. That double-digit jump followed a 5.8% increase in the third quarter. RXO expects mid-single-digit percentage growth in pricing in 2025, although spot rates could break higher, Corey Klujsza, vice president of pricing and procurement at RXO, said in an interview this week. Year over year, spot pricing was up about 12% in February, he said. Truckload spot rates dropped in seasonal fashion in February, but truckload capacity continues to tighten, with more small carriers leaving the market, he said. That should drive spot rates higher, eventually pulling up contract rates, according to RXO. “It’s still a challenging environment without a doubt, but I believe we’re pretty close to what I would call a supply-demand equilibrium,” Klujsza said. He sees signs that freight demand is set to grow, perhaps spurred by several separate demand triggers rather than just one. “The consumer remains relatively resilient, and we think we’re in the early innings of [inventory] restocking,” Klujsza said. “That can be part of a demand trigger as we go into the second quarter.” Others are more skeptical. “You need some sort of a shock [to spark demand],” Klaskow said at TPM25. Consumer confidence has been shaken. The Conference Board in February reported the largest monthly decline in its consumer confidence index since August 2021. “When I think of past capacity crunches, they’ve been man-made,” Jeff Tucker, president and CEO of logistics provider Tucker Company Worldwide, said at TPM25. He cited changes in truck driver hours-of-service rules in 2004 and the electronic logging device mandate in 2017 as examples of actions that helped tighten capacity. This year, “I don’t see anything from a regulatory or legislative standpoint that would change things in a dramatic fashion,” Tucker said. PMIs rising Beyond inventory restocking and consumer spending, Klujsza pointed to rising industrial production and new orders as potential demand triggers. The Purchasing Managers’ Indexes (PMIs) published by the Institute for Supply Management (ISM) and S&P Global Market Intelligence both were positive in February, the second straight month of expansion. The PMIs are important as industrial production represents about 58% of total US truck tonnage, according to the Commodity Flow Census from the US Census Bureau. Klaskow called the PMI a leading indicator of LTL demand. “That’s important to us, as 60% of our shipments are industrial freight,” Adam Satterfield, CFO of LTL provider Old Dominion Freight Line (ODFL), said in an interview Wednesday. ODFL’s tonnage and shipment count dropped year over year in the first two months of the first quarter, but both measures increased sequentially from January to February. “[The increases were] higher than our 10-year average increase for those months,” Satterfield said. US manufacturing expansion in February was supported by increases in both production and new orders, said S&P Global, parent company of the Journal of Commerce. Some of the order activity may have been driven by advanced purchases ahead of likely price increases and supply disruption related to potential US tariffs, S&P Global said. The S&P Global PMI rose to 52.7% in February from 52.1% in January, while the ISM PMI fell slightly from 50.9% to 50.3%. Any PMI reading higher than 50 represents expansion. Manufacturing improvements, however welcome, may only be “skin deep,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement in early March. “Production and purchasing were often buoyed by companies and their customers building inventory to beat price hikes and supply issues caused by tariffs,” said Williamson, adding that higher factory input costs are being passed onto consumers. Contact William B. Cassidy at bill.cassidy@spglobal.com .Senior Editor Ari Ashe contributed to this report.

Trucking News

Truckload

Surface

Tariff uncertainty casts shadow on US trucking demand, pricing

<div class="phx-topic abstract-wrapper">The Cosco Shipping subsidiary recorded another highly profitable year but pointed to growing geopolitical uncertainties and industry-specific challenges that will test container shipping in the year ahead.</div>

The Cosco Shipping subsidiary recorded another highly profitable year but pointed to growing geopolitical uncertainties and industry-specific challenges that will test container shipping in the year ahead.

<div class="phx-topic">OOCL reported a 2024 net profit of $2.5 billion Thursday, an 88% increase over the previous year that the ocean carrier attributed to strong import demand in developed economies and rapid trade growth in emerging markets. But the Hong Kong-listed subsidiary of Cosco Shipping Holdings was quick to highlight the growing geopolitical uncertainties and industry-specific challenges that threaten to reshape global supply chains and test container shipping in the year ahead. “Potential overcapacity may arise as new vessels are delivered, especially when the Suez Canal reopens,” OOCL said in its earnings statement. Other areas of concern included steadily tightening environmental regulations, the impact on supply chains from restructured carrier alliances and trade policies from the new US administration that will impact the global economy and supply chain “in the short and long run.” “These factors do not exist or function independently,” OOCL said. “They are interactively intertwined, adding to the complexity of the shipping market ... their effects should not be underestimated.” Still, that complexity helped OOCL post a significantly improved set of annual results compared with 2023. Revenue was up 28% year over year at $10.7 billion, earnings before interest, taxes, depreciation and amortization (EBITDA) increased 60% to $3.5 billion and earnings before interest and taxes (EBIT) were up 86% at $2.6 billion. Total volumes handled by the carrier increased 4% to 7.6 million TEUs. <h3>Shifting supply-demand dynamics </h3>Commenting on 2024, OOCL said the diversions around southern Africa as carriers avoided the Red Sea added transit time to voyages, while longshore labor uncertainty along the US East and Gulf coasts and the threat of new tariffs under the Trump administration led to a rise in frontloading by US importers. “Geopolitical uncertainties not only shifted the dynamics between supply and demand for the entire industry, but also affected people’s expectations and behaviors,” OOCL noted. While detours around the Cape of Good Hope absorbed about 10% of available ocean capacity, they disrupted the on-time performance of carriers that was further impacted by poor weather in Asia and Europe. The resulting port congestion put further pressure on supply chains, OOCL said. “These interconnected factors helped push freight rates to a post-pandemic peak around the middle of the year, especially on trans-Pacific routes,” the carrier said. Average Asia-US West Coast rates began 2024 at $1,246 per FEU, rose to a high of $7,411/FEU on July 4 and ended the year at $5,200/FEU, according to rate benchmarking platform Xeneta. OOCL has been rapidly increasing its owned capacity, taking delivery of six 24,188-TEU ships and one 16,828-TEU vessel. The carrier also chartered in six new 13,000-TEU series vessels that will begin operating in 2026. Cosco Shipping Holdings has not yet released its 2024 financial results, but the China state-owned carrier said in January <a href="https://www.joc.com/article/cosco-forecasts-95-jump-in-2024-net-profit-on-robust-volumes-freight-rates-5920588">it was expecting $7.5 billion in net profit</a>, a 95% year-over-year increase. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

OOCL reported a 2024 net profit of $2.5 billion Thursday, an 88% increase over the previous year that the ocean carrier attributed to strong import demand in developed economies and rapid trade growth in emerging markets. But the Hong Kong-listed subsidiary of Cosco Shipping Holdings was quick to highlight the growing geopolitical uncertainties and industry-specific challenges that threaten to reshape global supply chains and test container shipping in the year ahead. “Potential overcapacity may arise as new vessels are delivered, especially when the Suez Canal reopens,” OOCL said in its earnings statement. Other areas of concern included steadily tightening environmental regulations, the impact on supply chains from restructured carrier alliances and trade policies from the new US administration that will impact the global economy and supply chain “in the short and long run.” “These factors do not exist or function independently,” OOCL said. “They are interactively intertwined, adding to the complexity of the shipping market ... their effects should not be underestimated.” Still, that complexity helped OOCL post a significantly improved set of annual results compared with 2023. Revenue was up 28% year over year at $10.7 billion, earnings before interest, taxes, depreciation and amortization (EBITDA) increased 60% to $3.5 billion and earnings before interest and taxes (EBIT) were up 86% at $2.6 billion. Total volumes handled by the carrier increased 4% to 7.6 million TEUs. Shifting supply-demand dynamics Commenting on 2024, OOCL said the diversions around southern Africa as carriers avoided the Red Sea added transit time to voyages, while longshore labor uncertainty along the US East and Gulf coasts and the threat of new tariffs under the Trump administration led to a rise in frontloading by US importers. “Geopolitical uncertainties not only shifted the dynamics between supply and demand for the entire industry, but also affected people’s expectations and behaviors,” OOCL noted. While detours around the Cape of Good Hope absorbed about 10% of available ocean capacity, they disrupted the on-time performance of carriers that was further impacted by poor weather in Asia and Europe. The resulting port congestion put further pressure on supply chains, OOCL said. “These interconnected factors helped push freight rates to a post-pandemic peak around the middle of the year, especially on trans-Pacific routes,” the carrier said. Average Asia-US West Coast rates began 2024 at $1,246 per FEU, rose to a high of $7,411/FEU on July 4 and ended the year at $5,200/FEU, according to rate benchmarking platform Xeneta. OOCL has been rapidly increasing its owned capacity, taking delivery of six 24,188-TEU ships and one 16,828-TEU vessel. The carrier also chartered in six new 13,000-TEU series vessels that will begin operating in 2026. Cosco Shipping Holdings has not yet released its 2024 financial results, but the China state-owned carrier said in January it was expecting $7.5 billion in net profit , a 95% year-over-year increase. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Trans-Pacific

OOCL banks $2.5 billion 2024 net profit on solid demand, high rates

<div class="phx-topic abstract-wrapper">The Dubai-based terminal operator’s end-to-end supply chain strategy is paying dividends with strategic investment in forwarding services attracting business from high value verticals. </div>

The Dubai-based terminal operator’s end-to-end supply chain strategy is paying dividends with strategic investment in forwarding services attracting business from high value verticals.

<div class="phx-topic">DP World on Thursday reported solid gains in 2024 revenue and operating profit that the terminal operator attributed to a focus on handling high-margin cargo and the continued expansion of its end-to-end reach deeper into shipper supply chains. Group chairman and CEO Sultan Ahmed bin Sulayem said the terminal operator had to navigate a complex geopolitical landscape in 2024, but its growing logistics capabilities enabled the company to add value and build lucrative long-term relationships with cargo owners. “We have expanded into new verticals, including chemicals and retail, bringing our total number of focused verticals to eight and covering nearly 50% of global GDP,” bin Sulayem said in an earnings statement. “This strategy is positioning DP World for sustained long-term growth and value creation,” he added. “We continue to strengthen our logistics platform, attracting more cargo owners with end-to-end, tailored solutions that drive efficiency and improve the flow of trade.” The Dubai-based company posted $20 billion in revenue for 2024, up almost 10% year over year and a record for the company, while earnings before interest, taxes, depreciation and amortization (EBITDA) were up 6.7% at $5.4 billion. Net profit was down 2% at $1.5 billion due to “higher finance costs,” while container throughput increased 8.3% to 88.3 million TEUs. Infrastructure investment in key growth markets has taken DP World’s global container handling capacity past 100 million TEUs, with capital expenditures of $2.2 billion made during 2024. The capital expenditure budget for 2025 is $2.5 billion, and investment will be made mainly at Jebel Ali, the Jebel Ali Freezone and Drydocks World in the United Arab Emirates; Tuna Tekra in India; London Gateway in the UK; Ndayane in Senegal; and Jeddah in Saudi Arabia. Bin Sulayem said strategic investments in forwarding services have increased DP World’s network coverage to more than 200 locations across most global trade routes, a calculated move away from the traditional asset-light approach of global forwarders. The terminal operator has been aggressively expanding its logistics exposure, integrating its infrastructure ownership in terminals, warehouses, rail and trucking around the world into the expanded forwarding product. DP World last September <a href="https://www.joc.com/article/dp-world-adds-hong-kong-forwarder-to-growing-3pl-network-5717969">acquired Hong Kong-based supply chain solutions provider Cargo Services Far East</a>, adding a China specialist forwarder with products covering origin purchase order management, ocean and air freight, and warehousing for a diverse range of sectors. DP World’s foray into the forwarding business <a href="https://www.joc.com/article/psa-leveraging-forwarder-acquisition-to-serve-shippers-directly-5242073">mirrors moves made by other global port operators</a> such as Singapore-based PSA, Manila-based International Container Terminal Services Inc. and Maersk’s APM Terminals. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

DP World on Thursday reported solid gains in 2024 revenue and operating profit that the terminal operator attributed to a focus on handling high-margin cargo and the continued expansion of its end-to-end reach deeper into shipper supply chains. Group chairman and CEO Sultan Ahmed bin Sulayem said the terminal operator had to navigate a complex geopolitical landscape in 2024, but its growing logistics capabilities enabled the company to add value and build lucrative long-term relationships with cargo owners. “We have expanded into new verticals, including chemicals and retail, bringing our total number of focused verticals to eight and covering nearly 50% of global GDP,” bin Sulayem said in an earnings statement. “This strategy is positioning DP World for sustained long-term growth and value creation,” he added. “We continue to strengthen our logistics platform, attracting more cargo owners with end-to-end, tailored solutions that drive efficiency and improve the flow of trade.” The Dubai-based company posted $20 billion in revenue for 2024, up almost 10% year over year and a record for the company, while earnings before interest, taxes, depreciation and amortization (EBITDA) were up 6.7% at $5.4 billion. Net profit was down 2% at $1.5 billion due to “higher finance costs,” while container throughput increased 8.3% to 88.3 million TEUs. Infrastructure investment in key growth markets has taken DP World’s global container handling capacity past 100 million TEUs, with capital expenditures of $2.2 billion made during 2024. The capital expenditure budget for 2025 is $2.5 billion, and investment will be made mainly at Jebel Ali, the Jebel Ali Freezone and Drydocks World in the United Arab Emirates; Tuna Tekra in India; London Gateway in the UK; Ndayane in Senegal; and Jeddah in Saudi Arabia. Bin Sulayem said strategic investments in forwarding services have increased DP World’s network coverage to more than 200 locations across most global trade routes, a calculated move away from the traditional asset-light approach of global forwarders. The terminal operator has been aggressively expanding its logistics exposure, integrating its infrastructure ownership in terminals, warehouses, rail and trucking around the world into the expanded forwarding product. DP World last September acquired Hong Kong-based supply chain solutions provider Cargo Services Far East , adding a China specialist forwarder with products covering origin purchase order management, ocean and air freight, and warehousing for a diverse range of sectors. DP World’s foray into the forwarding business mirrors moves made by other global port operators such as Singapore-based PSA, Manila-based International Container Terminal Services Inc. and Maersk’s APM Terminals. Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

International ports

Expansion into logistics underpins DP World’s strong 2024 result

<div class="phx-topic abstract-wrapper">While shippers might have expected ocean carriers to make application programming interfaces widely available by 2025, negative incentives have inhibited that progress. </div>

While shippers might have expected ocean carriers to make application programming interfaces widely available by 2025, negative incentives have inhibited that progress.

<div class="phx-topic">Visibility providers are having to meet the ever-expanding real-time ocean freight data needs of their forwarder and shipper customers without measurable progress from shipping lines in establishing application programming interfaces (APIs) to convey key milestones. Instead, those vendors are having to cobble together data via web scraping, electronic data interchange (EDI) messages, CSV files and automatic ship identification (AIS) information to paint a predictive picture for those customers. Whereas the industry might have expected shipping lines to have provided APIs to allow easy access to container milestones by now, the reality is that there is a large variance between the availability, completeness and quality of the APIs that do exist. “The top 10 ocean carriers, they’re moving a significant volume of containers,” Akshay Dodeja, CEO of visibility provider Terminal49, said at the Journal of Commerce’s TPM25 conference in Long Beach last week. “And they’re already investing a lot in their own infrastructure. We’re talking about millions and millions of dollars of investment to maybe just break even on providing those APIs, so I can empathize with them. There are also maybe even negative incentives to develop APIs.” Dodeja said it might not even make sense for carriers to invest in APIs given the direction the software engineering world is headed. “On the customer-facing side, we’re way beyond APIs,” he said. “We actually don’t even encourage APIs, because we completely sync everything to their data warehouses, so the more sophisticated buyers that are using us are warehousing all their data into [data warehouse providers] Snowflake, BigQuery, or Google Cloud.” The move by shippers and forwarders to build data warehouses is focused on being able to test new software vendors easily but also to drive faster and more accurate reporting. “That’s not happening via API,” Dodeja said. “Now, we just sync everything to a data warehouse every hour. Ultimately, programmatic data will make supply chains more efficient.” <h3>Carrier dilemma </h3>Anand Medepalli, chief product officer at visibility provider Shippeo, said that ocean carriers are in a bit of a dilemma when it comes to investing in APIs to connect with the market. On one hand, in EDI there are existing and trusted standardized means for conveying container milestones. On the other hand, creating APIs would allow a carrier more control over who is accessing location and status data versus having third parties web scraping to get that data. “[Scraping] is the pull mechanism that we use today,” Medepalli said at TPM25. “If ocean carriers do have an API strategy, they have to give credentials and therefore can control access. They know who is coming and why, they can even direct them to a certain area of the website so that the website is not getting heavy hits at the wrong time. Ocean carriers have got tons of good reasons to do this right, but they really need to get their heads together, come up with one standard that everybody can subscribe to, and then become reliable.” In the interim, users of milestone data are relying on aggregators in lieu of setting up feeds of their own. “From a forwarder perspective, I’m never going to integrate directly with a carrier,” Jamie Andrade, senior vice president of product management at SEKO Logistics, said at TPM25. “Ultimately, I don’t care how [my visibility provider] gets the data. They can pull it off of a CSV or an Excel spreadsheet, but they need to give me an API.” There’s also the issue of maintaining APIs. “We don’t have the resources to go do all of the individual carrier APIs, and then have to maintain all of that,” she said. “That’s why there’s value in going through an integrator. But then if the carrier charges you, your prices go up, and yes, my price goes up.” Andrade also mentioned that many forwarders are essentially “double paying” for visibility data because their freight management systems also provide visibility that can’t be turned off, but that’s not always good enough for their needs. <h3>Context needed </h3>Medepalli said another reason that ocean carrier APIs haven’t progressed as fast as the industry may have hoped is that visibility providers are able to add context to simple milestone information for their customers in ways that carriers don’t. “Visibility, for the sake of visibility, is not interesting,” he said. “We just don’t take someone’s data and massage it and then throw it to them. We actually contextualize it. We integrate with other systems to make sure that this data makes sense.” Medepalli added that using other data shows that the API data from carriers often isn’t of a high enough quality upon which to base a prediction. “If an AIS position says that the vessel is there, does it correspond to what the carrier is saying?” he said. “Sometimes, it’s the reverse problem. We actually correlate other data, like AIS data, to make sure that the data we are getting from the carrier API is actually a good quality.” Ultimately, Dodeja said he believes shipping lines will have to adapt to an environment where quality data is a given for customers. Larger shippers and forwarders have the internal teams to manage that data directly and small to midsize companies will use visibility aggregators. “Not every customer solution [for carriers] is a massive financial opportunity,” he said. “But some things just make a lot of sense because customers want it, and we now are moving towards more programmatic access to this data to integrate it into their workflows.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Visibility providers are having to meet the ever-expanding real-time ocean freight data needs of their forwarder and shipper customers without measurable progress from shipping lines in establishing application programming interfaces (APIs) to convey key milestones. Instead, those vendors are having to cobble together data via web scraping, electronic data interchange (EDI) messages, CSV files and automatic ship identification (AIS) information to paint a predictive picture for those customers. Whereas the industry might have expected shipping lines to have provided APIs to allow easy access to container milestones by now, the reality is that there is a large variance between the availability, completeness and quality of the APIs that do exist. “The top 10 ocean carriers, they’re moving a significant volume of containers,” Akshay Dodeja, CEO of visibility provider Terminal49, said at the Journal of Commerce’s TPM25 conference in Long Beach last week. “And they’re already investing a lot in their own infrastructure. We’re talking about millions and millions of dollars of investment to maybe just break even on providing those APIs, so I can empathize with them. There are also maybe even negative incentives to develop APIs.” Dodeja said it might not even make sense for carriers to invest in APIs given the direction the software engineering world is headed. “On the customer-facing side, we’re way beyond APIs,” he said. “We actually don’t even encourage APIs, because we completely sync everything to their data warehouses, so the more sophisticated buyers that are using us are warehousing all their data into [data warehouse providers] Snowflake, BigQuery, or Google Cloud.” The move by shippers and forwarders to build data warehouses is focused on being able to test new software vendors easily but also to drive faster and more accurate reporting. “That’s not happening via API,” Dodeja said. “Now, we just sync everything to a data warehouse every hour. Ultimately, programmatic data will make supply chains more efficient.” Carrier dilemma Anand Medepalli, chief product officer at visibility provider Shippeo, said that ocean carriers are in a bit of a dilemma when it comes to investing in APIs to connect with the market. On one hand, in EDI there are existing and trusted standardized means for conveying container milestones. On the other hand, creating APIs would allow a carrier more control over who is accessing location and status data versus having third parties web scraping to get that data. “[Scraping] is the pull mechanism that we use today,” Medepalli said at TPM25. “If ocean carriers do have an API strategy, they have to give credentials and therefore can control access. They know who is coming and why, they can even direct them to a certain area of the website so that the website is not getting heavy hits at the wrong time. Ocean carriers have got tons of good reasons to do this right, but they really need to get their heads together, come up with one standard that everybody can subscribe to, and then become reliable.” In the interim, users of milestone data are relying on aggregators in lieu of setting up feeds of their own. “From a forwarder perspective, I’m never going to integrate directly with a carrier,” Jamie Andrade, senior vice president of product management at SEKO Logistics, said at TPM25. “Ultimately, I don’t care how [my visibility provider] gets the data. They can pull it off of a CSV or an Excel spreadsheet, but they need to give me an API.” There’s also the issue of maintaining APIs. “We don’t have the resources to go do all of the individual carrier APIs, and then have to maintain all of that,” she said. “That’s why there’s value in going through an integrator. But then if the carrier charges you, your prices go up, and yes, my price goes up.” Andrade also mentioned that many forwarders are essentially “double paying” for visibility data because their freight management systems also provide visibility that can’t be turned off, but that’s not always good enough for their needs. Context needed Medepalli said another reason that ocean carrier APIs haven’t progressed as fast as the industry may have hoped is that visibility providers are able to add context to simple milestone information for their customers in ways that carriers don’t. “Visibility, for the sake of visibility, is not interesting,” he said. “We just don’t take someone’s data and massage it and then throw it to them. We actually contextualize it. We integrate with other systems to make sure that this data makes sense.” Medepalli added that using other data shows that the API data from carriers often isn’t of a high enough quality upon which to base a prediction. “If an AIS position says that the vessel is there, does it correspond to what the carrier is saying?” he said. “Sometimes, it’s the reverse problem. We actually correlate other data, like AIS data, to make sure that the data we are getting from the carrier API is actually a good quality.” Ultimately, Dodeja said he believes shipping lines will have to adapt to an environment where quality data is a given for customers. Larger shippers and forwarders have the internal teams to manage that data directly and small to midsize companies will use visibility aggregators. “Not every customer solution [for carriers] is a massive financial opportunity,” he said. “But some things just make a lot of sense because customers want it, and we now are moving towards more programmatic access to this data to integrate it into their workflows.” Contact Eric Johnson at eric.johnson@spglobal.com .

Forwarding

Logistics Technology News

Lack of carrier API progress belies market adaptation to other visibility options

<div class="phx-topic abstract-wrapper">No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.</div>

No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.

<div class="phx-topic">On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, <a href="https://www.joc.com/article/fedex-freight-spinoff-is-latest-move-to-reshape-us-ltl-market-5909683">the leadership announced that a spinoff</a> was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. <h3>Greater role for technology </h3>While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at <a href="mailto:info@shipmatrix.com">info@shipmatrix.com</a>. </div>

On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, the leadership announced that a spinoff was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. Greater role for technology While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at info@shipmatrix.com .

How the LTL market could evolve as the FedEx Freight spinoff plays out

<div class="phx-topic abstract-wrapper">What we have today in containerization is the opposite of Malcom McLean’s vision, writes Ted Prince — a vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world.</div>

What we have today in containerization is the opposite of Malcom McLean’s vision, writes Ted Prince — a vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world.

<div class="phx-topic">The Journal of Commerce’s roots extend back to 1827, when Samuel Morse and partners started a newspaper in New York. In 1844, Morse effectively started the telecommunications revolution. His first telegraph message asked, “What hath God wrought?” To many, the answer to that question might have been the development of containerization by Malcom McLean of Maxton, North Carolina. McLean’s transportation roots were in less-than-truckload (LTL). He was an early pioneer; McLean Trucking was founded in 1934 — the same year as the Motor Carrier Act of 1934 — and at one time was the fourth-largest motor carrier in the United States. This Motor Carrier Act followed traditional regulatory thinking. To ensure sufficient capacity, carriers were granted monopolies in the form of operating authorities. With tobacco a highly rated commodity, this was an incredibly lucrative business. These profits supported the acquisition of other motor carriers and the seed capital to start containerization. What the hagiography of McLean frequently omits is that he was not perfect. He twice “bet the company” on oil prices — and got it wrong both times. The development of high-speed container ships known as SL-7s were deployed in 1972 and 1973 during the first fuel shock. The ships’ high operating costs destroyed any profitability, and they were sold to the United States Navy in 1981 and 1982. In 1969, McLean sold Sea-Land to R.J. Reynolds Tobacco Company. In 1978, McLean purchased United States Lines and built a fleet of 4,400-TEU container ships. These were the largest ships at the time and were designed to operate in around-the-world services. Following the second oil shock of 1979, these vessels were designed to be fuel-efficient — albeit slow. When oil prices cratered five years later, so did US Lines. <h3>A ‘grander strategy’</h3>While the SL-7s and EconoShips are well-known aspects of McLean’s legacy, I think it is worthwhile exploring his grander strategy. SeaLand was vertically integrated — deploying his ships, calling his terminals, utilizing cranes of his specifications, carrying his containers, and moving on his chassis. While this model was emulated by many of those that followed, it is worthwhile to think about what has changed since then — and what it means today. Independent vessel strings are mostly a thing of the past. Vessel-sharing agreements (VSAs) have given way to global alliances — not to mention outright acquisitions. SeaLand–Maersk was an early VSA that ultimately led to Maersk acquiring SeaLand. This is a reflection of the need for economies of scope and scale — alongside density and service frequency — that are table stakes in today’s liner shipping world. By the early 1960s, McLean’s concept for standardized shipping containers gave rise to the container leasing industry. Sea Containers was an early entrant that was followed by others. This was a reflection that the capital-intensive nature of liner shipping made it almost impossible for a carrier to invest in everything. It was also a realization that economies of scale were sometimes beyond the reach of a single entity. While the chassis was necessary to provide pickup and delivery, carrier provision of chassis was limited to the United States. McLean was a trucker at heart and couldn’t imagine not having his own wheels. This decision haunted the industry for decades. Finally, in 2012, Maersk sold its chassis-leasing subsidiary, Direct ChassisLink, Inc. (DCLI), to a private equity firm. In an industry where most want to be second, almost every other line followed. Marine terminals were the last to be unbundled — perhaps because lines viewed them as their “crown jewels,” or perhaps because of their high price tags. These investments became popular with infrastructure funds and their pension fund investors. What we have today is the opposite of McLean’s vision. A vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world. Whereas the former would inevitably cross-subsidize separate components through intricate transfer pricing, the latter has created a world of cutthroat capitalism. The impacts are not always clear. Container and chassis providers claim that they offer savings; however, their line customers may not agree — perhaps because they lack the sophistication to ascertain the true cost of ownership and operation. The impact on marine terminals is much more pervasive. Whereas an ocean carrier might have previously absorbed some additional costs (e.g., extra gates, third shifts, etc.) in a holistic service perspective, today’s terminals have owners that demand profitability across the spectrum. Our industry, despite its global scale, is still relatively young. We are living Joseph Schumpeter’s theory of creative destruction that he believed is essential for capitalism and economic growth. New innovations replace old ones. McLean’s innovations were essential, but not timeless. Our industry is essential, and the only certainty is change. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The Journal of Commerce’s roots extend back to 1827, when Samuel Morse and partners started a newspaper in New York. In 1844, Morse effectively started the telecommunications revolution. His first telegraph message asked, “What hath God wrought?” To many, the answer to that question might have been the development of containerization by Malcom McLean of Maxton, North Carolina. McLean’s transportation roots were in less-than-truckload (LTL). He was an early pioneer; McLean Trucking was founded in 1934 — the same year as the Motor Carrier Act of 1934 — and at one time was the fourth-largest motor carrier in the United States. This Motor Carrier Act followed traditional regulatory thinking. To ensure sufficient capacity, carriers were granted monopolies in the form of operating authorities. With tobacco a highly rated commodity, this was an incredibly lucrative business. These profits supported the acquisition of other motor carriers and the seed capital to start containerization. What the hagiography of McLean frequently omits is that he was not perfect. He twice “bet the company” on oil prices — and got it wrong both times. The development of high-speed container ships known as SL-7s were deployed in 1972 and 1973 during the first fuel shock. The ships’ high operating costs destroyed any profitability, and they were sold to the United States Navy in 1981 and 1982. In 1969, McLean sold Sea-Land to R.J. Reynolds Tobacco Company. In 1978, McLean purchased United States Lines and built a fleet of 4,400-TEU container ships. These were the largest ships at the time and were designed to operate in around-the-world services. Following the second oil shock of 1979, these vessels were designed to be fuel-efficient — albeit slow. When oil prices cratered five years later, so did US Lines. A ‘grander strategy’ While the SL-7s and EconoShips are well-known aspects of McLean’s legacy, I think it is worthwhile exploring his grander strategy. SeaLand was vertically integrated — deploying his ships, calling his terminals, utilizing cranes of his specifications, carrying his containers, and moving on his chassis. While this model was emulated by many of those that followed, it is worthwhile to think about what has changed since then — and what it means today. Independent vessel strings are mostly a thing of the past. Vessel-sharing agreements (VSAs) have given way to global alliances — not to mention outright acquisitions. SeaLand–Maersk was an early VSA that ultimately led to Maersk acquiring SeaLand. This is a reflection of the need for economies of scope and scale — alongside density and service frequency — that are table stakes in today’s liner shipping world. By the early 1960s, McLean’s concept for standardized shipping containers gave rise to the container leasing industry. Sea Containers was an early entrant that was followed by others. This was a reflection that the capital-intensive nature of liner shipping made it almost impossible for a carrier to invest in everything. It was also a realization that economies of scale were sometimes beyond the reach of a single entity. While the chassis was necessary to provide pickup and delivery, carrier provision of chassis was limited to the United States. McLean was a trucker at heart and couldn’t imagine not having his own wheels. This decision haunted the industry for decades. Finally, in 2012, Maersk sold its chassis-leasing subsidiary, Direct ChassisLink, Inc. (DCLI), to a private equity firm. In an industry where most want to be second, almost every other line followed. Marine terminals were the last to be unbundled — perhaps because lines viewed them as their “crown jewels,” or perhaps because of their high price tags. These investments became popular with infrastructure funds and their pension fund investors. What we have today is the opposite of McLean’s vision. A vertically integrated enterprise of cost centers has been replaced by a network of profit centers that closely resembles the intermodal rail world. Whereas the former would inevitably cross-subsidize separate components through intricate transfer pricing, the latter has created a world of cutthroat capitalism. The impacts are not always clear. Container and chassis providers claim that they offer savings; however, their line customers may not agree — perhaps because they lack the sophistication to ascertain the true cost of ownership and operation. The impact on marine terminals is much more pervasive. Whereas an ocean carrier might have previously absorbed some additional costs (e.g., extra gates, third shifts, etc.) in a holistic service perspective, today’s terminals have owners that demand profitability across the spectrum. Our industry, despite its global scale, is still relatively young. We are living Joseph Schumpeter’s theory of creative destruction that he believed is essential for capitalism and economic growth. New innovations replace old ones. McLean’s innovations were essential, but not timeless. Our industry is essential, and the only certainty is change. Contact Ted Prince at ted@tricitiesintermodal.com .

Supply chain

In appreciation of McLean’s essential, although not timeless, innovations

Notes: Data as of January 2025
Shaded areas indicate forecasts

MPV delivered

MPV demolished

HL capable delivered

HL capable demolished 

Net fleet loss/gain

The S&P Global multipurpose and heavy-lift fleet capacity database aggregates data for vessels that are in service, on order or have been demolished. The *Journal of Commerce* uses this database of current and historical data to forecast future newbuildings and demolitions.

Multipurpose and heavy-lift vessel deliveries and demolitions, with forecast (JOC)

MPV and HL Capable Fleet development Gateway

<div class="phx-topic abstract-wrapper">European governments and the European Commission will carry out regulatory reviews to assess the level of market concentration MSC will have with the planned takeover of Hutchison’s port assets, with divestitures likely on the table.</div>

European governments and the European Commission will carry out regulatory reviews to assess the level of market concentration MSC will have with the planned takeover of Hutchison’s port assets, with divestitures likely on the table.

<div class="phx-topic">Hutchison’s $22.8 billion disposal of most of its global terminal interests to a consortium of BlackRock Group and Mediterranean Shipping Co.’s Terminal Investment Limited (TiL) is likely to trigger a wave of terminal deals as MSC divests facilities to meet regulators’ anti-trust demands, Drewry’s leading port analyst says. These are expected to include terminals at Rotterdam, Le Havre, Antwerp, Hamburg and in Egypt, Eleanor Hadland, lead analyst for ports and terminals at Drewry Maritime Research, told the Journal of Commerce. The sale has also raised questions about the future of Hutchison’s port interests in China — which are not part of the BlackRock/TiL deal — and the 20% stake in Hutchison Port Holdings (HPH) held by Singapore-headquartered terminal operator PSA International, Hadland added. “Hutchison is not the most dynamic operator. Its ports portfolio has been chugging along since the COVID-19 pandemic,” Hadland said. “There has been growth, but it’s been organic, mainly expanding capacity at existing terminals rather than acquiring new ports.” CK Hutchison, the Hong Kong-listed parent of Hutchison Port Holdings, announced on Tuesday it had reached an agreement with BlackRock/TiL to sell its 80% stake in HPH, including the 90% HPH holds in the Panama Ports Company. The deal, subject to regulatory approval, will catapult MSC into pole position as the world’s largest terminal operator with annual throughput volumes of almost 120 million TEUs based on 2023 figures, leapfrogging the three existing top operators — Singapore’s PSA, China Merchants Port Holdings and Cosco Shipping Ports. Hadland said in Europe, national governments and the European Commission will carry out regulatory reviews to assess the level of market concentration MSC will have with the takeover of Hutchison’s port assets. She pointed out that in Rotterdam, MSC and Hutchison are among the largest terminal owners and operators, controlling more than 13 million TEUs of capacity. That includes MSC’s Delta Dedicated North Terminal operated under an agreement with ECT, which is 89.4% owned by Hutchison. ECT also operates the ECT Delta Terminal and holds a 60.8% stake in the Euromax Terminal, while Hutchison holds 100% of Hutchison Ports Delta II, she said. Euromax is likely to be among the divestment candidates, Hadland said. European Commission competition watchdogs are also likely to consider MSC’s dominant position in Antwerp and Hamburg when considering whether the Hutchison ports deal reduces competition at ports across Northern Europe. <h3>Future of PSA’s stake in Hutchison a question </h3>Commenting on PSA’s 20% stake in Hutchison Port Holdings, Hadland said there are two possible options. The first is for PSA to cash out, selling its interest to BlackRock/TiL or other investors. Or PSA can retain its shareholding in the hope its value increases as BlackRock/TiL rejuvenates Hutchison’s ports. PSA bought its stake for $4 billion in 2006 and made an unsuccessful attempt to dispose of its shareholding for a similar price tag in 2023 due to economic headwinds. PSA did not respond to Journal of Commerce questions about the future of its Hutchison ports stake. On the future of Hutchison’s port interests in China that are excluded from the BlackRock/TiL deal, Hadland speculated its stakes in terminals in Shanghai and Ningbo could be wrapped into Singapore-listed HPH Trust, which controls Hutchison’s port interests in Hong Kong and South China. She said an alternative option would be for Hutchison’s other shareholders — Shanghai International Port Group and Cosco Shipping Ports in Shanghai and Ningbo Port Group in Ningbo — to acquire them. The deal will bring significant benefits for MSC because the Hutchison portfolio is largely complementary to terminals controlled by TiL and opens new opportunities, such as in Australia, where MSC doesn’t have any terminals, while Hutchison has terminals in Sydney and Brisbane. “Operations in the high growth Southeast Asia and Mexican markets are seen to be particularly advantageous,” Hadland said. The deal could also prompt some shuffling of carriers between terminals as MSC moves operations to Hutchison terminals within ports. “Once the deal is done, which might be a year down the line, terminal operators could be worried about the business they are going to lose if or when MSC moves to Hutchison terminals,” Hadland said. <h3>Bank says Panama deal ‘understandable’ </h3>JPMorgan, meanwhile, said selling the Panama terminals was “understandable” given that Hutchison’s ownership has come under scrutiny from the Trump administration amid wider US concerns about alleged Chinese government control and influence on Panama Canal operations. But JPMorgan said the sale of Hutchison’s other terminals outside of China was a “surprise” and could be “an opportunistic deal.” “Based on our understanding of the management philosophy of CKH, any deal is possible as long as ‘the price is right,’” the bank said in a research note. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hutchison’s $22.8 billion disposal of most of its global terminal interests to a consortium of BlackRock Group and Mediterranean Shipping Co.’s Terminal Investment Limited (TiL) is likely to trigger a wave of terminal deals as MSC divests facilities to meet regulators’ anti-trust demands, Drewry’s leading port analyst says. These are expected to include terminals at Rotterdam, Le Havre, Antwerp, Hamburg and in Egypt, Eleanor Hadland, lead analyst for ports and terminals at Drewry Maritime Research, told the Journal of Commerce. The sale has also raised questions about the future of Hutchison’s port interests in China — which are not part of the BlackRock/TiL deal — and the 20% stake in Hutchison Port Holdings (HPH) held by Singapore-headquartered terminal operator PSA International, Hadland added. “Hutchison is not the most dynamic operator. Its ports portfolio has been chugging along since the COVID-19 pandemic,” Hadland said. “There has been growth, but it’s been organic, mainly expanding capacity at existing terminals rather than acquiring new ports.” CK Hutchison, the Hong Kong-listed parent of Hutchison Port Holdings, announced on Tuesday it had reached an agreement with BlackRock/TiL to sell its 80% stake in HPH, including the 90% HPH holds in the Panama Ports Company. The deal, subject to regulatory approval, will catapult MSC into pole position as the world’s largest terminal operator with annual throughput volumes of almost 120 million TEUs based on 2023 figures, leapfrogging the three existing top operators — Singapore’s PSA, China Merchants Port Holdings and Cosco Shipping Ports. Hadland said in Europe, national governments and the European Commission will carry out regulatory reviews to assess the level of market concentration MSC will have with the takeover of Hutchison’s port assets. She pointed out that in Rotterdam, MSC and Hutchison are among the largest terminal owners and operators, controlling more than 13 million TEUs of capacity. That includes MSC’s Delta Dedicated North Terminal operated under an agreement with ECT, which is 89.4% owned by Hutchison. ECT also operates the ECT Delta Terminal and holds a 60.8% stake in the Euromax Terminal, while Hutchison holds 100% of Hutchison Ports Delta II, she said. Euromax is likely to be among the divestment candidates, Hadland said. European Commission competition watchdogs are also likely to consider MSC’s dominant position in Antwerp and Hamburg when considering whether the Hutchison ports deal reduces competition at ports across Northern Europe. Future of PSA’s stake in Hutchison a question Commenting on PSA’s 20% stake in Hutchison Port Holdings, Hadland said there are two possible options. The first is for PSA to cash out, selling its interest to BlackRock/TiL or other investors. Or PSA can retain its shareholding in the hope its value increases as BlackRock/TiL rejuvenates Hutchison’s ports. PSA bought its stake for $4 billion in 2006 and made an unsuccessful attempt to dispose of its shareholding for a similar price tag in 2023 due to economic headwinds. PSA did not respond to Journal of Commerce questions about the future of its Hutchison ports stake. On the future of Hutchison’s port interests in China that are excluded from the BlackRock/TiL deal, Hadland speculated its stakes in terminals in Shanghai and Ningbo could be wrapped into Singapore-listed HPH Trust, which controls Hutchison’s port interests in Hong Kong and South China. She said an alternative option would be for Hutchison’s other shareholders — Shanghai International Port Group and Cosco Shipping Ports in Shanghai and Ningbo Port Group in Ningbo — to acquire them. The deal will bring significant benefits for MSC because the Hutchison portfolio is largely complementary to terminals controlled by TiL and opens new opportunities, such as in Australia, where MSC doesn’t have any terminals, while Hutchison has terminals in Sydney and Brisbane. “Operations in the high growth Southeast Asia and Mexican markets are seen to be particularly advantageous,” Hadland said. The deal could also prompt some shuffling of carriers between terminals as MSC moves operations to Hutchison terminals within ports. “Once the deal is done, which might be a year down the line, terminal operators could be worried about the business they are going to lose if or when MSC moves to Hutchison terminals,” Hadland said. Bank says Panama deal ‘understandable’ JPMorgan, meanwhile, said selling the Panama terminals was “understandable” given that Hutchison’s ownership has come under scrutiny from the Trump administration amid wider US concerns about alleged Chinese government control and influence on Panama Canal operations. But JPMorgan said the sale of Hutchison’s other terminals outside of China was a “surprise” and could be “an opportunistic deal.” “Based on our understanding of the management philosophy of CKH, any deal is possible as long as ‘the price is right,’” the bank said in a research note. Contact Keith Wallis at keithwallis@hotmail.com .

Marine terminals

Big Hutchison deal could reshuffle global ports network: Drewry

<div class="phx-topic abstract-wrapper">The carrier’s investment, announced while its chief executive met at the White House with President Donald Trump, comes amid heightened political sensitivities in the US as far as the container shipping industry is concerned.</div>

The carrier’s investment, announced while its chief executive met at the White House with President Donald Trump, comes amid heightened political sensitivities in the US as far as the container shipping industry is concerned.

<div class="phx-topic">CMA CGM announced Thursday it would spend $20 billion over the next four years to significantly bolster its logistics presence in the US, including expanding its US-flag fleet and increasing capacity at key US ports. The stunning announcement from the French shipping giant came as Rodolphe Saadé, chairman and CEO of CMA CGM Group, met at the White House with US President Donald Trump. The meeting between Trump and Saadé and the huge investment from the ocean carrier also comes amid heightened political sensitivities in the US as far as the container shipping industry is concerned. Trump’s US Trade Representative has <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">proposed slamming Chinese-built and -operated ships calling US ports with huge fees</a>, while the administration is making a push to re-energize the US shipbuilding sector. “Over the next four years, we will significantly grow our US-flagged fleet, expand the capacity of key container ports on both coasts, develop state-of-the-art warehousing across the country, and establish a significant air cargo hub in Chicago,” Saadé said in a statement. “This will create 10,000 new American jobs and further strengthen our partnership with American customers and public authorities.” The US investment plan for CMA CGM includes adding 30 new vessels to the fleet of its US-flag carrier APL and deploying five new Boeing 777 freighters to serve a new air cargo hub it will build in Chicago. The carrier said it will also develop infrastructure at ports in New York/New Jersey, Los Angeles, Houston, Miami and Dutch Harbor in Alaska and build or expand 400 “state-of-the-art" warehouses across the US. It will also develop a new logistics research and development hub in Boston. In comments from the Oval Office, Trump praised Saadé, saying that “knowing him,” he wouldn’t be surprised if CMA CGM becomes the world’s top container line. CMA CGM is now the world’s third-largest carrier as measured by tonnage. “He’s going to be investing $20 billion into the United States because of the election,” Trump said. “...We lost our way. For many years we didn’t do anything. We used to build a ship a day.” Trump said in the coming weeks he would announce a massive US shipbuilding program as the White House <a href="https://www.joc.com/article/trumps-expansionist-worldview-puts-us-maritime-interests-in-spotlight-5946935">aims to galvanize an industry</a> that’s been in decline since World War II. <h3>Spending plan follows prior US terminal investments </h3>The CMA CGM investment follows the company acquiring two marine terminals at the Port of New York and New Jersey in 2023. It also acquired the <a href="https://www.joc.com/article/cma-cgm-flexes-financial-might-fenix-marine-acquisition_20211103.html">Fenix Marine Services container terminal in Los Angeles in late 2021.</a>Thanks to record-setting profits in 2021 and 2022, container lines have invested heavily in marine terminals. Mediterranean Shipping Co., the world’s largest container line as measured by tonnage, is on track to become the largest global terminal operator after its Terminal Investment Limited (TiL) arm and BlackRock Group <a href="https://www.joc.com/article/hutchison-inks-228-billion-deal-to-sell-majority-of-port-holdings-to-blackrock-til-5955819">on Tuesday announced</a> they would acquire the majority of Hutchison Port Holdings’ network outside of China and Hong Kong in a $22.8 billion deal. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>.</div>

CMA CGM announced Thursday it would spend $20 billion over the next four years to significantly bolster its logistics presence in the US, including expanding its US-flag fleet and increasing capacity at key US ports. The stunning announcement from the French shipping giant came as Rodolphe Saadé, chairman and CEO of CMA CGM Group, met at the White House with US President Donald Trump. The meeting between Trump and Saadé and the huge investment from the ocean carrier also comes amid heightened political sensitivities in the US as far as the container shipping industry is concerned. Trump’s US Trade Representative has proposed slamming Chinese-built and -operated ships calling US ports with huge fees , while the administration is making a push to re-energize the US shipbuilding sector. “Over the next four years, we will significantly grow our US-flagged fleet, expand the capacity of key container ports on both coasts, develop state-of-the-art warehousing across the country, and establish a significant air cargo hub in Chicago,” Saadé said in a statement. “This will create 10,000 new American jobs and further strengthen our partnership with American customers and public authorities.” The US investment plan for CMA CGM includes adding 30 new vessels to the fleet of its US-flag carrier APL and deploying five new Boeing 777 freighters to serve a new air cargo hub it will build in Chicago. The carrier said it will also develop infrastructure at ports in New York/New Jersey, Los Angeles, Houston, Miami and Dutch Harbor in Alaska and build or expand 400 “state-of-the-art" warehouses across the US. It will also develop a new logistics research and development hub in Boston. In comments from the Oval Office, Trump praised Saadé, saying that “knowing him,” he wouldn’t be surprised if CMA CGM becomes the world’s top container line. CMA CGM is now the world’s third-largest carrier as measured by tonnage. “He’s going to be investing $20 billion into the United States because of the election,” Trump said. “...We lost our way. For many years we didn’t do anything. We used to build a ship a day.” Trump said in the coming weeks he would announce a massive US shipbuilding program as the White House aims to galvanize an industry that’s been in decline since World War II. Spending plan follows prior US terminal investments The CMA CGM investment follows the company acquiring two marine terminals at the Port of New York and New Jersey in 2023. It also acquired the Fenix Marine Services container terminal in Los Angeles in late 2021. Thanks to record-setting profits in 2021 and 2022, container lines have invested heavily in marine terminals. Mediterranean Shipping Co., the world’s largest container line as measured by tonnage, is on track to become the largest global terminal operator after its Terminal Investment Limited (TiL) arm and BlackRock Group on Tuesday announced they would acquire the majority of Hutchison Port Holdings’ network outside of China and Hong Kong in a $22.8 billion deal. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Port infrastructure

North American ports

CMA CGM to invest $20 billion in US shipping, ports and logistics

<div class="phx-topic abstract-wrapper">Spot rates soared as the deadline for US tariffs approached this week, and now many shipments are stranded in transit, according to logistics providers. </div>

Spot rates soared as the deadline for US tariffs approached this week, and now many shipments are stranded in transit, according to logistics providers.

<div class="phx-topic">Long Beach, California — Truck traffic in Laredo, Texas, surged for weeks until Tuesday, when the Trump administration’s 25% tariff on Mexican imports took effect. “Monday was just absolutely chaotic, and then yesterday was eerily slow,” Jordan Dewart, president of Redwood Mexico, told the Journal of Commerce Wednesday. “We had dozens and dozens of customers literally hit the pause button on all their northbound shipments from Mexico, wherever they were in transit,” Dewart said, speaking from Laredo. “They’ve all said, ‘Hey, let’s wait this out a few days to see what happens.’” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951880_0.1.jpg"></img></div>What’s happening is the collection of millions of dollars of duties that many shippers have never had to pay before when importing from Mexico or Canada, another US tariff target. “We have a customs broker partner here at the [Mexican] border, and they [took in] payments in excess of $1 million yesterday,” the first day tariffs were collected, Dewart said. Those payments came from multiple customers of Redwood Logistics “and every one of those customers had never paid” tariffs on Mexican goods previously, Dewart said. One customer had planned to bring a truckload shipment into the US Monday before the tariffs took effect, but a flat tire kept the drayage truck from crossing until Tuesday, he said. “A shipment that could have avoided the tariffs entirely instead was subject to $50,000 in duties,” said Dewart. <h3>Delays disrupting capacity </h3>Logistics providers expect to hear many similar stories as the Trump administration accelerates its trade wars with Mexico, Canada, China and other countries. Tariff threats and then the imposition of tariffs led to a surge in freight heading toward the US-Mexico border in January and February, causing congestion and delays. Now freight is being delayed as importers try to discern what twist the tariffs might take next. Late Wednesday, for example, the White House announced that cars and trucks produced in Mexico and Canada would be exempt from the 25% tariffs for one month. That’s likely to lead to a surge in high-value automotive imports in March. High-value shipments from Mexico and Canada surged in February, pushing up spot-market truckload rates in lanes between Canada, Mexico and the US by double digits. “We’ve seen easily 50% to 75% spot rate increases for some hot must-have type items [from Canada],” Paul Brashier, vice president of global logistics at ITS Logistics, said Wednesday. “It’s almost been similar to what we saw during COVID when shippers would say, ‘just let us know what it costs’ if we could cover a load — they were more worried about getting the shipment than what it would cost them,” Brashier told the Journal of Commerce. Earlier this week, US spot market load board operator DAT Freight &amp; Analytics reported surging spot rates and volumes in cross-border lanes connecting the US and Canada. Dry-van spot-market volumes from Toronto to Chicago rose 57% in the week ending Feb. 28, while rates in the cross-border lane rose 7%, according to DAT. Dewart noted that President Donald Trump plans to speak with Mexican President Claudia Sheinbaum Thursday, raising hopes that some tariff pressure may be relieved. “Frankly, the only trading partner that we have that knows how to handle [Trump] is Mexico’s Sheinbaum. She’s been able to work with him,” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM25 conference here Wednesday. <h3>Redesigning supply chains </h3>But the uncertainty is costing US importers millions of dollars not only in tariff duties but in delays and last-minute changes in supply chains, logistics providers said. “Pretty much when Trump was inaugurated, we started fielding a lot more requests for [supply chain] design work, for heavy volume flows inbound to the US from Mexico and Canada,” said Brashier. Now with many shipments stuck in transit, especially between Mexico and the US, it’s unclear what the impact will be on volumes and pricing in the days and weeks ahead — but costs aren’t likely to go down as long as the disruption persists. “Contract rates are in a holding pattern, I’d say, to see what happens next,” Dewart said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Long Beach, California — Truck traffic in Laredo, Texas, surged for weeks until Tuesday, when the Trump administration’s 25% tariff on Mexican imports took effect. “Monday was just absolutely chaotic, and then yesterday was eerily slow,” Jordan Dewart, president of Redwood Mexico, told the Journal of Commerce Wednesday. “We had dozens and dozens of customers literally hit the pause button on all their northbound shipments from Mexico, wherever they were in transit,” Dewart said, speaking from Laredo. “They’ve all said, ‘Hey, let’s wait this out a few days to see what happens.’” What’s happening is the collection of millions of dollars of duties that many shippers have never had to pay before when importing from Mexico or Canada, another US tariff target. “We have a customs broker partner here at the [Mexican] border, and they [took in] payments in excess of $1 million yesterday,” the first day tariffs were collected, Dewart said. Those payments came from multiple customers of Redwood Logistics “and every one of those customers had never paid” tariffs on Mexican goods previously, Dewart said. One customer had planned to bring a truckload shipment into the US Monday before the tariffs took effect, but a flat tire kept the drayage truck from crossing until Tuesday, he said. “A shipment that could have avoided the tariffs entirely instead was subject to $50,000 in duties,” said Dewart. Delays disrupting capacity Logistics providers expect to hear many similar stories as the Trump administration accelerates its trade wars with Mexico, Canada, China and other countries. Tariff threats and then the imposition of tariffs led to a surge in freight heading toward the US-Mexico border in January and February, causing congestion and delays. Now freight is being delayed as importers try to discern what twist the tariffs might take next. Late Wednesday, for example, the White House announced that cars and trucks produced in Mexico and Canada would be exempt from the 25% tariffs for one month. That’s likely to lead to a surge in high-value automotive imports in March. High-value shipments from Mexico and Canada surged in February, pushing up spot-market truckload rates in lanes between Canada, Mexico and the US by double digits. “We’ve seen easily 50% to 75% spot rate increases for some hot must-have type items [from Canada],” Paul Brashier, vice president of global logistics at ITS Logistics, said Wednesday. “It’s almost been similar to what we saw during COVID when shippers would say, ‘just let us know what it costs’ if we could cover a load — they were more worried about getting the shipment than what it would cost them,” Brashier told the Journal of Commerce. Earlier this week, US spot market load board operator DAT Freight & Analytics reported surging spot rates and volumes in cross-border lanes connecting the US and Canada. Dry-van spot-market volumes from Toronto to Chicago rose 57% in the week ending Feb. 28, while rates in the cross-border lane rose 7%, according to DAT. Dewart noted that President Donald Trump plans to speak with Mexican President Claudia Sheinbaum Thursday, raising hopes that some tariff pressure may be relieved. “Frankly, the only trading partner that we have that knows how to handle [Trump] is Mexico’s Sheinbaum. She’s been able to work with him,” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM25 conference here Wednesday. Redesigning supply chains But the uncertainty is costing US importers millions of dollars not only in tariff duties but in delays and last-minute changes in supply chains, logistics providers said. “Pretty much when Trump was inaugurated, we started fielding a lot more requests for [supply chain] design work, for heavy volume flows inbound to the US from Mexico and Canada,” said Brashier. Now with many shipments stuck in transit, especially between Mexico and the US, it’s unclear what the impact will be on volumes and pricing in the days and weeks ahead — but costs aren’t likely to go down as long as the disruption persists. “Contract rates are in a holding pattern, I’d say, to see what happens next,” Dewart said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Transport, Trade and Regulation News

TPM25: ‘Chaos’ erupts as US tariffs disrupt cross-border trucking with Mexico, Canada

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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<div class="phx-topic abstract-wrapper">The National Retail Federation now says it expects a downward shift in the second quarter as importers face challenges from tariffs and elevated inventories in the wake of significant cargo frontloading.</div>

The National Retail Federation now says it expects a downward shift in the second quarter as importers face challenges from tariffs and elevated inventories in the wake of significant cargo frontloading.

<div class="phx-topic">US retailers have downgraded their import projections for the second quarter amid the tariff chaos playing out between the Trump administration and key trading partners. The National Retail Federation (NRF) and Hackett Associates, publishers of the monthly Global Port Tracker (GPT), now say they expect a downward shift in the spring as retailers face challenges from tariffs and elevated inventories in the wake of significant cargo frontloading. “Retailers are continuing to bring as much merchandise into the country ahead of rising tariffs as possible,” Jonathan Gold, NRF vice president for supply chain and customs policy, said in the GPT. While March import projections remained unchanged, the latest GPT released this week has lowered import expectations for April, May, June and July compared with projections made just last month. The new GPT forecasts April volumes at 2.18 million TEUs, up 5.7% over the year but down from February’s projection of 8.2% year-over-year growth. While May’s import projections call for 2.8% growth to 2.14 million TEUs, that is down from the 5.4% year-over-year gain expected last month. June’s volume projections slipped to 2.07 million TEUs, down 3.2% over the year and a larger drop than the initial 0.6% decline predicted last month. It would be the first year-over-year import drop for any month since September 2023. And in its first forecast for July, the GPT projects import levels of 1.99 million TEUs, down 13.9% year over year. President Donald Trump’s recent doubling of tariffs on Chinese goods from 10% to 20% raises significant concerns for the shipping industry, particularly as reciprocal tariffs loom on the horizon, the NRF said. While the on-again, off-again tariffs on goods from Canada and Mexico are expected to have minimal direct impact on port volumes because most goods from those countries are transported via truck or rail, the uncertainty surrounding tariffs is prompting some retailers to adjust their supply chain strategies, the NRF said. Hackett Associates founder Ben Hackett noted that <a href="https://www.joc.com/article/proposed-us-tax-on-chinese-ship-calls-could-pressure-intermodal-networks-5960849">the possible implementation of new fees</a> on Chinese tonnage docking at US ports could further complicate the situation, potentially leading to increased costs for both cargo owners and consumers. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US retailers have downgraded their import projections for the second quarter amid the tariff chaos playing out between the Trump administration and key trading partners. The National Retail Federation (NRF) and Hackett Associates, publishers of the monthly Global Port Tracker (GPT), now say they expect a downward shift in the spring as retailers face challenges from tariffs and elevated inventories in the wake of significant cargo frontloading. “Retailers are continuing to bring as much merchandise into the country ahead of rising tariffs as possible,” Jonathan Gold, NRF vice president for supply chain and customs policy, said in the GPT. While March import projections remained unchanged, the latest GPT released this week has lowered import expectations for April, May, June and July compared with projections made just last month. The new GPT forecasts April volumes at 2.18 million TEUs, up 5.7% over the year but down from February’s projection of 8.2% year-over-year growth. While May’s import projections call for 2.8% growth to 2.14 million TEUs, that is down from the 5.4% year-over-year gain expected last month. June’s volume projections slipped to 2.07 million TEUs, down 3.2% over the year and a larger drop than the initial 0.6% decline predicted last month. It would be the first year-over-year import drop for any month since September 2023. And in its first forecast for July, the GPT projects import levels of 1.99 million TEUs, down 13.9% year over year. President Donald Trump’s recent doubling of tariffs on Chinese goods from 10% to 20% raises significant concerns for the shipping industry, particularly as reciprocal tariffs loom on the horizon, the NRF said. While the on-again, off-again tariffs on goods from Canada and Mexico are expected to have minimal direct impact on port volumes because most goods from those countries are transported via truck or rail, the uncertainty surrounding tariffs is prompting some retailers to adjust their supply chain strategies, the NRF said. Hackett Associates founder Ben Hackett noted that the possible implementation of new fees on Chinese tonnage docking at US ports could further complicate the situation, potentially leading to increased costs for both cargo owners and consumers. Contact Laura Robb at laura.robb@spglobal.com . 

Trans-Atlantic

Tariff uncertainty prompts US retailers to downgrade spring import forecast

<div class="phx-topic abstract-wrapper">Kate Farmer told TPM25 that people would be “shocked” at how much money the oft-targeted railroad spends on combating the increasingly sophisticated methods of cargo theft.</div>

Kate Farmer told TPM25 that people would be “shocked” at how much money the oft-targeted railroad spends on combating the increasingly sophisticated methods of cargo theft.

<div class="phx-topic">Long Beach, California — Combating cargo theft is a critically important issue for BNSF Railway, but it will require local, state and federal law enforcement to fully eradicate the increasingly organized and brazen criminal acts, the company’s CEO said. There has been a recent spike in US cargo thefts, including a Jan. 13 incident in Arizona during which thieves stole 1,985 pairs of unreleased Nike shoes worth more than $440,000 from a BNSF train, according to the <a href="https://www.latimes.com/california/story/2025-02-23/freight-train-heists-targeting-nike-merchandise-are-probed-as-related">Los Angeles Times</a>. Last November, criminals sabotaged another BNSF train in Arizona, forcing it to an emergency stop and stealing 180 unreleased Nike shoes worth $41,400. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5951879_0.1.jpg"></img></div>BNSF CEO Kate Farmer said fighting cargo theft is one of her top priorities. “If I told you how much money we were spending on prevention, people would be shocked,” Farmer told the Journal of Commerce’s TPM25 conference. “We are putting up electric fencing and building cement barriers in our intermodal facilities. Last year, our rail police spent 10,000 more hours in surveillance than the year before. We’re using drone technology between Barstow [California] and Belen [New Mexico]. We have heat technology, thermal technology and BNSF Police officers riding trains.” Cargo theft has affected <a href="https://www.joc.com/article/rail-industry-split-on-how-to-best-combat-cargo-theft-5742577">all major US railroads</a>, often targeting freight moving through urban rail hubs. In 2022, looters <a href="https://www.cbsnews.com/losangeles/news/thieves-raiding-cargo-containers-stealing-packages-on-downtown-section-of-union-pacific-train-tracks/">ransacked containers</a> outside Union Pacific Railroad’s (UP’s) Los Angeles Terminal Center, leaving the tracks strewn with discarded goods. Last October, thieves struck a UP train in Chicago that was <a href="https://www.nbcchicago.com/news/local/trains-halted-on-metra-line-due-to-groups-stealing-from-freight-traihttps:/www.nbcchicago.com/news/local/trains-halted-on-metra-line-due-to-groups-stealing-from-freight-trains-agency-says/3571665/?os=v&amp;ref=appns-agency-says/3571665/?os=v&amp;ref=app">being interchanged</a> with Norfolk Southern Railway. CSX Transportation has also reported <a href="https://www.joc.com/article/us-rail-cargo-crime-on-the-rise-as-thieves-methods-gain-sophistication-5219201">rising thefts in Memphis</a>. <h3>Growing sophistication among cargo thieves </h3>The scale and sophistication of recent thefts have raised concerns among law enforcement agencies. A federal investigator told the Los Angeles Times that some cargo theft operations rival the drug cartels of Sinaloa, Mexico, in their organization and sophistication. In a string of at least 10 cargo train burglaries since last March, thieves have targeted BNSF trains in California and Arizona. Criminals board slow-moving eastbound trains, wait until they reach remote stretches of the desert, and then sabotage the train or signals, forcing an emergency stop. Criminals will cut air brake hoses, disable signal boxes or sever control wires, disrupting train movements in ways similar to tampering with traffic lights. Some groups use follow vehicles to track shipments and deploy surveillance crews to monitor law enforcement activity. Despite the extensive security measures, Farmer said railroads must also receive stronger action from law enforcement at all levels. “We’ll have six folks that we will arrest on Monday, and then we will see them again on Friday, so this is not going to be something that the railroad is going to be able to solve on its own,” she said. “We cannot solve this alone as a rail industry. We absolutely must have federal involvement. I believe that it is starting to get the kind of attention in Washington that it needs, but we’ve got a long way to go.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Long Beach, California — Combating cargo theft is a critically important issue for BNSF Railway, but it will require local, state and federal law enforcement to fully eradicate the increasingly organized and brazen criminal acts, the company’s CEO said. There has been a recent spike in US cargo thefts, including a Jan. 13 incident in Arizona during which thieves stole 1,985 pairs of unreleased Nike shoes worth more than $440,000 from a BNSF train, according to the Los Angeles Times . Last November, criminals sabotaged another BNSF train in Arizona, forcing it to an emergency stop and stealing 180 unreleased Nike shoes worth $41,400. BNSF CEO Kate Farmer said fighting cargo theft is one of her top priorities. “If I told you how much money we were spending on prevention, people would be shocked,” Farmer told the Journal of Commerce’s TPM25 conference. “We are putting up electric fencing and building cement barriers in our intermodal facilities. Last year, our rail police spent 10,000 more hours in surveillance than the year before. We’re using drone technology between Barstow [California] and Belen [New Mexico]. We have heat technology, thermal technology and BNSF Police officers riding trains.” Cargo theft has affected all major US railroads , often targeting freight moving through urban rail hubs. In 2022, looters ransacked containers outside Union Pacific Railroad’s (UP’s) Los Angeles Terminal Center, leaving the tracks strewn with discarded goods. Last October, thieves struck a UP train in Chicago that was being interchanged with Norfolk Southern Railway. CSX Transportation has also reported rising thefts in Memphis . Growing sophistication among cargo thieves The scale and sophistication of recent thefts have raised concerns among law enforcement agencies. A federal investigator told the Los Angeles Times that some cargo theft operations rival the drug cartels of Sinaloa, Mexico, in their organization and sophistication. In a string of at least 10 cargo train burglaries since last March, thieves have targeted BNSF trains in California and Arizona. Criminals board slow-moving eastbound trains, wait until they reach remote stretches of the desert, and then sabotage the train or signals, forcing an emergency stop. Criminals will cut air brake hoses, disable signal boxes or sever control wires, disrupting train movements in ways similar to tampering with traffic lights. Some groups use follow vehicles to track shipments and deploy surveillance crews to monitor law enforcement activity. Despite the extensive security measures, Farmer said railroads must also receive stronger action from law enforcement at all levels. “We’ll have six folks that we will arrest on Monday, and then we will see them again on Friday, so this is not going to be something that the railroad is going to be able to solve on its own,” she said. “We cannot solve this alone as a rail industry. We absolutely must have federal involvement. I believe that it is starting to get the kind of attention in Washington that it needs, but we’ve got a long way to go.” Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

TPM25: BNSF CEO says fighting cargo theft requires collective effort

<div class="phx-topic abstract-wrapper">The visibility market has bifurcated into standalone vendors too small to be captured by Gartner’s “Magic Quadrant” report and larger vendors whose platforms extend far beyond what the report evaluates.</div>

The visibility market has bifurcated into standalone vendors too small to be captured by Gartner’s “Magic Quadrant” report and larger vendors whose platforms extend far beyond what the report evaluates.

<div class="phx-topic">Gnosis Freight has announced a product integration with logistics payment vendor PayCargo and ocean carrier Hapag-Lloyd that connects shipper and forwarder payments to the liner with reduced dwell times and faster cargo release. In a vacuum, the announcement this week would be seen as a positive step toward using visibility data — of which Gnosis has become a key provider for ocean and intermodal rail — in a way that directly influences actions that matter to shippers, carriers and container terminals. But the announcement came exactly one week after another noteworthy development in the freight visibility space: FourKites saying it was withdrawing from consideration from the so-called real-time transportation visibility provider (RTTVP) “Magic Quadrant” reports published by technology advisory firm Gartner. Gartner’s Magic Quadrants, or MQs, are software comparison reports widely used by enterprise shippers to help narrow down vendor options in several key supply chain software categories, from demand planning and warehouse management to freight-focused areas such as transportation management and visibility. Vendors are eligible for consideration based on the number of customers they have, their range of product and service features, customer interest and geographic footprint. Only six vendors were considered in the 2025 RTTVP edition. FourKites’ request to withdraw from the visibility MQ was due to its own changing business model focused around control tower technology, a model that wouldn’t be represented effectively by Gartner’s RTTVP criteria, FourKites asserted. FourKites was included in the most recent visibility MQ released last week, one of two providers (the other being fierce rival project44) in the “leaders” section of the quadrant. <h3>Public questioning </h3>In the 10 days since FourKites’ decision, much discussion has occurred online around the company’s withdrawal, including whether it was instigated by FourKites’ perennial placement in the quadrant behind project44. But more broadly, the decision has cast light on whether the visibility market as it currently exists is even well-captured by a report that focuses on pure transportation visibility data vendors that tend to cater mostly to large organizations with large software and data spend. The Gnosis-PayCargo announcement, in that context, shows the way the market is trending. “Quadrants and their naming tend to lag behind market evolution,” Eric Fullerton, vice president of product marketing at project44, said in a LinkedIn discussion Thursday. “No player in that MQ positions themselves as just RTTVP.” To be clear, much of the FourKites-Gartner debate is inexorably tinged by a vendor’s reliance on visibility data as a core revenue driver or a value-add component for customers. Those companies for whom visibility data is either the entire product or the core foundation of an application reliant on visibility data believe there is big differentiation in the market, largely based on modal coverage, geographic footprint, use of artificial intelligence and direct connection to decision-making tools. Those companies who view visibility as an ancillary product or perk regard it as undifferentiated and interchangeable. <h3>Shippers need more </h3>The FourKites decision essentially brought that long-simmering background issue into the open. But what does it mean for shippers? Brian Schultz, chief growth officer at control tower provider Paxafe and a veteran of visibility vendor Shippeo, wrote in a blog post Thursday that shippers will require that visibility providers proactively manage shipments across modes and not be “a glorified data aggregator ... and merely repeat carrier-provided data.” “While Gartner’s rankings generate discussion ... they’re increasingly disconnected from actual platform capabilities,” Schultz wrote. “Visibility alone is insufficient — actionability is essential.” The Gnosis-PayCargo payment portal with Hapag-Lloyd, announced during the Journal of Commerce’s TPM25 conference in Long Beach, is a sign of how the market is evolving. Gnosis was not in the Gartner Magic Quadrant. It was likely too small, had customers in too few geographical markets and didn’t have complete enough modal coverage to qualify for the MQ, which makes sense because Gnosis isn’t even really an RTTVP vendor, anyway. The company became a provider of ocean and intermodal visibility data almost by accident, a consequence of building execution software that covers those modes and not being satisfied with the data provided by specialists. Gnosis now supplies that data to other software vendors, some of whom occupy lofty positions on the MQ. In a sense, Gnosis is the perfect example of how the market moves ahead of where somewhat static metrics could possibly cover. And it raises questions about the future of pure play visibility providers that have raised huge sums of external capital — mostly via venture funds. <h3>Valuations leading to evolution </h3>The same day FourKites announced it was leaving the visibility MQ, Jonah McIntire, chief platform officer at Transporeon, wrote a blog post arguing that project44, FourKites and Shippeo had collectively raised more than $1.2 billion and would have to collectively exit for at least $5 billion to give their venture backers the return they would have initially sought. McIntire said that return will be impossible because the total addressable market (TAM) analysis of venture capital-backed startups “overestimated the actual market size and willingness to buy.” He said it’s especially true because the market isn’t inclined to spend more to achieve better visibility compared with “good enough” visibility. When considering McIntire’s view of the market, it’s important to note Transporeon falls into the category of vendors for whom visibility is an ancillary feature, not a core revenue driver. The company is more commonly used for transportation procurement and execution. But Fullerton argues the magic quadrants still have merit, if you consider who is using them. “While imperfect, these quadrants drive billions in tech spending annually,” he wrote on LinkedIn Thursday. “The market speaks. Buyers with budgets — not critics — fuel the demand.” “No company feels Gartner’s criteria represents them properly,” Fullerton added. “I don’t feel like RTTVP criteria reflects our platform, but it’s the game we signed up to play when agreeing to participate in the evaluation.” Indeed, both FourKites and project44 have in recent weeks announced AI enhancements to their products and new applications designed to extend the utility of visibility data. One source close to the Gartner process told the Journal of Commerce in early February that the RTTVP Magic Quadrant wasn’t really relevant any more given the way the market has evolved. “Visibility problems need to be increasingly urgent or novel,” McIntire wrote. “Their sales efforts need to make visibility more complicated than it really is. And I don’t think the supply chain management community buys that narrative anymore.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Gnosis Freight has announced a product integration with logistics payment vendor PayCargo and ocean carrier Hapag-Lloyd that connects shipper and forwarder payments to the liner with reduced dwell times and faster cargo release. In a vacuum, the announcement this week would be seen as a positive step toward using visibility data — of which Gnosis has become a key provider for ocean and intermodal rail — in a way that directly influences actions that matter to shippers, carriers and container terminals. But the announcement came exactly one week after another noteworthy development in the freight visibility space: FourKites saying it was withdrawing from consideration from the so-called real-time transportation visibility provider (RTTVP) “Magic Quadrant” reports published by technology advisory firm Gartner. Gartner’s Magic Quadrants, or MQs, are software comparison reports widely used by enterprise shippers to help narrow down vendor options in several key supply chain software categories, from demand planning and warehouse management to freight-focused areas such as transportation management and visibility. Vendors are eligible for consideration based on the number of customers they have, their range of product and service features, customer interest and geographic footprint. Only six vendors were considered in the 2025 RTTVP edition. FourKites’ request to withdraw from the visibility MQ was due to its own changing business model focused around control tower technology, a model that wouldn’t be represented effectively by Gartner’s RTTVP criteria, FourKites asserted. FourKites was included in the most recent visibility MQ released last week, one of two providers (the other being fierce rival project44) in the “leaders” section of the quadrant. Public questioning In the 10 days since FourKites’ decision, much discussion has occurred online around the company’s withdrawal, including whether it was instigated by FourKites’ perennial placement in the quadrant behind project44. But more broadly, the decision has cast light on whether the visibility market as it currently exists is even well-captured by a report that focuses on pure transportation visibility data vendors that tend to cater mostly to large organizations with large software and data spend. The Gnosis-PayCargo announcement, in that context, shows the way the market is trending. “Quadrants and their naming tend to lag behind market evolution,” Eric Fullerton, vice president of product marketing at project44, said in a LinkedIn discussion Thursday. “No player in that MQ positions themselves as just RTTVP.” To be clear, much of the FourKites-Gartner debate is inexorably tinged by a vendor’s reliance on visibility data as a core revenue driver or a value-add component for customers. Those companies for whom visibility data is either the entire product or the core foundation of an application reliant on visibility data believe there is big differentiation in the market, largely based on modal coverage, geographic footprint, use of artificial intelligence and direct connection to decision-making tools. Those companies who view visibility as an ancillary product or perk regard it as undifferentiated and interchangeable. Shippers need more The FourKites decision essentially brought that long-simmering background issue into the open. But what does it mean for shippers? Brian Schultz, chief growth officer at control tower provider Paxafe and a veteran of visibility vendor Shippeo, wrote in a blog post Thursday that shippers will require that visibility providers proactively manage shipments across modes and not be “a glorified data aggregator ... and merely repeat carrier-provided data.” “While Gartner’s rankings generate discussion ... they’re increasingly disconnected from actual platform capabilities,” Schultz wrote. “Visibility alone is insufficient — actionability is essential.” The Gnosis-PayCargo payment portal with Hapag-Lloyd, announced during the Journal of Commerce’s TPM25 conference in Long Beach, is a sign of how the market is evolving. Gnosis was not in the Gartner Magic Quadrant. It was likely too small, had customers in too few geographical markets and didn’t have complete enough modal coverage to qualify for the MQ, which makes sense because Gnosis isn’t even really an RTTVP vendor, anyway. The company became a provider of ocean and intermodal visibility data almost by accident, a consequence of building execution software that covers those modes and not being satisfied with the data provided by specialists. Gnosis now supplies that data to other software vendors, some of whom occupy lofty positions on the MQ. In a sense, Gnosis is the perfect example of how the market moves ahead of where somewhat static metrics could possibly cover. And it raises questions about the future of pure play visibility providers that have raised huge sums of external capital — mostly via venture funds. Valuations leading to evolution The same day FourKites announced it was leaving the visibility MQ, Jonah McIntire, chief platform officer at Transporeon, wrote a blog post arguing that project44, FourKites and Shippeo had collectively raised more than $1.2 billion and would have to collectively exit for at least $5 billion to give their venture backers the return they would have initially sought. McIntire said that return will be impossible because the total addressable market (TAM) analysis of venture capital-backed startups “overestimated the actual market size and willingness to buy.” He said it’s especially true because the market isn’t inclined to spend more to achieve better visibility compared with “good enough” visibility. When considering McIntire’s view of the market, it’s important to note Transporeon falls into the category of vendors for whom visibility is an ancillary feature, not a core revenue driver. The company is more commonly used for transportation procurement and execution. But Fullerton argues the magic quadrants still have merit, if you consider who is using them. “While imperfect, these quadrants drive billions in tech spending annually,” he wrote on LinkedIn Thursday. “The market speaks. Buyers with budgets — not critics — fuel the demand.” “No company feels Gartner’s criteria represents them properly,” Fullerton added. “I don’t feel like RTTVP criteria reflects our platform, but it’s the game we signed up to play when agreeing to participate in the evaluation.” Indeed, both FourKites and project44 have in recent weeks announced AI enhancements to their products and new applications designed to extend the utility of visibility data. One source close to the Gartner process told the Journal of Commerce in early February that the RTTVP Magic Quadrant wasn’t really relevant any more given the way the market has evolved. “Visibility problems need to be increasingly urgent or novel,” McIntire wrote. “Their sales efforts need to make visibility more complicated than it really is. And I don’t think the supply chain management community buys that narrative anymore.” Contact Eric Johnson at eric.johnson@spglobal.com .