<div class="phx-topic abstract-wrapper">Carriers have responded by adjusting schedules and blanking sailings, but the capacity management has so far failed to hold up prices on the trade lane.</div>

Carriers have responded by adjusting schedules and blanking sailings, but the capacity management has so far failed to hold up prices on the trade lane.

Feature image

<div class="phx-topic">The spot market on the Asia-Europe ocean trade continues to decline as carriers battle to overcome a growing capacity overhang despite reports of solid demand through the summer and ongoing port congestion in Europe. While carriers have responded by adjusting schedules and blanking sailings on routes to both North Europe and the Mediterranean, pulling the capacity management levers has not yet been able to slow the steadily falling rates. Hapag-Lloyd CEO Rolf Habben Jansen told analysts during a first-half earnings call Thursday that bookings on Asia-Europe remain “robust.” And although rates were falling, he described that as normal for this time of year. “Sometimes the peak season ends a little bit early, and right now it looks like we won’t see a strong peak running up to the end of September,” the CEO said. “Volumes into Europe have been pretty steady, and bookings are still robust, but we now need to see what happens in the coming couple of weeks.” Asia to North Europe spot rates of $2,700 per FEU this week are half the level recorded at the beginning of January and have fallen 15% in the past two months, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Asia-Mediterranean rates have been on an even more dramatic slide, falling 44% in the past two months to this week’s price of $2,600/FEU, also a decline of 50% compared with the first week of January. “Carriers face an immense challenge in preventing freight rates from falling further against the backdrop of significant overcapacity in the global fleet,” Emily Stausbøll, senior analyst at rate benchmarking platform Xeneta, noted in a recent market update. “It is unlikely the Red Sea will open up to container shipping at large during 2025, but in this scenario the challenge facing carriers in managing capacity would increase exponentially,” she added. <h3>Conservative capacity cuts </h3>The order book is currently at 9.3 million TEUs, or 29% of the in-service container shipping fleet, according to Sea-web, a sister company of the Journal of Commerce. Just over 1.2 million TEUs of vessels above 14,501 TEUs are expected to be delivered this year, mostly for Asia-Europe, while just 91,000 TEUs will be scrapped. Carriers are blanking sailings in an attempt to slow the rate decline but remain surprisingly conservative in their capacity withdrawals. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="eebb48eb-ad03-4e0f-a647-67693692edb4"></dynamic-object></div>Asia-North Europe carriers will deploy 1.1 million TEUs in capacity in August while blanking 94,470 TEUs, down from the 120,000 TEUs blanked in July, data from visibility provider eeSea shows. Capacity available in September will drop to just over 1 million TEUs, with blank sailings of 42,601 TEUs. Destine Ozuygur, chief analyst at eeSea, said the persistent port congestion in Europe could be contributing to carriers announcing fewer blanks during August and September on Asia-North Europe. “Blanks last August accounted for about 13% of planned calls, and 15% of total planned calls in September, while this year it shapes up to 11% of planned calls in August and just 6% in September,” Ozuygur told the Journal of Commerce. C.H. Robinson advised Asia-Europe shippers in a recent market update to continue booking space three to four weeks ahead, as August capacity was expected to remain tight despite demand softening in some segments. “The combination of port congestion and deliberate capacity cuts favors advance planning over spot market strategies,” the forwarder noted. Schedule reliability data for the Asia-North Europe trade lane reveals the impact of the port bottlenecks. After reaching a 2025 high of 45% in May, on-time performance on the trade lane in July was 28%, according to eeSea. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The spot market on the Asia-Europe ocean trade continues to decline as carriers battle to overcome a growing capacity overhang despite reports of solid demand through the summer and ongoing port congestion in Europe. While carriers have responded by adjusting schedules and blanking sailings on routes to both North Europe and the Mediterranean, pulling the capacity management levers has not yet been able to slow the steadily falling rates. Hapag-Lloyd CEO Rolf Habben Jansen told analysts during a first-half earnings call Thursday that bookings on Asia-Europe remain “robust.” And although rates were falling, he described that as normal for this time of year. “Sometimes the peak season ends a little bit early, and right now it looks like we won’t see a strong peak running up to the end of September,” the CEO said. “Volumes into Europe have been pretty steady, and bookings are still robust, but we now need to see what happens in the coming couple of weeks.” Asia to North Europe spot rates of $2,700 per FEU this week are half the level recorded at the beginning of January and have fallen 15% in the past two months, according to Platts, a sister company of the Journal of Commerce within S&P Global. Asia-Mediterranean rates have been on an even more dramatic slide, falling 44% in the past two months to this week’s price of $2,600/FEU, also a decline of 50% compared with the first week of January. “Carriers face an immense challenge in preventing freight rates from falling further against the backdrop of significant overcapacity in the global fleet,” Emily Stausbøll, senior analyst at rate benchmarking platform Xeneta, noted in a recent market update. “It is unlikely the Red Sea will open up to container shipping at large during 2025, but in this scenario the challenge facing carriers in managing capacity would increase exponentially,” she added. Conservative capacity cuts The order book is currently at 9.3 million TEUs, or 29% of the in-service container shipping fleet, according to Sea-web, a sister company of the Journal of Commerce. Just over 1.2 million TEUs of vessels above 14,501 TEUs are expected to be delivered this year, mostly for Asia-Europe, while just 91,000 TEUs will be scrapped. Carriers are blanking sailings in an attempt to slow the rate decline but remain surprisingly conservative in their capacity withdrawals. Asia-North Europe carriers will deploy 1.1 million TEUs in capacity in August while blanking 94,470 TEUs, down from the 120,000 TEUs blanked in July, data from visibility provider eeSea shows. Capacity available in September will drop to just over 1 million TEUs, with blank sailings of 42,601 TEUs. Destine Ozuygur, chief analyst at eeSea, said the persistent port congestion in Europe could be contributing to carriers announcing fewer blanks during August and September on Asia-North Europe. “Blanks last August accounted for about 13% of planned calls, and 15% of total planned calls in September, while this year it shapes up to 11% of planned calls in August and just 6% in September,” Ozuygur told the Journal of Commerce. C.H. Robinson advised Asia-Europe shippers in a recent market update to continue booking space three to four weeks ahead, as August capacity was expected to remain tight despite demand softening in some segments. “The combination of port congestion and deliberate capacity cuts favors advance planning over spot market strategies,” the forwarder noted. Schedule reliability data for the Asia-North Europe trade lane reveals the impact of the port bottlenecks. After reaching a 2025 high of 45% in May, on-time performance on the trade lane in July was 28%, according to eeSea. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Forwarding

Asia-Europe

Maritime

Asia-Europe ocean rates edging down despite ‘robust’ bookings

<div class="phx-topic abstract-wrapper">The US-based ocean carrier and logistics company paid about $2 million for the two transload specialists following the July shutdown of GSC.</div>

The US-based ocean carrier and logistics company paid about $2 million for the two transload specialists following the July shutdown of GSC.

<div class="phx-topic">The parent of US-based ocean carrier Pasha has acquired two Pacific Northwest transloading businesses of newly shuttered California trucking company GSC Logistics, which bought the businesses two years ago but whose assets are now under court receivership following a loan default. Pasha Group said in a statement Wednesday its logistics arm acquired MacMillan-Piper and Tacoma Transload in agreement with <a href="https://www.joc.com/article/drayage-stakeholders-say-industry-under-threat-from-falling-rates-increased-costs-6045985">the court-appointed receiver of GSC’s assets</a>. The two businesses have five leased warehouses totaling 370,000 square feet that service trucks as well as BNSF Railway and Union Pacific railcars. Pasha said the businesses have “specialized expertise in handling commodities including agriculture, paper, lumber, steel, and dry bulk.” Pasha Chief Executive George Pasha IV said in the statement the acquisition is a “strategic leap forward” for the company, which is mostly known for Jones Act container and automotive shipping services to Hawaii. Pasha also handles breakbulk and military cargoes. “This move expands our capacity and flexibility across the Pacific Northwest,” Pasha said. Pasha did not disclose the purchase price. But an asset purchase agreement filed with a court order authorizing the sale shows Pasha will pay up to $1.9 million for the warehouse space and equipment and up to $600,000 for the account receivables. <a href="https://www.joc.com/article/retail-3pl-gsc-expands-service-scope-with-macmillan-piper-acquisition-5223496">GSC bought MacMillan and Tacoma Transload in July 2023</a> in a bid to diversify from its main business serving the Port of Oakland and northern California. According to court documents filed by its lender, GSC had $4.6 million in promissory notes as of last year related to the purchases. An Illinois district court placed GSC under receivership in July following its default on a $2 million loan made by asset-based lender SG Stonegate in December 2024. Among other obligations, the loan required GSC to have operating earnings of at least $904,000 during the fourth quarter of last year; the company’s operating earnings fell to about $105,000. GSC entered a forbearance agreement in February 2025 that required it to stanch its losses and seek out a buyer by the end of April. However, GSC had negative cash flow of $755,000 between February and May and had not found a buyer, according to a court document filed by SG Stonegate. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The parent of US-based ocean carrier Pasha has acquired two Pacific Northwest transloading businesses of newly shuttered California trucking company GSC Logistics, which bought the businesses two years ago but whose assets are now under court receivership following a loan default. Pasha Group said in a statement Wednesday its logistics arm acquired MacMillan-Piper and Tacoma Transload in agreement with the court-appointed receiver of GSC’s assets . The two businesses have five leased warehouses totaling 370,000 square feet that service trucks as well as BNSF Railway and Union Pacific railcars. Pasha said the businesses have “specialized expertise in handling commodities including agriculture, paper, lumber, steel, and dry bulk.” Pasha Chief Executive George Pasha IV said in the statement the acquisition is a “strategic leap forward” for the company, which is mostly known for Jones Act container and automotive shipping services to Hawaii. Pasha also handles breakbulk and military cargoes. “This move expands our capacity and flexibility across the Pacific Northwest,” Pasha said. Pasha did not disclose the purchase price. But an asset purchase agreement filed with a court order authorizing the sale shows Pasha will pay up to $1.9 million for the warehouse space and equipment and up to $600,000 for the account receivables. GSC bought MacMillan and Tacoma Transload in July 2023 in a bid to diversify from its main business serving the Port of Oakland and northern California. According to court documents filed by its lender, GSC had $4.6 million in promissory notes as of last year related to the purchases. An Illinois district court placed GSC under receivership in July following its default on a $2 million loan made by asset-based lender SG Stonegate in December 2024. Among other obligations, the loan required GSC to have operating earnings of at least $904,000 during the fourth quarter of last year; the company’s operating earnings fell to about $105,000. GSC entered a forbearance agreement in February 2025 that required it to stanch its losses and seek out a buyer by the end of April. However, GSC had negative cash flow of $755,000 between February and May and had not found a buyer, according to a court document filed by SG Stonegate. Contact Michael Angell at michael.angell@spglobal.com .

Surface

Port News

Drayage

Pasha picks up GSC’s Pacific Northwest transload businesses in court sale

<div class="phx-topic abstract-wrapper">The Hong Kong-based JV will provide coordination, performance management and strategic oversight of all origin locations across Asia for members of the BCO group.</div>

The Hong Kong-based JV will provide coordination, performance management and strategic oversight of all origin locations across Asia for members of the BCO group.

<div class="phx-topic">The ShiftX coalition of cargo owners has formed a joint venture with Chinese logistics giant Unitrans, establishing a new business unit in Hong Kong called OriginX and expanding the shipper network’s global reach. Scheduled to start operations on Oct. 1, OriginX will provide coordination, performance management and strategic oversight of all origin locations across Asia for members of the beneficial cargo owner (BCO) group. “Through this partnership, we strengthen our network in the Asian region, establish shared best practices while preserving local expertise, and initiate the technological transformation toward a more data-driven organization,” Stephan Schiller, managing partner of ShiftX, said in a statement Thursday. ShiftX leverages a collaborative network model where BCOs pool their shipping volumes to negotiate better rates and secure reliable capacity with service providers. The portfolio comprises over 50 network service providers in Europe and Asia and has offices in Düsseldorf and Hamburg in Germany, Katowice in Poland, and now Hong Kong. “OriginX will become the unified platform for future growth — not only for our organization but also for each individual member of our alliance,” Schiller said. Earlier this summer, ShiftX formed a partnership with British supply chain consultancy Evolution Supply Chain to form ShiftX BCO Network, headquartered in Manchester and led by Keith Gaskin. The UK unit has already begun operations. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The ShiftX coalition of cargo owners has formed a joint venture with Chinese logistics giant Unitrans, establishing a new business unit in Hong Kong called OriginX and expanding the shipper network’s global reach. Scheduled to start operations on Oct. 1, OriginX will provide coordination, performance management and strategic oversight of all origin locations across Asia for members of the beneficial cargo owner (BCO) group. “Through this partnership, we strengthen our network in the Asian region, establish shared best practices while preserving local expertise, and initiate the technological transformation toward a more data-driven organization,” Stephan Schiller, managing partner of ShiftX, said in a statement Thursday. ShiftX leverages a collaborative network model where BCOs pool their shipping volumes to negotiate better rates and secure reliable capacity with service providers. The portfolio comprises over 50 network service providers in Europe and Asia and has offices in Düsseldorf and Hamburg in Germany, Katowice in Poland, and now Hong Kong. “OriginX will become the unified platform for future growth — not only for our organization but also for each individual member of our alliance,” Schiller said. Earlier this summer, ShiftX formed a partnership with British supply chain consultancy Evolution Supply Chain to form ShiftX BCO Network, headquartered in Manchester and led by Keith Gaskin. The UK unit has already begun operations. Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Shipper network ShiftX inks Asia joint venture with Unitrans

<div class="phx-topic abstract-wrapper">But the growing synergy and efficiencies of its Gemini network with Maersk are expected to generate significant savings over the next few quarters, CEO Rolf Habben Jansen says.</div>

But the growing synergy and efficiencies of its Gemini network with Maersk are expected to generate significant savings over the next few quarters, CEO Rolf Habben Jansen says.

<div class="phx-topic">Hapag-Lloyd’s transition to its new Gemini Cooperation network cost the Hamburg-based carrier a “three-digit million-dollar figure,” offsetting robust growth in its first-half revenue and volume, CEO Rolf Habben Jansen said Thursday. But the carrier has implemented an aggressive cost-savings program that, by the end of 2026, will have reduced costs across the Hapag-Lloyd network by $1 billion, upward of 40% of which is expected to be derived from growing synergy and efficiencies of its Gemini partnership with Maersk. “When you look at the savings we anticipated with Gemini, and which we still think we are going to deliver out of Gemini alone, it is going to be $350 million to $400 million,” Habben Jansen told reporters during Hapag-Lloyd’s second-quarter earnings call. “With the new network, we have had some challenges on utilization that are getting less and less, and those benefits of the new network we will start seeing in Q3, Q4 and also into 2026,” he added. Other factors adding to Hapag-Lloyd’s expenses in the first half were higher storage costs for containers as a result of port congestion, particularly on European trades, and increased hinterland transportation costs due to the carrier capturing a rising share of door-to-door business. While Gemini does not increase the size of the fleet deployed by Hapag-Lloyd, it increases the amount of capacity the carrier can offer every week, an effect that was clearly reflected in the revenue and volume numbers. Revenue in the first half rose 11% year over year to $10.6 billion on the back of an 11% increase in volume to 6.7 million TEUs. But the cost-heavy second quarter created a significant drag on first-half earnings. While average spot rates of $1,400 per TEU were flat compared with the first six months of 2024, rates fell 11% sequentially from the first quarter to the second quarter. It was a similar picture in earnings before interest, taxes, depreciation and amortization (EBITDA) that in the second quarter fell 20% year over year, bringing the first-half numbers down 2% to $1.9 billion. Earnings before interest and taxes (EBIT) of $677 million in the first half were down 23%, while net profit slid 2% to $775 million. <h3>Delivering on reliability promise </h3>Habben Jansen said phasing in the Gemini network concluded in June and the process was able to deliver the promised 90% schedule reliability. “A lot of people were skeptical about that at the beginning of the year, but we have been delivering 90% reliability every month since the start, and I think that’s something to be really proud of,” he told reporters. “Now it’s about fine-tuning that network,” the CEO added. “Despite a lot of planning, reality is always a little bit different, but we are optimistic we will see further improvements.” Data from eeSea shows that the Gemini Cooperation topped reliability among the carrier alliances up to July, <a href="https://www.joc.com/article/high-gemini-reliability-lays-groundwork-for-premium-rate-discussions-maersk-ceo-6059343">but its overall on-time performance recorded by the ocean visibility provider was 84%</a>. Gemini’s best performance was on the Europe-North America trade, where it maintained above 90% reliability throughout June and July. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7041fe54-edf1-4d59-9d82-94781e7a7eb1"></dynamic-object></div>With the first half now over, Hapag-Lloyd has narrowed its full-year outlook and expects EBITDA to come in between $2.8 billion and $3.8 billion (previously $2.5 billion to $4 billion) and EBIT to land at $250 million to $1.25 billion (previously zero to $1.5 billion). The carrier expects frontloading and higher permanent tariffs to slow down demand in the second half of the year. Hapag-Lloyd forecasts that global container market volume will grow about 3% to 4% in the second half and that its own volume will be above the market average. “If you look at the beginning of the year, most people would have predicted flat growth or maybe negative in 2025, but for the first six months we saw [overall market] growth of 4.5%,” Habben Jansen said. “Even if the second half is a little bit weaker, we’re going to end the year definitely with a plus.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd’s transition to its new Gemini Cooperation network cost the Hamburg-based carrier a “three-digit million-dollar figure,” offsetting robust growth in its first-half revenue and volume, CEO Rolf Habben Jansen said Thursday. But the carrier has implemented an aggressive cost-savings program that, by the end of 2026, will have reduced costs across the Hapag-Lloyd network by $1 billion, upward of 40% of which is expected to be derived from growing synergy and efficiencies of its Gemini partnership with Maersk. “When you look at the savings we anticipated with Gemini, and which we still think we are going to deliver out of Gemini alone, it is going to be $350 million to $400 million,” Habben Jansen told reporters during Hapag-Lloyd’s second-quarter earnings call. “With the new network, we have had some challenges on utilization that are getting less and less, and those benefits of the new network we will start seeing in Q3, Q4 and also into 2026,” he added. Other factors adding to Hapag-Lloyd’s expenses in the first half were higher storage costs for containers as a result of port congestion, particularly on European trades, and increased hinterland transportation costs due to the carrier capturing a rising share of door-to-door business. While Gemini does not increase the size of the fleet deployed by Hapag-Lloyd, it increases the amount of capacity the carrier can offer every week, an effect that was clearly reflected in the revenue and volume numbers. Revenue in the first half rose 11% year over year to $10.6 billion on the back of an 11% increase in volume to 6.7 million TEUs. But the cost-heavy second quarter created a significant drag on first-half earnings. While average spot rates of $1,400 per TEU were flat compared with the first six months of 2024, rates fell 11% sequentially from the first quarter to the second quarter. It was a similar picture in earnings before interest, taxes, depreciation and amortization (EBITDA) that in the second quarter fell 20% year over year, bringing the first-half numbers down 2% to $1.9 billion. Earnings before interest and taxes (EBIT) of $677 million in the first half were down 23%, while net profit slid 2% to $775 million. Delivering on reliability promise Habben Jansen said phasing in the Gemini network concluded in June and the process was able to deliver the promised 90% schedule reliability. “A lot of people were skeptical about that at the beginning of the year, but we have been delivering 90% reliability every month since the start, and I think that’s something to be really proud of,” he told reporters. “Now it’s about fine-tuning that network,” the CEO added. “Despite a lot of planning, reality is always a little bit different, but we are optimistic we will see further improvements.” Data from eeSea shows that the Gemini Cooperation topped reliability among the carrier alliances up to July, but its overall on-time performance recorded by the ocean visibility provider was 84% . Gemini’s best performance was on the Europe-North America trade, where it maintained above 90% reliability throughout June and July. With the first half now over, Hapag-Lloyd has narrowed its full-year outlook and expects EBITDA to come in between $2.8 billion and $3.8 billion (previously $2.5 billion to $4 billion) and EBIT to land at $250 million to $1.25 billion (previously zero to $1.5 billion). The carrier expects frontloading and higher permanent tariffs to slow down demand in the second half of the year. Hapag-Lloyd forecasts that global container market volume will grow about 3% to 4% in the second half and that its own volume will be above the market average. “If you look at the beginning of the year, most people would have predicted flat growth or maybe negative in 2025, but for the first six months we saw [overall market] growth of 4.5%,” Habben Jansen said. “Even if the second half is a little bit weaker, we’re going to end the year definitely with a plus.” Contact Greg Knowler at greg.knowler@spglobal.com .

High cost of Gemini transition drags on Hapag-Lloyd’s H1 result

<div class="phx-topic abstract-wrapper">Traditional retailers in the US are scaling back their space requirements, according to an annual report, as the volatility over tariffs trickles down to the industrial real estate market.</div>

Traditional retailers in the US are scaling back their space requirements, according to an annual report, as the volatility over tariffs trickles down to the industrial real estate market.

<div class="phx-topic">US tariff uncertainty is holding back retailers from taking a larger warehousing footprint, fueling demand for domestic manufacturing facilities and giving third-party logistics companies (3PLs) a larger share of the available pipeline of industrial space, according to JLL’s annual Industrial Tenant Demand Study. Traditional retailers in the US have scaled back their industrial space requirements by 16.7% year over year, according to data collected by JLL during the first half of 2025. In contrast, 3PLs expanded their footprint by 12.8% in the same period. Still, overall demand is down almost 11%, marking the third year in a row with demand reductions. “[3PLs are] looking for incremental space,” Daniel Stephen Letter, president and director of Prologis, the largest US industrial real estate firm as measured by square footage, said during a July 16 earnings call. “We’re seeing this mostly from the larger 3PLs, many of them are unphased by all the noise in the macro picture.” Additionally, the average warehouse vacancy rate in the US rose to 7.1% in the second quarter — the highest level in over a decade and up one percentage point from the second quarter of 2024, commercial real estate services firm Cushman &amp; Wakefield said in its second-quarter industrial real estate report. Meanwhile, JLL said first-half demand for warehousing and distribution was down 14.6% compared with a year ago. JLL said the juxtaposition of the two trends signals retailers are becoming more cautious as logistics providers prepare for potential supply chain disruptions. Prologis said 3PLs accounted for about one-third of the company’s leasing in the second quarter. <h3>Significant 3PL growth </h3>In a sign of their growth, the number of 3PLs occupying the top 100 largest US industrial real estate leases rose in the first quarter of 2025, with 38 3PLs managing 28.9 million square feet — a 35% increase in square footage from the first quarter of 2024, when 28 3PLS controlled 20.6 million square feet. <a href="https://www.joc.com/article/multiplying-supply-chain-risks-drive-growth-for-global-us-based-logistics-firms-6026573">Amazon tops the annual revenue rankings</a> of both domestic and global 3PLs by logistics research firm Armstrong &amp; Associates, with $156.2 billion in 3PL-related revenue. Meanwhile, DHL Supply Chain &amp; Global Forwarding came in second in the global 3PL rankings, followed by Kuehne + Nagel. The Armstrong report said risk created by trade uncertainty and other geopolitical conflicts <a href="https://www.joc.com/article/multiplying-supply-chain-risks-drive-growth-for-global-us-based-logistics-firms-6026573">will help push global gross 3PL revenue up</a> another 2.7% in 2025 to $1.25 trillion. That revenue should grow again by 4.9% in 2026 to $1.3 trillion, it said. Amid the growth, 3PLs accounted for 13% of build-to-suit projects in 2025 in data JLL collected during the first half of 2025 — the largest share of any industry, JLL said. According to Prologis CFO Timothy D. Arndt, build-to-suit starts for the first half of 2025 totaled $1.1 billion — the largest start to a year that the company has ever had. “In terms of capital deployment, we started over $900 million in new development starts — nearly 65% of which was build-to-suit activity across seven additional projects in both U.S. and Europe,” Arndt said on Prologis’ earnings call. “Beyond this activity, we have signed for an additional three build-to-suits post quarter end.” <h3>Hesitant to commit </h3>Overall, importers are seeking more agile leasing options. Lessees are shifting toward short-term renewals and away from long-term commitments “as they evaluate how evolving global supply chain strategies might impact their space requirements,” JLL wrote in its report. Meanwhile, industrial lessees are slower to move lately, said JLL, with potential lessees staying on the market for an average of 11 months — up almost 70% compared with 6.5 months observed in the fourth quarter of last year. By 2026, JLL projects that figure to reach 14 months. “At the fundamental level, immediate tariff effects have resulted in a pause of deals and decision deferment among occupiers,” said JLL. As tariffs dampen leasing decisions, manufacturing is still showing signs of momentum, with leasing demand up 9% year over year in data collected by JLL during the first half of 2025. The firm noted the shift to manufacturing continues to be a long-term pattern, with those investments taking as long as five years to come to fruition in some cases, said JLL. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US tariff uncertainty is holding back retailers from taking a larger warehousing footprint, fueling demand for domestic manufacturing facilities and giving third-party logistics companies (3PLs) a larger share of the available pipeline of industrial space, according to JLL’s annual Industrial Tenant Demand Study. Traditional retailers in the US have scaled back their industrial space requirements by 16.7% year over year, according to data collected by JLL during the first half of 2025. In contrast, 3PLs expanded their footprint by 12.8% in the same period. Still, overall demand is down almost 11%, marking the third year in a row with demand reductions. “[3PLs are] looking for incremental space,” Daniel Stephen Letter, president and director of Prologis, the largest US industrial real estate firm as measured by square footage, said during a July 16 earnings call. “We’re seeing this mostly from the larger 3PLs, many of them are unphased by all the noise in the macro picture.” Additionally, the average warehouse vacancy rate in the US rose to 7.1% in the second quarter — the highest level in over a decade and up one percentage point from the second quarter of 2024, commercial real estate services firm Cushman & Wakefield said in its second-quarter industrial real estate report. Meanwhile, JLL said first-half demand for warehousing and distribution was down 14.6% compared with a year ago. JLL said the juxtaposition of the two trends signals retailers are becoming more cautious as logistics providers prepare for potential supply chain disruptions. Prologis said 3PLs accounted for about one-third of the company’s leasing in the second quarter. Significant 3PL growth In a sign of their growth, the number of 3PLs occupying the top 100 largest US industrial real estate leases rose in the first quarter of 2025, with 38 3PLs managing 28.9 million square feet — a 35% increase in square footage from the first quarter of 2024, when 28 3PLS controlled 20.6 million square feet. Amazon tops the annual revenue rankings of both domestic and global 3PLs by logistics research firm Armstrong & Associates, with $156.2 billion in 3PL-related revenue. Meanwhile, DHL Supply Chain & Global Forwarding came in second in the global 3PL rankings, followed by Kuehne + Nagel. The Armstrong report said risk created by trade uncertainty and other geopolitical conflicts will help push global gross 3PL revenue up another 2.7% in 2025 to $1.25 trillion. That revenue should grow again by 4.9% in 2026 to $1.3 trillion, it said. Amid the growth, 3PLs accounted for 13% of build-to-suit projects in 2025 in data JLL collected during the first half of 2025 — the largest share of any industry, JLL said. According to Prologis CFO Timothy D. Arndt, build-to-suit starts for the first half of 2025 totaled $1.1 billion — the largest start to a year that the company has ever had. “In terms of capital deployment, we started over $900 million in new development starts — nearly 65% of which was build-to-suit activity across seven additional projects in both U.S. and Europe,” Arndt said on Prologis’ earnings call. “Beyond this activity, we have signed for an additional three build-to-suits post quarter end.” Hesitant to commit Overall, importers are seeking more agile leasing options. Lessees are shifting toward short-term renewals and away from long-term commitments “as they evaluate how evolving global supply chain strategies might impact their space requirements,” JLL wrote in its report. Meanwhile, industrial lessees are slower to move lately, said JLL, with potential lessees staying on the market for an average of 11 months — up almost 70% compared with 6.5 months observed in the fourth quarter of last year. By 2026, JLL projects that figure to reach 14 months. “At the fundamental level, immediate tariff effects have resulted in a pause of deals and decision deferment among occupiers,” said JLL. As tariffs dampen leasing decisions, manufacturing is still showing signs of momentum, with leasing demand up 9% year over year in data collected by JLL during the first half of 2025. The firm noted the shift to manufacturing continues to be a long-term pattern, with those investments taking as long as five years to come to fruition in some cases, said JLL. Contact Laura Robb at laura.robb@spglobal.com . 

Industrial Real Estate News

Supply chain

Retailers cut back on warehouse space as supply chain hurdles fuel 3PL growth

<div class="phx-topic abstract-wrapper">The latest Intermodal Service Scorecard from the Journal of Commerce marks a major boost in confidence that railroads can deliver reliable intermodal service only a few years after historic disruption gridlocked rail networks across North America amid pandemic-linked chaos.</div>

The latest Intermodal Service Scorecard from the Journal of Commerce marks a major boost in confidence that railroads can deliver reliable intermodal service only a few years after historic disruption gridlocked rail networks across North America amid pandemic-linked chaos.

<div class="phx-topic">Less than five years after one of the worst congestion crises ever in the US supply chain, domestic intermodal shippers are reporting record satisfaction with rail service. In the first half of 2025, 93.9% of shippers were “satisfied” with rail service, the highest mark in the history of the Journal of Commerce <a href="https://www.joc.com/resources/special-reports/domestic-intermodal-service-scorecard">Intermodal Service Scorecard</a> (ISS). Some 87.1% of asset-based and non-asset-based intermodal marketing companies (IMCs) were also satisfied with rail performance during the period, according to the ISS, a Journal of Commerce survey of more than 300 shippers and IMCs conducted between May 1 and June 30. The survey is conducted twice each year. The results mark a major boost in confidence that railroads can deliver reliable intermodal service only a few years after historic disruption gridlocked rail networks across North America amid pandemic-linked disruptions. Union Pacific Railroad received the most votes for best domestic intermodal railroad among the six North American Class I railroads and Mexico’s Ferromex, with 38.2% in the latest ISS. In the inaugural survey conducted in early 2023 during the tenure of former CEO Lance Fritz, 52.9% of respondents voted UP the worst railroad. Two years later, UP’s current CEO Jim Vena has transformed the railroad and its intermodal business as it seeks approval from US federal regulators to create <a href="https://www.joc.com/article/up-looks-to-create-first-coast-to-coast-railroad-with-85-billion-ns-deal-6052288">the first transcontinental US railroad</a>. “We have a strong engagement strategy, and the most important part of that engagement strategy is just listening and then taking that feedback into action,” Kenny Rocker, UP’s executive vice president of marketing and sales, told the Journal of Commerce. “A transit schedule is different than execution, and when you’re executing like we are, you can win more. You can put anything down on paper, but at the end of the day, you must execute to win.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="45ab49e4-37e7-4f99-9e19-e7928966c752"></dynamic-object></div>The improvement is even more striking given that the IMCs grading the railroads rarely change, so many who were critical of UP in early 2023 are the same ones praising it today. The shippers showed very little change in preferences. J.B. Hunt Transport Services received 41.5% of the vote for best provider. Hub Group and “other” IMCs, which include asset-light and non-asset-based brokers, ranked second and third, respectively. Asset-light provider Alliance Shippers earned high marks for the second consecutive survey, with customers citing its ability to deliver exceptional service even if it isn’t the cheapest option. “Understandably, Alliance’s pricing comes at a premium relative to the large asset providers,” one shipper wrote. “[But] accounting for the costly errors they regularly help us avoid — that the asset players previously had not — unequivocally it’s a net savings.” Non-asset brokers Cornerstone Systems, Mode Transportation and Uber Freight received similar praise. <h3>All rails except CPKC get strong scores </h3>When asked to grade railroads from 1 to 5, with five as the highest, all four US railroads scored between 3.7 and 4.2. BNSF Railway trailed UP, ranking second. CSX Transportation received a score of 3.9, unchanged from a year ago, as customers said the eastern railroad effectively communicated longer transit times caused by <a href="https://www.joc.com/article/csx-q1-service-metrics-take-hit-amid-storm-recovery-tunnel-project-5978828">two construction projects</a>, allowing them to adjust delivery schedules. CPKC received the lowest marks, with 52.3% of respondents saying it was the worst-performing railroad between Jan. 1 and June 30, reflecting winter weather and an <a href="https://www.joc.com/article/cpkc-disruptions-in-gulf-states-now-impacting-carload-intermodal-traffic-6033092">IT snafu</a> during its migration from Kansas City Southern Railway operating systems. “[We] lost business to trucking due to the inability to perform at the terminal level in Kansas City and Bensenville [Chicago],” one CPKC customer wrote. <h3>Major IMC scores </h3>Similar to prior surveys, J.B. Hunt scored at least 4 out of 5 on all key performance indicators. More than eight in 10 shippers were satisfied, whether J.B. Hunt handled most of their freight or served as a backup to other providers such as Hub Group or Schneider National. It remains to be seen whether J.B. Hunt’s decision to apply <a href="https://www.joc.com/article/jb-hunt-says-surcharges-necessary-to-maintain-peak-season-service-6044880">a surcharge in Southern California</a> will impact scores in the next survey, although a similar move last year had no impact. Hub Group saw the largest score gain, rising to 4.1 from 3.2 year over year. Fewer customers complained about its outsourced drayage, which hurt on-time pickup and delivery scores in prior surveys. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e941362d-3ba1-4d80-b80f-ecee796d4fdc"></dynamic-object></div>One shipper said he recently used Hub Group on a short-term basis and was pleasantly surprised how good the service was compared with a poor experience a few years earlier. But the proportion of “core customers” — i.e. those giving Hub Group most of their freight — was significantly higher than in prior surveys, skewing results. Core customers gave Hub Group a 98% satisfaction score, but customers who use Hub Group as a second or third option only gave the carrier a 46.9% score. Other metrics also showed strong support among Hub’s core customers but underperformance elsewhere. The survey shows Hub Group has made strides but still needs to improve with shippers who use it as a second or third option. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Less than five years after one of the worst congestion crises ever in the US supply chain, domestic intermodal shippers are reporting record satisfaction with rail service. In the first half of 2025, 93.9% of shippers were “satisfied” with rail service, the highest mark in the history of the Journal of Commerce Intermodal Service Scorecard (ISS). Some 87.1% of asset-based and non-asset-based intermodal marketing companies (IMCs) were also satisfied with rail performance during the period, according to the ISS, a Journal of Commerce survey of more than 300 shippers and IMCs conducted between May 1 and June 30. The survey is conducted twice each year. The results mark a major boost in confidence that railroads can deliver reliable intermodal service only a few years after historic disruption gridlocked rail networks across North America amid pandemic-linked disruptions. Union Pacific Railroad received the most votes for best domestic intermodal railroad among the six North American Class I railroads and Mexico’s Ferromex, with 38.2% in the latest ISS. In the inaugural survey conducted in early 2023 during the tenure of former CEO Lance Fritz, 52.9% of respondents voted UP the worst railroad. Two years later, UP’s current CEO Jim Vena has transformed the railroad and its intermodal business as it seeks approval from US federal regulators to create the first transcontinental US railroad . “We have a strong engagement strategy, and the most important part of that engagement strategy is just listening and then taking that feedback into action,” Kenny Rocker, UP’s executive vice president of marketing and sales, told the Journal of Commerce. “A transit schedule is different than execution, and when you’re executing like we are, you can win more. You can put anything down on paper, but at the end of the day, you must execute to win.” The improvement is even more striking given that the IMCs grading the railroads rarely change, so many who were critical of UP in early 2023 are the same ones praising it today. The shippers showed very little change in preferences. J.B. Hunt Transport Services received 41.5% of the vote for best provider. Hub Group and “other” IMCs, which include asset-light and non-asset-based brokers, ranked second and third, respectively. Asset-light provider Alliance Shippers earned high marks for the second consecutive survey, with customers citing its ability to deliver exceptional service even if it isn’t the cheapest option. “Understandably, Alliance’s pricing comes at a premium relative to the large asset providers,” one shipper wrote. “[But] accounting for the costly errors they regularly help us avoid — that the asset players previously had not — unequivocally it’s a net savings.” Non-asset brokers Cornerstone Systems, Mode Transportation and Uber Freight received similar praise. All rails except CPKC get strong scores When asked to grade railroads from 1 to 5, with five as the highest, all four US railroads scored between 3.7 and 4.2. BNSF Railway trailed UP, ranking second. CSX Transportation received a score of 3.9, unchanged from a year ago, as customers said the eastern railroad effectively communicated longer transit times caused by two construction projects , allowing them to adjust delivery schedules. CPKC received the lowest marks, with 52.3% of respondents saying it was the worst-performing railroad between Jan. 1 and June 30, reflecting winter weather and an IT snafu during its migration from Kansas City Southern Railway operating systems. “[We] lost business to trucking due to the inability to perform at the terminal level in Kansas City and Bensenville [Chicago],” one CPKC customer wrote. Major IMC scores Similar to prior surveys, J.B. Hunt scored at least 4 out of 5 on all key performance indicators. More than eight in 10 shippers were satisfied, whether J.B. Hunt handled most of their freight or served as a backup to other providers such as Hub Group or Schneider National. It remains to be seen whether J.B. Hunt’s decision to apply a surcharge in Southern California will impact scores in the next survey, although a similar move last year had no impact. Hub Group saw the largest score gain, rising to 4.1 from 3.2 year over year. Fewer customers complained about its outsourced drayage, which hurt on-time pickup and delivery scores in prior surveys. One shipper said he recently used Hub Group on a short-term basis and was pleasantly surprised how good the service was compared with a poor experience a few years earlier. But the proportion of “core customers” — i.e. those giving Hub Group most of their freight — was significantly higher than in prior surveys, skewing results. Core customers gave Hub Group a 98% satisfaction score, but customers who use Hub Group as a second or third option only gave the carrier a 46.9% score. Other metrics also showed strong support among Hub’s core customers but underperformance elsewhere. The survey shows Hub Group has made strides but still needs to improve with shippers who use it as a second or third option. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Intermodal providers

Shippers, logistics providers satisfied with H1 rail performance

<div class="phx-topic abstract-wrapper">There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters. </div>

There are measures carriers can take around the edges, but if they really want to take control of supply — and thus price — collectively sidelining some high-caliber tonnage is the standout solution, writes Jeremy Masters.

<div class="phx-topic">The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. <h3>Pushing pause </h3>The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. <h3>Beyond parking </h3>Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

The laws of supply and demand dictate that prices will move in accordance with the relativity of the two. Container carriers can marginally move the dial between what is containerized and what is bulk or breakbulk by offering very attractive (low contribution) rates. An innovative product — for example, Gemini Cooperation’s high reliability network or an express service — might lure some air freight to sea freight. For the most part, however, carriers have very little control over demand. The key price lever that carriers have is slot supply, and current fundamentals point to heavy surplus, even as diversions around southern Africa continue. Are the carriers, then, sprinting to the edge of the cliff with newbuild deliveries, fresh orders, second-hand buying and chartering of what little spare capacity is left, followed by a freefall? Or do they at least have a parachute to slow down their momentum? There are some things they can do to help themselves in trades with overcapacity. Pushing pause The most obvious and dramatic way would be to park ships. To be impactful, that would mean collectively taking out multiple strings rather than tinkering with single strings or blank sailings. Understandably, there is a mental block in the big east-west trades when it comes to parking high-capacity, high-value, newer ships. But if the carriers get supply even minimally below demand, the economics are massively in their favor. Let's assume that, in the Asia-to-Europe trade, each consortium (for these purposes, Mediterranean Shipping Co. would be considered a consortium) ties up one string of ultra-large container vessels (ULCVs) that was forecasted to make a minimal contribution to fixed cost because of declining rates. If, because of removing these strings, freight rates were a very conservative $500 per TEU higher on average on the headhaul than they would have been, based on 20,000 TEU per week and 50 weeks, all consortiums would accumulate an additional $500,000 million per annum on all remaining loops. There would be, of course, some incremental lay-up costs, but other costs would remain similar. Parking some $3 billion worth of assets per consortium is easier in theory than in practice, especially for those carriers who need to justify some heavy investments to their boards. If the carriers accept that drastic action is required, however, and there is enough collective action — not orchestrated action, of course, in contravention of competition rules — then the results will be dramatically better, and the ships will be readily available for an upturn. Beyond parking Are there less capacity-eating measures that carriers could undertake? The catalyst for a major dive in multi-trade rates would be a return to the Red Sea and Suez Canal for Asia-to-Europe strings, but it's unlikely that we will go overnight from high-risk Red Sea transits to totally safe ones. Given the disruption and risk — for carriers and their clients — of moving all strings back to the Red Sea only to find that further issues arise, it would be entirely justifiable to keep some strings moving around the Cape of Good Hope. Big beneficial cargo owners (BCOs) and forwarders/non-vessel operating common carriers (NVOCCs) have — forcefully — adjusted to the Cape routing. And while there is higher on-the-water inventory cost, the weekly pipeline of arrivals are established. They would naturally lean towards the faster Red Sea routing, but at the same time, would want to strenuously avoid a situation where production lines are stopped or shelves empty because they have put all their eggs in the Red Sea basket that has turned bad again. This may be counterintuitive, given more expensive ship systems around the Cape, but carriers could also implement two-tier pricing to re-enforce this prudence — essentially, a premium for Red Sea risk or a deficit for longer transits, whichever you prefer. Slow-steaming is another area of capacity control where a systematic approach could eat up more capacity. This means not just applying it in over-tonnaged trades, but in all trades. Tonnage can then be moved from trades where there is oversupply to those that are short because of slow-steaming. Finally, there is the scrapping of older vessels. If we look at carriers' desire to hold onto bigger, newer assets and their purchase of relatively old smaller tonnage to run regional and feeder networks, this does not look to be a particularly encouraging area for capacity shedding. There are measures the carriers can take around the edges, but if they really want to take control of supply – and thus price – collectively sidelining some high-caliber tonnage is the standout solution. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Ocean carriers are not helpless when it comes to managing capacity

<div class="phx-topic abstract-wrapper">The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base.</div>

The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base.

<div class="phx-topic">For decades, international containerized freight from Michigan and the broader Midwest has been routed through distant US coastal gateways such as New York, Norfolk and Savannah, or Canadian ports such as Halifax and Montreal. Export-side users have included automotive original equipment manufacturers (OEMs), steel and chemical producers and agricultural shippers, while imports have consisted of tier 1 suppliers, machinery and equipment distributors and retail or e-commerce consolidators. These routes were not chosen for efficiency or cost. They were imposed by federal restrictions that have for decades prevented containerized freight from entering or exiting the Great Lakes by vessel. US Customs today does not permit such movements through Michigan because no facility in the state meets the required federal standards for security and processing. That is about to change. In 2026, the Port of Monroe will activate the first SAFE Port Act-compliant international container terminal in the Great Lakes, along with a new roll-on/roll-off (ro/ro) platform that complements existing vessel berths, dual Class I rail access and proximity to interstate highways and Midwest manufacturing. Together, these assets position Monroe as a fully integrated inland gateway for containerized trade and high-value industrial logistics. Conservatively, 1 million to 2 million TEUs of oceangoing cargo are generated annually from the Great Lakes’ industrial core, according to port estimates. This includes high-value shipments from sectors such as automotive, machinery, chemicals and electronics. Rather than projecting future throughput volumes, the Port of Monroe is focused on establishing a lawful and functioning corridor, allowing the market to respond. The goal is to restore balance, provide carriers with a practical entry point and give shippers a logistics option that should have existed decades ago. The terminal at Monroe will be available to operators who recognize the value of establishing service in an underserved but strategically positioned market. The automotive industry, in particular, stands to benefit. With production concentrated in the Midwest and export demand on the rise, direct vessel service from Monroe reduces complexity and supports just-in-time inventory models. Monroe offers a new point of connection between Midwest production and global markets, serving as a strategic outlet for general containerized freight and, more uniquely, for the direct shipment of new vehicles via ro/ro or in containers. Resilience has become a defining priority for today’s logistics networks. The March 2024 collapse of the Francis Scott Key Bridge in Baltimore, a critical ro/ro and vehicle export hub, exposed the system’s fragility. Overnight, cargo flows were disrupted, schedules were delayed and shippers were forced to reroute at significant cost. Inland ports such as the Port of Monroe offer a hedge against that kind of single-point failure. <h3>‘Manageable’ constraints </h3>Do the Great Lakes have constraints? Yes, but they are manageable. The annual three-month winter closure of the St. Lawrence Seaway is predictable and published well in advance, allowing cargo owners and carriers to plan accordingly. Intra-lake shipping continues throughout the winter, particularly with ice-class vessels. Recent climate trends indicate shorter freeze periods and milder conditions, which are gradually increasing intralake shipping capacity during the winter months. Other northern regions facing even harsher winter conditions have demonstrated what is possible. The Baltic Sea offers a relevant example. Despite a smaller economic footprint and more severe ice conditions, Baltic ports remain active year-round through the use of ice-capable vessels and integrated multimodal infrastructure. There is no reason the Great Lakes, now that the regulatory path has been cleared, should not do the same and make a comparable contribution to North American trade resilience. Unlike coastal gateways, which face sudden disruptions from hurricanes, labor action and infrastructure failures, the risks on the Great Lakes are stable and foreseeable. That reliability offers a competitive advantage for shippers navigating global volatility. But infrastructure alone is not enough. What is required is a shift in mindset. Federal freight policy must treat the Great Lakes as a fully integrated corridor. Carriers need to revisit assumptions about vessel size and routing patterns. Shippers will now be able to prioritize proximity, reliability and carbon performance rather than adhering to legacy paths shaped by outdated restrictions. The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base. Supporting inland container movement by vessel can drive demand for US-built ships, sustain skilled shipyard jobs, and expand the national maritime workforce. This is not just a logistics upgrade. It is a long-term investment in national capacity, employment, and competitiveness. This is a practical opportunity to enhance the national freight system using inland infrastructure that is efficient, cost-effective and underutilized. Monroe stands ready to serve shippers, carriers and policymakers seeking flexible, durable solutions. The Great Lakes have always had the potential to support containerized trade. Now that the path is open, the Port of Monroe is prepared to deliver. Capt. Paul C. LaMarre III is also director of the Port of Monroe in Michigan. Contact him at <a href="mailto:plamarre@portofmonroe.com">plamarre@portofmonroe.com</a>. </div>

For decades, international containerized freight from Michigan and the broader Midwest has been routed through distant US coastal gateways such as New York, Norfolk and Savannah, or Canadian ports such as Halifax and Montreal. Export-side users have included automotive original equipment manufacturers (OEMs), steel and chemical producers and agricultural shippers, while imports have consisted of tier 1 suppliers, machinery and equipment distributors and retail or e-commerce consolidators. These routes were not chosen for efficiency or cost. They were imposed by federal restrictions that have for decades prevented containerized freight from entering or exiting the Great Lakes by vessel. US Customs today does not permit such movements through Michigan because no facility in the state meets the required federal standards for security and processing. That is about to change. In 2026, the Port of Monroe will activate the first SAFE Port Act-compliant international container terminal in the Great Lakes, along with a new roll-on/roll-off (ro/ro) platform that complements existing vessel berths, dual Class I rail access and proximity to interstate highways and Midwest manufacturing. Together, these assets position Monroe as a fully integrated inland gateway for containerized trade and high-value industrial logistics. Conservatively, 1 million to 2 million TEUs of oceangoing cargo are generated annually from the Great Lakes’ industrial core, according to port estimates. This includes high-value shipments from sectors such as automotive, machinery, chemicals and electronics. Rather than projecting future throughput volumes, the Port of Monroe is focused on establishing a lawful and functioning corridor, allowing the market to respond. The goal is to restore balance, provide carriers with a practical entry point and give shippers a logistics option that should have existed decades ago. The terminal at Monroe will be available to operators who recognize the value of establishing service in an underserved but strategically positioned market. The automotive industry, in particular, stands to benefit. With production concentrated in the Midwest and export demand on the rise, direct vessel service from Monroe reduces complexity and supports just-in-time inventory models. Monroe offers a new point of connection between Midwest production and global markets, serving as a strategic outlet for general containerized freight and, more uniquely, for the direct shipment of new vehicles via ro/ro or in containers. Resilience has become a defining priority for today’s logistics networks. The March 2024 collapse of the Francis Scott Key Bridge in Baltimore, a critical ro/ro and vehicle export hub, exposed the system’s fragility. Overnight, cargo flows were disrupted, schedules were delayed and shippers were forced to reroute at significant cost. Inland ports such as the Port of Monroe offer a hedge against that kind of single-point failure. ‘Manageable’ constraints Do the Great Lakes have constraints? Yes, but they are manageable. The annual three-month winter closure of the St. Lawrence Seaway is predictable and published well in advance, allowing cargo owners and carriers to plan accordingly. Intra-lake shipping continues throughout the winter, particularly with ice-class vessels. Recent climate trends indicate shorter freeze periods and milder conditions, which are gradually increasing intralake shipping capacity during the winter months. Other northern regions facing even harsher winter conditions have demonstrated what is possible. The Baltic Sea offers a relevant example. Despite a smaller economic footprint and more severe ice conditions, Baltic ports remain active year-round through the use of ice-capable vessels and integrated multimodal infrastructure. There is no reason the Great Lakes, now that the regulatory path has been cleared, should not do the same and make a comparable contribution to North American trade resilience. Unlike coastal gateways, which face sudden disruptions from hurricanes, labor action and infrastructure failures, the risks on the Great Lakes are stable and foreseeable. That reliability offers a competitive advantage for shippers navigating global volatility. But infrastructure alone is not enough. What is required is a shift in mindset. Federal freight policy must treat the Great Lakes as a fully integrated corridor. Carriers need to revisit assumptions about vessel size and routing patterns. Shippers will now be able to prioritize proximity, reliability and carbon performance rather than adhering to legacy paths shaped by outdated restrictions. The introduction of containerized shipping to Michigan presents an opportunity to reinforce the domestic maritime industrial base. Supporting inland container movement by vessel can drive demand for US-built ships, sustain skilled shipyard jobs, and expand the national maritime workforce. This is not just a logistics upgrade. It is a long-term investment in national capacity, employment, and competitiveness. This is a practical opportunity to enhance the national freight system using inland infrastructure that is efficient, cost-effective and underutilized. Monroe stands ready to serve shippers, carriers and policymakers seeking flexible, durable solutions. The Great Lakes have always had the potential to support containerized trade. Now that the path is open, the Port of Monroe is prepared to deliver. Capt. Paul C. LaMarre III is also director of the Port of Monroe in Michigan. Contact him at plamarre@portofmonroe.com .

Ro/ro cargo

North American ports

Marine terminals

Port infrastructure

Michigan inland port offers new option for Great Lakes containerized freight

North Europe to US East Coast

Mediterranean to US East Coast

eeSea collects and centralizes liner network data from dozens of public sources including carriers’ vessel tracking portals, long-term schedules, customer advisories, port and terminal operator schedules, and pilot schedules. These disparate datasets are continually inspected, cleaned, and carefully structured. eeSea synthesizes this refined public data with AIS positions from a third-party provider and its datasets spanning schedule reliability, transit times, trade capacity evolution, and 60-day vessel forecasts. Ships are deemed late if they are one calendar day or late than scheduled. [eeSea](https://www.eesea.com)

North Europe and Mediterranean to US East Coast ocean reliability (eeSea)

On-Time Performance Northern Europe and Mediterranean to US East Coast (eeSea) Gateway

<div class="phx-topic abstract-wrapper">US tariffs are fuel cost-cutting mandates, heaping pressure on cargo owners to push for lower ocean shipping rates even if at the expense of carrier relations. </div>

US tariffs are fuel cost-cutting mandates, heaping pressure on cargo owners to push for lower ocean shipping rates even if at the expense of carrier relations.

<div class="phx-topic">A combination of factors that includes shippers’ hunger to lower costs in the face of the highest US tariffs in decades and a growing supply-demand imbalance are raising the specter of worsening shipper-carrier relations. In the near term, shippers operating under strict cost-cutting mandates could, for example, begin diverting contracted cargo to a lower-priced spot market. In the long term, this dynamic could result in shippers walking away from established carrier and forwarder partnerships in pursuit of marginally lower rates. “The pressure is immense already,” Mark Chadwick, president of the Global Shippers Association, told the Journal of Commerce. “With margins squeezed because of tariffs and nearshoring expenses, many CFOs are pushing their procurement teams to lower other costs, with logistics certainly on the list.” M. Can Fidan, executive vice president at forwarder MTS Logistics, said some shippers are still motivated in part by the record rates seen during the COVID-19 pandemic. “[Some] importers are always looking for lower prices, but I think now they have the appetite to push carriers, or maybe to switch to other carriers, after experiencing what they saw as unfair price increases during COVID-19 from longstanding carrier partners,” Fidan said. Those opportunities to drive down costs may well present themselves; analysts expect new vessel arrivals to tip the market into overcapacity next year, despite factors such as Red Sea diversions, port congestion in Asia and Europe, and alliance reshuffling that worked in carriers’ favor this year. JP Morgan said on Aug. 11 that “steep losses into 2026–27 [are] unavoidable” for Maersk, reflecting a deteriorating freight rate environment for the wider industry. It’s a familiar dynamic in container shipping. One party takes advantage of favorable market forces but in doing so sets itself up for future retaliation when the market turns against them. “The same bosses who are demanding a 10% reduction in your ocean spend now are the ones who are going to be screaming when you can’t get space on a ship,” Chadwick said. “There are many companies for whom air cargo is not a viable alternative, so if they can’t get access to ocean freight, it could be game over.” Shippers will no doubt recall that, in tight markets over the five-plus years since the beginning of the pandemic, carriers sought to maximize revenue, leaving lower-priced yet contracted cargo behind, improving their profitability but hurting customers’ supply chains in the process. They will remember how carriers aggressively use blank sailings and other capacity-restricting tools to support the market, the effect of which for shippers is longer transit times, higher inventory costs and revenue impact. “Even if you tell a customer today, ‘You know this x carrier took care of us during that time,’ they’ll say, ‘Yeah, I know, but they didn’t do it because they love me. They do it because I paid them the highest rate, right? So now, why do I need to support them when they need me?,’” Fidan said. <h3>History, repeated </h3>Shippers, for their part, had the opportunity to turn the tables in 2022 and 2024, when the market collapsed, and they are poised to do it again. Trans-Pacific spot rates have plunged more than 70% to the West Coast and 61% to the East Coast since mid-June, when China cargo was unleashed after the temporary easing of 145% tariffs. There are early signs that cost pressures are leading some shippers to seek out lower spot rates, even when failing to fulfill contracted minimum quantity commitments (MQCs). In other words, market forces may yet again overwhelm relationships, partnerships and any semblance of win-win value creation in the container supply chain. Even some shippers are warning that overly aggressive cost-cutting could come back to bite them when the market tightens. This is seen as inevitable given the current environment, characterized by repeated capacity shocks due to external forces and a consolidated carrier industry ready to take advantage. “It’s important for shippers to avoid the temptation of compromising commitments to their carrier partners in exchange for these relatively small, short-term gains,” Chadwick said. “Given the turmoil in international trade, some shippers won’t have the volume to meet their MQCs and should be upfront with the carriers about this, so that they can plan space utilization accordingly. But it’s a different story when that MQC’s missed because the shipper’s chasing an off contract alternative that’s slightly lower cost. “We need to protect the goodwill that we’ve been earning with the carriers, standing by our commitments so that we can expect the same when the market flips again,” he added. <h3>Lessons learned? </h3>But market forces will, as they have many times in the past, exert powerful pressures that undermine partnership. These include the intense margin pressure shippers are under when attempting to mitigate the impact of US tariffs, which are above 18% now on average, up from 2.4% last year and the highest level since the 1930s. Those pressures also include the wave of new vessels currently being delivered to carriers that will result in increasingly attractive rates being shopped to beneficial cargo owners. “We expect [rates] to continue to decline on a widening demand-supply imbalance,” JP Morgan wrote following Maersk’s second-quarter earnings report on Aug. 7. Chadwick said carriers are already floating “low-ball offers,” and this trend will likely accelerate through the end of 2025 and into 2026 as carriers and forwarders look to maintain volumes. “We know to expect the unexpected, so a lot could happen that could quickly reverse this trend, another reason to stay focused on being good partners to our carriers,” he said. Shippers will try different tactics to get away with shipping under lower spot rates while preserving carrier relationships, an increasingly important priority for them given there are fewer carriers available due to consolidation. They will argue, for example, that manufacturing or other delays prevent them fulfilling MQCs, an excuse carriers may accept to the extent the market is weak, and the carrier itself wants to preserve the relationship with the shipper in the upcoming contract cycle. A question hanging over the market is how much carriers learned over the past five years to maximize their advantage, specifically about limiting capacity in various ways when facing soft market conditions, or whether carriers will return to predatory practices of raiding each other’s cargo base just to fill their ships. “For the next few months, you will see carriers blanking capacity because I do think they realize the party is over and they brought in too much capacity this spring,” said Sanjay Tejwani, CEO of consulting firm 365 Logistics. “But that said, they have been pretty good in reacting, and they will react again, pulling capacity out and creating a stable market. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

A combination of factors that includes shippers’ hunger to lower costs in the face of the highest US tariffs in decades and a growing supply-demand imbalance are raising the specter of worsening shipper-carrier relations. In the near term, shippers operating under strict cost-cutting mandates could, for example, begin diverting contracted cargo to a lower-priced spot market. In the long term, this dynamic could result in shippers walking away from established carrier and forwarder partnerships in pursuit of marginally lower rates. “The pressure is immense already,” Mark Chadwick, president of the Global Shippers Association, told the Journal of Commerce. “With margins squeezed because of tariffs and nearshoring expenses, many CFOs are pushing their procurement teams to lower other costs, with logistics certainly on the list.” M. Can Fidan, executive vice president at forwarder MTS Logistics, said some shippers are still motivated in part by the record rates seen during the COVID-19 pandemic. “[Some] importers are always looking for lower prices, but I think now they have the appetite to push carriers, or maybe to switch to other carriers, after experiencing what they saw as unfair price increases during COVID-19 from longstanding carrier partners,” Fidan said. Those opportunities to drive down costs may well present themselves; analysts expect new vessel arrivals to tip the market into overcapacity next year, despite factors such as Red Sea diversions, port congestion in Asia and Europe, and alliance reshuffling that worked in carriers’ favor this year. JP Morgan said on Aug. 11 that “steep losses into 2026–27 [are] unavoidable” for Maersk, reflecting a deteriorating freight rate environment for the wider industry. It’s a familiar dynamic in container shipping. One party takes advantage of favorable market forces but in doing so sets itself up for future retaliation when the market turns against them. “The same bosses who are demanding a 10% reduction in your ocean spend now are the ones who are going to be screaming when you can’t get space on a ship,” Chadwick said. “There are many companies for whom air cargo is not a viable alternative, so if they can’t get access to ocean freight, it could be game over.” Shippers will no doubt recall that, in tight markets over the five-plus years since the beginning of the pandemic, carriers sought to maximize revenue, leaving lower-priced yet contracted cargo behind, improving their profitability but hurting customers’ supply chains in the process. They will remember how carriers aggressively use blank sailings and other capacity-restricting tools to support the market, the effect of which for shippers is longer transit times, higher inventory costs and revenue impact. “Even if you tell a customer today, ‘You know this x carrier took care of us during that time,’ they’ll say, ‘Yeah, I know, but they didn’t do it because they love me. They do it because I paid them the highest rate, right? So now, why do I need to support them when they need me?,’” Fidan said. History, repeated Shippers, for their part, had the opportunity to turn the tables in 2022 and 2024, when the market collapsed, and they are poised to do it again. Trans-Pacific spot rates have plunged more than 70% to the West Coast and 61% to the East Coast since mid-June, when China cargo was unleashed after the temporary easing of 145% tariffs. There are early signs that cost pressures are leading some shippers to seek out lower spot rates, even when failing to fulfill contracted minimum quantity commitments (MQCs). In other words, market forces may yet again overwhelm relationships, partnerships and any semblance of win-win value creation in the container supply chain. Even some shippers are warning that overly aggressive cost-cutting could come back to bite them when the market tightens. This is seen as inevitable given the current environment, characterized by repeated capacity shocks due to external forces and a consolidated carrier industry ready to take advantage. “It’s important for shippers to avoid the temptation of compromising commitments to their carrier partners in exchange for these relatively small, short-term gains,” Chadwick said. “Given the turmoil in international trade, some shippers won’t have the volume to meet their MQCs and should be upfront with the carriers about this, so that they can plan space utilization accordingly. But it’s a different story when that MQC’s missed because the shipper’s chasing an off contract alternative that’s slightly lower cost. “We need to protect the goodwill that we’ve been earning with the carriers, standing by our commitments so that we can expect the same when the market flips again,” he added. Lessons learned? But market forces will, as they have many times in the past, exert powerful pressures that undermine partnership. These include the intense margin pressure shippers are under when attempting to mitigate the impact of US tariffs, which are above 18% now on average, up from 2.4% last year and the highest level since the 1930s. Those pressures also include the wave of new vessels currently being delivered to carriers that will result in increasingly attractive rates being shopped to beneficial cargo owners. “We expect [rates] to continue to decline on a widening demand-supply imbalance,” JP Morgan wrote following Maersk’s second-quarter earnings report on Aug. 7. Chadwick said carriers are already floating “low-ball offers,” and this trend will likely accelerate through the end of 2025 and into 2026 as carriers and forwarders look to maintain volumes. “We know to expect the unexpected, so a lot could happen that could quickly reverse this trend, another reason to stay focused on being good partners to our carriers,” he said. Shippers will try different tactics to get away with shipping under lower spot rates while preserving carrier relationships, an increasingly important priority for them given there are fewer carriers available due to consolidation. They will argue, for example, that manufacturing or other delays prevent them fulfilling MQCs, an excuse carriers may accept to the extent the market is weak, and the carrier itself wants to preserve the relationship with the shipper in the upcoming contract cycle. A question hanging over the market is how much carriers learned over the past five years to maximize their advantage, specifically about limiting capacity in various ways when facing soft market conditions, or whether carriers will return to predatory practices of raiding each other’s cargo base just to fill their ships. “For the next few months, you will see carriers blanking capacity because I do think they realize the party is over and they brought in too much capacity this spring,” said Sanjay Tejwani, CEO of consulting firm 365 Logistics. “But that said, they have been pretty good in reacting, and they will react again, pulling capacity out and creating a stable market. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Transport, Trade and Regulation News

Shipper cost pressures risk further fraying carrier relationships

<div class="phx-topic abstract-wrapper">OOCL’s newest express shuttle service from China to Mexico joins other carrier services linking the two and underscores the ongoing growth in trade between the two countries. </div>

OOCL’s newest express shuttle service from China to Mexico joins other carrier services linking the two and underscores the ongoing growth in trade between the two countries.

<div class="phx-topic">Orient Overseas Container Line (OOCL) later this month will begin offering a trans-Pacific express service to Mexico’s West Coast, adding to the list of new ocean services that have sprung up as China reorients its trade networks. OOCL said Monday that its Trans-Pacific Latin Pacific 8 (TLP8) service will start with an Aug. 20 departure from Shanghai. The TLP8’s Asia rotation covers Shanghai and Qingdao, and the eastbound voyage includes Mexico’s Ensenada and Manzanillo, along with a westbound call at Yokohama. The TLP8 is offering 17-day transit between Qingdao and Ensenada. The Port of Ensenada has one berth capable of handling post-Panamax ships up to 6,000 TEUs in capacity. The TLP8 joins three other OOCL trans-Pacific services that connect Mexico, along with the West Coast of South America, to Asia. OOCL added its last Asia-Mexico-South America service, TLP5, back in May 2024. Last year also saw <a href="https://www.joc.com/article/msc-adds-to-growing-asia-mexico-service-launches-5192264">Mediterranean Shipping Co. and CMA CGM add new trans-Pacific services between Asia, Mexico and South America</a>. Mexico saw a surge of foreign direct investment last year from China, reaching $710 million, according to Mexico’s economic secretary. Mexico imported $129 billion worth of goods from China in 2024, according to data from the country’s economy secretary, the highest in two decades. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Orient Overseas Container Line (OOCL) later this month will begin offering a trans-Pacific express service to Mexico’s West Coast, adding to the list of new ocean services that have sprung up as China reorients its trade networks. OOCL said Monday that its Trans-Pacific Latin Pacific 8 (TLP8) service will start with an Aug. 20 departure from Shanghai. The TLP8’s Asia rotation covers Shanghai and Qingdao, and the eastbound voyage includes Mexico’s Ensenada and Manzanillo, along with a westbound call at Yokohama. The TLP8 is offering 17-day transit between Qingdao and Ensenada. The Port of Ensenada has one berth capable of handling post-Panamax ships up to 6,000 TEUs in capacity. The TLP8 joins three other OOCL trans-Pacific services that connect Mexico, along with the West Coast of South America, to Asia. OOCL added its last Asia-Mexico-South America service, TLP5, back in May 2024. Last year also saw Mediterranean Shipping Co. and CMA CGM add new trans-Pacific services between Asia, Mexico and South America . Mexico saw a surge of foreign direct investment last year from China, reaching $710 million, according to Mexico’s economic secretary. Mexico imported $129 billion worth of goods from China in 2024, according to data from the country’s economy secretary, the highest in two decades. Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

OOCL adds service to tap China-to-Mexico trade boom

<div class="phx-topic abstract-wrapper">Import volumes for September through December are expected to come in each month about 20% under the comparable 2024 levels, according to the latest Global Port Tracker, with tariff-linked frontloading one of the primary reasons.</div>

Import volumes for September through December are expected to come in each month about 20% under the comparable 2024 levels, according to the latest Global Port Tracker, with tariff-linked frontloading one of the primary reasons.

<div class="phx-topic">US imports for the last four months of 2025 will show sharp year-over-year declines due to a combination of the frontloading that took place at the end of 2024 amid longshore labor concerns and this year’s early peak season driven by tariff deadlines, US retailers said Friday. The latest Global Port Tracker (GPT) from the National Retail Federation (NRF) and Hackett Associates made just minimal upgrades to import forecasts for September, October and November from projections made in July. Still, the NRF expects significant year-over-year reductions overall, with import volumes for September through December forecast to come in each month about 20% under the comparable 2024 levels <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">when shippers were working to move cargo ahead of a strike threat at East and Gulf coast ports.</a><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3f082f38-731c-4471-b484-2aa37e8ab119"></dynamic-object></div>The GPT’s updated forecast for September calls for 1.83 million TEUs in US imports, down 19.4% compared with 2.27 million TEUs in 2024. October is slated for 1.82 million TEUs, down 18.7% from the year-ago period, while November (1.71 million TEUs) and December (1.72 million TEUs) are projected to be down 20.8% and 19.2%, respectively, from 2024 levels. November’s forecast calls for the lowest month for US imports since April 2023. <h3>Tariff pressure </h3>Tariff-linked frontloading is also a significant factor in the severe year-over-year declines in imports. “Friends, allies and foes are all being hit by distortions in trade flows as importers try to second-guess tariff levels by pulling forward imports before the tariffs take effect,” Hackett Associates founder Ben Hackett said. “This, in turn, will certainly lead to a downturn in trade volumes by late September because inventories for the holiday season will already be in hand.” The latest GPT increased August import expectations to 2.2 million TEUs, up 5.8% from the 2.08 million TEUs forecast in July. Meanwhile, June’s actual volume of 1.96 million TEUs was almost 5% less than projected in the prior GPT. Imports for the first half of the year were up 3.6% compared with 2024 at 12.53 million TEUs — likely driven by tariff frontloading. The NRF forecasts US imports for all of 2025 will slide to 24.1 million TEUs, down 5.6% from 25.5 million TEUs last year. “While this forecast is preliminary, it shows the impact the tariffs and the [Trump] administration’s trade policy are having on the supply chain,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “Tariffs are beginning to drive up consumer prices, and fewer imports will eventually mean fewer goods on store shelves.” The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US imports for the last four months of 2025 will show sharp year-over-year declines due to a combination of the frontloading that took place at the end of 2024 amid longshore labor concerns and this year’s early peak season driven by tariff deadlines, US retailers said Friday. The latest Global Port Tracker (GPT) from the National Retail Federation (NRF) and Hackett Associates made just minimal upgrades to import forecasts for September, October and November from projections made in July. Still, the NRF expects significant year-over-year reductions overall, with import volumes for September through December forecast to come in each month about 20% under the comparable 2024 levels when shippers were working to move cargo ahead of a strike threat at East and Gulf coast ports. The GPT’s updated forecast for September calls for 1.83 million TEUs in US imports, down 19.4% compared with 2.27 million TEUs in 2024. October is slated for 1.82 million TEUs, down 18.7% from the year-ago period, while November (1.71 million TEUs) and December (1.72 million TEUs) are projected to be down 20.8% and 19.2%, respectively, from 2024 levels. November’s forecast calls for the lowest month for US imports since April 2023. Tariff pressure Tariff-linked frontloading is also a significant factor in the severe year-over-year declines in imports. “Friends, allies and foes are all being hit by distortions in trade flows as importers try to second-guess tariff levels by pulling forward imports before the tariffs take effect,” Hackett Associates founder Ben Hackett said. “This, in turn, will certainly lead to a downturn in trade volumes by late September because inventories for the holiday season will already be in hand.” The latest GPT increased August import expectations to 2.2 million TEUs, up 5.8% from the 2.08 million TEUs forecast in July. Meanwhile, June’s actual volume of 1.96 million TEUs was almost 5% less than projected in the prior GPT. Imports for the first half of the year were up 3.6% compared with 2024 at 12.53 million TEUs — likely driven by tariff frontloading. The NRF forecasts US imports for all of 2025 will slide to 24.1 million TEUs, down 5.6% from 25.5 million TEUs last year. “While this forecast is preliminary, it shows the impact the tariffs and the [Trump] administration’s trade policy are having on the supply chain,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “Tariffs are beginning to drive up consumer prices, and fewer imports will eventually mean fewer goods on store shelves.” The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com . 

Trans-Atlantic

US retailers project big year-over-year import declines to close out 2025

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At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: https://www.ssamarine.mx/

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<div class="phx-topic abstract-wrapper">The new rule, a second attempt at requiring the so-called ABC test for workers in the state, has drawn opposition from multiple groups, with port trucking among the affected industries.</div>

The new rule, a second attempt at requiring the so-called ABC test for workers in the state, has drawn opposition from multiple groups, with port trucking among the affected industries.

<div class="phx-topic">A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period on Wednesday over a proposed rule that would require use of the so-called “ABC” test for determining whether a worker is a full-time employee or an independent contractor.The ABC test, which looks at factors such as the kind of work, how it’s done and who supervises it, undergirds <a href="https://www.joc.com/article/trucker-classification-effort-ripe-for-national-expansion-5197032">California’s AB5 law</a> passed in 2019. AB5 imposed a higher hurdle on the state’s trucking industry for using independent owner-operators as drivers. That same year, <a href="https://www.joc.com/article/njs-classification-bill-dead-for-now-but-will-return-senator-5196905">New Jersey’s legislature failed to pass a similar law</a> codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group — Save Independent Work — said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors. As with the earlier attempted legislation, the Labor Department’s proposed rule drew opposition from the state’s drayage carriers, which rely on about 8,300 independent contractor drivers at the Port of New York and New Jersey. Lisa Yakomin, president of the Association of Bi-State Motor Carriers, said during public testimony in Trenton in June the rule would “paralyze the regional supply chain.” “Previous attempts to enshrine the Labor Department’s narrow application of the ABC test have been soundly rejected by the state legislature,” Yakomin said during her testimony. “This new rulemaking ignores that opposition and bypasses the authority of our state’s elected legislative representatives.” Other port stakeholders joined to oppose the new rule, including the Shipping Association of New York and New Jersey and the Maritime Association of the Port of New York and New Jersey (MAPONYNJ), which said disrupting the business model for port truckers would hurt supply chains.“Rather than protecting independent contractors, the proposal would effectively eliminate their ability to operate,” MAPONYNJ said in its comments. The proposed rule did draw support from the groups aligned with labor unions, such as the Economic Policy Institute and Human Rights Watch, which highlighted how delivery and rideshare drivers in Texas only earn about $5 per hour due to being classified as independent contractors. <h3>No timeline for decision</h3>The decision to adopt the rule rests largely with Robert Asaro-Angelo, the state’s labor commissioner and an appointee of New Jersey Gov. Phil Murphy, a Democrat.There is no timeline for when Asaro-Angelo must decide on whether to implement the rule. Bi-State’s Yakomin told the Journal of Commerce a decision on the rule is an overhang for port truckers as the outgoing Murphy administration may try to push it through during a lame duck session“If Asaro-Angelo wants to move forward, there’s nothing we can do,” Yakomin said. “It would take some legislation to roll back some of the test.”However, Yakomin said that this second attempt at implementing the ABC test has drawn more opposition from other New Jersey legislators, especially Democratic legislators who have typically been friendlier to unions and other labor groups. State Sen. Angela McKnight, a Democrat representing the area around the marine terminal in Bayonne, said in a letter to the Labor Department this month the proposed rule “could have serious unintended economic consequences” at the NY-NJ port and could “push drivers to relocate to less restrictive states.” Democratic State Sen. John Burzichelli, who took over the seat vacated by the senator who sponsored the original ABC legislation in 2019, also said in comments about the rule that he’s heard from constituents that the rule would be “detrimental.”“It’s great to see how many legislators have expressed concerns about the rule,” Yakomin said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period on Wednesday over a proposed rule that would require use of the so-called “ABC” test for determining whether a worker is a full-time employee or an independent contractor. The ABC test, which looks at factors such as the kind of work, how it’s done and who supervises it, undergirds California’s AB5 law passed in 2019. AB5 imposed a higher hurdle on the state’s trucking industry for using independent owner-operators as drivers. That same year, New Jersey’s legislature failed to pass a similar law codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group — Save Independent Work — said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors. As with the earlier attempted legislation, the Labor Department’s proposed rule drew opposition from the state’s drayage carriers, which rely on about 8,300 independent contractor drivers at the Port of New York and New Jersey. Lisa Yakomin, president of the Association of Bi-State Motor Carriers, said during public testimony in Trenton in June the rule would “paralyze the regional supply chain.” “Previous attempts to enshrine the Labor Department’s narrow application of the ABC test have been soundly rejected by the state legislature,” Yakomin said during her testimony. “This new rulemaking ignores that opposition and bypasses the authority of our state’s elected legislative representatives.” Other port stakeholders joined to oppose the new rule, including the Shipping Association of New York and New Jersey and the Maritime Association of the Port of New York and New Jersey (MAPONYNJ), which said disrupting the business model for port truckers would hurt supply chains. “Rather than protecting independent contractors, the proposal would effectively eliminate their ability to operate,” MAPONYNJ said in its comments. The proposed rule did draw support from the groups aligned with labor unions, such as the Economic Policy Institute and Human Rights Watch, which highlighted how delivery and rideshare drivers in Texas only earn about $5 per hour due to being classified as independent contractors. No timeline for decision The decision to adopt the rule rests largely with Robert Asaro-Angelo, the state’s labor commissioner and an appointee of New Jersey Gov. Phil Murphy, a Democrat. There is no timeline for when Asaro-Angelo must decide on whether to implement the rule. Bi-State’s Yakomin told the Journal of Commerce a decision on the rule is an overhang for port truckers as the outgoing Murphy administration may try to push it through during a lame duck session “If Asaro-Angelo wants to move forward, there’s nothing we can do,” Yakomin said. “It would take some legislation to roll back some of the test.” However, Yakomin said that this second attempt at implementing the ABC test has drawn more opposition from other New Jersey legislators, especially Democratic legislators who have typically been friendlier to unions and other labor groups. State Sen. Angela McKnight, a Democrat representing the area around the marine terminal in Bayonne, said in a letter to the Labor Department this month the proposed rule “could have serious unintended economic consequences” at the NY-NJ port and could “push drivers to relocate to less restrictive states.” Democratic State Sen. John Burzichelli, who took over the seat vacated by the senator who sponsored the original ABC legislation in 2019, also said in comments about the rule that he’s heard from constituents that the rule would be “detrimental.” “It’s great to see how many legislators have expressed concerns about the rule,” Yakomin said. Contact Michael Angell at michael.angell@spglobal.com .

Trucking labor

New Jersey’s proposed worker classification rule hangs over port truckers

<div class="phx-topic abstract-wrapper">Containerized imports into the US last month set an all-time high, according to PIERS data, reflecting what is likely a peak in 2025 imports as shippers tried to get ahead of tariffs.</div>

Containerized imports into the US last month set an all-time high, according to PIERS data, reflecting what is likely a peak in 2025 imports as shippers tried to get ahead of tariffs.

<div class="phx-topic">Tariff-driven frontloading pushed US containerized imports to an all-time high in July, with most ports seeing double-digit volume growth over June’s numbers. While China remained the top source for overseas goods, US shippers appeared more eager to move freight from other tariff targets in southern Europe and Southeast Asia. Total US container volumes last month reached 2.609 million TEUs, the most ever recorded for a single month by PIERS, a sister company of the Journal of Commerce within S&amp;P Global. July’s volume was a 17.5% gain from June. The Trump administration’s implementation of wide-ranging tariffs against US trading partners this spring — and subsequent 90-day reprieves — were the obvious reasons for the July surge. The month’s numbers followed a 5% year-over-year decline in May volumes as <a href="https://www.joc.com/article/hapag-lloyd-saw-china-bookings-drop-hard-after-us-enacted-tariffs-5990185">freight bookings fell after Trump issued his reciprocal tariff plans</a>, and a smaller 3% decline in June as <a href="https://www.joc.com/article/trans-pacific-spot-rates-falling-as-tariff-linked-demand-surge-loses-steam-6027420">shippers started returning to the market</a> when the administration began pausing its various tariff plans. The month-to-month volatility, though, masks more normal growth in the container trade and the likelihood of a down year. US import volumes year to date through July are up 5.4%, PIERS data shows. The second half of 2025 is not likely to match those numbers, according to the National Retail Federation. <a href="https://www.joc.com/article/us-retailers-project-big-year-over-year-import-declines-to-close-out-2025-6060323">It forecasts a 5.6% decline in total container imports</a> due to the uncertain effect tariffs will have on inflation, consumer spending and the overall US economy. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9a6fd2cc-4064-49a6-af1b-2d581edf5eb5"></dynamic-object></div><h3>China down, but not out </h3>After two consecutive months of 20% or higher declines, containerized imports from China, the biggest tariff target, rebounded in July, reaching 1.228 million TEUs, a 36% increase from June, according to PIERS. But July’s volume from China was still down 8% from a year earlier, likely reflecting the longer-term US sourcing shift away from that country. With countries such as Vietnam, Thailand and Cambodia also receiving a reprieve from tariffs, imports from that region led July’s growth. Container imports from Southeast Asia saw a 24% year-over-year gain last month, reaching a record for any month, of 581,803 TEUs. July’s volume bested the previous record of 542,414 TEUs set just in June. Imports from countries in the Indian subcontinent also reached a record high last month. PIERS data for July shows container volumes from that region totaled 152,630 TEUs, a 21% gain from a year earlier. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="cc01c87a-ccc1-4d28-8673-5c101f0b7bc8"></dynamic-object></div>Imports from Southern Europe, meanwhile, rose 7% from a year earlier to 155,587 TEUs, while July’s imports from Northern Europe were essentially flat. <h3>LA, Houston volumes stand out </h3>As the first call for most container services from Asia, the Port of Los Angeles saw strong growth in July. Containerized import volumes there reached 542,940 TEUs, PIERS data shows, a 10% increase from a year earlier and the highest monthly total for the port since August 2024. Following similarly strong volumes in June, Port of Los Angeles Executive Director Gene Seroka said last month that he expects July may represent the year’s peak season due to the tariff-driven whipsaw in volumes. “Some importers are bringing in year-end holiday cargo now ahead of potential higher tariffs later in the year,” Seroka said in a statement. “July may be our peak season month as retailers and manufacturers bring orders in earlier than usual, then brace for trade uncertainty.” Among big US ports, Houston saw the strongest year-over-year import growth, with July volumes reaching 184,418 TEUs, representing an 18.5% gain from a year earlier. The jump was largely attributable to imports from Southeast Asia, which grew 63% from a year earlier, and China, which rose 9.8%. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Tariff-driven frontloading pushed US containerized imports to an all-time high in July, with most ports seeing double-digit volume growth over June’s numbers. While China remained the top source for overseas goods, US shippers appeared more eager to move freight from other tariff targets in southern Europe and Southeast Asia. Total US container volumes last month reached 2.609 million TEUs, the most ever recorded for a single month by PIERS, a sister company of the Journal of Commerce within S&P Global. July’s volume was a 17.5% gain from June. The Trump administration’s implementation of wide-ranging tariffs against US trading partners this spring — and subsequent 90-day reprieves — were the obvious reasons for the July surge. The month’s numbers followed a 5% year-over-year decline in May volumes as freight bookings fell after Trump issued his reciprocal tariff plans , and a smaller 3% decline in June as shippers started returning to the market when the administration began pausing its various tariff plans. The month-to-month volatility, though, masks more normal growth in the container trade and the likelihood of a down year. US import volumes year to date through July are up 5.4%, PIERS data shows. The second half of 2025 is not likely to match those numbers, according to the National Retail Federation. It forecasts a 5.6% decline in total container imports due to the uncertain effect tariffs will have on inflation, consumer spending and the overall US economy. China down, but not out After two consecutive months of 20% or higher declines, containerized imports from China, the biggest tariff target, rebounded in July, reaching 1.228 million TEUs, a 36% increase from June, according to PIERS. But July’s volume from China was still down 8% from a year earlier, likely reflecting the longer-term US sourcing shift away from that country. With countries such as Vietnam, Thailand and Cambodia also receiving a reprieve from tariffs, imports from that region led July’s growth. Container imports from Southeast Asia saw a 24% year-over-year gain last month, reaching a record for any month, of 581,803 TEUs. July’s volume bested the previous record of 542,414 TEUs set just in June. Imports from countries in the Indian subcontinent also reached a record high last month. PIERS data for July shows container volumes from that region totaled 152,630 TEUs, a 21% gain from a year earlier. Imports from Southern Europe, meanwhile, rose 7% from a year earlier to 155,587 TEUs, while July’s imports from Northern Europe were essentially flat. LA, Houston volumes stand out As the first call for most container services from Asia, the Port of Los Angeles saw strong growth in July. Containerized import volumes there reached 542,940 TEUs, PIERS data shows, a 10% increase from a year earlier and the highest monthly total for the port since August 2024. Following similarly strong volumes in June, Port of Los Angeles Executive Director Gene Seroka said last month that he expects July may represent the year’s peak season due to the tariff-driven whipsaw in volumes. “Some importers are bringing in year-end holiday cargo now ahead of potential higher tariffs later in the year,” Seroka said in a statement. “July may be our peak season month as retailers and manufacturers bring orders in earlier than usual, then brace for trade uncertainty.” Among big US ports, Houston saw the strongest year-over-year import growth, with July volumes reaching 184,418 TEUs, representing an 18.5% gain from a year earlier. The jump was largely attributable to imports from Southeast Asia, which grew 63% from a year earlier, and China, which rose 9.8%. Contact Michael Angell at michael.angell@spglobal.com .

Whipsaw from Trump’s tariffs drove US container import record in July

<div class="phx-topic abstract-wrapper">The reasons for the increase are largely tariff-related, sources say, as market participants adjust to the possibility of permanently higher tariff levels imposed by the Trump administration.</div>

The reasons for the increase are largely tariff-related, sources say, as market participants adjust to the possibility of permanently higher tariff levels imposed by the Trump administration.

<div class="phx-topic">(Adds comment from Maersk’s Aug. 7 earnings call). Growing volumes of trans-Pacific eastbound spot cargo are being controlled at origin countries such as China as the impact of US tariffs bores deeply into shipping practices, sources tell the Journal of Commerce. The reasons for a noticeable increase in origin-controlled container trade are largely tariff-related, sources said, as parties to trade transactions adjust to possibly permanently higher tariff levels imposed by the Trump Administration. Origin-controlled cargo means the purchasing of ocean transportation is done by parties in exporting countries such as China, for example, rather than in the US. “At Toll Group, we are observing a slight upward trend in origin-controlled cargo,” said Marc Meier, Toll’s global head of ocean freight. “This trend appears to be influenced by factors such as the current supply and demand situation, where supply is notably higher than demand, as well as ongoing tariff discussions.” Meier said Toll’s origin-controlled cargo is now about 35% of its total cargo compared with 20% a few years ago. “We believe going forward, it might be 40-45%,” he said. Others see the trend also. “I have noticed a significant shift in the traditional mix of our smaller volume shippers where there is more Asia controlled/nominated shipments as a percent of our overall weekly bookings … this has been going on for the last five to six months,” said Kurt McElroy, executive vice president at the forwarder Kerry Apex. McElroy said the shift could be due to “smaller importers choosing to buy DDP [delivery duty paid] and leaving the duty uncertainty to the shipper.” “Volatile freight rates could also be a contributing factor in small importers’ decisions to have terms of sale [DDP or cost-insurance-freight], instead of typical [free-on-board] terms of sale,” he said. Under DDP terms, the seller bears all shipping and customs costs until it delivers the goods to the buyer, having cleared customs as the named place of destination. Another possible reason for growth in origin-controlled spot cargo is the growing ease of booking using online tools from carriers such as Maersk, Hapag Lloyd and CMA-CGM, who sources say are allocating greater amounts of their vessel space to online channels. McElroy said the volatile market could also be prompting large US retailers to seek DDP terms from their suppliers versus receiving such goods at origin and shipping them under their own contracts. “Big box retailers like Walmart, when ocean rates are not as volatile, will want to purchase FOB from their smaller suppliers and move under their own contract,” McElroy said. “Yet, when rates get volatile … on the upswing, and space tightens, along with duty uncertainty, Walmart will choose to have small suppliers ship to Walmart distribution centers CIF and not allow price increases. They have such leverage with smaller suppliers to accept these kind of terms.” <h3>Contract market shifting from US control? </h3> Few are seeing the contract market shift from US control, but some see it coming. “In the trans-Pacific trade, there has been a view that importers of goods into the USA were the major buyers of freight as they purchased goods from manufacturers in Asia FOB and controlled the import supply chain into the USA,” said Lian Hoon Lim, Singapore-based partner and managing director of Alix Partners, which has a long history in ocean freight. “So carriers naturally gave priority to marketing and selling freight to the ‘FOB buyer’ over the exporter in Asia who was labelled the ‘CIF buyer,’” he added. “Ten to 15 years ago that was very true for pretty much everything that came out of China, and that you could price up somewhat for FOB cargo vs. CIF.” But as Chinese companies emerge as sellers of goods under their own brand names, the ocean freight landscape will begin to change. “If you look at South Korea and Japan, as their exporting companies became big enough and more adventurous and spread their wings overseas, they established sales units in the US and Europe,” Lim said. “So instead of exporting their goods to third-party distributors, they sold to their own sales companies in the US and Europe. At that point the FOB vs. CIF issue becomes moot, because the control of the freight passes over to those companies and if their [headquarters] are in Japan or Korea or China, they are more likely to buy freight there versus at destination. “I can easily imagine that at some point in time, companies like Huawei saying we have a sales company in the US or Europe and that we should take control of long-distance shipments ourselves, and when that happens you can easily see the freight buying shifting from destination to origin,” Lim added. This is starting to happen.“Now we’re seeing a different phase…China gaining market share on the world stage, not by producing stuff for Western companies, but by having its own companies going global,” AP Moller-Maersk CEO Vincent Clerc said <a href="https://www.joc.com/article/chinese-brand-expansion-changing-fabric-of-global-trade-clerc-6059345">on an earnings call on Aug. 7</a>, pointing to electric vehicles, solar panels, wind turbines, chemicals, mobile phones and electronics, with ocean freight controlled in China in most or all of those cases.Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

(Adds comment from Maersk’s Aug. 7 earnings call). Growing volumes of trans-Pacific eastbound spot cargo are being controlled at origin countries such as China as the impact of US tariffs bores deeply into shipping practices, sources tell the Journal of Commerce. The reasons for a noticeable increase in origin-controlled container trade are largely tariff-related, sources said, as parties to trade transactions adjust to possibly permanently higher tariff levels imposed by the Trump Administration. Origin-controlled cargo means the purchasing of ocean transportation is done by parties in exporting countries such as China, for example, rather than in the US. “At Toll Group, we are observing a slight upward trend in origin-controlled cargo,” said Marc Meier, Toll’s global head of ocean freight. “This trend appears to be influenced by factors such as the current supply and demand situation, where supply is notably higher than demand, as well as ongoing tariff discussions.” Meier said Toll’s origin-controlled cargo is now about 35% of its total cargo compared with 20% a few years ago. “We believe going forward, it might be 40-45%,” he said. Others see the trend also. “I have noticed a significant shift in the traditional mix of our smaller volume shippers where there is more Asia controlled/nominated shipments as a percent of our overall weekly bookings … this has been going on for the last five to six months,” said Kurt McElroy, executive vice president at the forwarder Kerry Apex. McElroy said the shift could be due to “smaller importers choosing to buy DDP [delivery duty paid] and leaving the duty uncertainty to the shipper.” “Volatile freight rates could also be a contributing factor in small importers’ decisions to have terms of sale [DDP or cost-insurance-freight], instead of typical [free-on-board] terms of sale,” he said. Under DDP terms, the seller bears all shipping and customs costs until it delivers the goods to the buyer, having cleared customs as the named place of destination. Another possible reason for growth in origin-controlled spot cargo is the growing ease of booking using online tools from carriers such as Maersk, Hapag Lloyd and CMA-CGM, who sources say are allocating greater amounts of their vessel space to online channels. McElroy said the volatile market could also be prompting large US retailers to seek DDP terms from their suppliers versus receiving such goods at origin and shipping them under their own contracts. “Big box retailers like Walmart, when ocean rates are not as volatile, will want to purchase FOB from their smaller suppliers and move under their own contract,” McElroy said. “Yet, when rates get volatile … on the upswing, and space tightens, along with duty uncertainty, Walmart will choose to have small suppliers ship to Walmart distribution centers CIF and not allow price increases. They have such leverage with smaller suppliers to accept these kind of terms.” Contract market shifting from US control? Few are seeing the contract market shift from US control, but some see it coming. “In the trans-Pacific trade, there has been a view that importers of goods into the USA were the major buyers of freight as they purchased goods from manufacturers in Asia FOB and controlled the import supply chain into the USA,” said Lian Hoon Lim, Singapore-based partner and managing director of Alix Partners, which has a long history in ocean freight. “So carriers naturally gave priority to marketing and selling freight to the ‘FOB buyer’ over the exporter in Asia who was labelled the ‘CIF buyer,’” he added. “Ten to 15 years ago that was very true for pretty much everything that came out of China, and that you could price up somewhat for FOB cargo vs. CIF.” But as Chinese companies emerge as sellers of goods under their own brand names, the ocean freight landscape will begin to change. “If you look at South Korea and Japan, as their exporting companies became big enough and more adventurous and spread their wings overseas, they established sales units in the US and Europe,” Lim said. “So instead of exporting their goods to third-party distributors, they sold to their own sales companies in the US and Europe. At that point the FOB vs. CIF issue becomes moot, because the control of the freight passes over to those companies and if their [headquarters] are in Japan or Korea or China, they are more likely to buy freight there versus at destination. “I can easily imagine that at some point in time, companies like Huawei saying we have a sales company in the US or Europe and that we should take control of long-distance shipments ourselves, and when that happens you can easily see the freight buying shifting from destination to origin,” Lim added. This is starting to happen. “Now we’re seeing a different phase…China gaining market share on the world stage, not by producing stuff for Western companies, but by having its own companies going global,” AP Moller-Maersk CEO Vincent Clerc said on an earnings call on Aug. 7 , pointing to electric vehicles, solar panels, wind turbines, chemicals, mobile phones and electronics, with ocean freight controlled in China in most or all of those cases. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

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