PDS 2025 Free Trial 640x340.png

Subscription Sale Pop Up - Free/Free Trials

Events

Maritime

Surface

Air Cargo

Magazine

Supply chain

Gateway

Breakbulk News

Container Shipping News

Port News

Trucking News

Rail News

Air Cargo Forwarder News

Air Cargo Carriers News

Transport, Trade and Regulation News

Logistics Technology News

Cool Cargo News

Last Mile News

Industrial Real Estate News

Special Reports

Breakbulk carriers

Ro/ro cargo

Energy projects

Heavy-haul transport

Project cargo

Container lines

Trans-Atlantic

Forwarding

Asia-Europe

Trans-Pacific

Drayage

Port infrastructure

Breakbulk ports

North American ports

Marine terminals

International ports

Longshore labor

Truckload

Truck brokers

Flatbed

Trucking labor

North-American rail

International rail

Intermodal providers

Quarterly Intelligence Report

Intermodal Savings Index

Domestic Intermodal Service Scorecard

Breakbulk Quarterly Intelligence

PDS 2025 S SP 640x340.png

Subscription Sale Pop Up - Silver/Silver Plus

Resources

Platts Containers Update

<div class="phx-topic abstract-wrapper">Dayton Freight Lines and A. Duie Pyle are partnering to provide next-day service from the East Coast to all parts of Ohio as shippers demand more speed. </div>

Dayton Freight Lines and A. Duie Pyle are partnering to provide next-day service from the East Coast to all parts of Ohio as shippers demand more speed.

Feature image

<div class="phx-topic">Regional less-than-truckload (LTL) carriers in the US are redrawing their service maps by buying new terminals, merging with competitors and forming partnerships to build density in their freight networks and offer their shipper customers more services to more locations. Two of the largest US regional LTL providers, Dayton Freight Lines and A. Duie Pyle, on Tuesday said they would partner to expand their service territories, with A. Duie Pyle gaining next-day lanes throughout Ohio and Dayton pushing into Pennsylvania. The partnership follows the purchase of Ohio-based <a href="https://www.joc.com/article/ma-activity-redrawing-regional-ltl-map-in-us-midwest-and-beyond-5917864">Sutton Transport</a> by Pittsburgh-based Pitt Ohio and smaller deals that are consolidating LTL regional capacity in the Midwest, such as the acquisition of RMX Freight Systems last year by <a href="https://www.joc.com/article/smaller-us-ltl-carriers-increasingly-merging-in-sink-or-swim-market-5783875">Moran Transportation</a>. Pyle and Dayton have been partners since 2003, exchanging two-day shipments at Pyle’s Streetsboro, Ohio, terminals and Dayton’s Cleveland service center. The new initiative upgrades two-day service to next-day, meeting shipper demand for faster transit. For Pyle, increased <a href="https://www.joc.com/article/us-ltl-rates-rising-as-industrial-outlook-shipper-confidence-improve-5944443">LTL competition</a> made the need to expand into Ohio clear, said John Luciani, chief operating officer of the West Chester, Pennsylvania-based company. “We needed to provide overnight service from New Jersey to the state of Ohio,” Luciani said. “There’s competition providing overnight service, so we were at a disadvantage,” he told the Journal of Commerce Wednesday. “We worked for a little over a year with Dayton to work out ways to infuse next-day shipments into each other’s networks.” Pyle is expanding its terminal network in Ohio to facilitate next-day service. “We’ve purchased a service center in Bowling Green [Ohio] and we will build in Columbus and lease in Toledo,” complementing service centers in Streetsboro and Cleveland, Luciani added. “We had customers tell us that if we were in Columbus we’d be handling their business going to the Northeast, and that was all the motivation we needed,” he said. “Our customers have asked us to expand to provide the high-quality service they want.” Dayton is the third-largest regional US LTL provider ranked by revenue, while Pyle is sixth-largest, according to data from SJ Consulting Group. Its next-day service expansion will be rolled out over the next few quarters, Luciani said. Closing coverage gaps LTL carriers in the Midwest are not just looking to grow, they are filling a gap left by the loss of USF Holland, a leading regional LTL carrier in the Midwest and a subsidiary of bankrupt LTL provider Yellow. Holland shut down along with Yellow’s other carriers in July 2023. “I still think there’s a hole” in the LTL landscape left by Holland, Mike Moran, president of Moran Transportation, told the Journal of Commerce. Holland, acquired by Yellow in 2005, covered the entire Midwest and parts of the south central and southeast United States. Despite decades of offshoring of manufacturing jobs, the Midwest is still home to many US manufacturers, with five of the 10 largest manufacturing states in the US and more than 57,000 manufacturing companies, according to industrial data provider MNI. As the Dayton-Pyle partnership underscores, the Midwest is also a gateway to the Northeast market. R+L Carriers, a Wilmington, Ohio-based national LTL provider, acquired Yellow’s 304-door Maybrook, New York, terminal in December to expand in the Northeast. ”The Midwest is a critical link [in LTL networks] and it’s often overlooked,” said Kevin Huntsman, president of Mastio &amp; Company, a transportation market research firm. The Midwest is a key hub for shipments from the West, East and Gulf coasts, he said. “There’s a strong connection between the Midwest and the Dallas and Houston markets,” Huntsman said. Pitt Ohio recently launched an express LTL service from Ohio to Texas, and LTL carriers are looking to make more <a href="https://www.joc.com/article/us-ltl-providers-seeking-bigger-share-of-mexico-cross-border-trucking-5929402">Midwest-to-Mexico</a> connections. Regional LTL carriers across the US are also positioning themselves to compete against national carriers and multiregional companies such as Knight-Swift, which has three regional subsidiaries and is <a href="https://www.joc.com/article/knight-swift-puts-ltl-buyouts-on-hold-as-us-freight-market-flattens-5928140">seeking a fourth LTL provider</a> in the Northeast. “There’s a lot happening with regional carriers and I’d expect a lot of consolidation or strategic partnerships,” said Dean Jones, chief commercial officer at AFS Logistics. LTL providers are also watching FedEx Freight, the largest US LTL provider, which is being spun off by parcel carrier FedEx. It is unclear how an independent FedEx Freight <a href="https://www.joc.com/article/fedex-freight-spinoff-is-latest-move-to-reshape-us-ltl-market-5909683">might alter the competitive balance</a> and reshape the LTL market. More density, freight Tim Haitz, chief commercial officer at Wisconsin-based regional LTL provider Standard Forwarding Freight, sees more freight flowing to regional companies. "When freight is going only 500 miles, a long-haul LTL carrier probably touches it more in transit than a regional guy, just because of how the long-haul network is set up to service the whole country,” said Haitz, who worked for decades for Yellow and Roadway. “That’s why you’re seeing a lot of mergers and acquisitions and partnerships among regional carriers all over the country,” Haitz said. “If you can integrate systems and hand off freight, you can extend your networks and become more important to the customer.” Standard Forwarding Freight itself was acquired at the end of 2024 from DHL by Sakaem Logistics, an investment firm owned by the family that used to own defunct car hauler Jack Cooper Transport. The regional LTL carrier has 14 terminals across the Midwest. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Regional less-than-truckload (LTL) carriers in the US are redrawing their service maps by buying new terminals, merging with competitors and forming partnerships to build density in their freight networks and offer their shipper customers more services to more locations. Two of the largest US regional LTL providers, Dayton Freight Lines and A. Duie Pyle, on Tuesday said they would partner to expand their service territories, with A. Duie Pyle gaining next-day lanes throughout Ohio and Dayton pushing into Pennsylvania. The partnership follows the purchase of Ohio-based Sutton Transport by Pittsburgh-based Pitt Ohio and smaller deals that are consolidating LTL regional capacity in the Midwest, such as the acquisition of RMX Freight Systems last year by Moran Transportation . Pyle and Dayton have been partners since 2003, exchanging two-day shipments at Pyle’s Streetsboro, Ohio, terminals and Dayton’s Cleveland service center. The new initiative upgrades two-day service to next-day, meeting shipper demand for faster transit. For Pyle, increased LTL competition made the need to expand into Ohio clear, said John Luciani, chief operating officer of the West Chester, Pennsylvania-based company. “We needed to provide overnight service from New Jersey to the state of Ohio,” Luciani said. “There’s competition providing overnight service, so we were at a disadvantage,” he told the Journal of Commerce Wednesday. “We worked for a little over a year with Dayton to work out ways to infuse next-day shipments into each other’s networks.” Pyle is expanding its terminal network in Ohio to facilitate next-day service. “We’ve purchased a service center in Bowling Green [Ohio] and we will build in Columbus and lease in Toledo,” complementing service centers in Streetsboro and Cleveland, Luciani added. “We had customers tell us that if we were in Columbus we’d be handling their business going to the Northeast, and that was all the motivation we needed,” he said. “Our customers have asked us to expand to provide the high-quality service they want.” Dayton is the third-largest regional US LTL provider ranked by revenue, while Pyle is sixth-largest, according to data from SJ Consulting Group. Its next-day service expansion will be rolled out over the next few quarters, Luciani said. Closing coverage gaps LTL carriers in the Midwest are not just looking to grow, they are filling a gap left by the loss of USF Holland, a leading regional LTL carrier in the Midwest and a subsidiary of bankrupt LTL provider Yellow. Holland shut down along with Yellow’s other carriers in July 2023. “I still think there’s a hole” in the LTL landscape left by Holland, Mike Moran, president of Moran Transportation, told the Journal of Commerce. Holland, acquired by Yellow in 2005, covered the entire Midwest and parts of the south central and southeast United States. Despite decades of offshoring of manufacturing jobs, the Midwest is still home to many US manufacturers, with five of the 10 largest manufacturing states in the US and more than 57,000 manufacturing companies, according to industrial data provider MNI. As the Dayton-Pyle partnership underscores, the Midwest is also a gateway to the Northeast market. R+L Carriers, a Wilmington, Ohio-based national LTL provider, acquired Yellow’s 304-door Maybrook, New York, terminal in December to expand in the Northeast. ”The Midwest is a critical link [in LTL networks] and it’s often overlooked,” said Kevin Huntsman, president of Mastio & Company, a transportation market research firm. The Midwest is a key hub for shipments from the West, East and Gulf coasts, he said. “There’s a strong connection between the Midwest and the Dallas and Houston markets,” Huntsman said. Pitt Ohio recently launched an express LTL service from Ohio to Texas, and LTL carriers are looking to make more Midwest-to-Mexico connections. Regional LTL carriers across the US are also positioning themselves to compete against national carriers and multiregional companies such as Knight-Swift, which has three regional subsidiaries and is seeking a fourth LTL provider in the Northeast. “There’s a lot happening with regional carriers and I’d expect a lot of consolidation or strategic partnerships,” said Dean Jones, chief commercial officer at AFS Logistics. LTL providers are also watching FedEx Freight, the largest US LTL provider, which is being spun off by parcel carrier FedEx. It is unclear how an independent FedEx Freight might alter the competitive balance and reshape the LTL market. More density, freight Tim Haitz, chief commercial officer at Wisconsin-based regional LTL provider Standard Forwarding Freight, sees more freight flowing to regional companies. "When freight is going only 500 miles, a long-haul LTL carrier probably touches it more in transit than a regional guy, just because of how the long-haul network is set up to service the whole country,” said Haitz, who worked for decades for Yellow and Roadway. “That’s why you’re seeing a lot of mergers and acquisitions and partnerships among regional carriers all over the country,” Haitz said. “If you can integrate systems and hand off freight, you can extend your networks and become more important to the customer.” Standard Forwarding Freight itself was acquired at the end of 2024 from DHL by Sakaem Logistics, an investment firm owned by the family that used to own defunct car hauler Jack Cooper Transport. The regional LTL carrier has 14 terminals across the Midwest. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Regional LTL partnership to speed service linking Midwest, Northeast

<div class="phx-topic abstract-wrapper">As the new US administration looks to strengthen its regional sphere of influence, bipartisan political support is building to boost US shipbuilding, and thus, the country’s ability to project power in the Arctic and reduce dependence on foreign carriers. </div>

As the new US administration looks to strengthen its regional sphere of influence, bipartisan political support is building to boost US shipbuilding, and thus, the country’s ability to project power in the Arctic and reduce dependence on foreign carriers.

<div class="phx-topic"><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5946735_0.1.jpg"></img></div>US President Donald Trump has maritime on the mind, flexing an expansionist worldview to expand regional control and limit Chinese and Russian influence in the Western Hemisphere. In just the very early days of the new administration, the White House has cited the security threat of Russian and Chinese shipping in Arctic waters as justification for Trump’s designs on Greenland and Canada and has escalated pressure on Panama to push out a Hong Kong-based marine terminal operator it deems under China’s sway.  The president’s missives, importantly, have not impacted container shipping, but they are noteworthy, nonetheless. Commercial shipping and the extensions of military power, most visible via navies and strategic port investment such as China’s Belt and Road, have rarely come into conflict while sharing the same waters. But increased geopolitical risks, driven largely by heightened tensions between China and the United States, are pushing the commercial and government spheres closer together. As the US looks to strengthen its regional sphere of influence, <a href="https://www.joc.com/article/us-flag-vessel-owners-investors-tout-wave-of-support-for-expanding-fleet-5819921">bipartisan political attention is building to boost US shipbuilding</a>, and thus, its ability to project power in the Arctic and reduce dependence on foreign carriers. While political interest for a US shipbuilding renaissance might be the most favorable since the Nixon administration, the challenge is daunting. Rebuilding an industry that has been in decline since World War II would take massive and consistent multiyear investment — unlike, say, renaming a body of water shared with Mexico and Cuba. Once at more than 2,000 vessels and 300 shipyards, the US international merchant fleet now numbers approximately 80 and just 20 or so of domestic shipyards. During a call in November with the president of South Korea, Trump <a href="http://go.microsoft.com/fwlink/p/?LinkId=255141">expressed interest</a> in the increased cooperation between the two countries’ shipbuilding industries, according to Nikkei Asia. Hanwhan Systems and Hanwha Ocean acquired Philly Shipyard, which builds US-flag ships for Jones Act trades, in December for approximately $100 million. The outgoing Biden administration, which like Trump defended US Steel from Japanese buyers, blasted Chinese steel subsidies for unfairly propping up Chinese shipbuilding. Trump on Feb. 10 announced a 25% tariff on US imports of steel and aluminum, effective March 12.  US shipbuilding proponents are encouraged by Trump filling his new cabinet with three men known to have supported US shipbuilding while in Congress — former congressmen Mike Waltz and Jamieson Greer are now national security advisor and US trade representative, respectively, while ex-Sen. Marco Rubio is Secretary of State.  The Trump administration has a legislative vehicle at its disposal via the newly introduced SHIPS Act. The <a href="https://www.joc.com/article/legislation-aims-to-mandate-rising-share-of-china-imports-on-expanded-us-flag-fleet-5909698">SHIPS Act</a>, introduced in the Senate and House and backed by both sides of the aisle, would require all government cargoes to be shipped via the US-flag fleet. The legislation, if passed, would mandate that an annually increasing percentage of commercial goods imported from China move on US-flag ships starting in 2029, eventually reaching 10%. The legislation as of mid-February had yet to start moving through either of the respective Senate or House committees. <h3>Panama squeeze</h3>More immediately, the Trump administration is putting the heat on Panama’s government for allowing Hong Kong-based Hutchison Port Holdings (HPH) to operate a port on either side of the Panama Canal through a long-standing concession that began in 1997 and was renewed in 2021. Louis Sola, newly tapped by Trump as chairman of the Federal Maritime Commission and a one-time Panama resident, told senators during a Jan 28 that <a href="https://www.joc.com/article/fmc-chair-questions-level-playing-field-in-panama-canal-operations-5932469">US terminal operators did not get a fair shake</a> in the country due to corruption in the government. US-based SSA Marine, Singapore-based PSA and Taiwan-based Evergreen Terminal also have terminals in Panama. Panama announced on Feb. 7 that it would not renew its membership in China’s Belt and Road initiative, the massive infrastructure investment designed to string ports, including Cosco Shipping’s newly opened mega-terminal in Peru, like proverbial pearls. Trump has proposed a massive US sovereign investment fund, which could hypothetically aid the canal in a $2 billion project to ensure it has enough water to fully support its locks. CK Hutchison Group’s container division, spanning 298 berths and 53 ports in 24 countries, reports that <a href="https://centerformaritimestrategy.org/publications/part-2-can-the-greatest-maritime-infrastructure-project-ever-provide-even-more-benefits-to-the-united-states/">8.9% of its revenue</a> comes from its Panama operations, which contributes 1.3% to its global berthage, analyst John McCown of the Center for Maritime Strategy wrote. “It is unreasonable to consider a de minimis segment of a conglomerate that actually has nothing to do with the canal to be a national security risk,” McCown wrote in a Feb. 18 analysis. Meanwhile, Senate Republicans are laying out the legal argument that the US could retake control of the canal if the neutrality has been violated. And Mauricio Claver-Carone, Trump’s special envoy for Latin America, told Politico in early February that the US Army Corps of Engineers <a href="https://www.politico.com/news/magazine/2025/02/12/mauricio-claver-carone-interview-trump-latin-america-00203718">could help the canal</a>, with the condition that the US could get a “piece of it.” Expanding the remit of the Panama Canal Authority to the management of port concessions could be one way to increase US oversight without trying to force a cancellation of HPH’s concessions, which are in place until 2047, or retaking control of the waterway. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

US President Donald Trump has maritime on the mind, flexing an expansionist worldview to expand regional control and limit Chinese and Russian influence in the Western Hemisphere. In just the very early days of the new administration, the White House has cited the security threat of Russian and Chinese shipping in Arctic waters as justification for Trump’s designs on Greenland and Canada and has escalated pressure on Panama to push out a Hong Kong-based marine terminal operator it deems under China’s sway.  The president’s missives, importantly, have not impacted container shipping, but they are noteworthy, nonetheless. Commercial shipping and the extensions of military power, most visible via navies and strategic port investment such as China’s Belt and Road, have rarely come into conflict while sharing the same waters. But increased geopolitical risks, driven largely by heightened tensions between China and the United States, are pushing the commercial and government spheres closer together. As the US looks to strengthen its regional sphere of influence, bipartisan political attention is building to boost US shipbuilding , and thus, its ability to project power in the Arctic and reduce dependence on foreign carriers. While political interest for a US shipbuilding renaissance might be the most favorable since the Nixon administration, the challenge is daunting. Rebuilding an industry that has been in decline since World War II would take massive and consistent multiyear investment — unlike, say, renaming a body of water shared with Mexico and Cuba. Once at more than 2,000 vessels and 300 shipyards, the US international merchant fleet now numbers approximately 80 and just 20 or so of domestic shipyards. During a call in November with the president of South Korea, Trump expressed interest in the increased cooperation between the two countries’ shipbuilding industries, according to Nikkei Asia. Hanwhan Systems and Hanwha Ocean acquired Philly Shipyard, which builds US-flag ships for Jones Act trades, in December for approximately $100 million. The outgoing Biden administration, which like Trump defended US Steel from Japanese buyers, blasted Chinese steel subsidies for unfairly propping up Chinese shipbuilding. Trump on Feb. 10 announced a 25% tariff on US imports of steel and aluminum, effective March 12.  US shipbuilding proponents are encouraged by Trump filling his new cabinet with three men known to have supported US shipbuilding while in Congress — former congressmen Mike Waltz and Jamieson Greer are now national security advisor and US trade representative, respectively, while ex-Sen. Marco Rubio is Secretary of State.  The Trump administration has a legislative vehicle at its disposal via the newly introduced SHIPS Act. The SHIPS Act , introduced in the Senate and House and backed by both sides of the aisle, would require all government cargoes to be shipped via the US-flag fleet. The legislation, if passed, would mandate that an annually increasing percentage of commercial goods imported from China move on US-flag ships starting in 2029, eventually reaching 10%. The legislation as of mid-February had yet to start moving through either of the respective Senate or House committees. Panama squeeze More immediately, the Trump administration is putting the heat on Panama’s government for allowing Hong Kong-based Hutchison Port Holdings (HPH) to operate a port on either side of the Panama Canal through a long-standing concession that began in 1997 and was renewed in 2021. Louis Sola, newly tapped by Trump as chairman of the Federal Maritime Commission and a one-time Panama resident, told senators during a Jan 28 that US terminal operators did not get a fair shake in the country due to corruption in the government. US-based SSA Marine, Singapore-based PSA and Taiwan-based Evergreen Terminal also have terminals in Panama. Panama announced on Feb. 7 that it would not renew its membership in China’s Belt and Road initiative, the massive infrastructure investment designed to string ports, including Cosco Shipping’s newly opened mega-terminal in Peru, like proverbial pearls. Trump has proposed a massive US sovereign investment fund, which could hypothetically aid the canal in a $2 billion project to ensure it has enough water to fully support its locks. CK Hutchison Group’s container division, spanning 298 berths and 53 ports in 24 countries, reports that 8.9% of its revenue comes from its Panama operations, which contributes 1.3% to its global berthage, analyst John McCown of the Center for Maritime Strategy wrote. “It is unreasonable to consider a de minimis segment of a conglomerate that actually has nothing to do with the canal to be a national security risk,” McCown wrote in a Feb. 18 analysis. Meanwhile, Senate Republicans are laying out the legal argument that the US could retake control of the canal if the neutrality has been violated. And Mauricio Claver-Carone, Trump’s special envoy for Latin America, told Politico in early February that the US Army Corps of Engineers could help the canal , with the condition that the US could get a “piece of it.” Expanding the remit of the Panama Canal Authority to the management of port concessions could be one way to increase US oversight without trying to force a cancellation of HPH’s concessions, which are in place until 2047, or retaking control of the waterway. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Trump’s expansionist worldview puts US maritime interests in spotlight

<div class="phx-topic abstract-wrapper">The forwarder reported solid results to close 2024 as unknowns linked to US longshore labor, tariff policy and changes to de minimis rules fueled trans-Pacific freight demand. </div>

The forwarder reported solid results to close 2024 as unknowns linked to US longshore labor, tariff policy and changes to de minimis rules fueled trans-Pacific freight demand.

<div class="phx-topic">Frontloading of air and ocean cargo pushed earnings higher for Expeditors International during the fourth quarter as a litany of uncertainties from port labor to tariffs to geopolitics prodded shippers to move their freight as quickly as possible. The trans-Pacific forwarder reported Q4 2024 earnings of $1.68 per share, up 54% from a year ago and well above the $1.43 S&amp;P Capital IQ consensus estimate. Revenue for the quarter was up 30% to $2.95 billion, beating the consensus estimate of $2.8 billion. Expeditors Chief Executive Jeffrey Musser said in a statement Tuesday the results were driven by “strong demand from Asia, along with heavy de minimis-driven e-commerce business and increased demand for technology products” that helped drive an 11% year-on-year gain in air freight kilos during the fourth quarter. Musser said Expeditors moved its most air freight since the end of 2021. The company’s air segment saw revenue rise 22% year over year in the fourth quarter to just over $1 billion. The forwarder’s ocean freight volumes increased 14% during the quarter, with segment revenue rising 77% year over year to $908 million. Along with higher volumes, Musser said Expeditors was able to capitalize on the spread between its contract rates with ocean carriers and rates shippers paid to move freight during the quarter. “Strong demand generally for ocean transportation combined with longer transit times and capacity issues caused by the disruptions in the Red Sea resulted in significant increases in overall average buy and sell rates and growth in volumes,” Musser said. The knock-on effect of higher volumes across air and ocean freight also drove a 9% revenue increase in Expeditors’ customs brokerage and related services business. Musser said it was unclear whether the market volatility will ease given the uncertainty about US polices on de minimis shipments, new tariffs from the Trump administration and whether ocean carriers will resume Red Sea transits anytime soon. He added that “geopolitical words and actions are driving disruption at a faster pace than we can ever recall, and national policies regarding tariffs and other similar measures are highly unclear in many countries around the globe.” Separately, Musser announced that he will step down from the chief executive role in March and be replaced by Daniel Wall, Expeditors’ president of global geographies.   Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a></div>

Frontloading of air and ocean cargo pushed earnings higher for Expeditors International during the fourth quarter as a litany of uncertainties from port labor to tariffs to geopolitics prodded shippers to move their freight as quickly as possible. The trans-Pacific forwarder reported Q4 2024 earnings of $1.68 per share, up 54% from a year ago and well above the $1.43 S&P Capital IQ consensus estimate. Revenue for the quarter was up 30% to $2.95 billion, beating the consensus estimate of $2.8 billion. Expeditors Chief Executive Jeffrey Musser said in a statement Tuesday the results were driven by “strong demand from Asia, along with heavy de minimis-driven e-commerce business and increased demand for technology products” that helped drive an 11% year-on-year gain in air freight kilos during the fourth quarter. Musser said Expeditors moved its most air freight since the end of 2021. The company’s air segment saw revenue rise 22% year over year in the fourth quarter to just over $1 billion. The forwarder’s ocean freight volumes increased 14% during the quarter, with segment revenue rising 77% year over year to $908 million. Along with higher volumes, Musser said Expeditors was able to capitalize on the spread between its contract rates with ocean carriers and rates shippers paid to move freight during the quarter. “Strong demand generally for ocean transportation combined with longer transit times and capacity issues caused by the disruptions in the Red Sea resulted in significant increases in overall average buy and sell rates and growth in volumes,” Musser said. The knock-on effect of higher volumes across air and ocean freight also drove a 9% revenue increase in Expeditors’ customs brokerage and related services business. Musser said it was unclear whether the market volatility will ease given the uncertainty about US polices on de minimis shipments, new tariffs from the Trump administration and whether ocean carriers will resume Red Sea transits anytime soon. He added that “geopolitical words and actions are driving disruption at a faster pace than we can ever recall, and national policies regarding tariffs and other similar measures are highly unclear in many countries around the globe.” Separately, Musser announced that he will step down from the chief executive role in March and be replaced by Daniel Wall, Expeditors’ president of global geographies.   Contact Michael Angell at michael.angell@spglobal.com

String of market uncertainties helped drive strong Q4 for Expeditors

<div class="phx-topic abstract-wrapper">The threat dynamic in the Houthi-controlled area remains too high for ocean carriers to consider ending diversions around southern Africa, and higher insurance costs likely await when they do. </div>

The threat dynamic in the Houthi-controlled area remains too high for ocean carriers to consider ending diversions around southern Africa, and higher insurance costs likely await when they do.

<div class="phx-topic">Ocean carriers will require “a full and permanent” ceasefire between Israel and Hamas before they are confident enough to shift services back to the Red Sea and Suez Canal, according to marine management company Inchcape Shipping Services. And the unstable situation that currently prevails in the region does not suggest an end to the vessel diversions around southern Africa anytime soon, Chris Greenwood, vice president of survey and inspection at Inchcape, said Wednesday. “There remains no clear timeline on when the ceasefire will be solidified to the point that container lines will regain the confidence to resume transiting the Red Sea,” Greenwood told a webinar hosted by security risk management firm Ambrey. Despite <a href="https://www.joc.com/article/carriers-eye-red-sea-transits-after-houthi-rebels-pledge-restraint-5925939">recent pledges by the Hamas-supporting Houthi militants</a> that attacks will now be limited to ships affiliated with Israel, Greenwood was not convinced. “It will be a full and permanent ceasefire in Gaza that will make a Red Sea return possible, but it is a very unstable and uncertain environment with a lot of peripheral geopolitical issues going on,” he noted. “The threat dynamic is very uncertain and the confidence among our clients [to reroute ships via the Red Sea] is not there yet,” Greenwood added. Attacks on commercial shipping by Houthi militants at the Bab al-Mandab Strait, the narrow waterway at the southern end of the Red Sea between Yemen and Djibouti, have forced most ocean carriers to divert around southern Africa for the past 15 months. The diversions have added up to two weeks to Asia-Europe voyages, kept rates elevated, and in 2024 increased TEU miles by 17%. A return to the Red Sea and Suez by ocean carriers will depend on both Israel and Hamas meeting the conditions agreed to in the ceasefire, the individual risk tolerance of each container shipping company and the willingness of insurance companies to underwrite vessels making the voyages. <h3>Rising cost of insurance </h3>Before the Red Sea attacks began in November 2023, insurance for one-way transits was about 0.05% of the value of a ship, but that has doubled to approximately 1%, Greenwood said. That means a vessel valued at $100 million would have an insurance cost of $1 million for a single passage. “The P&amp;I clubs [protection and indemnity insurers] are taking a wait-and-see approach, but the underwriters, especially the lead underwriters, are likely to require material changes before lowering their premiums significantly,” said Greenwood. While making no mention of the insurance challenges, several ocean carrier executives have made it clear that they will only send ships through the Red Sea, “when it is safe to do so.” Maersk CEO Vincent Clerc said during his carrier’s 2024 annual earnings call earlier this month that Maersk’s resumption of Red Sea voyages would revolve around <a href="https://www.joc.com/article/maersks-profitability-in-2025-hinges-on-return-to-red-sea-clerc-5939261">a guarantee of safe passage for seamen, ships and cargo</a>. “You need to look at the situation on the ground and say, ‘the Houthis [are] either no longer capable or whatever gives them the willingness to attack is no longer,’” Clerc said. CMA CGM, however, appears to be taking a more relaxed approach to regional security concerns with certain services. The carrier this week announced a new service from India to ports along the Red Sea that passes through the Houthi-controlled Bab al-Mandab Strait using three vessels operated jointly by Saudi-based Folk Maritime and Oman-based Asyad Shipping. Another service passing through the Red Sea and Suez is <a href="https://www.joc.com/article/suez-routing-allows-rapid-transit-of-new-expedited-china-europe-service-5930379">Kawa Shipping’s new China-Europe Express</a>, which suggests the Chinese carrier has no fear of attacks by Houthi militants. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers will require “a full and permanent” ceasefire between Israel and Hamas before they are confident enough to shift services back to the Red Sea and Suez Canal, according to marine management company Inchcape Shipping Services. And the unstable situation that currently prevails in the region does not suggest an end to the vessel diversions around southern Africa anytime soon, Chris Greenwood, vice president of survey and inspection at Inchcape, said Wednesday. “There remains no clear timeline on when the ceasefire will be solidified to the point that container lines will regain the confidence to resume transiting the Red Sea,” Greenwood told a webinar hosted by security risk management firm Ambrey. Despite recent pledges by the Hamas-supporting Houthi militants that attacks will now be limited to ships affiliated with Israel, Greenwood was not convinced. “It will be a full and permanent ceasefire in Gaza that will make a Red Sea return possible, but it is a very unstable and uncertain environment with a lot of peripheral geopolitical issues going on,” he noted. “The threat dynamic is very uncertain and the confidence among our clients [to reroute ships via the Red Sea] is not there yet,” Greenwood added. Attacks on commercial shipping by Houthi militants at the Bab al-Mandab Strait, the narrow waterway at the southern end of the Red Sea between Yemen and Djibouti, have forced most ocean carriers to divert around southern Africa for the past 15 months. The diversions have added up to two weeks to Asia-Europe voyages, kept rates elevated, and in 2024 increased TEU miles by 17%. A return to the Red Sea and Suez by ocean carriers will depend on both Israel and Hamas meeting the conditions agreed to in the ceasefire, the individual risk tolerance of each container shipping company and the willingness of insurance companies to underwrite vessels making the voyages. Rising cost of insurance Before the Red Sea attacks began in November 2023, insurance for one-way transits was about 0.05% of the value of a ship, but that has doubled to approximately 1%, Greenwood said. That means a vessel valued at $100 million would have an insurance cost of $1 million for a single passage. “The P&I clubs [protection and indemnity insurers] are taking a wait-and-see approach, but the underwriters, especially the lead underwriters, are likely to require material changes before lowering their premiums significantly,” said Greenwood. While making no mention of the insurance challenges, several ocean carrier executives have made it clear that they will only send ships through the Red Sea, “when it is safe to do so.” Maersk CEO Vincent Clerc said during his carrier’s 2024 annual earnings call earlier this month that Maersk’s resumption of Red Sea voyages would revolve around a guarantee of safe passage for seamen, ships and cargo . “You need to look at the situation on the ground and say, ‘the Houthis [are] either no longer capable or whatever gives them the willingness to attack is no longer,’” Clerc said. CMA CGM, however, appears to be taking a more relaxed approach to regional security concerns with certain services. The carrier this week announced a new service from India to ports along the Red Sea that passes through the Houthi-controlled Bab al-Mandab Strait using three vessels operated jointly by Saudi-based Folk Maritime and Oman-based Asyad Shipping. Another service passing through the Red Sea and Suez is Kawa Shipping’s new China-Europe Express , which suggests the Chinese carrier has no fear of attacks by Houthi militants. Contact Greg Knowler at greg.knowler@spglobal.com .

No clear timeline for Red Sea return as carriers face rising insurance costs

<div class="phx-topic abstract-wrapper">Automation of the customs entry process, which software provider Magaya announced this week, is being enabled by advances in data extraction from emails and offline files.</div>

Automation of the customs entry process, which software provider Magaya announced this week, is being enabled by advances in data extraction from emails and offline files.

<div class="phx-topic">Freight forwarding software vendor Magaya has released a new tool that enables its customs broker customers to automate US customs entry and product classification processes. The tool, called Broker AI Assistant, automates the extraction of data from commercial invoices to populate fields in an entry. “With no standardized format for commercial invoices, filers have, until now, spent lengthy amounts of time manually extracting data, line by line, into customs filing software,” Magaya said in a statement Tuesday. “What used to take several minutes per line item is reduced to seconds.” Broker AI Assistant extracts data from commercial invoices in PDF or spreadsheet format and creates an entry in Magaya’s customs compliance product. The product also recommends the correct Harmonized Tariff Schedules (HTS) classification codes. The product is an example of how automation based on artificial intelligence (AI) is inserting itself into a range of logistics and trade compliance processes, from bots that answer rate quote requests, to voice agents that call truckload carriers to get shipment status information, to workflow automation agents that pull data from one system into another. Last week, Gaia, a startup focusing on automation of HTS classification, said it is using AI to automatically assign HTS codes to products at a 92% accuracy level within 30 seconds, with people taking at least 15 minutes to complete the same task. Amari AI, a provider of documentation automation software, told the Journal of Commerce in early February that it is gaining traction among customs brokers. Its product speeds up the process for brokers filing traditional entries, Importer Security Filings (ISFs) and Type 86 entries, which are required for de minimis shipments for brokers participating in a US Customs and Border Protection program where the importer provides a set of data elements on duty free shipments of under $800 per day. <h3>Race to provide AI tools </h3>All of these developments come as a slew of established and new software providers race to provide AI tools to shippers, intermediaries and carriers to increase their efficiency. The selling point for many of these products comes down to simple math: Automated processes perform faster on a per-hour basis than human counterparts, are more accurate and work 24 hours per day. The idea of automating HTS classification has been discussed for at least a decade but is only now gaining traction as compliance teams and brokers get their arms around how the technology works and whether it is scalable. Automating the entry process has largely been enabled by improvements in data extraction from emails and offline files through a combination of AI and computer vision intended to replicate the workflows of humans. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Freight forwarding software vendor Magaya has released a new tool that enables its customs broker customers to automate US customs entry and product classification processes. The tool, called Broker AI Assistant, automates the extraction of data from commercial invoices to populate fields in an entry. “With no standardized format for commercial invoices, filers have, until now, spent lengthy amounts of time manually extracting data, line by line, into customs filing software,” Magaya said in a statement Tuesday. “What used to take several minutes per line item is reduced to seconds.” Broker AI Assistant extracts data from commercial invoices in PDF or spreadsheet format and creates an entry in Magaya’s customs compliance product. The product also recommends the correct Harmonized Tariff Schedules (HTS) classification codes. The product is an example of how automation based on artificial intelligence (AI) is inserting itself into a range of logistics and trade compliance processes, from bots that answer rate quote requests, to voice agents that call truckload carriers to get shipment status information, to workflow automation agents that pull data from one system into another. Last week, Gaia, a startup focusing on automation of HTS classification, said it is using AI to automatically assign HTS codes to products at a 92% accuracy level within 30 seconds, with people taking at least 15 minutes to complete the same task. Amari AI, a provider of documentation automation software, told the Journal of Commerce in early February that it is gaining traction among customs brokers. Its product speeds up the process for brokers filing traditional entries, Importer Security Filings (ISFs) and Type 86 entries, which are required for de minimis shipments for brokers participating in a US Customs and Border Protection program where the importer provides a set of data elements on duty free shipments of under $800 per day. Race to provide AI tools All of these developments come as a slew of established and new software providers race to provide AI tools to shippers, intermediaries and carriers to increase their efficiency. The selling point for many of these products comes down to simple math: Automated processes perform faster on a per-hour basis than human counterparts, are more accurate and work 24 hours per day. The idea of automating HTS classification has been discussed for at least a decade but is only now gaining traction as compliance teams and brokers get their arms around how the technology works and whether it is scalable. Automating the entry process has largely been enabled by improvements in data extraction from emails and offline files through a combination of AI and computer vision intended to replicate the workflows of humans. Contact Eric Johnson at eric.johnson@spglobal.com .

Technology providers take aim at automating core US customs tasks

<div class="phx-topic abstract-wrapper">The carrier has inked an MOU with Cochin Shipyard Ltd., India’s largest facility, pledging to work together on shipbuilding and ship repair services.</div>

The carrier has inked an MOU with Cochin Shipyard Ltd., India’s largest facility, pledging to work together on shipbuilding and ship repair services.

<div class="phx-topic">India seems to have become an appealing location for global container carriers seeking new shipbuilding capacity and yard development opportunities as their traditional marketplaces in China and South Korea remain full and prefer building ultra-large container ships. Signaling that newfound interest, Maersk — typically a bellwether for changing industry dynamics — has inked a memorandum of understanding with Cochin Shipyard Ltd. (CSL), India’s largest facility, pledging to work together on shipbuilding and ship repair services. For the Danish carrier, the strategic partnership extends its interests in India beyond port-to-port shipping and terminal/inland operations. “The collaboration comes at a crucial time when the global shipping industry is expected to face capacity constraints in ship repair yards around the world,” Maersk said in a statement. “Maersk will leverage its expertise as an off-taker in its global fleet to strengthen CSL’s capabilities, primarily focusing on container ship maintenance, repair and drydocking operations.” The carrier said it will initially concentrate on vessels up to 7,000 TEUs for afloat repairs and up to 4,000 TEUs for drydocking at Cochin, scaling up capabilities in stages. “The first Maersk vessel repair at CSL, planned already for 2025, will mark the beginning of what we envisage as a long-term collaborative relationship,” the carrier said. Maersk, which is preparing to name one of its newest methanol dual-fuel containerships in India’s Nhava Sheva Port next week, also noted that the extended business program ties in with New Delhi’s recently announced policy incentives for shipbuilding verticals. Maersk is not alone in pursuing that new “port of call.” Mediterranean Shipping Co. and CMA CGM are firming up plans to follow suit as Asian supply chains increasingly diversify from a “China-plus-one” to a “China-plus-two-or-more” sourcing model. MSC is considering setting up a shipbuilding and repair center in India, while CMA CGM is expected to emulate Maersk’s approach, industry sources say. “Chinese yards now have a filled order book and are turning away smaller-size orders,” a Mumbai-based industry observer who didn’t want to be identified told the Journal of Commerce. “This is driving a business shift to India as the government has rolled out a red carpet for investment.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

India seems to have become an appealing location for global container carriers seeking new shipbuilding capacity and yard development opportunities as their traditional marketplaces in China and South Korea remain full and prefer building ultra-large container ships. Signaling that newfound interest, Maersk — typically a bellwether for changing industry dynamics — has inked a memorandum of understanding with Cochin Shipyard Ltd. (CSL), India’s largest facility, pledging to work together on shipbuilding and ship repair services. For the Danish carrier, the strategic partnership extends its interests in India beyond port-to-port shipping and terminal/inland operations. “The collaboration comes at a crucial time when the global shipping industry is expected to face capacity constraints in ship repair yards around the world,” Maersk said in a statement. “Maersk will leverage its expertise as an off-taker in its global fleet to strengthen CSL’s capabilities, primarily focusing on container ship maintenance, repair and drydocking operations.” The carrier said it will initially concentrate on vessels up to 7,000 TEUs for afloat repairs and up to 4,000 TEUs for drydocking at Cochin, scaling up capabilities in stages. “The first Maersk vessel repair at CSL, planned already for 2025, will mark the beginning of what we envisage as a long-term collaborative relationship,” the carrier said. Maersk, which is preparing to name one of its newest methanol dual-fuel containerships in India’s Nhava Sheva Port next week, also noted that the extended business program ties in with New Delhi’s recently announced policy incentives for shipbuilding verticals. Maersk is not alone in pursuing that new “port of call.” Mediterranean Shipping Co. and CMA CGM are firming up plans to follow suit as Asian supply chains increasingly diversify from a “China-plus-one” to a “China-plus-two-or-more” sourcing model. MSC is considering setting up a shipbuilding and repair center in India, while CMA CGM is expected to emulate Maersk’s approach, industry sources say. “Chinese yards now have a filled order book and are turning away smaller-size orders,” a Mumbai-based industry observer who didn’t want to be identified told the Journal of Commerce. “This is driving a business shift to India as the government has rolled out a red carpet for investment.” Contact Bency Mathew at bencyvmathew@gmail.com .

Maersk joins Indian shipbuilding race amid government incentives, China pivot

<div class="phx-topic abstract-wrapper">FMCSA’s proposed rule serves no commercial purpose, violates principles of free trade and irresponsibly exposes confidential data to potential bad actors, writes Jeff Tucker.</div>

FMCSA’s proposed rule serves no commercial purpose, violates principles of free trade and irresponsibly exposes confidential data to potential bad actors, writes Jeff Tucker.

<div class="phx-topic">The Federal Motor Carrier Safety Administration (FMCSA) has crossed a dangerous line. Amid rapid government downsizing, FMCSA is defying logic with a proposed rule that would expand its mission beyond highway safety into commercial contracts, undermining decades of deregulation and free enterprise. For over four decades, pricing deregulation in freight has supercharged the nation’s economy to become the fastest and safest delivery system in the world. Free markets drive innovation and economic growth. FMCSA’s unprecedented attempt to re-regulate pricing undercuts one of America’s greatest strengths. <a href="https://www.joc.com/article/us-regulator-reopens-truck-broker-transparency-proposal-for-new-comments-5946406">The proposed rule</a> mandates that brokers disclose proprietary pricing information to motor carriers — 48 hours after the deal is completed. This arbitrary intervention serves no commercial or safety purpose, instead setting a dangerous precedent that jeopardizes the confidentiality of business contracts. If implemented, this rule would unravel decades of industry progress, harming brokers, shippers and carriers alike, while raising prices for consumers. FMCSA’s legal justification relies on a long-outdated notion intended to protect motor carriers and shippers from rebates. Ironically, this rule achieves the opposite — it harms shippers, distorts competition, increases costs and exposes sensitive commercial data to exploitation. Shippers oppose this direct assault on free trade that violates their confidentiality and call it a regulatory overreach. The Transportation Intermediaries Association (TIA), the largest broker and forwarder group — the American Trucking Associations, the largest trucking group — and the National Industrial Transportation League (NITL), representing America’s largest shippers, each strongly oppose the proposed rule. FMCSA has been led to believe that some small carriers should not need to find shipper customers and instead be given access to confidential pricing data for personal gain. The proposal rewards those unwilling to build a sustainable business by giving them a backdoor to proprietary information. Why not petition the Securities and Exchange Commission to protect day traders from their poor investment decisions? Just as stock market participants assume risks, carriers choosing to operate solely in the spot market must take responsibility for their business models. FMCSA’s intervention is not about fairness — it is government-sanctioned theft. FMCSA’s belief that this rule is a minor adjustment is dangerously naive. The reality is far more insidious: <ul><li>Thousands of motor carriers own brokerages, meaning confidential pricing data would immediately fall into the hands of direct competitors. </li><li>Freight payment companies, factoring firms and unregulated dispatch services — many operating without proper licensing — would gain unrestricted access to private contracts. </li><li>Supply chains would become fully exposed, allowing bad actors to dismantle shipper relationships and exploit competitive advantages. </li></ul>FMCSA has no authority to regulate the consequences of such a reckless policy. Once proprietary data is released, it will be impossible to contain. <h3>FMCSA ‘loses public confidence’ </h3>FMCSA expressed a belief that the rule may enhance highway safety by ensuring carriers are “better capitalized.” No data supports this notion, which is yet another example of FMCSA crafting policy based on personal belief rather than empirical evidence. FMCSA continually loses public confidence. FMCSA’s Compliance, Safety, Accountability (CSA) program, introduced in 2010, promised to predict unsafe carriers. Fifteen years later, after academia, the Congressional Budget Office, FMCSA’s Inspector General and Congress proved that CSA failed to predict future crashes, we are still waiting for CSA 2010. The agency was forced to withdraw the data from public view. FMCSA is once again making policy based on speculation, not facts. At a recent meeting, the former chief safety officer of FMCSA acknowledged that there are only four or five complaints regarding rate transparency. Bewilderingly, FMCSA is prioritizing this issue instead of addressing the national security matter of over 80,000 fraud complaints in its database. Fraud poses a significant risk to supply chains that are crucial for food security and pharmaceuticals. Instead of tackling real threats, FMCSA pursues nonsense. In addition to its fundamental flaws, this proposed rule is impractical. Most shipments do not settle within 48 hours due to delays related to claims, proof of delivery or payment cycles. FMCSA has not provided a clear plan for how brokers would securely transmit sensitive information or navigate the complexities involved in calculating per-shipment service costs. This regulation places an unnecessary burden on tens of thousands of brokers and hundreds of thousands of shippers, all to meet an inconsequential demand. FMCSA’s proposed rule poses a serious threat to the freight industry; it serves no commercial purpose, violates principles of free trade, and irresponsibly exposes confidential data to potential bad actors. Moreover, it distracts FMCSA from its primary mission: ensuring highway safety. The industry, including carriers, shippers and brokers, stands in unanimous opposition to this detrimental regulation. It must be stopped before it causes irreparable harm to one of the most critical sectors of the US economy. Contact Jeff Tucker at <a href="mailto:Jeff.Tucker@tuckerco.com">jeff.tucker@tuckerco.com</a>.</div>

The Federal Motor Carrier Safety Administration (FMCSA) has crossed a dangerous line. Amid rapid government downsizing, FMCSA is defying logic with a proposed rule that would expand its mission beyond highway safety into commercial contracts, undermining decades of deregulation and free enterprise. For over four decades, pricing deregulation in freight has supercharged the nation’s economy to become the fastest and safest delivery system in the world. Free markets drive innovation and economic growth. FMCSA’s unprecedented attempt to re-regulate pricing undercuts one of America’s greatest strengths. The proposed rule mandates that brokers disclose proprietary pricing information to motor carriers — 48 hours after the deal is completed. This arbitrary intervention serves no commercial or safety purpose, instead setting a dangerous precedent that jeopardizes the confidentiality of business contracts. If implemented, this rule would unravel decades of industry progress, harming brokers, shippers and carriers alike, while raising prices for consumers. FMCSA’s legal justification relies on a long-outdated notion intended to protect motor carriers and shippers from rebates. Ironically, this rule achieves the opposite — it harms shippers, distorts competition, increases costs and exposes sensitive commercial data to exploitation. Shippers oppose this direct assault on free trade that violates their confidentiality and call it a regulatory overreach. The Transportation Intermediaries Association (TIA), the largest broker and forwarder group — the American Trucking Associations, the largest trucking group — and the National Industrial Transportation League (NITL), representing America’s largest shippers, each strongly oppose the proposed rule. FMCSA has been led to believe that some small carriers should not need to find shipper customers and instead be given access to confidential pricing data for personal gain. The proposal rewards those unwilling to build a sustainable business by giving them a backdoor to proprietary information. Why not petition the Securities and Exchange Commission to protect day traders from their poor investment decisions? Just as stock market participants assume risks, carriers choosing to operate solely in the spot market must take responsibility for their business models. FMCSA’s intervention is not about fairness — it is government-sanctioned theft. FMCSA’s belief that this rule is a minor adjustment is dangerously naive. The reality is far more insidious: Thousands of motor carriers own brokerages, meaning confidential pricing data would immediately fall into the hands of direct competitors. Freight payment companies, factoring firms and unregulated dispatch services — many operating without proper licensing — would gain unrestricted access to private contracts. Supply chains would become fully exposed, allowing bad actors to dismantle shipper relationships and exploit competitive advantages. FMCSA has no authority to regulate the consequences of such a reckless policy. Once proprietary data is released, it will be impossible to contain. FMCSA ‘loses public confidence’ FMCSA expressed a belief that the rule may enhance highway safety by ensuring carriers are “better capitalized.” No data supports this notion, which is yet another example of FMCSA crafting policy based on personal belief rather than empirical evidence. FMCSA continually loses public confidence. FMCSA’s Compliance, Safety, Accountability (CSA) program, introduced in 2010, promised to predict unsafe carriers. Fifteen years later, after academia, the Congressional Budget Office, FMCSA’s Inspector General and Congress proved that CSA failed to predict future crashes, we are still waiting for CSA 2010. The agency was forced to withdraw the data from public view. FMCSA is once again making policy based on speculation, not facts. At a recent meeting, the former chief safety officer of FMCSA acknowledged that there are only four or five complaints regarding rate transparency. Bewilderingly, FMCSA is prioritizing this issue instead of addressing the national security matter of over 80,000 fraud complaints in its database. Fraud poses a significant risk to supply chains that are crucial for food security and pharmaceuticals. Instead of tackling real threats, FMCSA pursues nonsense. In addition to its fundamental flaws, this proposed rule is impractical. Most shipments do not settle within 48 hours due to delays related to claims, proof of delivery or payment cycles. FMCSA has not provided a clear plan for how brokers would securely transmit sensitive information or navigate the complexities involved in calculating per-shipment service costs. This regulation places an unnecessary burden on tens of thousands of brokers and hundreds of thousands of shippers, all to meet an inconsequential demand. FMCSA’s proposed rule poses a serious threat to the freight industry; it serves no commercial purpose, violates principles of free trade, and irresponsibly exposes confidential data to potential bad actors. Moreover, it distracts FMCSA from its primary mission: ensuring highway safety. The industry, including carriers, shippers and brokers, stands in unanimous opposition to this detrimental regulation. It must be stopped before it causes irreparable harm to one of the most critical sectors of the US economy. Contact Jeff Tucker at jeff.tucker@tuckerco.com .

FMCSA’s overreach threatens small business, free enterprise in freight

<div class="phx-topic abstract-wrapper">When considering the outlook for intermodal, there are any number of factors that could drive results. But for now, it seems that the only inflection has been that of expectations — not volume.</div>

When considering the outlook for intermodal, there are any number of factors that could drive results. But for now, it seems that the only inflection has been that of expectations — not volume.

<div class="phx-topic">Netflix just released a new documentary, “Churchill at War.” Given its focus, it most likely omits Churchill’s observation that, “If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.” This Keynesian methodology has been characteristic of our industry for the past four years. We are now passing through the third consecutive second half in which freight demand was supposed to pick up. When considering the outlook for intermodal, there are any number of factors that could drive results. But for now, it seems that the only inflection has been that of expectations — not volume. North American intermodal has two main components: international and domestic. The former is waterborne trade into and out of North America. Inventory restocking (and a rush to avoid the unanticipated) has increased import flows. And while a great deal of import volume crosses over into the domestic sphere by transloading adjacent to the port of discharge, there has also been an increase in intact intermodal movement. Import volume is the straw that stirs intermodal’s drink. It depends on a number of factors. The most pressing is the economy: Will consumers continue to spend? And then trade politics: Will we degrade into a mutually destructive war of tit-for-tat tariffs that is reminiscent of the Smoot-Hawley tariffs that helped bring on the Great Depression? There are also other issues that drive these volumes. Will reshoring or nearshoring replace waterborne trade? While we are seeing some of this, it is not in the labor-intensive categories of footwear, clothing and household goods, which will continue to be manufactured overseas where labor costs are low. The other factor is homeownership. Many consumer purchases are tied to new homes, and with that market being depressed, so is the associated demand. East Coast labor concerns, though now settled, were accompanied by Canadian labor issues last year that increased volumes at US West Coast ports to the point where volumes resulted in gridlock conditions. Lessons from 2021 and 2022 seemed to have passed into collective amnesia. Unfortunately, there are so many disparate parties involved (ports, ocean carriers, marine terminal operators, railroads, beneficial cargo owners, truckers, etc.) that the only point of agreement is that it is someone else’s fault. To this cacophony, you can add the issues of regulation — environmental and otherwise. While the impact of the Chevron decision is not yet clear, the new administration has promised to reduce regulatory burdens, California retains its preeminence under the Clean Air Act — and other states are following their lead. It seems probable that we will see a continuation of federalism to stifle national initiatives. However, these will now be filed in San Francisco instead of Amarillo. The domestic intermodal market has seen some growth, although there is some question as to how railroad consolidation has impacted reporting participation. The most talked about opportunity has centered around expectations for trans-border traffic across North America. This is certainly a political wildcard.   <h3>Trade politics at the fore</h3>President Donald Trump has once again pledged that he could immediately increase American manufacturing by renegotiating a trade agreement with Mexico and Canada. However, the North American Free Trade Agreement (NAFTA) — which Trump called the “worst trade deal ever made” — was replaced by the US-Mexico-Canada Agreement (USMCA.) In his first term, Trump negotiated, signed, and called USMCA “the most modern, up-to-date, and balanced trade agreement in the history of our country.” It might be a great time to be a trade lawyer or customs house broker. Expect a number of pitched battles on the question of what is “manufacturing” and what is “assembly.” Domestic intermodal will continue to see different railroads pursue various market channels to grow volume. However, it remains to be seen if service can remain excellent when volumes increase, and whether intermodal rates can compete with gravity-defying truckload rates that have seemed to ignore all inflationary cost pressures. We may also see a renewed focus on oil prices. Our nation’s recent energy independence has been driven by fracking. However, fracking cannot compete if oil prices drop below $50 a barrel after “drill baby, drill.” In closing, I would listen to Margo Channing, Bette Davis’ character in “All About Eve.” “Fasten your seatbelts, it’s going to be a bumpy night.” Opportunities are great; however, the number of permutations is greater. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

Netflix just released a new documentary, “Churchill at War.” Given its focus, it most likely omits Churchill’s observation that, “If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.” This Keynesian methodology has been characteristic of our industry for the past four years. We are now passing through the third consecutive second half in which freight demand was supposed to pick up. When considering the outlook for intermodal, there are any number of factors that could drive results. But for now, it seems that the only inflection has been that of expectations — not volume. North American intermodal has two main components: international and domestic. The former is waterborne trade into and out of North America. Inventory restocking (and a rush to avoid the unanticipated) has increased import flows. And while a great deal of import volume crosses over into the domestic sphere by transloading adjacent to the port of discharge, there has also been an increase in intact intermodal movement. Import volume is the straw that stirs intermodal’s drink. It depends on a number of factors. The most pressing is the economy: Will consumers continue to spend? And then trade politics: Will we degrade into a mutually destructive war of tit-for-tat tariffs that is reminiscent of the Smoot-Hawley tariffs that helped bring on the Great Depression? There are also other issues that drive these volumes. Will reshoring or nearshoring replace waterborne trade? While we are seeing some of this, it is not in the labor-intensive categories of footwear, clothing and household goods, which will continue to be manufactured overseas where labor costs are low. The other factor is homeownership. Many consumer purchases are tied to new homes, and with that market being depressed, so is the associated demand. East Coast labor concerns, though now settled, were accompanied by Canadian labor issues last year that increased volumes at US West Coast ports to the point where volumes resulted in gridlock conditions. Lessons from 2021 and 2022 seemed to have passed into collective amnesia. Unfortunately, there are so many disparate parties involved (ports, ocean carriers, marine terminal operators, railroads, beneficial cargo owners, truckers, etc.) that the only point of agreement is that it is someone else’s fault. To this cacophony, you can add the issues of regulation — environmental and otherwise. While the impact of the Chevron decision is not yet clear, the new administration has promised to reduce regulatory burdens, California retains its preeminence under the Clean Air Act — and other states are following their lead. It seems probable that we will see a continuation of federalism to stifle national initiatives. However, these will now be filed in San Francisco instead of Amarillo. The domestic intermodal market has seen some growth, although there is some question as to how railroad consolidation has impacted reporting participation. The most talked about opportunity has centered around expectations for trans-border traffic across North America. This is certainly a political wildcard.   Trade politics at the fore President Donald Trump has once again pledged that he could immediately increase American manufacturing by renegotiating a trade agreement with Mexico and Canada. However, the North American Free Trade Agreement (NAFTA) — which Trump called the “worst trade deal ever made” — was replaced by the US-Mexico-Canada Agreement (USMCA.) In his first term, Trump negotiated, signed, and called USMCA “the most modern, up-to-date, and balanced trade agreement in the history of our country.” It might be a great time to be a trade lawyer or customs house broker. Expect a number of pitched battles on the question of what is “manufacturing” and what is “assembly.” Domestic intermodal will continue to see different railroads pursue various market channels to grow volume. However, it remains to be seen if service can remain excellent when volumes increase, and whether intermodal rates can compete with gravity-defying truckload rates that have seemed to ignore all inflationary cost pressures. We may also see a renewed focus on oil prices. Our nation’s recent energy independence has been driven by fracking. However, fracking cannot compete if oil prices drop below $50 a barrel after “drill baby, drill.” In closing, I would listen to Margo Channing, Bette Davis’ character in “All About Eve.” “Fasten your seatbelts, it’s going to be a bumpy night.” Opportunities are great; however, the number of permutations is greater. Contact Ted Prince at ted@tricitiesintermodal.com .

North American intermodal market readies for ‘bumpy night’ in 2025

Spot Truckload Shipper Rates

Spot Intermodal Shipper Rates

 Intermodal ${valueY.formatNumber('#.##')}

The Journal of Commerce Intermodal Savings Indices (ISIs) measure the average differential between rates for US domestic intermodal rail and truckload service — both spot and contract — across 120 lanes by sending estimates to third-party logistics providers (3PLs) and shippers to review. The estimates include margins and fuel but exclude accessorial charges such as detention, demurrage (storage fees), excessive per diem, lumper fees and other fees. ISI data partners include DAT Freight & Analytics, the International Association of North America (IANA), InTek Freight and Logistics, Loadsmart, and Sunset Transport.

US shipper truckload and domestic intermodal spot rates (JOC)

JOC ISI Spot Market Rates Gateway

<div class="phx-topic abstract-wrapper">Spot rates on the eastbound corridor are fast converging on long-term prices, and carriers want to lock in cargo owners ahead of a return to Red Sea transits and the resulting capacity overhang.</div>

Spot rates on the eastbound corridor are fast converging on long-term prices, and carriers want to lock in cargo owners ahead of a return to Red Sea transits and the resulting capacity overhang.

<div class="phx-topic">Uncertainty over the timing of shipping’s resumption of Red Sea transits is being reflected in Asia-North Europe long-term rate deals, with carriers offering substantial “discounts” to shippers agreeing to contracts longer than six months, according to rate benchmarking platform Xeneta. The move by carriers comes as the spot market on the eastbound trade lane continues its slide, with Xeneta’s average short-term rates assessed on Tuesday of $2,949 per FEU now just $199 above the long-term rates signed in the last three months. The data shows Asia-North Europe spot rates have almost halved since the start of the year. Emily Stausbøll, senior shipping analyst at Xeneta, noted in a market update this week that the uncertainty prevalent in the Asia-North Europe trade lane was seeing carriers agreeing to discounts of 22% as they tried to lock shippers in for longer periods. “On the one hand you have the seller trying to incentivize longer-term agreements to manage risk and protect market share ... on the other hand, you have the buyer doing everything possible to keep their options open for as long as possible while not spending more than necessary,” Stausbøll said. Marc Meier, global head of ocean freight at the forwarder Toll Group, said freight-all-kinds (FAK) rates on Asia-North Europe were coming under growing pressure and were at the same level as long-term rates for the January to December period. “We expect the market to be decreasing between now and [the] end of March or early April at the earliest before we see conditions to push for a rate increase,” Meier told the Journal of Commerce. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a1e904d2-7e92-4785-b6a0-a738fca52dd1"></dynamic-object></div>Some carriers have announced March 1 FAK rates on Asia-North Europe of $4,100/FEU. A 22% discount on the current Xeneta spot rate would drop the rate on the index to $2,300/FEU, but with the short-term market softening every week, some cargo owners are holding off on signing contracts. “Some shippers may be happy to lock in for more than six months if it protects their supply chains and negates the need for further negotiation in the event of another major global disruption,” Stausbøll said. “Other shippers may choose to gamble on being able to achieve a lower rate in a few months and are happy to go through another tender round.” <h3>Base case for a second half return to Red Sea </h3>The risk tolerance level of shippers on Asia-North Europe is ultimately based around a guess when diversions around southern Africa will end. The base case of many analysts is for a return to Red Sea transits at some point in the second half, but the fast-changing political dynamics in the Israel-Hamas conflict provide little certainty. Carriers have said they will only return to the Red Sea and Suez Canal “<a href="https://www.joc.com/article/carriers-eye-red-sea-transits-after-houthi-rebels-pledge-restraint-5925939">when it was safe to do so</a>,” and are continuing to divert vessels around Africa despite Hamas-supporting Houthi militants pledging to only attack Israel-affiliated ships following <a href="https://www.joc.com/article/return-to-suez-not-a-certainty-even-after-israel-hamas-ceasefire-analysts-5923830">the start of a ceasefire</a> in Gaza in January. The only consensus appears to be that when Red Sea voyages do finally resume, significant amounts of capacity no longer being diverted will overwhelm the market. Sea-Intelligence Maritime Analysis expects the impact to be “dramatic” — although temporary — as the trade lane adjusts to the resumption of shorter transits. The analyst estimated that demand growth on Asia-Europe received a boost of 2.9 percentage points in 2024 once the longer voyages and increased inventory levels were factored into the equation. Demand would contract by the same amount when the Red Sea reopens, according to Sea-Intelligence CEO Alan Murphy. “The excess inventory held in the longer supply chain will be released, and for a temporary period, importers will curb ordering to mitigate this sudden excess inventory,” Murphy wrote in his Sunday Spotlight newsletter. “If it unravels over just a few months, the Asia-Europe trade will see dramatic decreases in demand.” Murphy noted that the fall in demand would occur at the same time as shorter sailing times released significant amounts of capacity into the market, with the supply overhang placing downward pressure on rates. But <a href="https://www.joc.com/article/container-shipping-still-has-an-overcapacity-problem-but-its-far-from-insurmountable-5234357">carriers have been playing down the impact of overcapacity</a> once the resumption of transits through Suez occurs, pointing to an increase in scrapping — which has been close to zero for the last few years — and the ability to slow steam ships that have been at full speed since the Africa diversions began. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Uncertainty over the timing of shipping’s resumption of Red Sea transits is being reflected in Asia-North Europe long-term rate deals, with carriers offering substantial “discounts” to shippers agreeing to contracts longer than six months, according to rate benchmarking platform Xeneta. The move by carriers comes as the spot market on the eastbound trade lane continues its slide, with Xeneta’s average short-term rates assessed on Tuesday of $2,949 per FEU now just $199 above the long-term rates signed in the last three months. The data shows Asia-North Europe spot rates have almost halved since the start of the year. Emily Stausbøll, senior shipping analyst at Xeneta, noted in a market update this week that the uncertainty prevalent in the Asia-North Europe trade lane was seeing carriers agreeing to discounts of 22% as they tried to lock shippers in for longer periods. “On the one hand you have the seller trying to incentivize longer-term agreements to manage risk and protect market share ... on the other hand, you have the buyer doing everything possible to keep their options open for as long as possible while not spending more than necessary,” Stausbøll said. Marc Meier, global head of ocean freight at the forwarder Toll Group, said freight-all-kinds (FAK) rates on Asia-North Europe were coming under growing pressure and were at the same level as long-term rates for the January to December period. “We expect the market to be decreasing between now and [the] end of March or early April at the earliest before we see conditions to push for a rate increase,” Meier told the Journal of Commerce. Some carriers have announced March 1 FAK rates on Asia-North Europe of $4,100/FEU. A 22% discount on the current Xeneta spot rate would drop the rate on the index to $2,300/FEU, but with the short-term market softening every week, some cargo owners are holding off on signing contracts. “Some shippers may be happy to lock in for more than six months if it protects their supply chains and negates the need for further negotiation in the event of another major global disruption,” Stausbøll said. “Other shippers may choose to gamble on being able to achieve a lower rate in a few months and are happy to go through another tender round.” Base case for a second half return to Red Sea The risk tolerance level of shippers on Asia-North Europe is ultimately based around a guess when diversions around southern Africa will end. The base case of many analysts is for a return to Red Sea transits at some point in the second half, but the fast-changing political dynamics in the Israel-Hamas conflict provide little certainty. Carriers have said they will only return to the Red Sea and Suez Canal “ when it was safe to do so ,” and are continuing to divert vessels around Africa despite Hamas-supporting Houthi militants pledging to only attack Israel-affiliated ships following the start of a ceasefire in Gaza in January. The only consensus appears to be that when Red Sea voyages do finally resume, significant amounts of capacity no longer being diverted will overwhelm the market. Sea-Intelligence Maritime Analysis expects the impact to be “dramatic” — although temporary — as the trade lane adjusts to the resumption of shorter transits. The analyst estimated that demand growth on Asia-Europe received a boost of 2.9 percentage points in 2024 once the longer voyages and increased inventory levels were factored into the equation. Demand would contract by the same amount when the Red Sea reopens, according to Sea-Intelligence CEO Alan Murphy. “The excess inventory held in the longer supply chain will be released, and for a temporary period, importers will curb ordering to mitigate this sudden excess inventory,” Murphy wrote in his Sunday Spotlight newsletter. “If it unravels over just a few months, the Asia-Europe trade will see dramatic decreases in demand.” Murphy noted that the fall in demand would occur at the same time as shorter sailing times released significant amounts of capacity into the market, with the supply overhang placing downward pressure on rates. But carriers have been playing down the impact of overcapacity once the resumption of transits through Suez occurs, pointing to an increase in scrapping — which has been close to zero for the last few years — and the ability to slow steam ships that have been at full speed since the Africa diversions began. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe carriers dangle contract discounts before shippers: Xeneta

<div class="phx-topic abstract-wrapper">Unless legally binding safeguards are introduced, there is a risk that fossil fuels will be replaced with unsustainable biofuels that provide “a cure worse than the disease,” shipping groups said in an open letter to the IMO.</div>

Unless legally binding safeguards are introduced, there is a risk that fossil fuels will be replaced with unsustainable biofuels that provide “a cure worse than the disease,” shipping groups said in an open letter to the IMO.

<div class="phx-topic">Hapag-Lloyd, Hoegh Autoliners and Louis Dreyfus are among several shipping companies calling for the International Maritime Organization (IMO) to exclude crop-based biofuels from its list of sustainable alternatives to fossil fuels citing fears of deforestation and water and food scarcity. The call, which included shipping association NABU and climate activist Transport &amp; Environment (T&amp;E), comes despite the continuing rollout of lower-emission feedstock-based biofuel services by several carriers, including Hapag-Lloyd, as growing regulatory pressure on shippers to reduce their “scope 3” supply chain carbon footprints increases demand for those services. The groups outlined their concerns in an open letter to the IMO ahead of the 18th Intersessional Working Group on Greenhouse Gases that is meeting in London this week. “Unless legally binding safeguards are introduced, there is a risk that a large amount of fossil fuels will be replaced with unsustainable biofuels,” the open letter warned. It pointed out that Europe has already decided to exclude the use of feed- and food-based biofuels from its flagship shipping fuels regulation known as FuelEU, adding that the IMO should follow suit. “The IMO should take note of the biofuels policy experiences and avoid similar mistakes to ensure a sustainable future for international shipping ... otherwise we risk deploying a cure worse than the disease to address shipping’s climate impact,” the open letter said. While some biofuels may be produced sustainably and deliver significant greenhouse gas (GHG) reductions, there are scalability limitations. Most biofuels are produced from food crop-based feedstocks, which come with direct and indirect deforestation, as well as many other sustainability issues ranging from water scarcity to food security, the letter said. The volumes carried under the premium feedstock-based biofuel products offered by Hapag-Lloyd, Maersk, Ocean Network Express, CMA CGM and HMM are slowly increasing but are only growing at low single-digit percentages of annual volumes. Carrier executives also acknowledge that biofuel is, at best, a temporary measure and not a means to achieve the IMO’s 2030 targets of reducing CO2 emissions by 20% to 30%. <h3>Biofuel demand driving deforestation </h3>The open letter to the IMO noted that when the EU decided to encourage the use of biofuels in 2009, the consumption of palm oil-based biofuels doubled over the following 10 years, comprising close to one-third of EU biofuels use by 2020. Scientific evidence later demonstrated that 45% of palm oil expansion happened at the expense of carbon-rich ecosystems such as forests or peatlands over that same period, with similar findings uncovered for other crop-based feedstock such as soy, the letter said. A study by energy consultancy Cerulogy on behalf of T&amp;E shows that palm and soy oil would likely make up almost two-thirds of the biodiesel used to power the shipping industry in 2030 because they represented the cheapest fuels to comply with emissions reduction targets. However, that would have a detrimental impact on the climate with palm and soy responsible for two to three times more carbon emissions than even the dirtiest shipping fuels today once deforestation and land clearance are considered, T&amp;E warned. “Fueling cargo ships with deforestation is a terrible idea. Burning crops for fuel is bad for the planet and bad for global food security,” Constance Dijkstra, shipping manager at T&amp;E, said in a statement Monday. “The IMO should consider the climate impact of bad biofuels to avoid doing more harm than good.” T&amp;E said waste biofuels such as used cooking oil and animal fats had limited availability and would only cover just a small proportion of shipping’s projected biofuel demand. As an example, T&amp;E noted that a cargo ship traveling between China and Brazil would require the yearly waste oil from more than 2,000 McDonald’s restaurants, and to run the vessel on animal fats would require more than one million pigs. T&amp;E estimated that 34 million hectares of farmland — the total area of Germany — would be needed by 2030 to produce enough crops to meet the increased biofuels demand from the shipping industry alone. Still, demand for biofuel is not only from shipping. China is the world’s main producer of biofuel derived from used cooking oil and exports more than half of its stocks, mainly to power trucks in the US and Europe. Airlines are also ramping up their usage of biofuel-generated sustainable aviation fuel (SAF). More sustainable routes to net-zero are being debated this week at the IMO’s Intersessional Working Group, where proposals for a carbon intensity index and fuel efficiency standards, economic measures such as carbon pricing and new technologies for cleaner marine fuels will be among the topics under discussion. The working group will meet again in April before their recommendations are carried over to the IMO’s Marine Environment Protection Committee (MEPC) meeting April 7-11 that will vote on the crucial mid-term measures, including a global pricing mechanism for carbon emissions to be rolled out in October. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Hapag-Lloyd, Hoegh Autoliners and Louis Dreyfus are among several shipping companies calling for the International Maritime Organization (IMO) to exclude crop-based biofuels from its list of sustainable alternatives to fossil fuels citing fears of deforestation and water and food scarcity. The call, which included shipping association NABU and climate activist Transport & Environment (T&E), comes despite the continuing rollout of lower-emission feedstock-based biofuel services by several carriers, including Hapag-Lloyd, as growing regulatory pressure on shippers to reduce their “scope 3” supply chain carbon footprints increases demand for those services. The groups outlined their concerns in an open letter to the IMO ahead of the 18th Intersessional Working Group on Greenhouse Gases that is meeting in London this week. “Unless legally binding safeguards are introduced, there is a risk that a large amount of fossil fuels will be replaced with unsustainable biofuels,” the open letter warned. It pointed out that Europe has already decided to exclude the use of feed- and food-based biofuels from its flagship shipping fuels regulation known as FuelEU, adding that the IMO should follow suit. “The IMO should take note of the biofuels policy experiences and avoid similar mistakes to ensure a sustainable future for international shipping ... otherwise we risk deploying a cure worse than the disease to address shipping’s climate impact,” the open letter said. While some biofuels may be produced sustainably and deliver significant greenhouse gas (GHG) reductions, there are scalability limitations. Most biofuels are produced from food crop-based feedstocks, which come with direct and indirect deforestation, as well as many other sustainability issues ranging from water scarcity to food security, the letter said. The volumes carried under the premium feedstock-based biofuel products offered by Hapag-Lloyd, Maersk, Ocean Network Express, CMA CGM and HMM are slowly increasing but are only growing at low single-digit percentages of annual volumes. Carrier executives also acknowledge that biofuel is, at best, a temporary measure and not a means to achieve the IMO’s 2030 targets of reducing CO2 emissions by 20% to 30%. Biofuel demand driving deforestation The open letter to the IMO noted that when the EU decided to encourage the use of biofuels in 2009, the consumption of palm oil-based biofuels doubled over the following 10 years, comprising close to one-third of EU biofuels use by 2020. Scientific evidence later demonstrated that 45% of palm oil expansion happened at the expense of carbon-rich ecosystems such as forests or peatlands over that same period, with similar findings uncovered for other crop-based feedstock such as soy, the letter said. A study by energy consultancy Cerulogy on behalf of T&E shows that palm and soy oil would likely make up almost two-thirds of the biodiesel used to power the shipping industry in 2030 because they represented the cheapest fuels to comply with emissions reduction targets. However, that would have a detrimental impact on the climate with palm and soy responsible for two to three times more carbon emissions than even the dirtiest shipping fuels today once deforestation and land clearance are considered, T&E warned. “Fueling cargo ships with deforestation is a terrible idea. Burning crops for fuel is bad for the planet and bad for global food security,” Constance Dijkstra, shipping manager at T&E, said in a statement Monday. “The IMO should consider the climate impact of bad biofuels to avoid doing more harm than good.” T&E said waste biofuels such as used cooking oil and animal fats had limited availability and would only cover just a small proportion of shipping’s projected biofuel demand. As an example, T&E noted that a cargo ship traveling between China and Brazil would require the yearly waste oil from more than 2,000 McDonald’s restaurants, and to run the vessel on animal fats would require more than one million pigs. T&E estimated that 34 million hectares of farmland — the total area of Germany — would be needed by 2030 to produce enough crops to meet the increased biofuels demand from the shipping industry alone. Still, demand for biofuel is not only from shipping. China is the world’s main producer of biofuel derived from used cooking oil and exports more than half of its stocks, mainly to power trucks in the US and Europe. Airlines are also ramping up their usage of biofuel-generated sustainable aviation fuel (SAF). More sustainable routes to net-zero are being debated this week at the IMO’s Intersessional Working Group, where proposals for a carbon intensity index and fuel efficiency standards, economic measures such as carbon pricing and new technologies for cleaner marine fuels will be among the topics under discussion. The working group will meet again in April before their recommendations are carried over to the IMO’s Marine Environment Protection Committee (MEPC) meeting April 7-11 that will vote on the crucial mid-term measures, including a global pricing mechanism for carbon emissions to be rolled out in October. Contact Greg Knowler at greg.knowler@spglobal.com .

Biofuel not the answer to shipping decarbonization: carriers

<div class="phx-topic abstract-wrapper">A 5.8% jump in the less-than-truckload producer price index in January accompanied growth in US manufacturing orders and output.</div>

A 5.8% jump in the less-than-truckload producer price index in January accompanied growth in US manufacturing orders and output.

<div class="phx-topic">US less-than-truckload (LTL) freight volumes have been flat in early 2025, depressed by soft demand and harsh winter weather. But LTL trucking companies are <a href="https://www.joc.com/article/green-shoots-in-us-economy-fuel-optimism-but-not-exuberance-among-ltl-carriers-5933070">increasingly optimistic</a> about a potential increase in freight demand this spring. LTL carriers continue to obtain contract rate increases from shippers. Industrial orders and output kicked into higher gear in January, and shippers are more confident about their business prospects — although still uncertain about the impact of tariffs. After going flat for four straight months, the US long-distance LTL producer price index (PPI) shot up 5.8% in January from December, according to data released Thursday by the US Bureau of Labor Statistics (BLS). The LTL PPI was up 6.2% year over year. The sudden ascent of the LTL PPI last month — a measure of all-inclusive pricing — lit up the trucking landscape like a firework. The 5.8% gain in January was the biggest monthly increase in the PPI since the collapse of Yellow in August 2023. That is a clear signal LTL rates are back on an upward track ahead of any comparable increase in LTL freight demand. In mid-February, however, there is a sense that happy days are at least near again for US manufacturers and the LTL carriers that move their freight. All eyes are on March, typically the make-or-break month for the first quarter when it comes to demand. March is also when threatened tariffs against Mexico and Canada, two of the largest US trading partners, could take effect. <h3>PMIs turning positive </h3>Optimism alone won’t put freight into 53-foot trailers, but increased industrial production would help. Both the Institute for Supply Management (ISM) and S&amp;P Global Purchasing Manager’s Indexes (PMIs) turned positive in January, a sign of industrial recovery. The ISM PMI rose to 50.9%, signaling expansion for the first time in 26 months, and the PMI published by S&amp;P Global, the parent company of the Journal of Commerce, climbed to 51.2%. New manufacturing orders increased for the first time since last June as businesses expressed greater confidence in the US economy, according to the S&amp;P Global PMI. US manufacturing production output rose for the first time in six months. “A new year and a new president have brought new optimism in the US manufacturing sector,” Chris Williamson, chief business economist at S&amp;P Global Market Intelligence, said in a statement. That optimism is evident in higher levels of hiring at factories. Those increases, which S&amp;P Global still called “modest,” are whetting freight appetites. “We’d love to see increased business levels with our industrial-related customers,” Adam Satterfield, CFO of Old Dominion Freight Line (ODFL), said during a Feb. 3 earnings call. ODFL is the second-largest US LTL provider after FedEx Freight. “In the fourth quarter, we saw our industrial business outperform our retail-related business for the first time in a while,” Satterfield said. However, ODFL’s shipments per day were down 7.6% year over year in the fourth quarter, while tonnage dropped 8.2%. <h3>Waiting for the freight </h3>Despite rising expectations, the lack of actual freight on docks still anchors LTL carriers, and to a lesser extent, LTL pricing. Overall shipment volume fell 5.3% in January from December and was down 8.2% year over year, according to data released by Cass Thursday. The Cass Index is a broad measure of shipment traffic encompassing LTL, truckload and other modes. Industrial shipments on docks or in trucks typically lag increases in the PMI by about two months, ODFL’s Satterfield said. “We’re in a great spot to take those increased shipments if they materialize,” he said. But Satterfield believes the industrial freight recovery will be slow. “It’s going to be a multiyear type of story,” he said.Most shippers surveyed by XPO expect a gradual improvement in demand this year, CEO Mario Harik said during a recent earnings call. The carrier’s January survey saw an increase of 10 percentage points in customers expecting demand to accelerate, with only 15% expecting deceleration. “Obviously, we can’t control the macro environment, but we are hearing more optimism from customers,” he said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US less-than-truckload (LTL) freight volumes have been flat in early 2025, depressed by soft demand and harsh winter weather. But LTL trucking companies are increasingly optimistic about a potential increase in freight demand this spring. LTL carriers continue to obtain contract rate increases from shippers. Industrial orders and output kicked into higher gear in January, and shippers are more confident about their business prospects — although still uncertain about the impact of tariffs. After going flat for four straight months, the US long-distance LTL producer price index (PPI) shot up 5.8% in January from December, according to data released Thursday by the US Bureau of Labor Statistics (BLS). The LTL PPI was up 6.2% year over year. The sudden ascent of the LTL PPI last month — a measure of all-inclusive pricing — lit up the trucking landscape like a firework. The 5.8% gain in January was the biggest monthly increase in the PPI since the collapse of Yellow in August 2023. That is a clear signal LTL rates are back on an upward track ahead of any comparable increase in LTL freight demand. In mid-February, however, there is a sense that happy days are at least near again for US manufacturers and the LTL carriers that move their freight. All eyes are on March, typically the make-or-break month for the first quarter when it comes to demand. March is also when threatened tariffs against Mexico and Canada, two of the largest US trading partners, could take effect. PMIs turning positive Optimism alone won’t put freight into 53-foot trailers, but increased industrial production would help. Both the Institute for Supply Management (ISM) and S&P Global Purchasing Manager’s Indexes (PMIs) turned positive in January, a sign of industrial recovery. The ISM PMI rose to 50.9%, signaling expansion for the first time in 26 months, and the PMI published by S&P Global, the parent company of the Journal of Commerce, climbed to 51.2%. New manufacturing orders increased for the first time since last June as businesses expressed greater confidence in the US economy, according to the S&P Global PMI. US manufacturing production output rose for the first time in six months. “A new year and a new president have brought new optimism in the US manufacturing sector,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement. That optimism is evident in higher levels of hiring at factories. Those increases, which S&P Global still called “modest,” are whetting freight appetites. “We’d love to see increased business levels with our industrial-related customers,” Adam Satterfield, CFO of Old Dominion Freight Line (ODFL), said during a Feb. 3 earnings call. ODFL is the second-largest US LTL provider after FedEx Freight. “In the fourth quarter, we saw our industrial business outperform our retail-related business for the first time in a while,” Satterfield said. However, ODFL’s shipments per day were down 7.6% year over year in the fourth quarter, while tonnage dropped 8.2%. Waiting for the freight Despite rising expectations, the lack of actual freight on docks still anchors LTL carriers, and to a lesser extent, LTL pricing. Overall shipment volume fell 5.3% in January from December and was down 8.2% year over year, according to data released by Cass Thursday. The Cass Index is a broad measure of shipment traffic encompassing LTL, truckload and other modes. Industrial shipments on docks or in trucks typically lag increases in the PMI by about two months, ODFL’s Satterfield said. “We’re in a great spot to take those increased shipments if they materialize,” he said. But Satterfield believes the industrial freight recovery will be slow. “It’s going to be a multiyear type of story,” he said. Most shippers surveyed by XPO expect a gradual improvement in demand this year, CEO Mario Harik said during a recent earnings call. The carrier’s January survey saw an increase of 10 percentage points in customers expecting demand to accelerate, with only 15% expecting deceleration. “Obviously, we can’t control the macro environment, but we are hearing more optimism from customers,” he said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

US LTL rates rising as industrial outlook, shipper confidence improve

Use code PDW25 at checkout to save 25% on the first year of any annual subscription! Offer ends Friday, February 28.

Subscribe Now - Free Trials - Wide Box

PRESIDENTS DAY SALE

Register today to redeem your Gold subscriber discount!

TPM Discount - Gold

Save 20% on TPM25

Use code PDW25 at checkout to save 25% on the first year of any annual subscription! offer ends Friday, February 28.

Subscribe Now - Anonymous - Wide Box

Use code PDW695 at checkout and save $800 on first year of a Gold subscription! Offer ends Friday, February 28. 

Upgrade Subscription - Wide Box

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

SMC3rates_shutterstock_5247046.jpg

Shippers save money, time with automated transportation bidding tools

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

SMC3rates_shutterstock_5247046 (1).jpg

Filling the Supply Chain Education Gap with LTL Education Courses

PRESIDENTS DAY SALE: Use code PDW25 at checkout to save 25% on first year of any annual subscription!

Subscribe Now - Anonymous - Offer Box

Subscribe Today

20% OFF ON TPM25: Register today and redeem your Gold subscriber discount!

TPM Discount - Gold 

20% OFF ON TPM25

PRESIDENTS DAY SALE: Use code PDW695 at checkout and save $800 on first year of a Gold subscription! 

Upgrade Subscription - Offer Box

Upgrade Subscription

PRESIDENTS DAY SALE: Use code PDW25 at checkout to save 25% on first year of any subscription plan!


Subscribe Now - Free Trials - Offer Box

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

The only editorially independent conference for the breakbulk & project cargo industry

Breakbulk Conference - Rectangle Box

Attend Breakbulk25

The premier conference for the global container shipping and supply chain community

TPM Conference - Rectangle Box

Attend TPM25

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

<div class="phx-topic abstract-wrapper">The European Commission wants member states to exert greater control over low-value imports, while its consumer watchdog has launched an investigation into e-commerce giant Shein.</div>

The European Commission wants member states to exert greater control over low-value imports, while its consumer watchdog has launched an investigation into e-commerce giant Shein.

<div class="phx-topic">The European Commission (EC) has joined the US in calling for the removal of the so-called de minimis exemption for low-value parcels that is a key driver of the massive increase in air cargo imports from China over the past two years. The EC wants joint action from member states to address concerns from the surge of unsafe, counterfeit, non-compliant or illicit products entering the European market, with its consumer protection authority launching an unspecified “coordinated action” against Chinese e-commerce giant Shein. “As e-commerce is booming, we must step up efforts to prevent non-compliant products from entering the EU market and to ensure fair competition for both European and third-country operators,” Maroš Šefčovič, the EC commissioner for trade and economic security, said in a proposal called “A Comprehensive EU Toolbox for Safe and Sustainable E-commerce” that was issued last week. “Our customs authorities are the first set of eyes at the border so we must equip them with the appropriate instruments to strengthen our enforcement capacities, in close cooperation with other authorities instrumental to checking goods entering the EU market,” he noted. Last year, 4.6 billion consignments with a value below the European Union’s de minimis threshold of €150 ($155) entered the EU market duty free, mostly from China and double the number recorded in 2023, EC data shows. In the US, China accounted for two-thirds of the 1.36 billion de minimis imports last year. De minimis regulations in the US allow one shipment of less than $800 in value to move between a single shipper and single consignee per day duty free. Removing low-value products from de minimis exemptions will mean all those millions of daily parcels will need to go through customs checks, a process that would immediately overwhelm the system in both the EU and the US. It is for that reason that soon after the Trump administration removed Chinese low-value products from de minimis rules, the exemption was restored. <h3>‘Profound’ impact on capacity </h3>While customs officials in the US and Europe search for ways to process the millions of daily packages, air freight analysts are trying to estimate the impact removing de minimis protection would have on the air cargo industry. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the impact on air freight capacity between China and the US would be “profound,” but he believes e-commerce demand is strong enough to withstand the clampdown. “E-commerce volumes out of China grew more than 30% last year following similar growth in 2023, so it’s going to take a sledgehammer to crack that level of consumer demand and I’m not sure blocking de minimis alone is enough,” van de Wouw said in a market update this week. “Products may be slightly more expensive if de minimis is removed, but they will still be cheaper than buying through retailers in the US,” he added. “But delays in receiving the goods due to operational disruptions could have a bigger impact than price because it takes away the attractiveness for consumers.” Judah Levine, head of research at Freightos Group, noted in a market update Tuesday that 60% of the air freight volume from China to the US comprised e-commerce shipments flown in dozens of daily freighters. “Total capacity out of China increased 25% year over year in 2024, so closing de minimis to China is expected to drive a sharp drop in volumes and a spike in available capacity,” Levine said. That would push down rates not just on the trans-Pacific, but on other trade lanes as significant capacity is released back into the market. But Levine added that with de minimis for China reinstated for now, “rates may not collapse immediately.” What is changing is the supply chain approach used by the Chinese online marketplaces as regulatory scrutiny grows. “The pause may serve as a wind-down period for [business-to-consumer] small imports from China during which Chinese e-commerce platforms shift away from their heavy reliance on de minimis and air cargo,” Levine said. “These platforms have already been increasing their use of ocean freight to build up inventories in Mexico and the US and there are reports that for American shoppers, Temu is already promoting items from sellers with US-based inventory,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The European Commission (EC) has joined the US in calling for the removal of the so-called de minimis exemption for low-value parcels that is a key driver of the massive increase in air cargo imports from China over the past two years. The EC wants joint action from member states to address concerns from the surge of unsafe, counterfeit, non-compliant or illicit products entering the European market, with its consumer protection authority launching an unspecified “coordinated action” against Chinese e-commerce giant Shein. “As e-commerce is booming, we must step up efforts to prevent non-compliant products from entering the EU market and to ensure fair competition for both European and third-country operators,” Maroš Šefčovič, the EC commissioner for trade and economic security, said in a proposal called “A Comprehensive EU Toolbox for Safe and Sustainable E-commerce” that was issued last week. “Our customs authorities are the first set of eyes at the border so we must equip them with the appropriate instruments to strengthen our enforcement capacities, in close cooperation with other authorities instrumental to checking goods entering the EU market,” he noted. Last year, 4.6 billion consignments with a value below the European Union’s de minimis threshold of €150 ($155) entered the EU market duty free, mostly from China and double the number recorded in 2023, EC data shows. In the US, China accounted for two-thirds of the 1.36 billion de minimis imports last year. De minimis regulations in the US allow one shipment of less than $800 in value to move between a single shipper and single consignee per day duty free. Removing low-value products from de minimis exemptions will mean all those millions of daily parcels will need to go through customs checks, a process that would immediately overwhelm the system in both the EU and the US. It is for that reason that soon after the Trump administration removed Chinese low-value products from de minimis rules, the exemption was restored. ‘Profound’ impact on capacity While customs officials in the US and Europe search for ways to process the millions of daily packages, air freight analysts are trying to estimate the impact removing de minimis protection would have on the air cargo industry. Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said the impact on air freight capacity between China and the US would be “profound,” but he believes e-commerce demand is strong enough to withstand the clampdown. “E-commerce volumes out of China grew more than 30% last year following similar growth in 2023, so it’s going to take a sledgehammer to crack that level of consumer demand and I’m not sure blocking de minimis alone is enough,” van de Wouw said in a market update this week. “Products may be slightly more expensive if de minimis is removed, but they will still be cheaper than buying through retailers in the US,” he added. “But delays in receiving the goods due to operational disruptions could have a bigger impact than price because it takes away the attractiveness for consumers.” Judah Levine, head of research at Freightos Group, noted in a market update Tuesday that 60% of the air freight volume from China to the US comprised e-commerce shipments flown in dozens of daily freighters. “Total capacity out of China increased 25% year over year in 2024, so closing de minimis to China is expected to drive a sharp drop in volumes and a spike in available capacity,” Levine said. That would push down rates not just on the trans-Pacific, but on other trade lanes as significant capacity is released back into the market. But Levine added that with de minimis for China reinstated for now, “rates may not collapse immediately.” What is changing is the supply chain approach used by the Chinese online marketplaces as regulatory scrutiny grows. “The pause may serve as a wind-down period for [business-to-consumer] small imports from China during which Chinese e-commerce platforms shift away from their heavy reliance on de minimis and air cargo,” Levine said. “These platforms have already been increasing their use of ocean freight to build up inventories in Mexico and the US and there are reports that for American shoppers, Temu is already promoting items from sellers with US-based inventory,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Europe joins US in call for end to e-commerce ‘de minimis’ exemption

<div class="phx-topic abstract-wrapper">Smaller forwarders on the trade lane are pooling their cargo volumes in formal and informal arrangements to get vessel space at favorable fixed rates as some carriers focus primarily on larger customers.</div>

Smaller forwarders on the trade lane are pooling their cargo volumes in formal and informal arrangements to get vessel space at favorable fixed rates as some carriers focus primarily on larger customers.

<div class="phx-topic">Smaller non-vessel-operating common carriers (NVOs) in the eastbound trans-Pacific are being advised to pool their volumes to secure vessel capacity and more favorable rates given that carrier-direct bookings on the trade are at their highest level since last April. The suggestion also comes as sources say some carriers are signing fixed-rate contracts only with the largest forwarders. “Smaller NVOs have to pool their cargo with a number of other NVOs. They do that [through co-loading in Asia] a lot,” an industry consultant who was formerly the logistics manager at two national retailers told the Journal of Commerce. Co-loading occurs mostly on an ad-hoc basis. A second method some NVOs choose for pooling cargo volumes is to participate in a formal working relationship with aggregators where fixed-rate, or named account (NAC), bookings are secured on a continuous basis year-round. Jon Monroe, an aggregator with more than two dozen forwarder partners in Asia, said an increasing number of mostly smaller NVOs have been participating in the aggregator model this past year as carriers have been focusing more on larger direct shippers and NVOs as spot and freight-all-kinds (FAK) rates remain high and space tight in the eastbound trans-Pacific. “This started some time ago,” Monroe said. “If you ship less than 500 TEUs a month, where do you go?” In May 2024, NVOs controlled 48.1% of the bookings in the eastbound Pacific. By December, NVO bookings had dropped to 45.9% of the market, according to data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4d1e7d47-859e-462d-9790-935e20f623d3"></dynamic-object></div>Some NVOs say the fixed-rate allocations in their current 2024–25 contracts, many of which expire at the end of April, have not been affected by the price and capacity trends in the market. One NVO source said he hasn’t experienced any difficulties in securing space, adding that the forwarder has “rock solid” allocations. <h3>Clear trend toward carrier focus on larger accounts </h3>Still, some NVOs are becoming increasingly agitated by what they describe as a clear trend among some carriers to focus on their larger accounts while ignoring smaller forwarders. “If the carriers keep this up at the current pace, it’s going to do away with the small to mid-size broker and forwarder,” said an NVO who did not want to be identified. But a carrier source told the Journal of Commerce it is not accurate to make a blanket statement that carriers will deal only with larger NVOs. “Carriers are very aware of refusing to handle someone’s cargo,” the source said. “No one is going to get refused. Everyone will get an offer.” Other sources said the problem from the perspective of smaller NVOs is that the carriers tell them to book their freight at the higher-priced FAK rates, which, in the current market, are much higher than the fixed-rate contracts the larger NVOs have with carriers. As carrier costs have increased in recent years, they have cut back on their sales staff and reduced travel budgets, and the carriers began to concentrate on fewer but larger clients, the consultant source said. “The greater the number of clients you have to deal with as a carrier, the more your costs go up,” he said. A second carrier source said some liners operate under a model in which they get 80% of their business from 20% of their customers. “For the smaller NVOs, it’s ‘Sorry, not interested. You can book on the spot market,’” the source said. On the other hand, a few carriers have built their business plan on the forwarder model and continue to deal with most forwarders, no matter their size. “My view of the market is the guy who books 5 TEUs today will book 500 TEUs tomorrow,” a third carrier source said. “We nurture those accounts.” <h3>Global changes offer opportunities for new relationships </h3>Carriers and forwarders say the uncertainties facing global shipping — including changes among alliance carriers, the possibility of shipping’s return to the Suez Canal and the rollout of tariffs by the Trump administration — have created an environment in which both parties should consider updating their relationships. “Our NAC accounts are still the same [until May 1], but we’ve started to look at the new market and the individual carriers,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. In the general trans-Pacific market, NVOs seem to be looking at the Premier Alliance carriers of Ocean Network Express, Yang Ming and HMM as liners that are receptive to freight tendered by smaller forwarders, Shames said. Carriers and NVOs say the new Gemini Cooperation alliance between Maersk Line and Hapag-Lloyd has raised some uncertainties among shippers with its hub-and-spoke network designed to improve on-time performance on major trade lanes. The concern is that secondary ports in Asia and the US could lose direct services or that transit times will increase, they say. Other carriers view the alliance changes as an opportunity to attract new customers and additional cargo. “The alliance changes are causing some concern among shippers and NVOs,” a fourth carrier source said. “Some carriers could backfill their vessels from these customers.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Smaller non-vessel-operating common carriers (NVOs) in the eastbound trans-Pacific are being advised to pool their volumes to secure vessel capacity and more favorable rates given that carrier-direct bookings on the trade are at their highest level since last April. The suggestion also comes as sources say some carriers are signing fixed-rate contracts only with the largest forwarders. “Smaller NVOs have to pool their cargo with a number of other NVOs. They do that [through co-loading in Asia] a lot,” an industry consultant who was formerly the logistics manager at two national retailers told the Journal of Commerce. Co-loading occurs mostly on an ad-hoc basis. A second method some NVOs choose for pooling cargo volumes is to participate in a formal working relationship with aggregators where fixed-rate, or named account (NAC), bookings are secured on a continuous basis year-round. Jon Monroe, an aggregator with more than two dozen forwarder partners in Asia, said an increasing number of mostly smaller NVOs have been participating in the aggregator model this past year as carriers have been focusing more on larger direct shippers and NVOs as spot and freight-all-kinds (FAK) rates remain high and space tight in the eastbound trans-Pacific. “This started some time ago,” Monroe said. “If you ship less than 500 TEUs a month, where do you go?” In May 2024, NVOs controlled 48.1% of the bookings in the eastbound Pacific. By December, NVO bookings had dropped to 45.9% of the market, according to data from PIERS, a sister company of the Journal of Commerce within S&P Global. Some NVOs say the fixed-rate allocations in their current 2024–25 contracts, many of which expire at the end of April, have not been affected by the price and capacity trends in the market. One NVO source said he hasn’t experienced any difficulties in securing space, adding that the forwarder has “rock solid” allocations. Clear trend toward carrier focus on larger accounts Still, some NVOs are becoming increasingly agitated by what they describe as a clear trend among some carriers to focus on their larger accounts while ignoring smaller forwarders. “If the carriers keep this up at the current pace, it’s going to do away with the small to mid-size broker and forwarder,” said an NVO who did not want to be identified. But a carrier source told the Journal of Commerce it is not accurate to make a blanket statement that carriers will deal only with larger NVOs. “Carriers are very aware of refusing to handle someone’s cargo,” the source said. “No one is going to get refused. Everyone will get an offer.” Other sources said the problem from the perspective of smaller NVOs is that the carriers tell them to book their freight at the higher-priced FAK rates, which, in the current market, are much higher than the fixed-rate contracts the larger NVOs have with carriers. As carrier costs have increased in recent years, they have cut back on their sales staff and reduced travel budgets, and the carriers began to concentrate on fewer but larger clients, the consultant source said. “The greater the number of clients you have to deal with as a carrier, the more your costs go up,” he said. A second carrier source said some liners operate under a model in which they get 80% of their business from 20% of their customers. “For the smaller NVOs, it’s ‘Sorry, not interested. You can book on the spot market,’” the source said. On the other hand, a few carriers have built their business plan on the forwarder model and continue to deal with most forwarders, no matter their size. “My view of the market is the guy who books 5 TEUs today will book 500 TEUs tomorrow,” a third carrier source said. “We nurture those accounts.” Global changes offer opportunities for new relationships Carriers and forwarders say the uncertainties facing global shipping — including changes among alliance carriers, the possibility of shipping’s return to the Suez Canal and the rollout of tariffs by the Trump administration — have created an environment in which both parties should consider updating their relationships. “Our NAC accounts are still the same [until May 1], but we’ve started to look at the new market and the individual carriers,” said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. In the general trans-Pacific market, NVOs seem to be looking at the Premier Alliance carriers of Ocean Network Express, Yang Ming and HMM as liners that are receptive to freight tendered by smaller forwarders, Shames said. Carriers and NVOs say the new Gemini Cooperation alliance between Maersk Line and Hapag-Lloyd has raised some uncertainties among shippers with its hub-and-spoke network designed to improve on-time performance on major trade lanes. The concern is that secondary ports in Asia and the US could lose direct services or that transit times will increase, they say. Other carriers view the alliance changes as an opportunity to attract new customers and additional cargo. “The alliance changes are causing some concern among shippers and NVOs,” a fourth carrier source said. “Some carriers could backfill their vessels from these customers.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Small trans-Pac forwarders, feeling ignored by carriers, stay agile to secure capacity

<div class="phx-topic abstract-wrapper">The Journal of Commerce Truckload Capacity Index hit a 10-year low in the fourth quarter, but its rate of decline has slowed considerably as truckload pricing begins to rise from its bottom.</div>

The Journal of Commerce Truckload Capacity Index hit a 10-year low in the fourth quarter, but its rate of decline has slowed considerably as truckload pricing begins to rise from its bottom.

<div class="phx-topic">Large US truckload carriers made shallow cuts to their truck counts in the fourth quarter, curbing capacity while anticipating an end to a more than two-year freight downturn. From the carriers’ perspective, that turning point <a href="https://www.joc.com/article/stakeholders-still-in-wait-and-see-mode-on-us-freight-market-turn-5941683">is long overdue</a>. US shippers using truckload services have enjoyed an unprecedented long stretch of pricing power, and the pendulum bearing negotiating leverage hasn’t swung back toward the carriers yet. “Market conditions continue to favor the shipper,” Landstar System CEO Frank Lonegro said during a recent earnings call. He cited “choppy conditions” in the industrial economy, which saw an <a href="https://www.joc.com/article/us-ltl-rates-rising-as-industrial-outlook-shipper-confidence-improve-5944443">uptick in orders</a> and production in January. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0207574c-45c4-46a7-bcc6-498de7fadebe"></dynamic-object></div>Even so, the truckload carriers represented by the Journal of Commerce Truckload Capacity Index (TCI) are trimming rather than slashing their fleet counts, which they <a href="https://www.joc.com/article/large-carrier-truckload-capacity-stabilizing-alongside-rates-5788958">cut deeply</a> from 2022 through mid-2024. That indicates they see a turning point on the horizon. “The fundamentals of the general freight industry have improved to a level that is now allowing us to negotiate pricing from a better posture than the last two years,” James Grant, CFO of Covenant Logistics, told Wall Street analysts during a January earnings call. <h3>Lowest TCI in 10 years </h3>The TCI, a measure of truck capacity at some of the largest US truckload providers, dropped from 76.6 in the third quarter to 75.7 in the fourth quarter, its lowest reading in 10 years. The index is down 18.8% from its mid-2022 peak reading of 93.2. But the purge of equipment from large truckload fleets has slowed in the past two quarters, as business for many companies began to gradually and incrementally improve. Capacity is still readily available to shippers in truckload lanes, with only occasional pockets of tightness, according to trucking executives. That underscores just how much small-carrier truckload capacity entered the market from 2020 through 2023. The number of active motor carrier operating authorities — mostly truckload carriers — rose 53% from 2019 through 2022, according to the US Federal Motor Carrier Safety Administration (FMCSA). Since 2022, about 35,000 to 40,000 trucking companies have left the market, whether through shutdowns or acquisitions. “While capacity has continued to exit the market, the pace has been slow,” Derek Leathers, CEO of Werner Enterprises, said during a Feb. 6 earnings call. That shows carriers are finding ways to stay on the road despite low rates. <h3>A coming bounce? </h3>There are indicators that the Journal of Commerce TCI may begin to climb again in the next few quarters, possibly turning upward by the third quarter of 2025. From mid-2022 through mid-2024, the US long-distance truckload producer price index (PPI) fell 24.2%. The PPI represents all-inclusive, mostly contractual selling prices. From last June through January, however, the PPI climbed 6.5%, mostly since November. Last month, the truckload PPI was up 6.4% year over year.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="949edfd1-bde1-4178-8bc3-b818539048c2"></dynamic-object></div>The Journal of Commerce TCI typically lags the PPI and other pricing measures by several months. Most truckload pricing indexes were largely flat from mid-2023 through late 2024. Improvements in pricing are likely to show up in the TCI in the second half of 2025. Leathers expects fairly limited truck count growth in the first half of 2025, with most of that growth in dedicated fleets. “We’re not looking to grow that one-way truckload fleet intentionally, at least until we get a much improved rate environment,” Leathers said. Lonegro expects Landstar’s truck count to continue to drop in the first quarter. “I’d like to think that we’re in the beginning of the next cycle, but I could also argue that we’re at the end of the prior cycle,” he said. “It does feel like some capacity needs to continue to come out.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Large US truckload carriers made shallow cuts to their truck counts in the fourth quarter, curbing capacity while anticipating an end to a more than two-year freight downturn. From the carriers’ perspective, that turning point is long overdue . US shippers using truckload services have enjoyed an unprecedented long stretch of pricing power, and the pendulum bearing negotiating leverage hasn’t swung back toward the carriers yet. “Market conditions continue to favor the shipper,” Landstar System CEO Frank Lonegro said during a recent earnings call. He cited “choppy conditions” in the industrial economy, which saw an uptick in orders and production in January. Even so, the truckload carriers represented by the Journal of Commerce Truckload Capacity Index (TCI) are trimming rather than slashing their fleet counts, which they cut deeply from 2022 through mid-2024. That indicates they see a turning point on the horizon. “The fundamentals of the general freight industry have improved to a level that is now allowing us to negotiate pricing from a better posture than the last two years,” James Grant, CFO of Covenant Logistics, told Wall Street analysts during a January earnings call. Lowest TCI in 10 years The TCI, a measure of truck capacity at some of the largest US truckload providers, dropped from 76.6 in the third quarter to 75.7 in the fourth quarter, its lowest reading in 10 years. The index is down 18.8% from its mid-2022 peak reading of 93.2. But the purge of equipment from large truckload fleets has slowed in the past two quarters, as business for many companies began to gradually and incrementally improve. Capacity is still readily available to shippers in truckload lanes, with only occasional pockets of tightness, according to trucking executives. That underscores just how much small-carrier truckload capacity entered the market from 2020 through 2023. The number of active motor carrier operating authorities — mostly truckload carriers — rose 53% from 2019 through 2022, according to the US Federal Motor Carrier Safety Administration (FMCSA). Since 2022, about 35,000 to 40,000 trucking companies have left the market, whether through shutdowns or acquisitions. “While capacity has continued to exit the market, the pace has been slow,” Derek Leathers, CEO of Werner Enterprises, said during a Feb. 6 earnings call. That shows carriers are finding ways to stay on the road despite low rates. A coming bounce? There are indicators that the Journal of Commerce TCI may begin to climb again in the next few quarters, possibly turning upward by the third quarter of 2025. From mid-2022 through mid-2024, the US long-distance truckload producer price index (PPI) fell 24.2%. The PPI represents all-inclusive, mostly contractual selling prices. From last June through January, however, the PPI climbed 6.5%, mostly since November. Last month, the truckload PPI was up 6.4% year over year. The Journal of Commerce TCI typically lags the PPI and other pricing measures by several months. Most truckload pricing indexes were largely flat from mid-2023 through late 2024. Improvements in pricing are likely to show up in the TCI in the second half of 2025. Leathers expects fairly limited truck count growth in the first half of 2025, with most of that growth in dedicated fleets. “We’re not looking to grow that one-way truckload fleet intentionally, at least until we get a much improved rate environment,” Leathers said. Lonegro expects Landstar’s truck count to continue to drop in the first quarter. “I’d like to think that we’re in the beginning of the next cycle, but I could also argue that we’re at the end of the prior cycle,” he said. “It does feel like some capacity needs to continue to come out.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Large US truckload carriers, expecting more demand, rein in capacity cuts

<div class="phx-topic abstract-wrapper">While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of those tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens, writes John McCauley.</div>

While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of those tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens, writes John McCauley.

<div class="phx-topic">It would be easy to be distracted by the noise in the supply chains of any organization today that has non-discretionary reliance on container shipping. By that I mean the organizations that have no transport or supply alternatives and are consigned to finding the right answers for their freight procurement. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5944344_0.1.jpg"></img></div>And there is plenty of noise to contend with — some real (Red Sea, China tariffs), some threats (more tariffs) and many unknowns (service levels under the new alliances). However, stripping all that away, it is essential for beneficial cargo owners (BCOs) to focus on what they know. And what they know is what volume they can anticipate TODAY for the forthcoming months up to a year, what their price history is with all carriers, and a view on what they can and cannot afford should rates go against them. What is also clear is that BCOs have learned a lot from the pandemic era about managing supply chain risk, balancing stock-outs and missed sales versus inventory carry, and to be less reliant on air freight as a reliable and available backup plan. BCOs have also seen a marked shift in carrier behavior. While relationships still count for tactical requirements, many of the decisions that were made locally (e.g. space availability for BCOs in excess of agreed quantities) have now been elevated to regional or central decision makers. Carriers are not passing up opportunities as they may have in the past, and BCOs, shippers and forwarders are feeling the impact. <h3>BCO chatter </h3>So how does this play out for the current contracting round? Here are some takeaways from discussions I am having with BCOs: Firstly, carriers are as cautious as BCOs in their approach. The potential for massive overcapacity should the Red Sea really open up (not just words or temporary truces) is a systemic threat to carriers. While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of these tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens. Secondly, an early indicator of a carrier’s expectations is their willingness to engage in three-month contracts, at best six, with a significant premium for a full year. Furthermore, very few carriers (I haven’t heard of any) are willing to give rates inclusive of surcharges. BCO tenders often specifically exclude surcharges, thereby giving surcharges a degree of credibility but also with a requirement they be discussed and agreed ahead of time for both the level of the surcharge and its duration. Thirdly, rate levels for backhauls continue to decline, and depending on the cargo characteristics, destination, weight, etc., close to zero all-in freight rates are back. Fourth, there is high skepticism of the new service levels, particularly Gemini Cooperation, and its ability to settle into expected (not promised) service levels. There is seemingly no appetite from carriers to link pricing to performance, even if shippers are willing to consider no or delayed show from their side. This surely indicates acknowledgement from carriers they do not expect significant improvement, at least in the short term. Finally, many BCOs recall the shenanigans about minimum quantity commitments (MQCs) and a 52-week division being held against them, particularly when volumes grew and space was denied or only given at premium rates. BCOs are likely to commit to less than 100% MQC to protect themselves on the upside and, regrettably, have some margin should volumes fall. <h3>De minimis unknowns </h3>So, what to make of all of this? The market is back in balance right now. BCOs I spoke to are not factoring in a return to Red Sea transit for this year. On that basis, the logic would be to stay in the short-term market of three months to a max of six. A full-year rate will likely attract a premium, but that may well be acceptable. The final thing to watch out for is the <a href="https://www.joc.com/article/europe-joins-us-in-call-for-end-to-e-commerce-de-minimis-exemption-5943108">de minimis drama</a>. It is not out of the question that air freight volumes may be adversely affected, and China exporters may find new solutions to deliver these items cheaply in the US and Europe. I expect this would not significantly affect the sea freight market but may make air freight cheaper for promotions, urgent shipments or high-value goods currently consigned to sea that could switch back to air. Of course, if the Red Sea does reopen and traffic resumes through the Suez Canal, all bets are off for rate levels. It would be worse than any slump seen in the 2010s. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

It would be easy to be distracted by the noise in the supply chains of any organization today that has non-discretionary reliance on container shipping. By that I mean the organizations that have no transport or supply alternatives and are consigned to finding the right answers for their freight procurement. And there is plenty of noise to contend with — some real (Red Sea, China tariffs), some threats (more tariffs) and many unknowns (service levels under the new alliances). However, stripping all that away, it is essential for beneficial cargo owners (BCOs) to focus on what they know. And what they know is what volume they can anticipate TODAY for the forthcoming months up to a year, what their price history is with all carriers, and a view on what they can and cannot afford should rates go against them. What is also clear is that BCOs have learned a lot from the pandemic era about managing supply chain risk, balancing stock-outs and missed sales versus inventory carry, and to be less reliant on air freight as a reliable and available backup plan. BCOs have also seen a marked shift in carrier behavior. While relationships still count for tactical requirements, many of the decisions that were made locally (e.g. space availability for BCOs in excess of agreed quantities) have now been elevated to regional or central decision makers. Carriers are not passing up opportunities as they may have in the past, and BCOs, shippers and forwarders are feeling the impact. BCO chatter So how does this play out for the current contracting round? Here are some takeaways from discussions I am having with BCOs: Firstly, carriers are as cautious as BCOs in their approach. The potential for massive overcapacity should the Red Sea really open up (not just words or temporary truces) is a systemic threat to carriers. While carriers are progressively mastering the dark arts of blank sailings, inexplicable and/or unexplainable surcharges and other supply restraints and revenue enhancements, no amount of these tactics will be sufficient to deal with the oversupply of capacity once the Red Sea reopens. Secondly, an early indicator of a carrier’s expectations is their willingness to engage in three-month contracts, at best six, with a significant premium for a full year. Furthermore, very few carriers (I haven’t heard of any) are willing to give rates inclusive of surcharges. BCO tenders often specifically exclude surcharges, thereby giving surcharges a degree of credibility but also with a requirement they be discussed and agreed ahead of time for both the level of the surcharge and its duration. Thirdly, rate levels for backhauls continue to decline, and depending on the cargo characteristics, destination, weight, etc., close to zero all-in freight rates are back. Fourth, there is high skepticism of the new service levels, particularly Gemini Cooperation, and its ability to settle into expected (not promised) service levels. There is seemingly no appetite from carriers to link pricing to performance, even if shippers are willing to consider no or delayed show from their side. This surely indicates acknowledgement from carriers they do not expect significant improvement, at least in the short term. Finally, many BCOs recall the shenanigans about minimum quantity commitments (MQCs) and a 52-week division being held against them, particularly when volumes grew and space was denied or only given at premium rates. BCOs are likely to commit to less than 100% MQC to protect themselves on the upside and, regrettably, have some margin should volumes fall. De minimis unknowns So, what to make of all of this? The market is back in balance right now. BCOs I spoke to are not factoring in a return to Red Sea transit for this year. On that basis, the logic would be to stay in the short-term market of three months to a max of six. A full-year rate will likely attract a premium, but that may well be acceptable. The final thing to watch out for is the de minimis drama . It is not out of the question that air freight volumes may be adversely affected, and China exporters may find new solutions to deliver these items cheaply in the US and Europe. I expect this would not significantly affect the sea freight market but may make air freight cheaper for promotions, urgent shipments or high-value goods currently consigned to sea that could switch back to air. Of course, if the Red Sea does reopen and traffic resumes through the Suez Canal, all bets are off for rate levels. It would be worse than any slump seen in the 2010s. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Regional LTL partnership to speed service linking Midwest, Northeast

Featured Gateway Chart

Essential Reads

Asia-Europe carriers dangle contract discounts before shippers: Xeneta

Biofuel not the answer to shipping decarbonization: carriers

US LTL rates rising as industrial outlook, shipper confidence improve

Recent Commentary

FMCSA’s overreach threatens small business, free enterprise in freight

North American intermodal market readies for ‘bumpy night’ in 2025

Top 5 Most Read Stories