<div class="phx-topic abstract-wrapper">The global chief economist for S&amp;P Global Ratings told TPM26 the uncertainties that come with current White House policies are part of the mix when formulating economic forecasts.</div>

The global chief economist for S&P Global Ratings told TPM26 the uncertainties that come with current White House policies are part of the mix when formulating economic forecasts.

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<div class="phx-topic">Long Beach, Calif. — The unpredictable nature of the Trump administration is simply a given that needs to be taken into account when generating economic forecasts, the global chief economist for S&amp;P Global Ratings said Monday. Dr. Paul Gruenwald, speaking at the Journal of Commerce’s TPM26 conference, presented a general overview of the US and world economies. He gave a cautiously optimistic presentation, but said there is uncertainty and the possibility of change in many areas, in particular when it comes to US policies. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177002_0.1.jpg"></img></div>”I like to say that (with) US policy, unpredictability is a feature, not a bug, in this administration,” Gruenwald said. “So that’s kind of the operating model, and we’re going to continue to work with that.” Pointing to the US/Israeli military action against Iran, US tariffs and economic sanctions, trade uncertainty, and other periodic disruptions, Gruenwald is forecasting that US economic growth will likely be more than 2% in 2026, but with lower job creation. "We're going to have to think hard about the big events over the last week, the attack on Iran, higher oil prices, a stronger dollar, lower to flat treasuries. If this lasts, higher oil prices are like a tax on growth," he said. "Obviously, the physical disruption of oil is going to have an impact. So right now, that's a downside risk, but we will be looking to incorporate that into our scenarios as you go through this round." Gruenwald said 2025 finished stronger than expected despite the uncertainty over tariffs and other trade disputes because it is difficult to change the overall direction of a $30 trillion dollar a year economy, while trading partners such as China, Canada, Mexico, and Vietnam are adjusting on the fly to the Trump administration policies. He said because of the Trump administration’s immigration crackdown, the US economy is creating fewer jobs per month than previous administrations, but 50,000 jobs per month is adequate to maintain the current 4.3% unemployment rate. “The labor market headline number 4.3% unemployment looks good, but if you look at it sector by sector, there's only one sector in the US that's adding jobs right now, that's healthcare,” Gruenwald said. “Tech is losing jobs, manufacturing is losing jobs, government's losing jobs. Education is kind of a wash, but we've got a very narrow base for our reasonably strong economy right now.” <h3>Interest rate cuts likely later this year </h3>Gruenwald told TPM26 there is room for the Federal Reserve to cut interest rates by 50 basis points in the future, but noted there is no hurry to do that. “We’ve got a couple of cuts from the Fed coming later in the year,” he said. Gruenwald said one of the high points in the economy that is helping to keep it relatively strong is the billions of dollars being invested by tech companies and others in artificial intelligence, which proponents believe will make the economy more efficient in the long run. "It's moving the macro needle in a big way,” he said. “The data centers are not just the physical construction. It's the software, it's the hardware, it's the racks, it's the servers, it's the HVAC, it's the cooling, it's the water, it's the power, it's everything else. “This is probably going to last for a couple of years, but when that's finished, we are going to need these operations to deliver the returns that are currently priced in, and as Secretary Yellen said, deliver some of these productivity gains over time," Gruenwald added. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com.</a></div>

Long Beach, Calif. — The unpredictable nature of the Trump administration is simply a given that needs to be taken into account when generating economic forecasts, the global chief economist for S&P Global Ratings said Monday. Dr. Paul Gruenwald, speaking at the Journal of Commerce’s TPM26 conference, presented a general overview of the US and world economies. He gave a cautiously optimistic presentation, but said there is uncertainty and the possibility of change in many areas, in particular when it comes to US policies. ”I like to say that (with) US policy, unpredictability is a feature, not a bug, in this administration,” Gruenwald said. “So that’s kind of the operating model, and we’re going to continue to work with that.” Pointing to the US/Israeli military action against Iran, US tariffs and economic sanctions, trade uncertainty, and other periodic disruptions, Gruenwald is forecasting that US economic growth will likely be more than 2% in 2026, but with lower job creation. "We're going to have to think hard about the big events over the last week, the attack on Iran, higher oil prices, a stronger dollar, lower to flat treasuries. If this lasts, higher oil prices are like a tax on growth," he said. "Obviously, the physical disruption of oil is going to have an impact. So right now, that's a downside risk, but we will be looking to incorporate that into our scenarios as you go through this round." Gruenwald said 2025 finished stronger than expected despite the uncertainty over tariffs and other trade disputes because it is difficult to change the overall direction of a $30 trillion dollar a year economy, while trading partners such as China, Canada, Mexico, and Vietnam are adjusting on the fly to the Trump administration policies. He said because of the Trump administration’s immigration crackdown, the US economy is creating fewer jobs per month than previous administrations, but 50,000 jobs per month is adequate to maintain the current 4.3% unemployment rate. “The labor market headline number 4.3% unemployment looks good, but if you look at it sector by sector, there's only one sector in the US that's adding jobs right now, that's healthcare,” Gruenwald said. “Tech is losing jobs, manufacturing is losing jobs, government's losing jobs. Education is kind of a wash, but we've got a very narrow base for our reasonably strong economy right now.” Interest rate cuts likely later this year Gruenwald told TPM26 there is room for the Federal Reserve to cut interest rates by 50 basis points in the future, but noted there is no hurry to do that. “We’ve got a couple of cuts from the Fed coming later in the year,” he said. Gruenwald said one of the high points in the economy that is helping to keep it relatively strong is the billions of dollars being invested by tech companies and others in artificial intelligence, which proponents believe will make the economy more efficient in the long run. "It's moving the macro needle in a big way,” he said. “The data centers are not just the physical construction. It's the software, it's the hardware, it's the racks, it's the servers, it's the HVAC, it's the cooling, it's the water, it's the power, it's everything else. “This is probably going to last for a couple of years, but when that's finished, we are going to need these operations to deliver the returns that are currently priced in, and as Secretary Yellen said, deliver some of these productivity gains over time," Gruenwald added. Contact Dan Ronan at contactdanronan@gmail.com.

Transport, Trade and Regulation News

Supply chain

TPM26: Unpredictability the ‘operating model’ for Trump administration: economist

<div class="phx-topic abstract-wrapper">The ex-US Treasury Secretary said consumers could pull back on spending should crude oil and gasoline prices remain aloft due to the latest attacks on Iran by the US and Israel. </div>

The ex-US Treasury Secretary said consumers could pull back on spending should crude oil and gasoline prices remain aloft due to the latest attacks on Iran by the US and Israel.

<div class="phx-topic">Long Beach, Calif. — The duration of US and Israeli attacks on Iran and the effect on oil prices threaten to push inflation higher and jeopardize the modest growth expected in global container shipping demand for 2026, former US Treasury Secretary Janet Yellen said Monday. Front-month crude oil futures jumped to their highest level in more than a year Monday due to the weekend attacks on Iran. Yellen, speaking during her keynote address at the start of the Journal of Commerce’s TPM26 conference, said the 14 million barrels of crude that flow through the Strait of Hormuz daily has been cut to a trickle, a development that bears watching. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177002_0.1.jpg"></img></div>“The risk to the global economy will depend on how long energy flows through the Strait of Hormuz are disrupted,” Yellen, also former chairperson of the US Federal Reserve, said. “If oil prices do remain higher, then we will really need to worry about the impact on inflation over the next year and it's likely to have negative consequences for growth.” Container shipping demand is expected to increase 1.7% globally this year, according to a forecast from S&amp;P Global Maritime, Trade and Supply Chain, a sister company of the Journal of Commerce. Most of that growth will occur outside of the US, which is likely to see flat results compared to 2025. The US economy is demonstrating some strength, Yellen said, with a low 4.3% unemployment rate, a tapering inflation rate of 3%, and gross domestic product (GDP) expected to grow at a similar rate in the first quarter. However, underneath those figures, Yellen said there are signs of fragility that could upend that growth. The monthly creation of 15,000 jobs in the US in 2025 remains well below trend. She added that consumer spending growth rests largely on high earners, with the top 10% of US household incomes now accounting for half of retail spending. ”We have a K-shaped economy and an expansion (in which) upper income households are doing well,” Yellen said. “They’re in good financial shape and driving consumer spending.” <h3>Fed could be cautious about new rate cuts </h3>The Supreme Court’s recent decision to strike down the Trump administration’s emergency tariff powers could cut the inflation rate modestly in 2026. But with oil prices having the opposite effect, the Federal Reserve may become more cautious about further interest rate cuts, Yellen said. The Fed’s key overnight lending rate, which currently sits between 3.5% and 3.75%, is a driver of mortgage rates and interest on other types of consumer loans. Trump has been browbeating the Fed to bring its key rates below 2% in a bid to stimulate the US economy. “The Fed is terribly worried that it's not yet gotten inflation back to its target of 2%,” Yellen told TPM26. “It's not realistic that we're going to go back to 2% right now. I think the recent Iran situation puts the Fed even more on hold, more reluctant to cut rates.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Long Beach, Calif. — The duration of US and Israeli attacks on Iran and the effect on oil prices threaten to push inflation higher and jeopardize the modest growth expected in global container shipping demand for 2026, former US Treasury Secretary Janet Yellen said Monday. Front-month crude oil futures jumped to their highest level in more than a year Monday due to the weekend attacks on Iran. Yellen, speaking during her keynote address at the start of the Journal of Commerce’s TPM26 conference, said the 14 million barrels of crude that flow through the Strait of Hormuz daily has been cut to a trickle, a development that bears watching. “The risk to the global economy will depend on how long energy flows through the Strait of Hormuz are disrupted,” Yellen, also former chairperson of the US Federal Reserve, said. “If oil prices do remain higher, then we will really need to worry about the impact on inflation over the next year and it's likely to have negative consequences for growth.” Container shipping demand is expected to increase 1.7% globally this year, according to a forecast from S&P Global Maritime, Trade and Supply Chain, a sister company of the Journal of Commerce. Most of that growth will occur outside of the US, which is likely to see flat results compared to 2025. The US economy is demonstrating some strength, Yellen said, with a low 4.3% unemployment rate, a tapering inflation rate of 3%, and gross domestic product (GDP) expected to grow at a similar rate in the first quarter. However, underneath those figures, Yellen said there are signs of fragility that could upend that growth. The monthly creation of 15,000 jobs in the US in 2025 remains well below trend. She added that consumer spending growth rests largely on high earners, with the top 10% of US household incomes now accounting for half of retail spending. ”We have a K-shaped economy and an expansion (in which) upper income households are doing well,” Yellen said. “They’re in good financial shape and driving consumer spending.” Fed could be cautious about new rate cuts The Supreme Court’s recent decision to strike down the Trump administration’s emergency tariff powers could cut the inflation rate modestly in 2026. But with oil prices having the opposite effect, the Federal Reserve may become more cautious about further interest rate cuts, Yellen said. The Fed’s key overnight lending rate, which currently sits between 3.5% and 3.75%, is a driver of mortgage rates and interest on other types of consumer loans. Trump has been browbeating the Fed to bring its key rates below 2% in a bid to stimulate the US economy. “The Fed is terribly worried that it's not yet gotten inflation back to its target of 2%,” Yellen told TPM26. “It's not realistic that we're going to go back to 2% right now. I think the recent Iran situation puts the Fed even more on hold, more reluctant to cut rates.” Contact Michael Angell at michael.angell@spglobal.com .

Container Shipping News

Maritime

 TPM26: Iran conflict puts new risk on US economic growth: Yellen 

<div class="phx-topic abstract-wrapper">The move comes as transshipment cargo handling declines are expected at Indian ports following a recent government decision to revoke the cabotage waiver that foreign-flag carriers have enjoyed since 2018.</div>

The move comes as transshipment cargo handling declines are expected at Indian ports following a recent government decision to revoke the cabotage waiver that foreign-flag carriers have enjoyed since 2018.

<div class="phx-topic">Mediterranean Shipping Co. is set to implement significant capacity cuts on trades from India to North Europe and the Mediterranean as incremental regional volumes tighten, multiple industry sources told the Journal of Commerce. The Geneva-based liner serves those trades via its Himalaya Express (HEX) and IPAK services, with the latter operated in a consortium arrangement with the Shipping Corporation of India (SCI). Sources have confirmed that the average capacity of vessels deployed on the HEX will be slashed from 14,000 TEUs to about 9,000 TEUs, while on the IPAK, the average MSC tonnage size will decrease from 9,000 TEUs to 8,000 TEUs. The capacity rejigging is expected to kick in through March. Indian allocations will be proportionately adjusted downward to right-size vessel operations, sources said. A minor rotation reshuffle is also in the cards for the network, with the HEX replacing the Valencia stop in Spain with a call to Sines in Portugal, they added. Efforts to seek comment from MSC were unsuccessful. The HEX has been an industry-leading, high-capacity network on the trade lane, using ultra-large vessels that have included calls in the range of 16,000 TEUs to 20,000 TEUs. <h3>Cabotage policy reset expected to take place next month </h3>The network reconfigurations come in the wake of anticipated transshipment cargo handling declines at Indian ports following a recent government decision <a href="https://www.joc.com/article/india-advances-launch-of-state-container-line-after-cabotage-rule-rewind-6164914">to revoke the cabotage waiver</a> that foreign-flag carriers have enjoyed since 2018. The policy reset, due to take effect next month, is arguably intended to encourage Indian vessel fleet development. MSC has had high stakes in regional container relays through several Indian gateways, particularly out of Mundra and Vizhinjam, riding on its strategic partnerships with local terminal partner Adani Ports. Ironically, MSC last year reorganized the HEX berthing window in India’s Nhava Port by shifting calls from the DP World terminal to PSA International’s capacity-rich facility for greater operational flexibility in tandem with growing vessel sizes; a call there from the 24,346-TEU MSC Micol in December was one notable example. Meanwhile, the reversal of cabotage relaxations for foreign tonnage has stoked an old industry debate centering on trade protectionism, with representatives of the Container Shipping Lines’ Association (India) warning that the policy U-turn could undermine the hub progress Indian ports have made in recent years by refueling a shift of transshipment volumes to regional competitors, especially Colombo Port in Sri Lanka. “In the absence of this waiver, the proposed expansion plans in some of the ports like Mundra and Vizhinjam might not be implemented, thereby further constraining vessel calls and transshipment,” the liner group said. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Mediterranean Shipping Co. is set to implement significant capacity cuts on trades from India to North Europe and the Mediterranean as incremental regional volumes tighten, multiple industry sources told the Journal of Commerce. The Geneva-based liner serves those trades via its Himalaya Express (HEX) and IPAK services, with the latter operated in a consortium arrangement with the Shipping Corporation of India (SCI). Sources have confirmed that the average capacity of vessels deployed on the HEX will be slashed from 14,000 TEUs to about 9,000 TEUs, while on the IPAK, the average MSC tonnage size will decrease from 9,000 TEUs to 8,000 TEUs. The capacity rejigging is expected to kick in through March. Indian allocations will be proportionately adjusted downward to right-size vessel operations, sources said. A minor rotation reshuffle is also in the cards for the network, with the HEX replacing the Valencia stop in Spain with a call to Sines in Portugal, they added. Efforts to seek comment from MSC were unsuccessful. The HEX has been an industry-leading, high-capacity network on the trade lane, using ultra-large vessels that have included calls in the range of 16,000 TEUs to 20,000 TEUs. Cabotage policy reset expected to take place next month The network reconfigurations come in the wake of anticipated transshipment cargo handling declines at Indian ports following a recent government decision to revoke the cabotage waiver that foreign-flag carriers have enjoyed since 2018. The policy reset, due to take effect next month, is arguably intended to encourage Indian vessel fleet development. MSC has had high stakes in regional container relays through several Indian gateways, particularly out of Mundra and Vizhinjam, riding on its strategic partnerships with local terminal partner Adani Ports. Ironically, MSC last year reorganized the HEX berthing window in India’s Nhava Port by shifting calls from the DP World terminal to PSA International’s capacity-rich facility for greater operational flexibility in tandem with growing vessel sizes; a call there from the 24,346-TEU MSC Micol in December was one notable example. Meanwhile, the reversal of cabotage relaxations for foreign tonnage has stoked an old industry debate centering on trade protectionism, with representatives of the Container Shipping Lines’ Association (India) warning that the policy U-turn could undermine the hub progress Indian ports have made in recent years by refueling a shift of transshipment volumes to regional competitors, especially Colombo Port in Sri Lanka. “In the absence of this waiver, the proposed expansion plans in some of the ports like Mundra and Vizhinjam might not be implemented, thereby further constraining vessel calls and transshipment,” the liner group said. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

Container lines

International ports

MSC downgrades India-Europe/Med network amid transshipment cargo lift woes

<div class="phx-topic abstract-wrapper">Cuts to traditional one-way service have been balanced by additional capacity in dedicated, specialized fleets.</div>

Cuts to traditional one-way service have been balanced by additional capacity in dedicated, specialized fleets.

<div class="phx-topic">Large US truckload carriers put enough additional trucks on the road late last year to boost the Journal of Commerce Truckload Capacity Index (TCI) slightly, despite ongoing cuts in capacity at many companies amid rising spot rates and volatile demand. Those trucks, however, were mostly destined for higher-paying dedicated and specialized services, not one-way truckload service. The quarterly TCI rose sequentially from 72.4% in the third quarter to 73.5% in the fourth quarter, as the collective capacity fielded by the large carriers in the index increased 1.5%. But carriers weren't rushing to throw additional trucks at <a href="https://www.joc.com/article/us-truckload-pricing-remains-unsettled-despite-red-hot-december-6148317">higher spot market rates</a>. The fourth quarter reading is still the second-lowest for the index since the fourth quarter of 2013, when the TCI dropped to 73.8% – the index’s 19-year floor until last year. The index, which is based on average truck counts in the 2006 fourth quarter, climbed to a peak of 93.2% in the 2022 second quarter before plunging over the next three years. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c27408c-a4a7-4bbf-84f5-4fe3e53846e0"></dynamic-object></div>The latest index shows large carriers keeping a tight grip on their available capacity amid volatile supply and demand. Some truckload companies in the index group continued to shrink their fleets, while others saw chances to pursue more specialized freight. ”We made a decision to strategically restructure our one-way trucking business to be even more targeted towards specialized expedited, cross-border Mexico and engineered business,” Derek Leathers, chairman and CEO of Werner Enterprises, said Feb. 5. <h3>Dedicated acquisition </h3>Werner is moving deeper into dedicated trucking by acquiring FirstFleet, a 2,400-tractor dedicated fleet provider with $615 million in annual revenue. The deal, announced Jan. 28, will increase Werner’s dedicated trucking revenue by 50%, the company said. ”We’re not abandoning one-way, but we are a leaner, more agile version of ourselves,” Leathers told Wall Street analysts in an earning conference call. Werner reduced its number of trucks in one-way service 13.8% year over year in the fourth quarter. The company -- which is part of the Journal of Commerce index group – increased its dedicated truck count by less than 1% year over year in the fourth quarter, according to its earnings report. With FirstFleet, that dedicated truck count will rise 50% past 7,000. Another TCI group carrier, Covenant Logistics, increased its fleet count slightly in the fourth quarter on a year-over-year basis, according to its earnings report. In early 2026, the company is experiencing what it called a sharp increase in shipper bid activity. Even so, Covenant plans to sell and not replace a number of trucks. “We expect a modestly smaller fleet at the end of 2026 and only $40 million to $50 million of net capex for the year,” CFO James S. Grant said during a Jan. 30 earnings conference call. Like larger competitor Werner, Covenant is acquiring business. In the fourth quarter, the company purchased a small truckload brokerage with two niche customer bases: state and federal disaster relief and high-service consumer packaged goods. Truck fleet cuts and additions are occurring as executives at large truckload carriers expect tightening capacity to <a href="https://www.joc.com/article/trucking-executives-buoyed-by-market-signals-as-winter-exit-nears-6172398">flip the truck market</a> in their favor after a three-year freight downturn. Publicly owned carriers are beginning to report low single-digit contract rate increases. An ongoing government crackdown on truck driver English language proficiency, <a href="https://www.joc.com/article/usdot-releases-interim-final-rule-on-non-domiciled-cdl-holders-6169023">non-domiciled commercial driver’s licenses (CDLs)</a>, substandard CDL schools and electronic logging devices is expected to drive more small carriers out of the market. Shippers are increasingly concerned about capacity and cargo security, Covenant executives said. ”What I’m seeing people say, especially, (is) I need a high-value program, I need assets,” President M. Paul Bunn said during the earnings call. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com.</a></div>

Large US truckload carriers put enough additional trucks on the road late last year to boost the Journal of Commerce Truckload Capacity Index (TCI) slightly, despite ongoing cuts in capacity at many companies amid rising spot rates and volatile demand. Those trucks, however, were mostly destined for higher-paying dedicated and specialized services, not one-way truckload service. The quarterly TCI rose sequentially from 72.4% in the third quarter to 73.5% in the fourth quarter, as the collective capacity fielded by the large carriers in the index increased 1.5%. But carriers weren't rushing to throw additional trucks at higher spot market rates . The fourth quarter reading is still the second-lowest for the index since the fourth quarter of 2013, when the TCI dropped to 73.8% – the index’s 19-year floor until last year. The index, which is based on average truck counts in the 2006 fourth quarter, climbed to a peak of 93.2% in the 2022 second quarter before plunging over the next three years. The latest index shows large carriers keeping a tight grip on their available capacity amid volatile supply and demand. Some truckload companies in the index group continued to shrink their fleets, while others saw chances to pursue more specialized freight. ”We made a decision to strategically restructure our one-way trucking business to be even more targeted towards specialized expedited, cross-border Mexico and engineered business,” Derek Leathers, chairman and CEO of Werner Enterprises, said Feb. 5. Dedicated acquisition Werner is moving deeper into dedicated trucking by acquiring FirstFleet, a 2,400-tractor dedicated fleet provider with $615 million in annual revenue. The deal, announced Jan. 28, will increase Werner’s dedicated trucking revenue by 50%, the company said. ”We’re not abandoning one-way, but we are a leaner, more agile version of ourselves,” Leathers told Wall Street analysts in an earning conference call. Werner reduced its number of trucks in one-way service 13.8% year over year in the fourth quarter. The company -- which is part of the Journal of Commerce index group – increased its dedicated truck count by less than 1% year over year in the fourth quarter, according to its earnings report. With FirstFleet, that dedicated truck count will rise 50% past 7,000. Another TCI group carrier, Covenant Logistics, increased its fleet count slightly in the fourth quarter on a year-over-year basis, according to its earnings report. In early 2026, the company is experiencing what it called a sharp increase in shipper bid activity. Even so, Covenant plans to sell and not replace a number of trucks. “We expect a modestly smaller fleet at the end of 2026 and only $40 million to $50 million of net capex for the year,” CFO James S. Grant said during a Jan. 30 earnings conference call. Like larger competitor Werner, Covenant is acquiring business. In the fourth quarter, the company purchased a small truckload brokerage with two niche customer bases: state and federal disaster relief and high-service consumer packaged goods. Truck fleet cuts and additions are occurring as executives at large truckload carriers expect tightening capacity to flip the truck market in their favor after a three-year freight downturn. Publicly owned carriers are beginning to report low single-digit contract rate increases. An ongoing government crackdown on truck driver English language proficiency, non-domiciled commercial driver’s licenses (CDLs) , substandard CDL schools and electronic logging devices is expected to drive more small carriers out of the market. Shippers are increasingly concerned about capacity and cargo security, Covenant executives said. ”What I’m seeing people say, especially, (is) I need a high-value program, I need assets,” President M. Paul Bunn said during the earnings call. Contact William B. Cassidy at bill.cassidy@spglobal.com.

Trucking News

Truckload

Surface

Truckload capacity index moves up as large US carriers shuffle assets

<div class="phx-topic abstract-wrapper">The US has established a maritime warning zone, effectively placing the region out of bounds to shipping, while airlines have suspended passenger and freighter flights across the Middle East.</div>

The US has established a maritime warning zone, effectively placing the region out of bounds to shipping, while airlines have suspended passenger and freighter flights across the Middle East.

<div class="phx-topic">Commercial shipping and airlines continued to avoid the Middle East Sunday as the US and Israel launched a second day of massive military strikes on Iran. The bombardment, meanwhile, prompted Tehran-backed Houthi militants in Yemen to threaten retaliation by saying they may resume attacks on commercial shipping in the Red Sea. Airlines have suspended passenger and freighter flights across the Middle East and the US has established a maritime warning zone in the Persian Gulf, Gulf of Oman, North Arabian Sea and the Strait of Hormuz, effectively placing the region out of bounds to shipping. “The establishment of the warning zone is intended to provide notice that dangerous military operations are taking place from within these locations and the US Navy cannot guarantee the safety of neutral or merchant shipping,” Jakob Larsen, chief safety and security officer at BIMCO, said in a statement Saturday. Two Houthi officials speaking on the condition of anonymity on Saturday <a href="https://www.yahoo.com/news/articles/yemens-iranian-backed-houthi-rebels-083643083.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuYmluZy5jb20v&amp;guce_referrer_sig=AQAAAHCSkq524Zuax-7RXYPUHL7WjCXLoDzxDA6oxH9lxQY48Svx1eiq28CB1EPKkJs30ZP9956P-XPnfis5r3FnNU3a4X4GWKphMEAzIxOLvy2kEVrs30VhCmW5QTvk4i_UISC1bNGzJqshxlFkcuwfpiUYmp6_A6xzvpJM1G6XP-8G">told the Associated Press</a> that attacks on commercial shipping in the Bab-el-Madeb Strait could restart as early as “tonight.” Houthi leadership has yet to make an official statement. A fire broke out at the Port of Jebel Ali in Dubai Sunday when debris fell to the ground after a drone launched from Iran was intercepted, according to media reports. No information on damage to the port was immediately available.CMA CGM on Sunday implemented an “emergency conflict surcharge” for the region of $2,000 per TEU, $3,000 per FEU, and $4,000 for refrigerated containers and special equipment. “In continued efforts to ensure the safety of our crew, vessels, and your cargo amid the ongoing developments in Iran and across the Arabian Peninsula, precautionary measures have been taken to safeguard operations in the affected areas,” the carrier said in customer advisory. “We understand these measures may impact your logistics and supply chain operations; however, they are necessary steps that also lead to additional operational costs.” That came a day after CMA CGM ordered 14 vessels inside the Persian Gulf and seven en route to the Gulf to immediately proceed to shelter. The carrier has also suspended all passages through the Red Sea and is rerouting ships around southern Africa. “This decision is dictated by safety considerations and is made in compliance with our Bill of Lading terms and conditions,” CMA CGM said in a statement Saturday. “Customers will be contacted as soon as we have more details of the possible alternative ports where their cargo could be discharged.” Maersk on Sunday said it was rerouting all sailings of its ME11 Middle East-India-Mediterranean service and MECL Middle East-India-US East Coast service back around southern Africa until further notice. That is an escalation <a href="https://www.joc.com/article/maersk-hapag-lloyd-to-reroute-some-march-sailings-away-from-red-seasuez-6177149">from Friday</a>, when the carrier announced select sailings of both services would avoid the Red Sea and Suez through the first half of March. “Once the situation stabilizes and the security situation again permits, we will continue to prioritize the trans-Suez route for ME11 and MECL services as it is the fastest, most sustainable and most efficient way for us to serve our customers,” Maersk said in a statement Sunday. The Houthis have not launched any attacks on shipping since the Gaza ceasefire between Israel and Hamas was announced last October. And while the Houthis’ top leader, Abdul-Malik Badr al-Din al-Houthi, voiced support over the weekend for Iran, he held back on pledging military action, Hisisham al-Omeisy, a geopolitical expert on Yemen, told the Journal of Commerce. Seeing the scale and severity of US and Israel attacks on Iran, the Houthis appear to be calculating their next move, he said. The Houthis understand “going full in at this point will prove to be costly if not suicidal, and may instead resort to measures to save face; the movement has called for public protests in areas under their control in Yemen,” al-Omeisy said. “Nevertheless, Houthis are now under immense pressure to act, and their leadership may still authorize limited strikes on ships or even Tel Aviv." Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy diversions around southern Africa. Peter Sand, chief analyst for rate benchmarking platform Xeneta, said the military action launched by the US and Israel and Iran’s retaliation will “shatter hopes of a large-scale return of container shipping to the Red Sea” this year. “If Houthi militia resume attacks, as now seems likely, carriers will reverse the decision to return services to the Red Sea and prioritize the safety of crew, ship and cargo,” Sand said in a statement Saturday. “Any plans for a phased return of container shipping to the Red Sea in 2026 will be shelved until the security situation becomes clearer.” The Mediterranean Port of Haifa in Israel was open and operational Monday, according to media reports.<h3>Marine insurance to soar </h3>The escalation of hostilities in the region is expected to push maritime risk insurance through the roof, according to Dylan Mortimer from UK-based insurance risk adviser Marsh. “It is very early to tell at this point, but we would estimate that near-term rate increases for marine hull insurance in the Gulf could range from 25% to 50%, barring any direct attack on merchant shipping, which could have major repercussions across war insurance rates,” Mortimer said in a statement. “The primary risks center on the Persian/Arabian Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” he added. Bimco has also warned that insurance rates are expected to increase “manyfold,” and Larsen said ships with business connections to the US or Israel would likely have their insurance withdrawn. While Iran will be able to disrupt commercial shipping in the Persian Gulf, Larsen did not expect that disruption to be long term. “It is assessed that within a few days US air and naval superiority will eventually establish a level of security which will enable commercial shipping to resume transportation in and out of the Persian Gulf and adjacent waters,” he said. Contact Greg Knowler at <a href="https://www.joc.com/article/rotterdam-congestion-limits-benefit-of-second-half-surge-in-imports-6176418">greg.knowler@spglobal.com</a>.</div>

Commercial shipping and airlines continued to avoid the Middle East Sunday as the US and Israel launched a second day of massive military strikes on Iran. The bombardment, meanwhile, prompted Tehran-backed Houthi militants in Yemen to threaten retaliation by saying they may resume attacks on commercial shipping in the Red Sea. Airlines have suspended passenger and freighter flights across the Middle East and the US has established a maritime warning zone in the Persian Gulf, Gulf of Oman, North Arabian Sea and the Strait of Hormuz, effectively placing the region out of bounds to shipping. “The establishment of the warning zone is intended to provide notice that dangerous military operations are taking place from within these locations and the US Navy cannot guarantee the safety of neutral or merchant shipping,” Jakob Larsen, chief safety and security officer at BIMCO, said in a statement Saturday. Two Houthi officials speaking on the condition of anonymity on Saturday told the Associated Press that attacks on commercial shipping in the Bab-el-Madeb Strait could restart as early as “tonight.” Houthi leadership has yet to make an official statement. A fire broke out at the Port of Jebel Ali in Dubai Sunday when debris fell to the ground after a drone launched from Iran was intercepted, according to media reports. No information on damage to the port was immediately available. CMA CGM on Sunday implemented an “emergency conflict surcharge” for the region of $2,000 per TEU, $3,000 per FEU, and $4,000 for refrigerated containers and special equipment. “In continued efforts to ensure the safety of our crew, vessels, and your cargo amid the ongoing developments in Iran and across the Arabian Peninsula, precautionary measures have been taken to safeguard operations in the affected areas,” the carrier said in customer advisory. “We understand these measures may impact your logistics and supply chain operations; however, they are necessary steps that also lead to additional operational costs.” That came a day after CMA CGM ordered 14 vessels inside the Persian Gulf and seven en route to the Gulf to immediately proceed to shelter. The carrier has also suspended all passages through the Red Sea and is rerouting ships around southern Africa. “This decision is dictated by safety considerations and is made in compliance with our Bill of Lading terms and conditions,” CMA CGM said in a statement Saturday. “Customers will be contacted as soon as we have more details of the possible alternative ports where their cargo could be discharged.” Maersk on Sunday said it was rerouting all sailings of its ME11 Middle East-India-Mediterranean service and MECL Middle East-India-US East Coast service back around southern Africa until further notice. That is an escalation from Friday , when the carrier announced select sailings of both services would avoid the Red Sea and Suez through the first half of March. “Once the situation stabilizes and the security situation again permits, we will continue to prioritize the trans-Suez route for ME11 and MECL services as it is the fastest, most sustainable and most efficient way for us to serve our customers,” Maersk said in a statement Sunday. The Houthis have not launched any attacks on shipping since the Gaza ceasefire between Israel and Hamas was announced last October. And while the Houthis’ top leader, Abdul-Malik Badr al-Din al-Houthi, voiced support over the weekend for Iran, he held back on pledging military action, Hisisham al-Omeisy, a geopolitical expert on Yemen, told the Journal of Commerce. Seeing the scale and severity of US and Israel attacks on Iran, the Houthis appear to be calculating their next move, he said. The Houthis understand “going full in at this point will prove to be costly if not suicidal, and may instead resort to measures to save face; the movement has called for public protests in areas under their control in Yemen,” al-Omeisy said. “Nevertheless, Houthis are now under immense pressure to act, and their leadership may still authorize limited strikes on ships or even Tel Aviv." Major container lines have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy diversions around southern Africa. Peter Sand, chief analyst for rate benchmarking platform Xeneta, said the military action launched by the US and Israel and Iran’s retaliation will “shatter hopes of a large-scale return of container shipping to the Red Sea” this year. “If Houthi militia resume attacks, as now seems likely, carriers will reverse the decision to return services to the Red Sea and prioritize the safety of crew, ship and cargo,” Sand said in a statement Saturday. “Any plans for a phased return of container shipping to the Red Sea in 2026 will be shelved until the security situation becomes clearer.” The Mediterranean Port of Haifa in Israel was open and operational Monday, according to media reports. Marine insurance to soar The escalation of hostilities in the region is expected to push maritime risk insurance through the roof, according to Dylan Mortimer from UK-based insurance risk adviser Marsh. “It is very early to tell at this point, but we would estimate that near-term rate increases for marine hull insurance in the Gulf could range from 25% to 50%, barring any direct attack on merchant shipping, which could have major repercussions across war insurance rates,” Mortimer said in a statement. “The primary risks center on the Persian/Arabian Gulf, particularly the threat of vessel boarding and seizure by Iranian forces and the potential closure of the Strait of Hormuz,” he added. Bimco has also warned that insurance rates are expected to increase “manyfold,” and Larsen said ships with business connections to the US or Israel would likely have their insurance withdrawn. While Iran will be able to disrupt commercial shipping in the Persian Gulf, Larsen did not expect that disruption to be long term. “It is assessed that within a few days US air and naval superiority will eventually establish a level of security which will enable commercial shipping to resume transportation in and out of the Persian Gulf and adjacent waters,” he said. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

Shipping avoids Middle East region after US, Israel begin strikes on Iran

<div class="phx-topic abstract-wrapper">Even if the terminal operator arm of the Virginia Port Authority violated the terms of its contract with the International Longshoremen’s Association, the VPA’s influence did not violate national labor law, the court said in its ruling.</div>

Even if the terminal operator arm of the Virginia Port Authority violated the terms of its contract with the International Longshoremen’s Association, the VPA’s influence did not violate national labor law, the court said in its ruling.

<div class="phx-topic">A federal court has dismissed the International Longshoremen’s Association’s (ILA) lawsuit alleging that the Virginia Ports Authority (VPA) and its chief executive violated national labor law by installing automated yard cranes without notifying the union as mandated by its master contract. A spokesperson for the VPA said the authority was “grateful for the court’s careful consideration of the matter,” but had no further comment on the lawsuit. The ILA did not immediately respond to a request for comment. The VPA in October 2025 <a href="https://www.joc.com/article/virginia-port-looks-to-dismiss-ila-lawsuit-on-rail-crane-rollout-6099283">filed a motion to dismiss the ILA complaint</a>, arguing that the union knew about plans to roll out new rail-mounted gantry (RMG) cranes in Norfolk in May 2023, nearly two years prior to their installation. The union’s lawsuit, <a href="https://www.joc.com/article/ila-suing-virginia-port-chief-executive-over-rollout-of-new-rail-cranes-6070318">filed last August</a>, said its members were only made aware of the new cranes as the first batch was installed in April 2025. In its ruling issued Thursday, the US District Court for the Eastern District of Virginia said that although the ILA “appears to have demonstrated” that the purchase of the RMG cranes without prior official notification violated the master contract, the contract is with Virginia International Terminals (VIT), which was not named in the complaint. VIT is a legally separate entity that handles daily operations and directly employs longshore workers. Under the ILA master contract ratified in March 2025, any new technology implemented by ports along the East and Gulf coasts must be vetted by a new technology committee comprised of the union and maritime employers to determine staffing levels for the new equipment, training and pay rates. The local union must also be notified so it can negotiate with employers about the new technology.</div>

A federal court has dismissed the International Longshoremen’s Association’s (ILA) lawsuit alleging that the Virginia Ports Authority (VPA) and its chief executive violated national labor law by installing automated yard cranes without notifying the union as mandated by its master contract. A spokesperson for the VPA said the authority was “grateful for the court’s careful consideration of the matter,” but had no further comment on the lawsuit. The ILA did not immediately respond to a request for comment. The VPA in October 2025 filed a motion to dismiss the ILA complaint , arguing that the union knew about plans to roll out new rail-mounted gantry (RMG) cranes in Norfolk in May 2023, nearly two years prior to their installation. The union’s lawsuit, filed last August , said its members were only made aware of the new cranes as the first batch was installed in April 2025. In its ruling issued Thursday, the US District Court for the Eastern District of Virginia said that although the ILA “appears to have demonstrated” that the purchase of the RMG cranes without prior official notification violated the master contract, the contract is with Virginia International Terminals (VIT), which was not named in the complaint. VIT is a legally separate entity that handles daily operations and directly employs longshore workers. Under the ILA master contract ratified in March 2025, any new technology implemented by ports along the East and Gulf coasts must be vetted by a new technology committee comprised of the union and maritime employers to determine staffing levels for the new equipment, training and pay rates. The local union must also be notified so it can negotiate with employers about the new technology.

North American ports

Marine terminals

Longshore labor

Federal court dismisses ILA complaint over Virginia rail cranes

<div class="phx-topic abstract-wrapper">That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones. </div>

That means minimizing drayage without degrading transit, requiring disaggregating volume from larger hubs into smaller ones.

<div class="phx-topic">With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. <h3>‘Closest to the pin’ </h3>UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>. </div>

With their proposed merger, Union Pacific and Norfolk Southern have channeled President Abraham Lincoln’s vision for a united transcontinental railroad. Under the tag line “The Great Connection,” they have put forth a vision of a single, integrated rail freight network. Recently, one of their executives touted the benefit from an envisioned “non-stop” service between Los Angeles and northern New Jersey that could be accomplished without needing to change trains in Chicago. This is indeed a powerful service vision. His remarks got me thinking about how airline marketing and flights have become somewhat muddled in their application of terms and performance. For example, many people confuse “non-stop” and “direct.” The former is a single flight that goes from origin to destination without any scheduled stops. One takeoff and one landing. The latter may have one flight number from origin to destination, but may include scheduled stops. Also, passengers may stay on board or change planes. Today, most of the intermodal train network is designed as non-stop at its core. Trains between major hubs run intact without pickups or setouts — although the tenets of precision scheduled railroading (PSR) may look to fill out trains enroute to achieve operating economies. While this works for many intermodal point pairs, it is not comprehensive. A connecting trip requires changing aircraft at an intermediate airport. There are separate flight segments with a layover; you usually change gates and, sometimes, terminals. In rare cases, you may actually need to change airports (e.g., a domestic leg at LaGuardia connecting to an overseas flight at JFK). This is the model for most transcontinental intermodal traffic today and what the UP-NS merger seeks to eliminate. A through flight is one where you stay on the same aircraft across one or more intermediate stops, or the airline provides through-checked baggage and a single itinerary even if you change planes. This is how intermodal efficiently expands scope today. For example, a train may run from Chicago to Harrisburg on one “flight” with the traffic for Philadelphia run as another train from Harrisburg. There are also flights marketed by one airline but operated by another; your ticket may show the marketing airline’s flight number while a partner operates the plane. For example, BNSF offers direct service into CSX facilities in Atlanta and Northwest Ohio. ‘Closest to the pin’ UP and CSX have a hybrid case of non-stop, connecting code shares. Traffic to Springfield, Mass., is loaded on cars in Los Angeles for non-stop service to Chicago. There the cars are delivered intact to CSX Bedford Park, where they are incorporated into another non-stop train. Of course, in cases of operational trauma, the units may be grounded in Chicago and cross-towned like most traffic. All of this is standard for asset-based, network-operating businesses. There are often competing network economies of scale (larger trains) and scope (more destinations to achieve higher volumes). This is the crux of the “hub-and-spoke” network that so many passenger airlines have implemented. They have a centralized structure: a few hubs connect to many peripheral spokes — which generally do not connect directly to each other. Plane density is achieved, lowering per-unit costs with improved asset utilization. This allows better network reach. Service is enabled between many origin-destination pairs with fewer links than full point-to-point connections. A hub with 10 spokes supports 110 lanes with only 10 spokes. In intermodal, these hubs are at the end points of railroad networks. They offer predictable, scheduled flows with regular, repeatable routes along the spokes. It is scalable because it is easy to add nodes without redesigning the whole network. This is the challenge for intermodal. To compete with trucking, the goal is to seamlessly provide service that looks like trucking but offers economics. That means being “closest to the pin” so as to minimize drayage without degrading transit. This requires disaggregating volume from larger hubs into smaller ones. Not Los Angeles to Croxton rail yard in Jersey City, but LA to ramps beyond immediate North Jersey: i.e., Albany, Allentown, Bethlehem and Philadelphia. And, in the other direction, Croxton to LA, West Colton, and Las Vegas. The ideal outcome would be the ability to connect all of those points in a seamless method in both directions; however, that is probably a future undertaking. For now, we will hopefully keep flying to expanded intermodal networks and service scope. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

North-American rail

Intermodal needs ‘closest to the pin’ strategy to compete with trucking

<div class="phx-topic abstract-wrapper">The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.</div>

The current market situation is favorable for BCOs, and the temptation will be great to drive down base rates because of internal cost pressures, writes John McCauley.

<div class="phx-topic">At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. <h3>Capacity </h3>I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. <h3>Demand </h3>Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. <h3>Recommendation </h3>What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a 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>

At this time of year, many have reflected on 2025 and made resolutions for 2026. I have adjusted this to make no resolutions, but a few predictions that, in most cases, I hope will not materialize. In addition, I want to give some advice to beneficial cargo owners (BCOs), many of whom are in various stages of negotiations for 2026–27 service contracts. Starting with the predictions, let’s consider some supply, capacity, and demand issues. Capacity I expect Red Sea transits will resume, but very slowly and primarily for East Med cargo and for the India sub-continent to the East Coast of the US. Asia-Europe transits will only resume if insurance premiums disappear. The Houthis are still present and will be volatile and unreliable, so they remain the wild card for this prediction. At best, Asia-Europe, if Suez passage resumes, would take six months to stabilize. The US port fees for Chinese-built and -owned vessels will be a non-event. However, for carriers, the sword of Damocles is hanging over this one, so don’t expect any major service reshuffles. Sadly, service reliability levels will stay stable at a horrible 60%, notwithstanding the herculean efforts of Gemini to drag the industry up. Most carriers won’t care enough to do something about it. Expect significant trucking and drayage disruption in the US. Bankruptcies will rise as seasonality gets more unpredictable. Driver shortages will get worse. The consequences will be price volatility, both up and down, with significant backlogs adding to detention and demurrage bills. Berthing and landside restrictions will continue to hinder moving larger vessels to north-south trades as few terminals are deep-sea; they are river or bay, at best, and are often hemmed in by towns and cities and tidal-constrained. Demand Many BCOs are under high internal pressure to contribute to reductions in overall supply chain costs as margins become thinner through higher input costs (somewhat largely driven by tariffs), downstream price squeezing, and weaker demand. Container freight downward trends will be an obvious target. Keep an eye on US credit card debt and defaults, which will rise significantly by the third quarter at the latest, thus further softening demand. Macro level indicators will prey on demand. US inflation will remain stubbornly near at least 2.5% to 3% while unemployment will remain at about 4.5% as immigration net deficits offset layoffs. Job creation will stagnate. Depending on the GDP trend, expect a high likelihood of stagflation toward the end of the fourth quarter (subject to the reliability of US government data). China will continue manufacturing export expansion and increase its proportion of global trade. Recommendation What does this mean for upcoming service contract negotiations? With the expectation of vessel oversupply continuing through the year, BCOs will push to the limit to reduce base rates. They will face several dilemmas, including how to get rid of unmerited and unjustifiable surcharges and which carriers to choose from in alliances and vessel-sharing agreements. Overall, the market situation is favorable for BCOs. The temptation to drive down base rates will be great because of internal cost pressures and/or wanting to make up for some years of carrier supply strength. This should be tempered with a caveat that many BCOs have been burnt in the past for being too empathetic to carriers’ financial difficulties. If I were in the shoes of a medium-size BCO of 30,000 TEUs and above, I would select a mix that would aim for base rates around the Xeneta/NYSHEX forecast average index levels, even if offered lower rates than those levels. It is important to keep in with Mediterranean Shipping Co. even if you don’t use them today. I would use index-linked contracts today and continue to do so with a maximum of 50% to leave yourself some volume for fixed rates and some spot prices. Of that remaining volume, I would leave about 25% for spot as the downside risk is still relatively low. Finally, the market situation should allow for BCOs to get into their contracts the exclusion of any non-explainable (by the carrier) and justifiable (judged and accepted by the BCO) surcharges. John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Trans-Pacific

A few market predictions and some advice for BCOs as contract season heats up

China to US

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The Freightos Air Index (FAX) is based on all-in spot rates for general cargo in US$ for weight category of 100 to 3,000 kilograms. The rates include the air freight fee, fuel, and security and seasonal surcharges. The per kg rate is calculated based on the standard chargeable weight (the greater of the actual gross weight and 166kgs, multiplied by the volume in cubic meters). [Freightos Air Index](https://www.freightos.com/enterprise/terminal/fax-global-freightos-air-index/?utm_source=terminal_embed&utm_medium=referral&utm_content=fax)

China to US air freight rates (Freightos)

China to US Air Freight Price Index by Weight Break 100–3000 kg (Freightos) Gateway

<div class="phx-topic abstract-wrapper">Hapag could leverage Zim-owned Gold Star Line’s ready-made ro/ro fleet to expand its offering in the breakbulk market, but overcapacity provides potential headwinds. </div>

Hapag could leverage Zim-owned Gold Star Line’s ready-made ro/ro fleet to expand its offering in the breakbulk market, but overcapacity provides potential headwinds.

<div class="phx-topic">Hapag-Lloyd’s <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">planned $4.2 billion takeover of Zim Integrated Shipping Services</a> offers an opportunity to develop the car carrier business established by Zim’s Hong Kong-headquartered affiliate Gold Star Line (GSL), shipping executives say. GSL currently operates two roll-on/roll-off (ro/ro) services linking Asia and Latin America and Asia with Africa. The Gold Star Pacific Vehicle Carrier (GPL) service includes calls at Shanghai, Masan (South Korea) and Yokohama, linking with Mazatlan and Lazaro Cardenas in Mexico, Buenaventura (Colombia) and San Antonio (Chile). Current vessel schedules show on-demand inducement calls at California’s Port Hueneme and Manta in Ecuador. Similarly, the VEC service includes calls such as Kobe (Japan), Taicang and Shanghai in China, Mombasa (Kenya) and Dar es Salaam (Tanzania). Vessels listed under the same service are also calling at Paranagua and Vitoria in Brazil in the next few weeks. Gold Star’s car carriers also call at Ashdod in Israel. GSL has developed its car carrier operations through specialized business, “targeting niche trades where we can provide a competitive service,” a senior source close to the company told the Journal of Commerce. “As a global operator, we have an ability to pivot quickly and efficiently towards areas to help our customers and their pain points,” the executive added. A third GSL ro/ro service connecting Asia and Europe has been suspended, although it could be reinstated. <h3>Operating a lean fleet </h3>Esgian, an Oslo, Norway-headquartered maritime consultant, said Gold Star Line has trimmed its ro/ro operations in the last few months. “Our data shows GSL currently operates a ro/ro fleet of 13 vessels,” Mijeong Jang Rolfsen, Esgian’s senior market impact analyst/shipping, told the Journal of Commerce. The vessels vary in size between 4,000 and 6,500 car equivalent units (CEUs) and are mostly chartered from other operators including Gram Car Carriers, Zodiac Maritime and Cido Shipping. “In terms of commercial footprint, Gold Star Line recorded 72 port calls in Q4 2025, which is 12% down from the previous quarter [Q3 2025], spanning Asia with services extending to South America and selected ports in Africa,” Rolfsen said. Captain Igal Dafni, who was Gold Star Line’s managing director in the early 2000s, said GSL’s ro/ro services are potentially a new source of business for Hapag-Lloyd. Dafni agreed Hapag-Lloyd could use the moves into the car carrier sector by rival container lines Mediterranean Shipping Co. and CMA CGM as a blueprint for its own expansion into the market, using GSL’s existing network as the foundation. “But I’m not sure what it will do,” he said. MSC entered the vehicle carrier sector in 2024 after acquiring Gram Car Carriers and has a fleet of approximately 20 pure car and truck carriers. CMA CGM operates ro/ro services in the Mediterranean and North Africa. <h3>Flurry of new vessels pressurizing the sector </h3>While GSL is focused on bespoke services that should be more profitable, the wider car carrier sector is facing increasing headwinds, especially potential overcapacity that could hit freight rates. “There is a huge backlog of new vessels to be delivered between 2026 [and] 2030 which will create significant pressure for tonnage providers and operators,” a senior executive at a European freight forwarder specializing in the vehicle carrier sector told the Journal of Commerce. British shipbroker Clarksons said there are 140 car carriers on order, equivalent to 16% of the existing fleet of 899 ships, although 27% of the fleet is over 20 years old and is a likely candidate for scrapping. “So, I am not so sure the sector will continue to boom and [be] ... a great market to enter, especially if you are not well established,” the forwarding executive said. “It could be Hapag-Lloyd will keep GSL’s existing car carrier services until they feel comfortable and see how things turn out.” Hapag-Lloyd and Gold Star Line executives told the Journal of Commerce it was too early to comment on how the Hamburg-based carrier would develop GSL’s business. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Hapag-Lloyd’s planned $4.2 billion takeover of Zim Integrated Shipping Services offers an opportunity to develop the car carrier business established by Zim’s Hong Kong-headquartered affiliate Gold Star Line (GSL), shipping executives say. GSL currently operates two roll-on/roll-off (ro/ro) services linking Asia and Latin America and Asia with Africa. The Gold Star Pacific Vehicle Carrier (GPL) service includes calls at Shanghai, Masan (South Korea) and Yokohama, linking with Mazatlan and Lazaro Cardenas in Mexico, Buenaventura (Colombia) and San Antonio (Chile). Current vessel schedules show on-demand inducement calls at California’s Port Hueneme and Manta in Ecuador. Similarly, the VEC service includes calls such as Kobe (Japan), Taicang and Shanghai in China, Mombasa (Kenya) and Dar es Salaam (Tanzania). Vessels listed under the same service are also calling at Paranagua and Vitoria in Brazil in the next few weeks. Gold Star’s car carriers also call at Ashdod in Israel. GSL has developed its car carrier operations through specialized business, “targeting niche trades where we can provide a competitive service,” a senior source close to the company told the Journal of Commerce. “As a global operator, we have an ability to pivot quickly and efficiently towards areas to help our customers and their pain points,” the executive added. A third GSL ro/ro service connecting Asia and Europe has been suspended, although it could be reinstated. Operating a lean fleet Esgian, an Oslo, Norway-headquartered maritime consultant, said Gold Star Line has trimmed its ro/ro operations in the last few months. “Our data shows GSL currently operates a ro/ro fleet of 13 vessels,” Mijeong Jang Rolfsen, Esgian’s senior market impact analyst/shipping, told the Journal of Commerce. The vessels vary in size between 4,000 and 6,500 car equivalent units (CEUs) and are mostly chartered from other operators including Gram Car Carriers, Zodiac Maritime and Cido Shipping. “In terms of commercial footprint, Gold Star Line recorded 72 port calls in Q4 2025, which is 12% down from the previous quarter [Q3 2025], spanning Asia with services extending to South America and selected ports in Africa,” Rolfsen said. Captain Igal Dafni, who was Gold Star Line’s managing director in the early 2000s, said GSL’s ro/ro services are potentially a new source of business for Hapag-Lloyd. Dafni agreed Hapag-Lloyd could use the moves into the car carrier sector by rival container lines Mediterranean Shipping Co. and CMA CGM as a blueprint for its own expansion into the market, using GSL’s existing network as the foundation. “But I’m not sure what it will do,” he said. MSC entered the vehicle carrier sector in 2024 after acquiring Gram Car Carriers and has a fleet of approximately 20 pure car and truck carriers. CMA CGM operates ro/ro services in the Mediterranean and North Africa. Flurry of new vessels pressurizing the sector While GSL is focused on bespoke services that should be more profitable, the wider car carrier sector is facing increasing headwinds, especially potential overcapacity that could hit freight rates. “There is a huge backlog of new vessels to be delivered between 2026 [and] 2030 which will create significant pressure for tonnage providers and operators,” a senior executive at a European freight forwarder specializing in the vehicle carrier sector told the Journal of Commerce. British shipbroker Clarksons said there are 140 car carriers on order, equivalent to 16% of the existing fleet of 899 ships, although 27% of the fleet is over 20 years old and is a likely candidate for scrapping. “So, I am not so sure the sector will continue to boom and [be] ... a great market to enter, especially if you are not well established,” the forwarding executive said. “It could be Hapag-Lloyd will keep GSL’s existing car carrier services until they feel comfortable and see how things turn out.” Hapag-Lloyd and Gold Star Line executives told the Journal of Commerce it was too early to comment on how the Hamburg-based carrier would develop GSL’s business. Contact Keith Wallis at keithwallis@hotmail.com .

Ro/ro cargo

Breakbulk News

Zim deal offers Hapag-Lloyd entry into niche car carrier market  

<div class="phx-topic abstract-wrapper">The widely used freight forwarding software vendor said artificial intelligence is enabling it to reduce staff in roles that include programming, product development and customer service.</div>

The widely used freight forwarding software vendor said artificial intelligence is enabling it to reduce staff in roles that include programming, product development and customer service.

<div class="phx-topic">WiseTech Global will lay off approximately 2,000 of its employees — nearly 30% of its current workforce — over the next two years because of the efficiencies artificial intelligence will bring to its ability to develop products and interact with customers, the forwarding software vendor said Wednesday. The announcement overshadowed WiseTech’s earnings release for the first half of its fiscal year and sparked a double-digit spike in the company’s share price. WiseTech CEO Zubin Appoo explained in a pre-recorded video message that the workforce reduction was due to the progression of AI tools, those developed internally and by the largest AI model developers such as Anthropic, OpenAI and Google. Cuts will come from roles that include programming, product development, and customer service. “This decision was not taken lightly, but it was necessary to ensure we stay disciplined, nimble, competitive, and future-ready,” Appoo said in the video. “A transformation of this scale will fundamentally reshape our cost base while allowing for an uplift in productivity.” The move comes months after Australia-based WiseTech shook the market <a href="https://www.joc.com/article/cargowises-pricing-model-change-could-mark-final-milestone-in-market-ascent-6133279">with a pricing model change</a> that affected virtually all of its forwarder, customs brokers and third-party logistics provider customers. It also comes as WiseTech integrates its <a href="https://www.joc.com/article/wisetech-makes-2-billion-gamble-on-overturning-complicated-software-history-6013221">largest-ever acquisition</a>, a $2.1 billion purchase of E2open last May, one that expanded the company’s customer reach from 3PLs to shippers. Taken together, those moves could be seen as WiseTech prepping itself for a future where AI transforms how software is built, sold and used, rather than waiting for those changes to undermine its business. WiseTech’s planned layoffs and its emphasis on AI can also be seen as a warning shot to software providers that either act as agentic layers on top of CargoWise — WiseTech’s flagship product — or focus on automating processes inside of CargoWise. Either way, the news will surely reverberate around the market, with software companies that have a fraction of WiseTech’s revenue and a lower operating margin asking themselves if their headcount is optimal given the impact AI is having. The move to cut a significant portion of its workforce should also be viewed through the lens that WiseTech must juggle public market scrutiny in a way that privately-held logistics technology providers do not. The narrative around AI potentially eroding the value of publicly-traded software vendors and data providers has surely spooked companies into showing that they are indeed ready for what AI will do to their products, customers, market share and profit margin. <h3>Revenue growth </h3>The announcement of layoffs comes as WiseTech reported solid financials for the first half of its fiscal year. The company posted operating profits of $252.1 million for the period between July 1 and Dec. 31 on revenue of $672 million, an operating margin of 38%. Total revenue in the first half increased 76% year over year, but much of that growth was attributable to the addition of E2open revenue. Organic revenue growth in the period was 12% Additionally, the company said it has lessened its reliance on its biggest customers over the past year, with 23% of its revenue coming from its top 20 customers in the first half of its current fiscal year, down from 33% in the same period in 2025. Another development worth noting from WiseTech’s fiscal year first-half earnings is its continued focus around building a one-stop shop for logistics software, one that encompasses international and domestic freight procurement, execution, payment and analytics, alongside trade compliance and accounting. The company is not there yet, as most of its customer base is still tied to international forwarding or customs compliance, but the intent is to move in that direction. WiseTech’s share price rose 11% Wednesday on the Australian stock exchange after the planned layoffs were announced. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

WiseTech Global will lay off approximately 2,000 of its employees — nearly 30% of its current workforce — over the next two years because of the efficiencies artificial intelligence will bring to its ability to develop products and interact with customers, the forwarding software vendor said Wednesday. The announcement overshadowed WiseTech’s earnings release for the first half of its fiscal year and sparked a double-digit spike in the company’s share price. WiseTech CEO Zubin Appoo explained in a pre-recorded video message that the workforce reduction was due to the progression of AI tools, those developed internally and by the largest AI model developers such as Anthropic, OpenAI and Google. Cuts will come from roles that include programming, product development, and customer service. “This decision was not taken lightly, but it was necessary to ensure we stay disciplined, nimble, competitive, and future-ready,” Appoo said in the video. “A transformation of this scale will fundamentally reshape our cost base while allowing for an uplift in productivity.” The move comes months after Australia-based WiseTech shook the market with a pricing model change that affected virtually all of its forwarder, customs brokers and third-party logistics provider customers. It also comes as WiseTech integrates its largest-ever acquisition , a $2.1 billion purchase of E2open last May, one that expanded the company’s customer reach from 3PLs to shippers. Taken together, those moves could be seen as WiseTech prepping itself for a future where AI transforms how software is built, sold and used, rather than waiting for those changes to undermine its business. WiseTech’s planned layoffs and its emphasis on AI can also be seen as a warning shot to software providers that either act as agentic layers on top of CargoWise — WiseTech’s flagship product — or focus on automating processes inside of CargoWise. Either way, the news will surely reverberate around the market, with software companies that have a fraction of WiseTech’s revenue and a lower operating margin asking themselves if their headcount is optimal given the impact AI is having. The move to cut a significant portion of its workforce should also be viewed through the lens that WiseTech must juggle public market scrutiny in a way that privately-held logistics technology providers do not. The narrative around AI potentially eroding the value of publicly-traded software vendors and data providers has surely spooked companies into showing that they are indeed ready for what AI will do to their products, customers, market share and profit margin. Revenue growth The announcement of layoffs comes as WiseTech reported solid financials for the first half of its fiscal year. The company posted operating profits of $252.1 million for the period between July 1 and Dec. 31 on revenue of $672 million, an operating margin of 38%. Total revenue in the first half increased 76% year over year, but much of that growth was attributable to the addition of E2open revenue. Organic revenue growth in the period was 12% Additionally, the company said it has lessened its reliance on its biggest customers over the past year, with 23% of its revenue coming from its top 20 customers in the first half of its current fiscal year, down from 33% in the same period in 2025. Another development worth noting from WiseTech’s fiscal year first-half earnings is its continued focus around building a one-stop shop for logistics software, one that encompasses international and domestic freight procurement, execution, payment and analytics, alongside trade compliance and accounting. The company is not there yet, as most of its customer base is still tied to international forwarding or customs compliance, but the intent is to move in that direction. WiseTech’s share price rose 11% Wednesday on the Australian stock exchange after the planned layoffs were announced. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

WiseTech says to cut nearly 30% of workforce as it preps for AI era

<div class="phx-topic abstract-wrapper">Nixon, one of the most recognized executives in container shipping, led the transformation of legacy Japanese carriers K Line, MOL and NYK into a unified global company based in Singapore. </div>

Nixon, one of the most recognized executives in container shipping, led the transformation of legacy Japanese carriers K Line, MOL and NYK into a unified global company based in Singapore.

<div class="phx-topic">Ocean Network Express CEO Jeremy Nixon will step down on July 1 from the leadership position he has held since ONE’s inception in 2018 and turn over the helm to industry veteran Till Ole Barrelet. The change was part of a “planned leadership transition” and will not have any impact on customers, the carrier said in a statement Wednesday. Nixon is one of the most recognized executives in container shipping and will stay on with ONE as a senior advisor after Barrelet becomes CEO. “Leading ONE from day one has been the defining chapter of my career,” Nixon said in the statement. “Now is the right time for new leadership, and I am very confident in Till’s ability to lead ONE forward.” Barrelet has more than 20 years of maritime and logistics experience, most recently serving as CEO of Emirates Shipping Line. He has expertise in ship owning, financing, container shipping and trade development across Asia, the Middle East, Europe and Africa. In addition to a change at the top, ONE will transition to a new executive management team structure comprising the CEO and seven representatives from across all the carrier’s divisions. The new executive team, together with six regional leaders, will report into the CEO. “As our founding CEO, Jeremy has helped build ONE from the ground up, establishing our corporate culture and market position,” said Jotaro Tamura, representative director and chairman of Ocean Network Express Holdings. Nixon has been a regular presence at the Journal of Commerce’s TPM conference in Long Beach, and will speak at TPM26 next Monday. <h3>Transforming three Japanese carriers </h3>As CEO of ONE, Nixon presided over the transformation of the container segments of legacy Japanese carriers K Line, MOL and NYK into a unified global container shipping company based in Singapore. Prior to taking the top job at ONE, he headed up the container division at NYK and served in senior management positions at P&amp;O Nedlloyd and Maersk. Under his stewardship, ONE’s fleet grew from 1.5 million TEUs to more than 260 vessels with capacity exceeding 2 million TEUs. Another 1.15 million TEUs of capacity are on order. ONE recorded a loss in 2018–19, its first year of operation, but rode the massive profitability wave generated during the pandemic-impacted years that followed. That profitability came to an end in the fiscal third quarter of ONE’s 2025 financial year when <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">the carrier posted an $88 million net loss</a>. “ONE is well-positioned to navigate industry headwinds with an increasingly modern fleet, financial strength, and proven capabilities,” Till said in the statement. Contact Greg Knowler at <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">greg.knowler@spglobal.com</a>. </div>

Ocean Network Express CEO Jeremy Nixon will step down on July 1 from the leadership position he has held since ONE’s inception in 2018 and turn over the helm to industry veteran Till Ole Barrelet. The change was part of a “planned leadership transition” and will not have any impact on customers, the carrier said in a statement Wednesday. Nixon is one of the most recognized executives in container shipping and will stay on with ONE as a senior advisor after Barrelet becomes CEO. “Leading ONE from day one has been the defining chapter of my career,” Nixon said in the statement. “Now is the right time for new leadership, and I am very confident in Till’s ability to lead ONE forward.” Barrelet has more than 20 years of maritime and logistics experience, most recently serving as CEO of Emirates Shipping Line. He has expertise in ship owning, financing, container shipping and trade development across Asia, the Middle East, Europe and Africa. In addition to a change at the top, ONE will transition to a new executive management team structure comprising the CEO and seven representatives from across all the carrier’s divisions. The new executive team, together with six regional leaders, will report into the CEO. “As our founding CEO, Jeremy has helped build ONE from the ground up, establishing our corporate culture and market position,” said Jotaro Tamura, representative director and chairman of Ocean Network Express Holdings. Nixon has been a regular presence at the Journal of Commerce’s TPM conference in Long Beach, and will speak at TPM26 next Monday. Transforming three Japanese carriers As CEO of ONE, Nixon presided over the transformation of the container segments of legacy Japanese carriers K Line, MOL and NYK into a unified global container shipping company based in Singapore. Prior to taking the top job at ONE, he headed up the container division at NYK and served in senior management positions at P&O Nedlloyd and Maersk. Under his stewardship, ONE’s fleet grew from 1.5 million TEUs to more than 260 vessels with capacity exceeding 2 million TEUs. Another 1.15 million TEUs of capacity are on order. ONE recorded a loss in 2018–19, its first year of operation, but rode the massive profitability wave generated during the pandemic-impacted years that followed. That profitability came to an end in the fiscal third quarter of ONE’s 2025 financial year when the carrier posted an $88 million net loss . “ONE is well-positioned to navigate industry headwinds with an increasingly modern fleet, financial strength, and proven capabilities,” Till said in the statement. Contact Greg Knowler at greg.knowler@spglobal.com .

Jeremy Nixon to step down as ONE CEO after eight years at the helm

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<div class="phx-topic abstract-wrapper">Retailers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, while carriers hold out hope market fundamentals will emerge to reverse the softening trend. </div>

Retailers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, while carriers hold out hope market fundamentals will emerge to reverse the softening trend.

<div class="phx-topic">Neither ocean carriers nor US importers are in a rush to sign contracts for the 2026–27 service year in a trans-Pacific market where spot rates to the West Coast have fallen more than 20% since early January and, many believe, have room to slide further. Multiple sources who spoke to the Journal of Commerce this week said carriers are in no hurry to ink deals with their customers, holding out hope market fundamentals will emerge to reverse the softening trend on the trans-Pacific. And shippers are biding their time, happy to watch rates continue to fall before they’ll put pen to paper on service contracts, most of which begin May 1. The levels and direction of spot rates impact service contracting, as it’s a barometer of the degree to which carriers can effectively match supply to demand. Long-term contract rates generally allow shippers to lock in lower prices than they could find in the spot market, leading shippers to watch the latter closely ahead of and during service contract negotiations. The Journal of Commerce spoke with three ocean carriers, three retailers, three forwarders, two consultants, and an industry analyst for this story. “No one will sign now,” one carrier executive said. “Most shippers will wait until [TPM26] to see if rates have dropped further.” In past years leading up to the Journal of Commerce’s Trans-Pacific Maritime Conference in Long Beach in the first week of March, at least one or two of the half-dozen largest retailers had already signed their service contracts. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. TPM26 will be held March 1–4. “No major big-box retailers have signed as of yet,” a source with a top 20 US retailer said. “We’re running two to three weeks late.” A second carrier executive said while a couple of carriers could be “close” to signing a big-box account, most customers are holding out to see how much further the market falls. <h3>Shippers’ market </h3>The signals, at least now, favor the importers. In addition to <a href="https://www.joc.com/article/soft-demand-in-eastbound-trans-pacific-overwhelms-carriers-gri-attempt-6109240">softer demand</a> and <a href="https://www.joc.com/article/pre-lunar-new-year-demand-to-give-trans-pac-market-first-test-of-2026-6149869">falling spot rates</a>, no significant surge in imports is projected in March, when the factories in Asia that closed for the Lunar New Year holiday that began Feb. 17 return to full production. Indeed, retailers and direct importers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, forcing carriers to reduce their contract tenders, said Bob Fredman, principal at the consulting firm SF Global Logistics who formerly negotiated service contracts for big-box retailers. “That’s what smart shippers should do,” Fredman said. “It doesn’t make much sense to get too far in front of the [big retailers].” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="56cdc0fc-22a5-4ef9-9e3e-11f96f369c70"></dynamic-object></div>A national furniture importer said he circulated his “boilerplate” tender to his core carrier partners but is not pressuring them to finalize a contract because he anticipates rates will move lower in March. “As a mid-size importer, why not wait? I want to get more clarity as to where the market is,” the source said. As of Feb. 19, the market from Asia to the West Coast was at $1,600 per FEU, down 23% since early January and 42% lower year over year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. The East Coast spot rate of $2,400 was down 21% so far this year and 39% lower year over year. According to online rate benchmarking platform Xeneta, Asia-West Coast rates were at $1.356 per FEU as of Feb. 19, down from $2,289 per FEU on Jan. 4 and almost 60% lower year over year. A second top 20 retailer said carriers and their customers are holding back from signing service contracts to see what the negotiating environment looks like after TPM26 in terms of spot rates and forecasts for demand in the second quarter. “We are pretty much completed with our tenders. I suspect we will be completed within the next couple of weeks,” the source said. “Demand right now leading up to Q2 is soft. Carriers are holding back to see if demand picks up after Chinese New Year.” <h3>Carriers ‘failed’ to balance supply and demand </h3>But the slower-than-usual finalizing of contracts by the largest big-box retailers does not mean that medium to smaller retailers will sign later than usual, said Jason Cook, CEO of forwarder Ardent Global Logistics. “After TPM there will be a rapid succession of completions for the big-box retailers,” Cook said. “Then the midsize and smaller importers will get serious in round two...” Unlike in past years when importers were anxious to lock in volume allotments, known as minimum quantity commitments (MQCs), because vessel space was tight, capacity is readily available this year, and it is the carriers who are edgy. The second top 20 retailer source said her preliminary discussions with carriers have been “colorful.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e5c8a2a0-9aa5-4787-bbed-bf4b7a9f9677"></dynamic-object></div>A major reason why there was no capacity shortage in the trans-Pacific leading into the Lunar New Year was that carriers did not respond quickly enough to the market conditions by managing vessel space, said Destine Ozuygur, senior analyst for liner network performance at Xeneta. According to data from Xeneta’s eeSea, carriers had 1.19 million TEUs of actual capacity on the Asia-West Coast trade lane in January, with that expected to rise to 1.26 million TEUs in February and 1.4 million TEUs in March. “Given the current slump in rates on the trans-Pacific and the absence of a strong Lunar New Year surge, it appears the carriers failed to balance supply against demand,” Ozuygur said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Neither ocean carriers nor US importers are in a rush to sign contracts for the 2026–27 service year in a trans-Pacific market where spot rates to the West Coast have fallen more than 20% since early January and, many believe, have room to slide further. Multiple sources who spoke to the Journal of Commerce this week said carriers are in no hurry to ink deals with their customers, holding out hope market fundamentals will emerge to reverse the softening trend on the trans-Pacific. And shippers are biding their time, happy to watch rates continue to fall before they’ll put pen to paper on service contracts, most of which begin May 1. The levels and direction of spot rates impact service contracting, as it’s a barometer of the degree to which carriers can effectively match supply to demand. Long-term contract rates generally allow shippers to lock in lower prices than they could find in the spot market, leading shippers to watch the latter closely ahead of and during service contract negotiations. The Journal of Commerce spoke with three ocean carriers, three retailers, three forwarders, two consultants, and an industry analyst for this story. “No one will sign now,” one carrier executive said. “Most shippers will wait until [TPM26] to see if rates have dropped further.” In past years leading up to the Journal of Commerce’s Trans-Pacific Maritime Conference in Long Beach in the first week of March, at least one or two of the half-dozen largest retailers had already signed their service contracts. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. TPM26 will be held March 1–4. “No major big-box retailers have signed as of yet,” a source with a top 20 US retailer said. “We’re running two to three weeks late.” A second carrier executive said while a couple of carriers could be “close” to signing a big-box account, most customers are holding out to see how much further the market falls. Shippers’ market The signals, at least now, favor the importers. In addition to softer demand and falling spot rates , no significant surge in imports is projected in March, when the factories in Asia that closed for the Lunar New Year holiday that began Feb. 17 return to full production. Indeed, retailers and direct importers are holding back on signing their 2026–27 service contracts because they anticipate spot rates may sink further in the next few weeks, forcing carriers to reduce their contract tenders, said Bob Fredman, principal at the consulting firm SF Global Logistics who formerly negotiated service contracts for big-box retailers. “That’s what smart shippers should do,” Fredman said. “It doesn’t make much sense to get too far in front of the [big retailers].” A national furniture importer said he circulated his “boilerplate” tender to his core carrier partners but is not pressuring them to finalize a contract because he anticipates rates will move lower in March. “As a mid-size importer, why not wait? I want to get more clarity as to where the market is,” the source said. As of Feb. 19, the market from Asia to the West Coast was at $1,600 per FEU, down 23% since early January and 42% lower year over year, according to Platts, a sister company of the Journal of Commerce within S&P Global. The East Coast spot rate of $2,400 was down 21% so far this year and 39% lower year over year. According to online rate benchmarking platform Xeneta, Asia-West Coast rates were at $1.356 per FEU as of Feb. 19, down from $2,289 per FEU on Jan. 4 and almost 60% lower year over year. A second top 20 retailer said carriers and their customers are holding back from signing service contracts to see what the negotiating environment looks like after TPM26 in terms of spot rates and forecasts for demand in the second quarter. “We are pretty much completed with our tenders. I suspect we will be completed within the next couple of weeks,” the source said. “Demand right now leading up to Q2 is soft. Carriers are holding back to see if demand picks up after Chinese New Year.” Carriers ‘failed’ to balance supply and demand But the slower-than-usual finalizing of contracts by the largest big-box retailers does not mean that medium to smaller retailers will sign later than usual, said Jason Cook, CEO of forwarder Ardent Global Logistics. “After TPM there will be a rapid succession of completions for the big-box retailers,” Cook said. “Then the midsize and smaller importers will get serious in round two...” Unlike in past years when importers were anxious to lock in volume allotments, known as minimum quantity commitments (MQCs), because vessel space was tight, capacity is readily available this year, and it is the carriers who are edgy. The second top 20 retailer source said her preliminary discussions with carriers have been “colorful.” A major reason why there was no capacity shortage in the trans-Pacific leading into the Lunar New Year was that carriers did not respond quickly enough to the market conditions by managing vessel space, said Destine Ozuygur, senior analyst for liner network performance at Xeneta. According to data from Xeneta’s eeSea, carriers had 1.19 million TEUs of actual capacity on the Asia-West Coast trade lane in January, with that expected to rise to 1.26 million TEUs in February and 1.4 million TEUs in March. “Given the current slump in rates on the trans-Pacific and the absence of a strong Lunar New Year surge, it appears the carriers failed to balance supply against demand,” Ozuygur said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Trans-Pacific carriers, importers slow-walking service contract negotiations

<div class="phx-topic abstract-wrapper">Premier Alliance carriers may not have the most chips in the game, but in a world where all the alliances are competing to provide the best product, they can inject some very useful capacity to enhance particular trade lanes, writes Jeremy Masters.</div>

Premier Alliance carriers may not have the most chips in the game, but in a world where all the alliances are competing to provide the best product, they can inject some very useful capacity to enhance particular trade lanes, writes Jeremy Masters.

<div class="phx-topic">Recent articles on <a href="https://www.joc.com/article/hapag-lloyd-bolsters-fleet-with-42-billion-deal-to-acquire-zim-6170540">Hapag Lloyd’s acquisition of Zim Integrated Shipping Services</a> have naturally focused on the additional critical mass it brings the fifth-largest carrier. It also has some signals for others. If we look at the top 10 carriers, we see the following existing TEU fleet size and capacity on order as of December 2025, (courtesy of Alphaliner): <div class="wrapper-full"><table><colgroup><col width="25%"></col><col width="25%"></col><col width="25%"></col><col width="25%"></col></colgroup><thead><tr><th>Company</th><th class="align-right">Existing Capacity</th><th class="align-right">On Order</th><th class="align-right">Total</th></tr></thead><tbody><tr><td>MSC                </td><td class="align-right">7,080,958</td><td class="align-right">2,102,992</td><td class="align-right">9,183,950</td></tr><tr><td>Maersk            </td><td class="align-right">4,602,633</td><td class="align-right">834,770</td><td class="align-right">5,437,403</td></tr><tr><td>CMA CGM </td><td class="align-right">4,081,155</td><td class="align-right"> 1,909,846</td><td class="align-right"> 5,991,001</td></tr><tr><td>Cosco </td><td class="align-right"> 3,553,514</td><td class="align-right">1,168,612</td><td class="align-right">4,722,126</td></tr><tr><td>Hapag-Lloyd</td><td class="align-right">2,412,728</td><td class="align-right">415,220</td><td class="align-right">2,827,948 </td></tr><tr><td>ONE </td><td class="align-right">2,050,500</td><td class="align-right">611,304</td><td class="align-right"> 2,661,804</td></tr><tr><td>Evergreen       </td><td class="align-right">1,938,786</td><td class="align-right">853,113</td><td class="align-right">2,791,899</td></tr><tr><td>HMM               </td><td class="align-right">1,016,180</td><td class="align-right">190,192</td><td class="align-right">1,206,372</td></tr><tr><td>Yang Ming</td><td class="align-right">717,715</td><td class="align-right">236,660</td><td class="align-right">954,375</td></tr><tr><td>Zim</td><td class="align-right">703,598</td><td class="align-right">163,128</td><td class="align-right">866,726</td></tr></tbody><tfoot><tr><td colspan="4">Source: Alphaliner</td></tr></tfoot></table></div>Switching to consortium carriers, combined existing capacity plus that on order (counting Mediterranean Shipping Co. as a consortium) leaves us with total TEU fleet sizes as follows: <div class="wrapper-full"><table><colgroup><col width="50%"></col><col width="50%"></col></colgroup><thead><tr><th>Company</th><th class="align-right">Fleet Size</th></tr></thead><tbody><tr><td>MSC </td><td class="align-right">9,183,950</td></tr><tr><td>Maersk and HL (including Zim)</td><td class="align-right">9,132,077</td></tr><tr><td>CMA CGM, Cosco and Evergreen</td><td class="align-right">13,505,026</td></tr><tr><td>ONE, HMM and Yang Ming</td><td class="align-right">4,822,551</td></tr></tbody><tfoot><tr><td colspan="2">Alphaliner</td></tr></tfoot></table></div>Of course, relative total fleet capacities do not correlate with relative capacities deployed in the consortium trades, but the above gives a clear guide to overall future strength as it stands. <h3>Significant variation in firepower </h3>MSC continues to surge ahead on both new buildings and second-hand acquisitions, and it would not be a surprise if their ultimate objective is a 30% share of total capacity (they currently sit at 21.5%). The Ocean Alliance of CMA CGM, Cosco (and OOCL), and Evergreen stands out as the biggest consortium by some margin, and the order book reinforces that. The agreement has been extended until 2032, all of the partners are strong, and unless politics gets in the way, this cooperation looks very solid. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6176395_0.1.jpg"></img></div>Whether or not the Zim transaction is completed and however that capacity is operated, Gemini Cooperation has critical mass and, of course, has differentiated itself by its drive for schedule reliability. The current joint vision is clear. The future one may be less so until Maersk’s integrated logistics adventure fully unfolds. Of course, the number that sticks out the most is the capacity of the Premier Alliance carriers of Ocean Network Express, HMM and Yang Ming. After newbuildings, it is 36% of the Ocean Alliance carriers and 53% of MSC and the Gemini carriers, including Zim. Previous articles have visited why capacity is not everything in a consortium and why THE Alliance (now Premier) carriers left behind by Hapag-Lloyd had more options than was originally perceived. Premier moved forward with great dexterity, and multi-trade viability was clutched from the jaws of impending marginalization. Slot exchanges with MSC on the Asia-to-Europe trade, slot purchases from Ocean Alliance to the North American West Coast, and joint services/slotting with Ocean Alliance on the trans-Atlantic were a critical part of that solution. <h3>Options for Premier </h3>Premier may not have the most chips in the game, but in a world where all the alliances are competing to provide the best product, they can inject some very useful capacity to enhance particular trade lanes. They also have enough capacity that any streamlined services they operate have the ability to be market disruptive, so there is an element of “keeping your enemy close,” or to be more exact, under control. On the flip side, we are about to enter a sustained period of structural overcapacity that could have negative effects on Premier as follows: other consortiums taking capacity out and streamlining services, which may reduce their need/desire for using capacity from outside their alliance members; and financial results coming under pressure, with those carriers with less economies of scale feeling the pinch first. Still, we are nowhere near a crisis point in the industry, and the carriers still have some potential to stabilize things. Given Premier’s strategic position, however, they may need to revisit their options calmly before any storm hits. Some potential areas: 1) ONE buying HMM or Yang Ming to consolidate their strength and reduce the vulnerability of Premier. 2) ONE, HMM or Yang Ming ramping up capacity by buying one or more carriers outside the top 10, or otherwise acquiring additional capacity (although in the current situation, any net addition of capacity would further exacerbate overcapacity). 3) Inviting one of the bigger carriers outside the top 10 such as Wan Hai or PIL to join Premier. 4) Recalibrating consortium trade focus. There is no rule that says the main consortiums need to be focused exclusively on east-west trades. If problems do hit, Premier also has the option to rationalize its east-west network and pick its spots where it can build competitive products. In that situation, it will certainly want to positively differentiate its physical or customer service product as Gemini has done with schedule reliability. The Premier Alliance carriers have proven they can be agile and inventive, and they will need to be again. Jeremy Masters is managing director of Shipping Masters. Contact him at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

Recent articles on Hapag Lloyd’s acquisition of Zim Integrated Shipping Services have naturally focused on the additional critical mass it brings the fifth-largest carrier. It also has some signals for others. If we look at the top 10 carriers, we see the following existing TEU fleet size and capacity on order as of December 2025, (courtesy of Alphaliner): Company Existing Capacity On Order Total MSC                 7,080,958 2,102,992 9,183,950 Maersk            4,602,633 834,770 5,437,403 CMA CGM 4,081,155 1,909,846 5,991,001 Cosco 3,553,514 1,168,612 4,722,126 Hapag-Lloyd 2,412,728 415,220 2,827,948 ONE 2,050,500 611,304 2,661,804 Evergreen       1,938,786 853,113 2,791,899 HMM               1,016,180 190,192 1,206,372 Yang Ming 717,715 236,660 954,375 Zim 703,598 163,128 866,726 Source: Alphaliner Switching to consortium carriers, combined existing capacity plus that on order (counting Mediterranean Shipping Co. as a consortium) leaves us with total TEU fleet sizes as follows: Company Fleet Size MSC 9,183,950 Maersk and HL (including Zim) 9,132,077 CMA CGM, Cosco and Evergreen 13,505,026 ONE, HMM and Yang Ming 4,822,551 Alphaliner Of course, relative total fleet capacities do not correlate with relative capacities deployed in the consortium trades, but the above gives a clear guide to overall future strength as it stands. Significant variation in firepower MSC continues to surge ahead on both new buildings and second-hand acquisitions, and it would not be a surprise if their ultimate objective is a 30% share of total capacity (they currently sit at 21.5%). The Ocean Alliance of CMA CGM, Cosco (and OOCL), and Evergreen stands out as the biggest consortium by some margin, and the order book reinforces that. The agreement has been extended until 2032, all of the partners are strong, and unless politics gets in the way, this cooperation looks very solid. Whether or not the Zim transaction is completed and however that capacity is operated, Gemini Cooperation has critical mass and, of course, has differentiated itself by its drive for schedule reliability. The current joint vision is clear. The future one may be less so until Maersk’s integrated logistics adventure fully unfolds. Of course, the number that sticks out the most is the capacity of the Premier Alliance carriers of Ocean Network Express, HMM and Yang Ming. After newbuildings, it is 36% of the Ocean Alliance carriers and 53% of MSC and the Gemini carriers, including Zim. Previous articles have visited why capacity is not everything in a consortium and why THE Alliance (now Premier) carriers left behind by Hapag-Lloyd had more options than was originally perceived. Premier moved forward with great dexterity, and multi-trade viability was clutched from the jaws of impending marginalization. Slot exchanges with MSC on the Asia-to-Europe trade, slot purchases from Ocean Alliance to the North American West Coast, and joint services/slotting with Ocean Alliance on the trans-Atlantic were a critical part of that solution. Options for Premier Premier may not have the most chips in the game, but in a world where all the alliances are competing to provide the best product, they can inject some very useful capacity to enhance particular trade lanes. They also have enough capacity that any streamlined services they operate have the ability to be market disruptive, so there is an element of “keeping your enemy close,” or to be more exact, under control. On the flip side, we are about to enter a sustained period of structural overcapacity that could have negative effects on Premier as follows: other consortiums taking capacity out and streamlining services, which may reduce their need/desire for using capacity from outside their alliance members; and financial results coming under pressure, with those carriers with less economies of scale feeling the pinch first. Still, we are nowhere near a crisis point in the industry, and the carriers still have some potential to stabilize things. Given Premier’s strategic position, however, they may need to revisit their options calmly before any storm hits. Some potential areas: 1) ONE buying HMM or Yang Ming to consolidate their strength and reduce the vulnerability of Premier. 2) ONE, HMM or Yang Ming ramping up capacity by buying one or more carriers outside the top 10, or otherwise acquiring additional capacity (although in the current situation, any net addition of capacity would further exacerbate overcapacity). 3) Inviting one of the bigger carriers outside the top 10 such as Wan Hai or PIL to join Premier. 4) Recalibrating consortium trade focus. There is no rule that says the main consortiums need to be focused exclusively on east-west trades. If problems do hit, Premier also has the option to rationalize its east-west network and pick its spots where it can build competitive products. In that situation, it will certainly want to positively differentiate its physical or customer service product as Gemini has done with schedule reliability. The Premier Alliance carriers have proven they can be agile and inventive, and they will need to be again. Jeremy Masters is managing director of Shipping Masters. Contact him at jeremy@shippingmastershk.com .

After Hapag-Zim deal, Premier Alliance may be next in the spotlight

<div class="phx-topic abstract-wrapper">The carrier has finalized plans to inject significant incremental westbound capacity into the market on its “MECL” service, multiple industry sources told the Journal of Commerce. </div>

The carrier has finalized plans to inject significant incremental westbound capacity into the market on its “MECL” service, multiple industry sources told the Journal of Commerce.

<div class="phx-topic">More container capacity is poised to enter the India-US trade lane as carrier executives spot measurable green shoots of volume after the <a href="https://www.joc.com/article/us-agrees-to-slash-tariffs-on-imports-from-india-after-reaching-trade-deal-6162939">recent reset of US tariffs on Indian-made goods</a>. Maersk has finalized plans to inject significant incremental westbound capacity into the market through vessel upsizing on its West India-US East Coast (USEC) “MECL” service, multiple industry sources told the Journal of Commerce. That comes as the US has lowered its tariff on Indian goods from 50% to 25%, with a further cut to 18% expected soon. Sources also confirmed that Maersk’s loading space for the Indian region will climb sequentially by up to 3,000 TEUs per week through the year, beginning with an extra 750 TEUS to 800 TEUs of capacity joining the MECL service in the second quarter that typically aligns with the onset of new service contract shipments. The weekly MECL service currently deploys ships with capacities ranging between 6,000 TEUS and 8,000 TEUs, available data shows. A Maersk executive declined to confirm specifics of the carrier’s planned capacity boost on the India-US trade but acknowledged cargo flows would increase on the lane soon. “Based on our read of the market, we expect meaningful new cargo flows to begin materializing from April onwards, as buyers and sellers lock in commitments and production cycles align,” Bhavik Mota, Maersk’s director of regional ocean management for India/Middle East/Africa (IMEA), told the Journal of Commerce. “We will then recalibrate our capacity for India-US trade based on customer requirements.” Bhavik also said while exporters across the sectors remain bullish about the demand outlook ahead, tariff realignments and new procurement cycles take time to filter through before containers begin moving. “This [tariff] reduction meaningfully improves the economics of doing business across this [India-US] lane, and that sentiment is clearly reflected in the conversations we are having with shippers,” he added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ae1df54b-4003-46b5-a8c3-e0d35707e941"></dynamic-object></div>There were some positive signs even before the trade deal between Washington and New Delhi was announced in early February. Exports from India to the US East Coast climbed 20% to 76,550 TEUs in January from December, the first month-over-month increase since last August, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. <h3>Spot rates on steady decline </h3>With the late-January <a href="https://www.joc.com/article/maersk-set-to-resume-regular-suez-transits-on-india-usec-mecl-loop-sources-6152441">reinstatement of regular Red Sea/Suez Canal transits westbound</a>, the MECL now boasts a 25-day transit from Nhava Sheva to Newark, NJ, currently the fastest connection on offer for Indian loads to the US East Coast. Maersk wants to reclaim India-USEC market share lost to rivals over the past decade, so capacity expansions now at play build on service upgrades it implemented last year, including the addition of Mundra as a third Indian port of call to enhance export allocations and the removal of Algeciras in Spain to shorten the roundtrip duration. Spot rate indicators and capacity utilization data, however, suggest carriers are struggling thus far to tilt the market back to their side. Booking rates from India to the USEC have almost halved since the 50% tariff blow, down to $1,173 per FEU as of Feb. 18 from $2,200 on Aug. 29, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="893ffa5c-0a69-45c7-a555-425e44318711"></dynamic-object></div>Additionally, according to rate benchmarking platform Xeneta, monthly average proforma capacity across seven services on the India-US trade lane between August 2025 and January 2026 was approximately 160,000 TEUs, whereas the nominal monthly average of capacity actually deployed by carriers over the period stood at 127,000 TEUs, blanking approximately 21% of scheduled space. And sources warn any large capacity influx could also weigh on carrier contract rate negotiations if there is no matching acceleration in demand. Meanwhile, Maersk on Wednesday announced a hefty peak season surcharge of $3,000 per container for loads from the Indian subcontinent/Middle East to the US East/Gulf coasts from March 20. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

More container capacity is poised to enter the India-US trade lane as carrier executives spot measurable green shoots of volume after the recent reset of US tariffs on Indian-made goods . Maersk has finalized plans to inject significant incremental westbound capacity into the market through vessel upsizing on its West India-US East Coast (USEC) “MECL” service, multiple industry sources told the Journal of Commerce. That comes as the US has lowered its tariff on Indian goods from 50% to 25%, with a further cut to 18% expected soon. Sources also confirmed that Maersk’s loading space for the Indian region will climb sequentially by up to 3,000 TEUs per week through the year, beginning with an extra 750 TEUS to 800 TEUs of capacity joining the MECL service in the second quarter that typically aligns with the onset of new service contract shipments. The weekly MECL service currently deploys ships with capacities ranging between 6,000 TEUS and 8,000 TEUs, available data shows. A Maersk executive declined to confirm specifics of the carrier’s planned capacity boost on the India-US trade but acknowledged cargo flows would increase on the lane soon. “Based on our read of the market, we expect meaningful new cargo flows to begin materializing from April onwards, as buyers and sellers lock in commitments and production cycles align,” Bhavik Mota, Maersk’s director of regional ocean management for India/Middle East/Africa (IMEA), told the Journal of Commerce. “We will then recalibrate our capacity for India-US trade based on customer requirements.” Bhavik also said while exporters across the sectors remain bullish about the demand outlook ahead, tariff realignments and new procurement cycles take time to filter through before containers begin moving. “This [tariff] reduction meaningfully improves the economics of doing business across this [India-US] lane, and that sentiment is clearly reflected in the conversations we are having with shippers,” he added. There were some positive signs even before the trade deal between Washington and New Delhi was announced in early February. Exports from India to the US East Coast climbed 20% to 76,550 TEUs in January from December, the first month-over-month increase since last August, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Spot rates on steady decline With the late-January reinstatement of regular Red Sea/Suez Canal transits westbound , the MECL now boasts a 25-day transit from Nhava Sheva to Newark, NJ, currently the fastest connection on offer for Indian loads to the US East Coast. Maersk wants to reclaim India-USEC market share lost to rivals over the past decade, so capacity expansions now at play build on service upgrades it implemented last year, including the addition of Mundra as a third Indian port of call to enhance export allocations and the removal of Algeciras in Spain to shorten the roundtrip duration. Spot rate indicators and capacity utilization data, however, suggest carriers are struggling thus far to tilt the market back to their side. Booking rates from India to the USEC have almost halved since the 50% tariff blow, down to $1,173 per FEU as of Feb. 18 from $2,200 on Aug. 29, according to Platts, a sister company of the Journal of Commerce within S&P Global. Additionally, according to rate benchmarking platform Xeneta, monthly average proforma capacity across seven services on the India-US trade lane between August 2025 and January 2026 was approximately 160,000 TEUs, whereas the nominal monthly average of capacity actually deployed by carriers over the period stood at 127,000 TEUs, blanking approximately 21% of scheduled space. And sources warn any large capacity influx could also weigh on carrier contract rate negotiations if there is no matching acceleration in demand. Meanwhile, Maersk on Wednesday announced a hefty peak season surcharge of $3,000 per container for loads from the Indian subcontinent/Middle East to the US East/Gulf coasts from March 20. Contact Bency Mathew at bencyvmathew@gmail.com .

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