<div class="phx-topic abstract-wrapper">Eighteen Republican members of Congress said the remedies laid out as part of the US’ investigation into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels. </div>

Eighteen Republican members of Congress said the remedies laid out as part of the US’ investigation into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels.

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<div class="phx-topic">A group of 18 farm state Republican members of Congress is warning that a wide-ranging proposal by the US Trade Representative (USTR) to reinvigorate the US shipbuilding industry would instead damage domestic agriculture interests by adding hundreds of millions of dollars to transportation costs and reducing export volumes. In a letter Thursday to USTR Jamieson Greer, the members of Congress said the remedies laid out as part of the US’ so-called <a href="https://www.joc.com/article/plan-to-tax-chinese-ships-turned-maritime-malaise-into-brainstorming-session-5971753">Section 301 investigation</a> into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels. The letter was signed by representatives from Georgia, Iowa, Illinois, Minnesota, Missouri, Nebraska, North Dakota, Oregon, Pennsylvania, South Dakota and Washington and is notable in that it represents a large group of Republican House members coming out against a proposal from the Trump administration. Representatives said they feared how ocean carriers using Chinese-made or –operated vessels would respond to being charged as much as $1.5 million per US port call. “While China is the target of USTR’s proposed port fee, ocean carriers will inevitably shift the expense onto their American customers,” the letter read. “We are concerned this proposed action will have disproportionate harm on American farmers and ranchers.” Ag interests also stand to see their transportation costs for bulk exports increase between $372 million and $930 million because the existing US fleet and the USTR’s seven-year phase-in to require more exports on US-flagged vessels “is not adequate to accommodate the needs of the domestic agriculture industry,” the representatives wrote. The letter, which noted the US agriculture industry exports 20% of its total production, said containerized exporters will “face extreme risks” from the USTR proposal, adding the plan would reduce bulk export volumes while doubling the cost of exports. “Agricultural goods are the first to be left behind and the last to resume trade when disruptions in the maritime industry occur,” the letter read. “These actions will collectively undermine the competitiveness of US agriculture in the global marketplace.” Having the support of rural America tends to draw the attention of officials in Washington, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM25 conference in March. “Members of Congress want to see [their] constituents — the ones who live and or work in their district [or] state — to see what they have to say,” Friedmann said. “Not some trade association. They listen to me when I bring [a] pistachio farmer with me... Real people, real constituents.” Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">Laura.Robb@spglobal.com</a>. </div>

A group of 18 farm state Republican members of Congress is warning that a wide-ranging proposal by the US Trade Representative (USTR) to reinvigorate the US shipbuilding industry would instead damage domestic agriculture interests by adding hundreds of millions of dollars to transportation costs and reducing export volumes. In a letter Thursday to USTR Jamieson Greer, the members of Congress said the remedies laid out as part of the US’ so-called Section 301 investigation into China’s maritime dominance are unworkable for farmers, notably a port tax on Chinese vessels and the requirement that an increasing volume of US exports be shipped on US-flagged vessels. The letter was signed by representatives from Georgia, Iowa, Illinois, Minnesota, Missouri, Nebraska, North Dakota, Oregon, Pennsylvania, South Dakota and Washington and is notable in that it represents a large group of Republican House members coming out against a proposal from the Trump administration. Representatives said they feared how ocean carriers using Chinese-made or –operated vessels would respond to being charged as much as $1.5 million per US port call. “While China is the target of USTR’s proposed port fee, ocean carriers will inevitably shift the expense onto their American customers,” the letter read. “We are concerned this proposed action will have disproportionate harm on American farmers and ranchers.” Ag interests also stand to see their transportation costs for bulk exports increase between $372 million and $930 million because the existing US fleet and the USTR’s seven-year phase-in to require more exports on US-flagged vessels “is not adequate to accommodate the needs of the domestic agriculture industry,” the representatives wrote. The letter, which noted the US agriculture industry exports 20% of its total production, said containerized exporters will “face extreme risks” from the USTR proposal, adding the plan would reduce bulk export volumes while doubling the cost of exports. “Agricultural goods are the first to be left behind and the last to resume trade when disruptions in the maritime industry occur,” the letter read. “These actions will collectively undermine the competitiveness of US agriculture in the global marketplace.” Having the support of rural America tends to draw the attention of officials in Washington, Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said at the Journal of Commerce’s TPM25 conference in March. “Members of Congress want to see [their] constituents — the ones who live and or work in their district [or] state — to see what they have to say,” Friedmann said. “Not some trade association. They listen to me when I bring [a] pistachio farmer with me... Real people, real constituents.” Contact Laura Robb at Laura.Robb@spglobal.com .

Container Shipping News

Transport, Trade and Regulation News

Trans-Pacific

North American ports

Maritime

Farm state House members say USTR proposal offers big risks to US ag interests

<div class="phx-topic abstract-wrapper">The partnership will see SMC3 provide less-than-truckload rating, booking and tracking data into Turvo’s transportation management system, which primarily serves US freight brokers and third-party logistics providers.</div>

The partnership will see SMC3 provide less-than-truckload rating, booking and tracking data into Turvo’s transportation management system, which primarily serves US freight brokers and third-party logistics providers.

<div class="phx-topic">Freight broker-focused transportation management system (TMS) provider Turvo is partnering with SMC3 to integrate less-than-truckload (LTL) management tools into its software as demand for LTL applications grows. The partnership, unveiled Thursday, will see Turvo customers get access to SMC3’s rating, booking, tracking and document retrieval application programming interfaces (APIs), which the TMS provider said will eliminate manual steps currently used to execute those processes. SMC3 is a widely-used platform for LTL rate benchmarking through its CzarLite, RateWare XL and BatchMark XL products while also providing data around LTL transit times and bidding. Turvo, acquired in 2022 by cold chain conglomerate Lineage Logistics, provides TMS products to brokers, shippers and carriers, but with a specialty in serving the brokerage and third-party logistics (3PL) markets. Its customers include Ryder, PortX Logistics and PortCity. SMC3 joins a list of more than three dozen existing Turvo partners, although most cater to the truckload or drayage markets. “The collaboration between Turvo and SMC3 will strengthen our LTL operations by enhancing visibility, improving efficiency and enabling more responsive service,” Kate Leatherbury, director of LTL at 3PL Gebrüder Weiss North America, said in a statement. “Having access to real-time contract, volume and dynamic pricing within our TMS will significantly improve our ability to deliver a seamless experience to both carriers and customers.” Brokers that have previously focused wholly or mostly on truckload are keying in on areas to expand into LTL even as the LTL market goes through a period of largely static demand. LTL carriers are positioning themselves, through the acquisition of regional carriers and expansion of terminal networks, to <a href="https://www.joc.com/article/us-ltl-getting-in-position-for-higher-freight-demand-when-it-comes-5968547">take advantage of renewed growth in LTL</a> when it comes. LTL-focused brokers also see themselves as being in a good position to help shippers adjust to the <a href="https://www.joc.com/article/us-shippers-urged-to-prepare-now-for-upcoming-ltl-class-changes-rate-resetting-5933927">ongoing revision of the LTL freight classification system</a>. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Freight broker-focused transportation management system (TMS) provider Turvo is partnering with SMC3 to integrate less-than-truckload (LTL) management tools into its software as demand for LTL applications grows. The partnership, unveiled Thursday, will see Turvo customers get access to SMC3’s rating, booking, tracking and document retrieval application programming interfaces (APIs), which the TMS provider said will eliminate manual steps currently used to execute those processes. SMC3 is a widely-used platform for LTL rate benchmarking through its CzarLite, RateWare XL and BatchMark XL products while also providing data around LTL transit times and bidding. Turvo, acquired in 2022 by cold chain conglomerate Lineage Logistics, provides TMS products to brokers, shippers and carriers, but with a specialty in serving the brokerage and third-party logistics (3PL) markets. Its customers include Ryder, PortX Logistics and PortCity. SMC3 joins a list of more than three dozen existing Turvo partners, although most cater to the truckload or drayage markets. “The collaboration between Turvo and SMC3 will strengthen our LTL operations by enhancing visibility, improving efficiency and enabling more responsive service,” Kate Leatherbury, director of LTL at 3PL Gebrüder Weiss North America, said in a statement. “Having access to real-time contract, volume and dynamic pricing within our TMS will significantly improve our ability to deliver a seamless experience to both carriers and customers.” Brokers that have previously focused wholly or mostly on truckload are keying in on areas to expand into LTL even as the LTL market goes through a period of largely static demand. LTL carriers are positioning themselves, through the acquisition of regional carriers and expansion of terminal networks, to take advantage of renewed growth in LTL when it comes. LTL-focused brokers also see themselves as being in a good position to help shippers adjust to the ongoing revision of the LTL freight classification system . Contact Eric Johnson at eric.johnson@spglobal.com .

Truck brokers

Logistics Technology News

TMS provider Turvo turns to SMC3 to enable LTL ambitions

<div class="phx-topic abstract-wrapper">A general rate increase implemented by carriers in the eastbound trans-Pacific on April 1 has largely stuck, giving shippers less leverage in attempting to lower contract rates for 2025–26 service year.</div>

A general rate increase implemented by carriers in the eastbound trans-Pacific on April 1 has largely stuck, giving shippers less leverage in attempting to lower contract rates for 2025–26 service year.

<div class="phx-topic">Just weeks after signing 2025–26 service contracts with trans-Pacific ocean carriers at $1,600 to $1,800 per FEU for West Coast imports, big-box retailers are attempting to knock those numbers down as they look to assign their remaining cargo to liners they have yet to ink deals with. That final push, which will play out in the coming weeks, may face some headwinds, however. That’s because a general rate increase (GRI) implemented by carriers on April 1 has largely stuck, giving shippers less leverage in attempting to lower contract rates for next service year. The largest big-box retailers <a href="https://www.joc.com/article/largest-us-importers-finalizing-contracts-in-unsettled-trans-pacific-5971122">in recent weeks signed annual service contracts</a> with their core carriers in the range of $1,600 to $1,800 per FEU from Asia to the West Coast and about $2,600 to $2,800 per FEU to the East Coast. Those rates are about 15% to 20% higher than what they signed for in their existing 2024–25 contracts. Most contracts will run from May 1 through April 30, 2026. The Journal of Commerce spoke with 10 forwarders, three carriers and two consultants for this story. Large retailers ship with multiple carriers, and they are reportedly negotiating with their remaining core carriers for lower rates. However, most carriers on Tuesday implemented GRIs of up to $1,000 per FEU on spot rates. “It’s pretty much across the board for almost all carriers,” Kurt McElroy, executive vice president at the forwarder Kerry Apex, said of the GRIs. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged spot rates to the West Coast at $2,275 per FEU as of Thursday, up 42% week over week. The East Coast rate was exactly $1,000 higher at $3,275/FEU, up 26%. Carriers attempt to leverage rising spot rates into higher contract rates as they finalize contract negotiations with customers. <h3>GRIs providing support for carriers </h3>When contract negotiations in the eastbound trans-Pacific began earlier this year, carriers said they were aiming for rates of <a href="https://www.joc.com/article/trans-pacific-carriers-reaching-higher-in-early-202526-contract-talks-5952701">$2,000 per FEU to the West Coast and $3,000 to the East Coast</a> with their largest customers. By setting the floor at those rates, carriers would then attempt to sign the second tier of customers for a couple of hundred dollars per FEU higher. But with spot rates in decline until late March, carriers were forced to accept levels about $200 to $400 under their expectations. Now, with a mostly successfully GRI to provide support, they are making a final push to reverse the momentum and get close to their original goal, Ben Coleman, president of the forwarder Teampower Logistics, said. “They started with $2,000 [to the West Coast], then early signings dropped that to $1,600-$1,800, and now they’re trying to claw back to $2,000,” Coleman said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>An industry consultant who formerly served as a logistics manager with national retailers said it is not unusual for larger importers to attempt to secure lower contract rates from each carrier they deal with until all their volume has been committed. “They will try to get the best rates they can,” the source said. “Maybe they can get it done with some contracts, but not all.” A carrier executive echoed that point, but noted retailers could end up being shut out by some lines. “The more you try to push down rates, the riskier it will be to get space,” the executive said. “Still, some are still trying to leverage their volumes.” A forwarder said even though the April 1 GRI may not be as fully effective as carriers would like, they appear resolved to reach their initial goals for service contract rates. “We are moving forward with our contract discussions, and benchmarks, at least for named accounts, remaining at $2,000 [for the West Coast] and $3,000 [for the East Coast], respectively,” the source said. Some carriers this week launched a second round of negotiations with non-vessel-operating common carriers (NVOs), which will put additional pressure on importers to wrap up their contract negotiations, a second forwarder said. He estimates that most NVO contracts will settle near $2,000 per FEU to the West Coast. Some importers had resisted finalizing their contracts until the Trump administration announced its tariff policy, but with <a href="https://www.joc.com/article/trump-announces-10-across-the-board-tariffs-on-all-us-imports-5975639">Wednesday’s announcement</a>, those retailers and other importers with fall merchandise to book are likely to finalize their contracts and step up their bookings, forwarders said. With spot rates higher, bookings in Asia picking up and importers looking beyond the tariffs to finalize their fall and holiday merchandise needs, shippers realize they can’t wait much longer to wrap up their contract negotiations, one forwarder said. “There’s been a different dynamic the last 72 hours,” the source said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>.</div>

Just weeks after signing 2025–26 service contracts with trans-Pacific ocean carriers at $1,600 to $1,800 per FEU for West Coast imports, big-box retailers are attempting to knock those numbers down as they look to assign their remaining cargo to liners they have yet to ink deals with. That final push, which will play out in the coming weeks, may face some headwinds, however. That’s because a general rate increase (GRI) implemented by carriers on April 1 has largely stuck, giving shippers less leverage in attempting to lower contract rates for next service year. The largest big-box retailers in recent weeks signed annual service contracts with their core carriers in the range of $1,600 to $1,800 per FEU from Asia to the West Coast and about $2,600 to $2,800 per FEU to the East Coast. Those rates are about 15% to 20% higher than what they signed for in their existing 2024–25 contracts. Most contracts will run from May 1 through April 30, 2026. The Journal of Commerce spoke with 10 forwarders, three carriers and two consultants for this story. Large retailers ship with multiple carriers, and they are reportedly negotiating with their remaining core carriers for lower rates. However, most carriers on Tuesday implemented GRIs of up to $1,000 per FEU on spot rates. “It’s pretty much across the board for almost all carriers,” Kurt McElroy, executive vice president at the forwarder Kerry Apex, said of the GRIs. Platts, a sister company of the Journal of Commerce within S&P Global, pegged spot rates to the West Coast at $2,275 per FEU as of Thursday, up 42% week over week. The East Coast rate was exactly $1,000 higher at $3,275/FEU, up 26%. Carriers attempt to leverage rising spot rates into higher contract rates as they finalize contract negotiations with customers. GRIs providing support for carriers When contract negotiations in the eastbound trans-Pacific began earlier this year, carriers said they were aiming for rates of $2,000 per FEU to the West Coast and $3,000 to the East Coast with their largest customers. By setting the floor at those rates, carriers would then attempt to sign the second tier of customers for a couple of hundred dollars per FEU higher. But with spot rates in decline until late March, carriers were forced to accept levels about $200 to $400 under their expectations. Now, with a mostly successfully GRI to provide support, they are making a final push to reverse the momentum and get close to their original goal, Ben Coleman, president of the forwarder Teampower Logistics, said. “They started with $2,000 [to the West Coast], then early signings dropped that to $1,600-$1,800, and now they’re trying to claw back to $2,000,” Coleman said. An industry consultant who formerly served as a logistics manager with national retailers said it is not unusual for larger importers to attempt to secure lower contract rates from each carrier they deal with until all their volume has been committed. “They will try to get the best rates they can,” the source said. “Maybe they can get it done with some contracts, but not all.” A carrier executive echoed that point, but noted retailers could end up being shut out by some lines. “The more you try to push down rates, the riskier it will be to get space,” the executive said. “Still, some are still trying to leverage their volumes.” A forwarder said even though the April 1 GRI may not be as fully effective as carriers would like, they appear resolved to reach their initial goals for service contract rates. “We are moving forward with our contract discussions, and benchmarks, at least for named accounts, remaining at $2,000 [for the West Coast] and $3,000 [for the East Coast], respectively,” the source said. Some carriers this week launched a second round of negotiations with non-vessel-operating common carriers (NVOs), which will put additional pressure on importers to wrap up their contract negotiations, a second forwarder said. He estimates that most NVO contracts will settle near $2,000 per FEU to the West Coast. Some importers had resisted finalizing their contracts until the Trump administration announced its tariff policy, but with Wednesday’s announcement , those retailers and other importers with fall merchandise to book are likely to finalize their contracts and step up their bookings, forwarders said. With spot rates higher, bookings in Asia picking up and importers looking beyond the tariffs to finalize their fall and holiday merchandise needs, shippers realize they can’t wait much longer to wrap up their contract negotiations, one forwarder said. “There’s been a different dynamic the last 72 hours,” the source said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Container lines

Forwarding

Trans-Pac GRI offers resistance to retailers’ push for lower contract rates

<div class="phx-topic abstract-wrapper">The deal will merge “K” Lines’ traditional logistics activities in ocean and air freight with Kamigumi’s niche business in project cargo logistics.</div>

The deal will merge “K” Lines’ traditional logistics activities in ocean and air freight with Kamigumi’s niche business in project cargo logistics.

<div class="phx-topic">Japanese carrier “K” Line will expand its international and domestic logistics business with the launch this week of a joint venture with Japanese forwarding company Kamigumi that is expected to target contract and project cargo logistics. That came after “K” Line transferred ownership of its “K” Line Logistics into a new holding company, KLKG Logistics Holdings. “K” Line subsequently transferred 47% of its shares in KLKG Logistics to Kamigumi. “Through this capital alliance, we aim to achieve further growth in domestic and overseas markets by [strengthening] contract logistics and providing high-quality and more diverse logistics services to customers,” “K” Line said in a statement announcing the venture. Keiji Kubo, “K” Line managing executive officer for the product logistics division, said the entry into new project cargo-related logistics businesses, such as offshore wind power, will also offer opportunities. The deal will merge “K” Lines’ traditional logistics activities in ocean and air freight with Kamigumi’s niche business in project cargo logistics, which includes handling spent nuclear fuel and transporting industrial equipment such as power transformers and wind power components. “K” Line Logistics had revenues of about $300 million last year, while Kamigumi is expected to post revenues of approximately $1.9 billion when it reports full-year earnings in May. “K” Line Logistics is mainly focused on Asia and Australia with warehousing and cold storage in China, Vietnam, Thailand, Indonesia, the Philippines, India and the United Arab Emirates, with freight forwarding across the region. It also operates cross-board trucking between Thailand and four neighboring countries including Malaysia, Myanmar and Laos. Operations in the Americas and Europe, which include offices in the US, Mexico, France, Germany and the Netherlands, mainly provide freight forwarding and customs brokerage. Kamigumi mainly operates in Southeast Asia, China and Mexico. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Japanese carrier “K” Line will expand its international and domestic logistics business with the launch this week of a joint venture with Japanese forwarding company Kamigumi that is expected to target contract and project cargo logistics. That came after “K” Line transferred ownership of its “K” Line Logistics into a new holding company, KLKG Logistics Holdings. “K” Line subsequently transferred 47% of its shares in KLKG Logistics to Kamigumi. “Through this capital alliance, we aim to achieve further growth in domestic and overseas markets by [strengthening] contract logistics and providing high-quality and more diverse logistics services to customers,” “K” Line said in a statement announcing the venture. Keiji Kubo, “K” Line managing executive officer for the product logistics division, said the entry into new project cargo-related logistics businesses, such as offshore wind power, will also offer opportunities. The deal will merge “K” Lines’ traditional logistics activities in ocean and air freight with Kamigumi’s niche business in project cargo logistics, which includes handling spent nuclear fuel and transporting industrial equipment such as power transformers and wind power components. “K” Line Logistics had revenues of about $300 million last year, while Kamigumi is expected to post revenues of approximately $1.9 billion when it reports full-year earnings in May. “K” Line Logistics is mainly focused on Asia and Australia with warehousing and cold storage in China, Vietnam, Thailand, Indonesia, the Philippines, India and the United Arab Emirates, with freight forwarding across the region. It also operates cross-board trucking between Thailand and four neighboring countries including Malaysia, Myanmar and Laos. Operations in the Americas and Europe, which include offices in the US, Mexico, France, Germany and the Netherlands, mainly provide freight forwarding and customs brokerage. Kamigumi mainly operates in Southeast Asia, China and Mexico. Contact Keith Wallis at keithwallis@hotmail.com .

Supply chain

‘K’ Line to expand logistics operations in joint venture with Kamigumi

<div class="phx-topic abstract-wrapper">For Singapore-based PSA, the investment cements a beachhead in a West India market primed to benefit from Asian trade diversification and burgeoning consumer demand.</div>

For Singapore-based PSA, the investment cements a beachhead in a West India market primed to benefit from Asian trade diversification and burgeoning consumer demand.

<div class="phx-topic">PSA International has kicked off operations at its 2.4 million-TEU Phase II terminal at India’s Nhava Sheva Port (JNPA), albeit at a limited scale ahead of an official full-fledged launch scheduled for April 15. The expansion doubles the size of PSA Mumbai, also known as Bharat Mumbai Container Terminals (BMCT), which opened its Phase I terminal of the same size in early 2018. Each stage of the overall project, on a 30-year concession involving a total $1 billion investment, has been designed with three berths with a quay of 1,000 meters able to accommodate 16,000- to 18,000-TEU vessels. The original terminal is already operating at 90% utilization, having seen fiscal year 2024–25 volumes spike 12% year over year to 2.3 million TEUs on 1,077 container ship visits, up from 863 calls a year earlier, data shows. As ocean services in and out of West India steadily expand, more volume consolidation toward the PSA facility is imminent as other terminals in the port complex, especially APM Terminals’ Gateway Terminals India (GTI), have little spare capacity. With a combined 4.8 million TEUs in annual capacity, BMCT is poised to emerge as India’s largest standalone terminal. It currently hosts about 30 weekly sailings, which include ship calls up to 15,000 TEUs, largely from Mediterranean Shipping Co. For Singapore-based PSA, the Nhava Sheva investment gives it a “beachhead” to cement itself in a market primed to benefit from Asian trade diversification and burgeoning consumer demand. Its Indian operations include a 1.4 million-TEU facility at Chennai Port, but that faces serious regional growth challenges. At the same time, with vessels often arriving out-of-window due to the Red Sea-linked diversions and carriers increasingly deploying “ultra-large” tonnage that typically involves significantly higher container exchanges per call, Nhava Sheva has been wrestling with severe pressure inland, a concern that could exacerbate as volumes build. To ease landside bottlenecks in the harbor, a second highway extension project has just been approved by the government at a cost of some $525 million, but a definite timeline is yet unknown for its completion. Contact Bency Mathew at <a href="bencyvmathew@gmail.com.">bencyvmathew@gmail.com</a>.</div>

PSA International has kicked off operations at its 2.4 million-TEU Phase II terminal at India’s Nhava Sheva Port (JNPA), albeit at a limited scale ahead of an official full-fledged launch scheduled for April 15. The expansion doubles the size of PSA Mumbai, also known as Bharat Mumbai Container Terminals (BMCT), which opened its Phase I terminal of the same size in early 2018. Each stage of the overall project, on a 30-year concession involving a total $1 billion investment, has been designed with three berths with a quay of 1,000 meters able to accommodate 16,000- to 18,000-TEU vessels. The original terminal is already operating at 90% utilization, having seen fiscal year 2024–25 volumes spike 12% year over year to 2.3 million TEUs on 1,077 container ship visits, up from 863 calls a year earlier, data shows. As ocean services in and out of West India steadily expand, more volume consolidation toward the PSA facility is imminent as other terminals in the port complex, especially APM Terminals’ Gateway Terminals India (GTI), have little spare capacity. With a combined 4.8 million TEUs in annual capacity, BMCT is poised to emerge as India’s largest standalone terminal. It currently hosts about 30 weekly sailings, which include ship calls up to 15,000 TEUs, largely from Mediterranean Shipping Co. For Singapore-based PSA, the Nhava Sheva investment gives it a “beachhead” to cement itself in a market primed to benefit from Asian trade diversification and burgeoning consumer demand. Its Indian operations include a 1.4 million-TEU facility at Chennai Port, but that faces serious regional growth challenges. At the same time, with vessels often arriving out-of-window due to the Red Sea-linked diversions and carriers increasingly deploying “ultra-large” tonnage that typically involves significantly higher container exchanges per call, Nhava Sheva has been wrestling with severe pressure inland, a concern that could exacerbate as volumes build. To ease landside bottlenecks in the harbor, a second highway extension project has just been approved by the government at a cost of some $525 million, but a definite timeline is yet unknown for its completion. Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

International ports

PSA expansion project doubles capacity at India’s Nhava Sheva terminal

<div class="phx-topic abstract-wrapper">The expedited service will require terminals within the Northwest Seaport Alliance to load rail-bound trains within 48 hours of vessel arrival, significantly faster than the average dwell times of eight to 15 days experienced last year during a surge in container volumes.</div>

The expedited service will require terminals within the Northwest Seaport Alliance to load rail-bound trains within 48 hours of vessel arrival, significantly faster than the average dwell times of eight to 15 days experienced last year during a surge in container volumes.

<div class="phx-topic">BNSF Railway will launch a faster international intermodal service linking the ports of Seattle and Tacoma to Chicago and points east with Norfolk Southern (NS), the two railroads announced along with the Northwest Seaport Alliance. Transit times from dock to Chicago will be reduced to six days from nine and include a streamlined handoff to a Norfolk Southern crew at Chicago for service on the same train to inland markets in the Midwest and Northeast. “This service product collaboration was an outcome of listening to our joint customers, who emphasized the desire to use more rail but would need to also reduce inventory carrying and total landed transportation costs out of their networks in 2025,” Jon Gabriel, BNSF’s group vice president of consumer products, said in a statement Wednesday. The faster service will require terminals within the Northwest Seaport Alliance to load rail-bound trains within 48 hours of vessel arrival, significantly faster than the average dwell times <a href="https://www.joc.com/article/tacoma-marine-terminals-grappling-with-heavy-import-rail-congestion-5706377">of eight to 15 days experienced last year</a> during a surge in container volumes. Between June and August 2024, the average rail dwell time at Tacoma’s Washington United and Husky terminals climbed to between eight and 10 days, according to data from Opentrac. When cargo was diverted to Seattle, average dwell times between the two ports stretched as long as 15 days in August and September. That backlog came during a spike in international intermodal volumes. About 100,000 import loads moved by rail from Seattle-Tacoma to Chicago on BNSF or Union Pacific trains in 2024, up from approximately 60,000 the previous year, according to Journal of Commerce estimates. It was the highest annual throughput since the pandemic-related freight surge in 2021. <h3>Hoping to cut inland delays </h3>The new service is also meant to reduce delays in Chicago. Rather than delivering trains to a BNSF terminal and relying on the Belt Railway of Chicago (BRC) to transfer containers to Norfolk Southern, as is typical for all Chicago interchanges, all traffic will be routed directly to Norfolk Southern’s Ashland Yard on the city’s south side. From there, the only step will be a change to an NS crew before continuing east with the same train. There will be no stop in a BNSF terminal, no haul between railroads by the BRC, and no building of a separate train inside an NS terminal. The process of western railroads separating blocks of containers, employing the BRC to haul them between terminals, and eastern railroads building new trains adds 24 to 48 hours to transit times. “By collaborating with BNSF and the Northwest Seaport Alliance, we’re offering a faster, more reliable rail option that helps shippers reduce transit time, cut costs, and streamline supply chains...,” Shawn Tureman, NS’ vice president of intermodal and automotive marketing, said in the statement. Nearly 50,000 imports to Seattle and Tacoma interchange between western and eastern US railroads annually, the majority bound for destinations such as Cleveland, Columbus and Detroit, according to Journal of Commerce estimates. Reducing transit times to those markets could help West Coast ports regain ground lost to East Coast gateways such as the Port of New York and New Jersey and the Port of Virginia, which together move an estimated 300,000 to 400,000 ocean containers annually to inland hubs in the Midwest. The collaboration comes as pressure builds to retain West Coast market share following the resolution of labor tensions on the East Coast that had resulted in some discretionary cargo being diverted to the West Coast. Shippers will now weigh the service improvements against their past experiences when deciding how to route freight inland in the months ahead. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

BNSF Railway will launch a faster international intermodal service linking the ports of Seattle and Tacoma to Chicago and points east with Norfolk Southern (NS), the two railroads announced along with the Northwest Seaport Alliance. Transit times from dock to Chicago will be reduced to six days from nine and include a streamlined handoff to a Norfolk Southern crew at Chicago for service on the same train to inland markets in the Midwest and Northeast. “This service product collaboration was an outcome of listening to our joint customers, who emphasized the desire to use more rail but would need to also reduce inventory carrying and total landed transportation costs out of their networks in 2025,” Jon Gabriel, BNSF’s group vice president of consumer products, said in a statement Wednesday. The faster service will require terminals within the Northwest Seaport Alliance to load rail-bound trains within 48 hours of vessel arrival, significantly faster than the average dwell times of eight to 15 days experienced last year during a surge in container volumes. Between June and August 2024, the average rail dwell time at Tacoma’s Washington United and Husky terminals climbed to between eight and 10 days, according to data from Opentrac. When cargo was diverted to Seattle, average dwell times between the two ports stretched as long as 15 days in August and September. That backlog came during a spike in international intermodal volumes. About 100,000 import loads moved by rail from Seattle-Tacoma to Chicago on BNSF or Union Pacific trains in 2024, up from approximately 60,000 the previous year, according to Journal of Commerce estimates. It was the highest annual throughput since the pandemic-related freight surge in 2021. Hoping to cut inland delays The new service is also meant to reduce delays in Chicago. Rather than delivering trains to a BNSF terminal and relying on the Belt Railway of Chicago (BRC) to transfer containers to Norfolk Southern, as is typical for all Chicago interchanges, all traffic will be routed directly to Norfolk Southern’s Ashland Yard on the city’s south side. From there, the only step will be a change to an NS crew before continuing east with the same train. There will be no stop in a BNSF terminal, no haul between railroads by the BRC, and no building of a separate train inside an NS terminal. The process of western railroads separating blocks of containers, employing the BRC to haul them between terminals, and eastern railroads building new trains adds 24 to 48 hours to transit times. “By collaborating with BNSF and the Northwest Seaport Alliance, we’re offering a faster, more reliable rail option that helps shippers reduce transit time, cut costs, and streamline supply chains...,” Shawn Tureman, NS’ vice president of intermodal and automotive marketing, said in the statement. Nearly 50,000 imports to Seattle and Tacoma interchange between western and eastern US railroads annually, the majority bound for destinations such as Cleveland, Columbus and Detroit, according to Journal of Commerce estimates. Reducing transit times to those markets could help West Coast ports regain ground lost to East Coast gateways such as the Port of New York and New Jersey and the Port of Virginia, which together move an estimated 300,000 to 400,000 ocean containers annually to inland hubs in the Midwest. The collaboration comes as pressure builds to retain West Coast market share following the resolution of labor tensions on the East Coast that had resulted in some discretionary cargo being diverted to the West Coast. Shippers will now weigh the service improvements against their past experiences when deciding how to route freight inland in the months ahead. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Intermodal providers

Surface

BNSF-Norfolk Southern unveil faster inland service from Pacific Northwest

<div class="phx-topic abstract-wrapper">There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession — rate deflation accompanied by cost inflation — and if carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. </div>

There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession — rate deflation accompanied by cost inflation — and if carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth.

<div class="phx-topic">The surface freight transportation industry is now pinning its hope on economic recovery — for the third straight year — on an expected recovery in the second half of the year. The industry consensus calls for incremental improvement in truckload rates driven by gradual improvement in sector fundamentals throughout the year. Nevertheless, the most recent results of many public truckload stocks have been sobering. Although some carriers observed some “green shoots” during peak season, post-election gains have been given back — and then some. Multiples are below historic norms, and fleet sizes continue to contract — despite several years of shrinkage. There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession caused by rate deflation accompanied by cost inflation. If carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. To analyze this dichotomy, I utilized “An Analysis of the Operational Cost of Trucking: 2024 Update.” Prepared by the American Transportation Research Institute (ATRI), this annual report casts a wide net in respondent type, size and operating model; provides historical context for almost the past 20 years and is remarkably transparent when compared with other self-anointed experts. The first chart explains this difference by looking at two distinct metrics: driver cost per hour and fuel cost per mile. Fuel costs have deviated wildly over this period, whereas driver cost has been steadily increasing. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b372d175-2a73-40b7-83a0-f350f63093d1"></dynamic-object></div>Nevertheless, in an environment where trucking costs are on an inexorable inflationary arc, how have rates remained so depressed? I believe that the issue is that the trucking market is less “free” since the COVID-19 pandemic. A free market exists when supply and demand (through “voluntary exchange”) determine economic outcomes. Buyers and sellers are free to trade goods and services free of governmental intervention or market dominance by one side: monopoly, oligopoly or monopsony. A free market also requires the freedom of firms to enter that market because there are no barriers of entry. Since deregulation, the truckload market has had this freedom. However, market freedom also permits firms to freely depart from the market without any barriers to exit. This has not necessarily been the case since the pandemic. At the smallest increment of production, an individual with a commercial driver’s license could acquire a tractor and trailer, obtain insurance, register with the government and be in business. If the business did not work out, the individual could hand the keys to the equipment lender and be on with their life. COVID changed these dynamics. Equipment was wildly expensive and lenders required more security than just the underlying asset. New entrants needed to pledge their homes or life savings. When the market turned, there was no exit possible because they were “upside down.” The asset was worth less than they paid for it. These owner-operators are now forced into an untenable situation. Having no exit, their only choice is to keep driving until the market changes. Because survival — not profitability — is the goal, their floor price is what I call “direct cash costs.” In the ATRI model, this is fuel, insurance, permits/licenses and tolls. Costs such as equipment payments, maintenance and repair and tires are deferred until the end. I call them “episodic cash.” Driver wages and benefits are notional. The second chart shows how these costs have tracked the past 10 years. I have also included traditional truckload and intermodal. The former has no episodic cash. Maintenance is maintained, and equipment cost is deferred by parking equipment. Non-asset intermodal is all “direct cash” because all components are purchased. Bimodal intermodal providers are not shown, but they would be between traditional truckload and non-asset intermodal. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7c8a9981-9386-4062-844d-cd07eb8ea529"></dynamic-object></div>The second chart also explains the freight recession. The traditional economies of scale enjoyed by large truckload carriers over owner-operators are meaningless when costs are not “apples to apples.” The same applies to intermodal’s competitive advantage. The intermodal line may be a little high; however, we have not seen a widespread willingness of railroads to cut their rates. This situation is not The Flying Dutchman, a phantom ship doomed to sail forever. Eventually, the equipment will be retired, and “normal” market conditions will return. Until then, this market situation is likely to maintain. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The surface freight transportation industry is now pinning its hope on economic recovery — for the third straight year — on an expected recovery in the second half of the year. The industry consensus calls for incremental improvement in truckload rates driven by gradual improvement in sector fundamentals throughout the year. Nevertheless, the most recent results of many public truckload stocks have been sobering. Although some carriers observed some “green shoots” during peak season, post-election gains have been given back — and then some. Multiples are below historic norms, and fleet sizes continue to contract — despite several years of shrinkage. There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession caused by rate deflation accompanied by cost inflation. If carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. To analyze this dichotomy, I utilized “An Analysis of the Operational Cost of Trucking: 2024 Update.” Prepared by the American Transportation Research Institute (ATRI), this annual report casts a wide net in respondent type, size and operating model; provides historical context for almost the past 20 years and is remarkably transparent when compared with other self-anointed experts. The first chart explains this difference by looking at two distinct metrics: driver cost per hour and fuel cost per mile. Fuel costs have deviated wildly over this period, whereas driver cost has been steadily increasing. Nevertheless, in an environment where trucking costs are on an inexorable inflationary arc, how have rates remained so depressed? I believe that the issue is that the trucking market is less “free” since the COVID-19 pandemic. A free market exists when supply and demand (through “voluntary exchange”) determine economic outcomes. Buyers and sellers are free to trade goods and services free of governmental intervention or market dominance by one side: monopoly, oligopoly or monopsony. A free market also requires the freedom of firms to enter that market because there are no barriers of entry. Since deregulation, the truckload market has had this freedom. However, market freedom also permits firms to freely depart from the market without any barriers to exit. This has not necessarily been the case since the pandemic. At the smallest increment of production, an individual with a commercial driver’s license could acquire a tractor and trailer, obtain insurance, register with the government and be in business. If the business did not work out, the individual could hand the keys to the equipment lender and be on with their life. COVID changed these dynamics. Equipment was wildly expensive and lenders required more security than just the underlying asset. New entrants needed to pledge their homes or life savings. When the market turned, there was no exit possible because they were “upside down.” The asset was worth less than they paid for it. These owner-operators are now forced into an untenable situation. Having no exit, their only choice is to keep driving until the market changes. Because survival — not profitability — is the goal, their floor price is what I call “direct cash costs.” In the ATRI model, this is fuel, insurance, permits/licenses and tolls. Costs such as equipment payments, maintenance and repair and tires are deferred until the end. I call them “episodic cash.” Driver wages and benefits are notional. The second chart shows how these costs have tracked the past 10 years. I have also included traditional truckload and intermodal. The former has no episodic cash. Maintenance is maintained, and equipment cost is deferred by parking equipment. Non-asset intermodal is all “direct cash” because all components are purchased. Bimodal intermodal providers are not shown, but they would be between traditional truckload and non-asset intermodal. The second chart also explains the freight recession. The traditional economies of scale enjoyed by large truckload carriers over owner-operators are meaningless when costs are not “apples to apples.” The same applies to intermodal’s competitive advantage. The intermodal line may be a little high; however, we have not seen a widespread willingness of railroads to cut their rates. This situation is not The Flying Dutchman, a phantom ship doomed to sail forever. Eventually, the equipment will be retired, and “normal” market conditions will return. Until then, this market situation is likely to maintain. Contact Ted Prince at ted@tricitiesintermodal.com .

Surface industry faces obstacles on way to hoped-for H2 recovery

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

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

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

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

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

Trans-Pacific spot rates slide to 15-month low in March

4-7 Container SR_TP Platts Asia-US spot rates

<div class="phx-topic abstract-wrapper">A total of 68 sailings globally are expected to be canceled during April, according to maritime consultancy Drewry, with about half of the cancellations in trans-Pacific services.</div>

A total of 68 sailings globally are expected to be canceled during April, according to maritime consultancy Drewry, with about half of the cancellations in trans-Pacific services.

<div class="phx-topic">Ocean carriers plan to blank more sailings through much of April as freight rates hit new lows for 2025 and more ships are expected to hit the water in the coming months. The withdrawal of capacity also comes as ocean carriers look to finalize annual service contracts with shippers. A total of 68 sailings globally are expected to be canceled during April, according to maritime consultancy Drewry, with about half of the cancellations in trans-Pacific services. The blankings are occurring across a variety of weekly services to major US ports. Mediterranean Shipping Co. last week said it would blank six voyages between Asia and the US, with most of the cancellations for sailings originally scheduled for the second half of April. MSC said it would cancel late-April voyages scheduled to the US West Coast on both its Orient service from northern China and its Pearl service from Vietnam and southern China. MSC will also cancel a weekly sailing on its Empire and America services to the US East Coast and another sailing on its Lone Star Express service to the US Gulf Coast. Schedules from other carriers also show more capacity being withdrawn in the coming weeks. Ocean Network Express’ (ONE’s) export schedule for Shanghai shows the Premier Alliance will have no vessels for mid-April sailings on both its EC1 service to the US East Coast and the EC2 service calling the Port of Manzanillo in Mexico and the US Southeast. ONE also canceled a mid-April sailing on its MS2 service between Asia and the US West Coast and a sailing originally scheduled this week on its PN3 service to the ports of Vancouver and Tacoma. Ocean Alliance member Cosco Shipping also appears to be removing trans-Pacific capacity in the short term. It has no weekly voyage scheduled in the second week of April for its Manhattan Bridge service to the US East Coast. The carrier’s Bohai and Hibiscus Express services to the US West Coast also do not have vessels scheduled for the same week. <h3>Blanks come with trans-Pacific spot rates at fresh lows </h3>Joseph Firrincieli, a New York-based sales manager for forwarder OEC Group, told the Journal of Commerce that the blanked sailings are part of the typical tactic ocean carriers use in an attempt to firm up rates as they look to finalize annual service contracts with shippers by May 1. The raft of blank sailings comes as trans-Pacific spot rates sit at 15-month lows. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged rates from North Asia to the West Coast at $1,600 per FEU as of Monday, with rates to the East Coast at $2,600 per FEU. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>“The reason for the increase in blanked sailings is to create an artificial supply and demand imbalance to justify increasing the floating rates,” Firrincieli said. The blanked sailings also come amid expectations of more ships hitting the water in the coming months. Trans-Pacific container capacity to the US West Coast is expected to increase 19% from March to April, according to data provider eeSea, going from 1.159 million TEUs to 1.379 million TEUs. By May, trans-Pacific capacity is expected to hit 1.426 million TEUs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1c1d9578-c129-4d4e-a136-e220473bd136"></dynamic-object></div>With the newbuilds being delivered, Firrincieli said ocean carriers may need to blank even more sailings in the coming weeks to bolster rates. While shippers don’t appear to be impacted by the blank sailings yet, he said the threat of tariffs and the potential that shippers will try to frontload imports to avoid them means that there is a risk that container capacity will be limited during late spring. “Right now, there is a lull in the market,” Firrincieli said. “But if the blankings persist into June or July, then shippers may find it more difficult to find space.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Ocean carriers plan to blank more sailings through much of April as freight rates hit new lows for 2025 and more ships are expected to hit the water in the coming months. The withdrawal of capacity also comes as ocean carriers look to finalize annual service contracts with shippers. A total of 68 sailings globally are expected to be canceled during April, according to maritime consultancy Drewry, with about half of the cancellations in trans-Pacific services. The blankings are occurring across a variety of weekly services to major US ports. Mediterranean Shipping Co. last week said it would blank six voyages between Asia and the US, with most of the cancellations for sailings originally scheduled for the second half of April. MSC said it would cancel late-April voyages scheduled to the US West Coast on both its Orient service from northern China and its Pearl service from Vietnam and southern China. MSC will also cancel a weekly sailing on its Empire and America services to the US East Coast and another sailing on its Lone Star Express service to the US Gulf Coast. Schedules from other carriers also show more capacity being withdrawn in the coming weeks. Ocean Network Express’ (ONE’s) export schedule for Shanghai shows the Premier Alliance will have no vessels for mid-April sailings on both its EC1 service to the US East Coast and the EC2 service calling the Port of Manzanillo in Mexico and the US Southeast. ONE also canceled a mid-April sailing on its MS2 service between Asia and the US West Coast and a sailing originally scheduled this week on its PN3 service to the ports of Vancouver and Tacoma. Ocean Alliance member Cosco Shipping also appears to be removing trans-Pacific capacity in the short term. It has no weekly voyage scheduled in the second week of April for its Manhattan Bridge service to the US East Coast. The carrier’s Bohai and Hibiscus Express services to the US West Coast also do not have vessels scheduled for the same week. Blanks come with trans-Pacific spot rates at fresh lows Joseph Firrincieli, a New York-based sales manager for forwarder OEC Group, told the Journal of Commerce that the blanked sailings are part of the typical tactic ocean carriers use in an attempt to firm up rates as they look to finalize annual service contracts with shippers by May 1. The raft of blank sailings comes as trans-Pacific spot rates sit at 15-month lows. Platts, a sister company of the Journal of Commerce within S&P Global, pegged rates from North Asia to the West Coast at $1,600 per FEU as of Monday, with rates to the East Coast at $2,600 per FEU. “The reason for the increase in blanked sailings is to create an artificial supply and demand imbalance to justify increasing the floating rates,” Firrincieli said. The blanked sailings also come amid expectations of more ships hitting the water in the coming months. Trans-Pacific container capacity to the US West Coast is expected to increase 19% from March to April, according to data provider eeSea, going from 1.159 million TEUs to 1.379 million TEUs. By May, trans-Pacific capacity is expected to hit 1.426 million TEUs. With the newbuilds being delivered, Firrincieli said ocean carriers may need to blank even more sailings in the coming weeks to bolster rates. While shippers don’t appear to be impacted by the blank sailings yet, he said the threat of tariffs and the potential that shippers will try to frontload imports to avoid them means that there is a risk that container capacity will be limited during late spring. “Right now, there is a lull in the market,” Firrincieli said. “But if the blankings persist into June or July, then shippers may find it more difficult to find space.” Contact Michael Angell at michael.angell@spglobal.com .

April blank sailings ramp up amid push to finalize long-term contracts

<div class="phx-topic abstract-wrapper">The move comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside of China to BlackRock and TiL, especially the Panama ports.</div>

The move comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside of China to BlackRock and TiL, especially the Panama ports.

<div class="phx-topic">Hong Kong-based CK Hutchison will miss next week’s target date to sign a deal selling its Panama Ports Company (PPC) to a consortium of BlackRock and Mediterranean Shipping Co. subsidiary Terminal Investment Limited (TiL). While the signing will not happen by the initial April 2 target date, the sale that has been shrouded in geopolitical intrigue has not been canceled, Hong Kong newspaper South China Morning Post reported Friday, quoting a source close to Hutchison. No new target date has been announced. The apparent delay comes as Hutchison is facing increasing pressure from the Chinese government over <a href="https://www.joc.com/article/hutchison-inks-228-billion-deal-to-sell-majority-of-port-holdings-to-blackrock-til-5955819">the $22.8 billion sale of its ports business outside of China to BlackRock and TiL</a>, especially the PPC-owned ports, Cristobal and Balboa, at either ends of the Panama Canal. On Friday, China’s State Administration for Market Regulation confirmed its second Anti-Monopoly Department will review the transaction “to protect fair competition in the market and safeguard the public interest.” The regulator gave no timeline for the probe in a notice published on its website. China has also reportedly told state-owned companies to halt new deals with CK Hutchison and other businesses linked to its founder, Hong Kong billionaire Li Ka-shing and his family, pending a review of their China operations, Bloomberg News reported Thursday. Only new ventures are covered by the moratorium, while existing operations are unaffected, Bloomberg said. Sale documentation for PPC was expected to be signed on or before April 2, Hutchison said in its March 4 announcement that it had reached an agreement “in principle” to sell PPC and its overseas ports network outside of China to BlackRock/TiL. The ports-telecoms-retail conglomerate had packaged PPC and its other global ports, excluding its China and Hong Kong terminals, into two separate contracts to enable a quicker sale of PPC and its two Panama ports. Hutchison has a 145-day exclusive negotiating period with BlackRock/TiL to sign final sale documents for both PPC and the other ports, which in total comprise 199 berths in 43 ports spread over 23 countries. The deal was announced amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal. Beijing has not officially commented on the deal, saying it is a commercial transaction, but it has indicated its displeasure in other ways. That includes posting several critical commentaries on government websites, the most recent one on Wednesday, published by a Hong Kong-based pro-Beijing newspaper. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Hong Kong-based CK Hutchison will miss next week’s target date to sign a deal selling its Panama Ports Company (PPC) to a consortium of BlackRock and Mediterranean Shipping Co. subsidiary Terminal Investment Limited (TiL). While the signing will not happen by the initial April 2 target date, the sale that has been shrouded in geopolitical intrigue has not been canceled, Hong Kong newspaper South China Morning Post reported Friday, quoting a source close to Hutchison. No new target date has been announced. The apparent delay comes as Hutchison is facing increasing pressure from the Chinese government over the $22.8 billion sale of its ports business outside of China to BlackRock and TiL , especially the PPC-owned ports, Cristobal and Balboa, at either ends of the Panama Canal. On Friday, China’s State Administration for Market Regulation confirmed its second Anti-Monopoly Department will review the transaction “to protect fair competition in the market and safeguard the public interest.” The regulator gave no timeline for the probe in a notice published on its website. China has also reportedly told state-owned companies to halt new deals with CK Hutchison and other businesses linked to its founder, Hong Kong billionaire Li Ka-shing and his family, pending a review of their China operations, Bloomberg News reported Thursday. Only new ventures are covered by the moratorium, while existing operations are unaffected, Bloomberg said. Sale documentation for PPC was expected to be signed on or before April 2, Hutchison said in its March 4 announcement that it had reached an agreement “in principle” to sell PPC and its overseas ports network outside of China to BlackRock/TiL. The ports-telecoms-retail conglomerate had packaged PPC and its other global ports, excluding its China and Hong Kong terminals, into two separate contracts to enable a quicker sale of PPC and its two Panama ports. Hutchison has a 145-day exclusive negotiating period with BlackRock/TiL to sign final sale documents for both PPC and the other ports, which in total comprise 199 berths in 43 ports spread over 23 countries. The deal was announced amid growing ire within the new Trump administration over alleged Chinese influence in the operation of the Panama Canal. Beijing has not officially commented on the deal, saying it is a commercial transaction, but it has indicated its displeasure in other ways. That includes posting several critical commentaries on government websites, the most recent one on Wednesday, published by a Hong Kong-based pro-Beijing newspaper. Contact Keith Wallis at keithwallis@hotmail.com .

Hutchison to delay Panama ports deal signing amid growing Beijing pressure

<div class="phx-topic abstract-wrapper">In creating the threat of a clearly significant penalty, the US Trade Representative essentially forced observers to not merely give a thumbs up or down to the proposal, but to offer alternative solutions. </div>

In creating the threat of a clearly significant penalty, the US Trade Representative essentially forced observers to not merely give a thumbs up or down to the proposal, but to offer alternative solutions.

<div class="phx-topic">Hearings this week held by the US Trade Representative (USTR) over the potential levying of fees on Chinese-built and -operated ships calling at US ports certainly struck a nerve in the maritime industry. The Section 301 investigation, officially known as “China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” prompted 520 comments submitted to the USTR by the March 24 deadline. More than 60 individuals gave testimony over two days of hearings. Perhaps the process was designed to elicit the heavy response the USTR received. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5971718_0.1.jpg"></img></div>By proposing fees of up to $1.5 million per US port call by Chinese tonnage, the industry had no option but to take notice. Some providing comments and testimony noted that the imposition of such fees would create an existential threat to their ability to serve US trades or specific ports, or, in some cases, to operate at all. In creating the threat of a clearly significant penalty, the USTR essentially forced those commenting to not merely give a thumbs up or down to the proposal, but to give alternative solutions based on the assumption that the Trump administration wanted something to be done to stimulate US shipbuilding. <h3>‘Think creatively’ </h3>“This essentially turned into a big brainstorming session,” Lauren Beagen, a trade attorney and former counsel at the US Federal Maritime Commission, told the Journal of Commerce this week. Beagen said the hearings forced the industry to think about ways that would allow the Trump administration to progress in its goals toward revitalizing the shipbuilding industry and US merchant fleet that likely wouldn’t have happened if the proposed penalties weren’t severe. “If the USTR just held a public hearing about how trade policies were impacting our shipbuilding industry, no one would have come,” she said. “This made everyone pay attention, and it also forced them to think creatively. How else would you have gotten the entire industry together to brainstorm like this.” To wit, a number of comments submitted to the USTR said the proposed fees were unworkable, but also had alternative suggestions to help invigorate US shipbuilding. The National Association of Waterfront Employers (NAWE), for instance, urged the USTR to consider a per-sailing fee, rather than a fee per port call, to prevent ocean carriers from consolidating port calls and hurting economic interests at US secondary and tertiary ports. <h3>Phased approach </h3>The Duluth Seaway Authority suggested the USTR phase in the port call fees and adopt a tiered approach to assessing the fees based on vessel and cargo types and the economic impact to the region. Similarly, the Port of New York and New Jersey said a phased approach to enforcing the fees would not penalize carriers for vessel and terminal investments that in some cases were made more than a decade ago. Container shipping analyst John McCown said in comments to the USTR that all fees collected in a prospective tariff program should go to a trust fund purely to support the US maritime sector. McCown estimated, using 2024 figures, that $58.9 billion would be collected annually in port fees, which represents 3.8% of the $1.5 trillion in imported goods moved via ocean, according to figures from UN Trade and Development (UNCTAD). “The good news/bad news is that the high value of container cargo puts that sector in the best position to absorb such large fees,” McCown wrote. And as an alternative to port call fees, he floated the idea of assessing per-container fees on boxes moving on Chinese-built ships that would be approximately equivalent to the amount China subsidizes its container line operators and shipbuilding industries. While that proposal, amounting to a fee of up to $60 per container, would generate far less revenue than the port call option, it would have a negligible impact on carrier networks and shippers’ supply chains, McCown argued. The broad effect of the port call fee proposal has been a call to arms across maritime and cargo interests to take seriously the administration’s efforts to reinvigorate US shipbuilding and operations in a way that would have been absent minus the threat of economic pain. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Hearings this week held by the US Trade Representative (USTR) over the potential levying of fees on Chinese-built and -operated ships calling at US ports certainly struck a nerve in the maritime industry. The Section 301 investigation, officially known as “China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance,” prompted 520 comments submitted to the USTR by the March 24 deadline. More than 60 individuals gave testimony over two days of hearings. Perhaps the process was designed to elicit the heavy response the USTR received. By proposing fees of up to $1.5 million per US port call by Chinese tonnage, the industry had no option but to take notice. Some providing comments and testimony noted that the imposition of such fees would create an existential threat to their ability to serve US trades or specific ports, or, in some cases, to operate at all. In creating the threat of a clearly significant penalty, the USTR essentially forced those commenting to not merely give a thumbs up or down to the proposal, but to give alternative solutions based on the assumption that the Trump administration wanted something to be done to stimulate US shipbuilding. ‘Think creatively’ “This essentially turned into a big brainstorming session,” Lauren Beagen, a trade attorney and former counsel at the US Federal Maritime Commission, told the Journal of Commerce this week. Beagen said the hearings forced the industry to think about ways that would allow the Trump administration to progress in its goals toward revitalizing the shipbuilding industry and US merchant fleet that likely wouldn’t have happened if the proposed penalties weren’t severe. “If the USTR just held a public hearing about how trade policies were impacting our shipbuilding industry, no one would have come,” she said. “This made everyone pay attention, and it also forced them to think creatively. How else would you have gotten the entire industry together to brainstorm like this.” To wit, a number of comments submitted to the USTR said the proposed fees were unworkable, but also had alternative suggestions to help invigorate US shipbuilding. The National Association of Waterfront Employers (NAWE), for instance, urged the USTR to consider a per-sailing fee, rather than a fee per port call, to prevent ocean carriers from consolidating port calls and hurting economic interests at US secondary and tertiary ports. Phased approach The Duluth Seaway Authority suggested the USTR phase in the port call fees and adopt a tiered approach to assessing the fees based on vessel and cargo types and the economic impact to the region. Similarly, the Port of New York and New Jersey said a phased approach to enforcing the fees would not penalize carriers for vessel and terminal investments that in some cases were made more than a decade ago. Container shipping analyst John McCown said in comments to the USTR that all fees collected in a prospective tariff program should go to a trust fund purely to support the US maritime sector. McCown estimated, using 2024 figures, that $58.9 billion would be collected annually in port fees, which represents 3.8% of the $1.5 trillion in imported goods moved via ocean, according to figures from UN Trade and Development (UNCTAD). “The good news/bad news is that the high value of container cargo puts that sector in the best position to absorb such large fees,” McCown wrote. And as an alternative to port call fees, he floated the idea of assessing per-container fees on boxes moving on Chinese-built ships that would be approximately equivalent to the amount China subsidizes its container line operators and shipbuilding industries. While that proposal, amounting to a fee of up to $60 per container, would generate far less revenue than the port call option, it would have a negligible impact on carrier networks and shippers’ supply chains, McCown argued. The broad effect of the port call fee proposal has been a call to arms across maritime and cargo interests to take seriously the administration’s efforts to reinvigorate US shipbuilding and operations in a way that would have been absent minus the threat of economic pain. Contact Eric Johnson at eric.johnson@spglobal.com .

Trans-Atlantic

Plan to tax Chinese ships turned maritime malaise into ‘brainstorming session’

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation. </div>

The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation.

<div class="phx-topic">A subsidiary of Mediterranean Shipping Co. has agreed in principle to acquire a majority ownership stake in intermodal logistics provider COFC Logistics, one of the most popular options for shippers looking to transport 53-foot domestic containers on BNSF Railway. Medlog USA, the MSC subsidiary, is expected to close the deal next week. It will keep the existing COFC Logistics management team in place, including CEO Garry Old. Terms of the deal were not disclosed. COFC hauls more than 100,000 intermodal shipments per year and grosses between $100 million and $500 million in revenue annually, according to Journal of Commerce estimates. Old, who will remain in his position for the next five years and retain a minority ownership stake in COFC, told the Journal of Commerce that shippers and intermodal marketing companies (IMCs) using COFC will not see any changes, adding that the company’s exclusive partnership with BNSF will remain intact. “The name is still the same, our email addresses, our logos, our brand will not change in any way,” Old said. “Our customers won’t notice any differences.” The deal comes as MSC attempts to get deeper into surface transportation in various countries and follows Medlog acquiring UK-based rail and road logistics provider Maritime Transport last September. Medlog made its first major splash in the US in 2022 when it acquired C&amp;K Holdings, which hauls ocean and domestic containers and owns terminals in nearly all US port cities, as well as rail ramps. Ohio-based COFC owns about 8,000 containers catering to customers who want to diversify their rail freight between BNSF and Union Pacific Railroad. Shippers who aren’t large enough to get the attention of leading IMC J.B. Hunt Transport Services will use brokers that team with COFC Logistics, although even large shippers use COFC to have multiple paths to access BNSF’s intermodal network. Medlog will infuse capital into COFC, which has faced the reality of intermodal contract rates falling from pandemic-level highs while operating costs keep rising. “We are restructuring some debt,” said Old. [The deal] improves our financial position.” Old said while asset-based and non-asset intermodal providers are struggling due to unsustainable rates, shippers don’t always tender the volumes they agree to, known as bid compliance. “Our industry needs to be better with BCO [beneficial cargo owner] compliance,” he said. “If the BCO is awarding 10,000 loads and it ends up being 1,000 loads, that’s a problem. That’s where the frustration sets in.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

A subsidiary of Mediterranean Shipping Co. has agreed in principle to acquire a majority ownership stake in intermodal logistics provider COFC Logistics, one of the most popular options for shippers looking to transport 53-foot domestic containers on BNSF Railway. Medlog USA, the MSC subsidiary, is expected to close the deal next week. It will keep the existing COFC Logistics management team in place, including CEO Garry Old. Terms of the deal were not disclosed. COFC hauls more than 100,000 intermodal shipments per year and grosses between $100 million and $500 million in revenue annually, according to Journal of Commerce estimates. Old, who will remain in his position for the next five years and retain a minority ownership stake in COFC, told the Journal of Commerce that shippers and intermodal marketing companies (IMCs) using COFC will not see any changes, adding that the company’s exclusive partnership with BNSF will remain intact. “The name is still the same, our email addresses, our logos, our brand will not change in any way,” Old said. “Our customers won’t notice any differences.” The deal comes as MSC attempts to get deeper into surface transportation in various countries and follows Medlog acquiring UK-based rail and road logistics provider Maritime Transport last September. Medlog made its first major splash in the US in 2022 when it acquired C&K Holdings, which hauls ocean and domestic containers and owns terminals in nearly all US port cities, as well as rail ramps. Ohio-based COFC owns about 8,000 containers catering to customers who want to diversify their rail freight between BNSF and Union Pacific Railroad. Shippers who aren’t large enough to get the attention of leading IMC J.B. Hunt Transport Services will use brokers that team with COFC Logistics, although even large shippers use COFC to have multiple paths to access BNSF’s intermodal network. Medlog will infuse capital into COFC, which has faced the reality of intermodal contract rates falling from pandemic-level highs while operating costs keep rising. “We are restructuring some debt,” said Old. [The deal] improves our financial position.” Old said while asset-based and non-asset intermodal providers are struggling due to unsustainable rates, shippers don’t always tender the volumes they agree to, known as bid compliance. “Our industry needs to be better with BCO [beneficial cargo owner] compliance,” he said. “If the BCO is awarding 10,000 loads and it ends up being 1,000 loads, that’s a problem. That’s where the frustration sets in.” Contact Ari Ashe at ari.ashe@spglobal.com .

MSC subsidiary acquiring US intermodal provider COFC Logistics

<div class="phx-topic abstract-wrapper">But countries believed by the White House as having an unfair advantage over the US on trade will be hit with higher levies, including China, South Korea and European Union nations. </div>

But countries believed by the White House as having an unfair advantage over the US on trade will be hit with higher levies, including China, South Korea and European Union nations.

<div class="phx-topic">President Donald Trump on Wednesday said the US will assess a minimum 10% tariff on all imports into the US, although countries the Trump administration views as having an unfair trade imbalance with the US will be hit with much higher levies. The so-called “reciprocal” tariffs that Trump unveiled Wednesday will be equivalent to half of what the US calculates each individual country imposes, through tariffs and non-tariff barriers, on US exports. The tariffs vary by country and will go into effect in two stages between April 5 and April 9. Products from countries hit with the baseline 10% tariff will be impacted from April 5, while products from individual countries with specific reciprocal tariffs will be affected from April 9. Imports from China, for example, will be set at 34%, the European Union at 20% and Vietnam at 46%. Other tariff levels announced Wednesday are 26% on goods from India, 25% on South Korea and 36% on Thailand. Most South American nations will see a 10% tariff on their exports to the US. Canada and Mexico have <a href="https://www.joc.com/article/disrupted-cross-border-freight-shipping-braces-for-us-tariffs-5974787">already been hit with 25% tariffs that went into effect Wednesday.</a>“We will be charging them approximately half of what they are and have been charging us,” Trump said during an event at the White House. The president also confirmed that all automobile imports will be subject to 25% tariffs. Trump’s announcement ends weeks of speculation about the administration’s actions to support its stated goal of reinvigorating the US manufacturing sector by imposing barriers on international trade. But the endless speculation has caused chaos in the global marketplace, hit the stock market hard and caused banks and economists to lower their expectations for US growth this year. Because tariffs are taxes that will ultimately be passed on to US shoppers, consumer confidence readings have taken a hit. Trump said he expects to receive calls from heads of state about how to reduce their tariffs and other market barriers — such as state subsidies or currency manipulation — in the coming days as countries seek to reduce the impact of the reciprocal tariffs. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

President Donald Trump on Wednesday said the US will assess a minimum 10% tariff on all imports into the US, although countries the Trump administration views as having an unfair trade imbalance with the US will be hit with much higher levies. The so-called “reciprocal” tariffs that Trump unveiled Wednesday will be equivalent to half of what the US calculates each individual country imposes, through tariffs and non-tariff barriers, on US exports. The tariffs vary by country and will go into effect in two stages between April 5 and April 9. Products from countries hit with the baseline 10% tariff will be impacted from April 5, while products from individual countries with specific reciprocal tariffs will be affected from April 9. Imports from China, for example, will be set at 34%, the European Union at 20% and Vietnam at 46%. Other tariff levels announced Wednesday are 26% on goods from India, 25% on South Korea and 36% on Thailand. Most South American nations will see a 10% tariff on their exports to the US. Canada and Mexico have already been hit with 25% tariffs that went into effect Wednesday. “We will be charging them approximately half of what they are and have been charging us,” Trump said during an event at the White House. The president also confirmed that all automobile imports will be subject to 25% tariffs. Trump’s announcement ends weeks of speculation about the administration’s actions to support its stated goal of reinvigorating the US manufacturing sector by imposing barriers on international trade. But the endless speculation has caused chaos in the global marketplace, hit the stock market hard and caused banks and economists to lower their expectations for US growth this year. Because tariffs are taxes that will ultimately be passed on to US shoppers, consumer confidence readings have taken a hit. Trump said he expects to receive calls from heads of state about how to reduce their tariffs and other market barriers — such as state subsidies or currency manipulation — in the coming days as countries seek to reduce the impact of the reciprocal tariffs. Contact Eric Johnson at eric.johnson@spglobal.com .

Trump announces 10% across-the-board tariffs on all US imports

<div class="phx-topic abstract-wrapper">Price and volume increases are being seen across trans-Pacific and trans-Atlantic trade lanes, but there is little clarity on whether underlying demand is enough to prop up spot rates once the tariffs have been implemented. </div>

Price and volume increases are being seen across trans-Pacific and trans-Atlantic trade lanes, but there is little clarity on whether underlying demand is enough to prop up spot rates once the tariffs have been implemented.

<div class="phx-topic">Air cargo rates on the trans-Pacific and trans-Atlantic were up again this week as shippers took to the air ahead of the April 2 rollout of US import tariffs on China and Europe. While there is little clarity on whether underlying demand is enough to prop up spot rates once the tariffs have been implemented, airlines and forwarders are benefiting from an unseasonal jump in rates and volume. The average Shanghai-North America rate of $5.40 per kilogram on Monday was up slightly on the previous week, the second consecutive week the price has topped $5/kg, according to the Baltic Air Index (BAI). Rates on other key lanes out of Asia to the US were also up, with large sequential weekly gains from Vietnam and India. North Europe to North America rates were up 2.5% from last week at $2.89/kg, with the index of outbound routes from Frankfurt increasing 8.3%. Outbound London rates were up 15.5% week over week, BAI data showed. Much of the air freight demand on the westbound trans-Atlantic routes is being driven by the automotive sector that is <a href="https://www.joc.com/article/trans-atlantic-air-cargo-demand-surges-ahead-of-us-tariffs-5965691">facing stiff tariffs on vehicles exported to the US</a>. “Demand remains high due to restocking efforts in the US,” Loic Gay, global air freight leader at CEVA Logistics, told the Journal of Commerce. “Flights are expected to operate at full capacity and air freight rates will likely remain elevated, especially for main deck cargo space.” While rates rose on the US-bound routes, it was the Asia-Europe trade lane where the largest price gains were seen, according to rate benchmarking platform Xeneta. Data from Xeneta shows spot rates sold by airlines to forwarders on Asia-Europe rose 11% year over year this week to $4.28/kg. The first three weeks of March saw double-digit year-over-year growth in air cargo volume on the Asia-to-Europe trade, according to an update this week by Xeneta air freight analyst Wenwen Zhang. “This growing demand from Northeast Asia to Europe is driven largely by robust e-commerce volume and sits well above the levels seen 12 months ago in both chargeable weight per shipment and shipment count,” Zhang noted. <h3>Signs of future demand emerging </h3>There are encouraging signs of future air freight demand indicated by the Purchasing Managers Indexes (PMIs) produced by S&amp;P Global, parent company of the Journal of Commerce. China’s manufacturing sector expanded at a faster rate in March with factory output growth accelerating on the back of a sustained rise in new orders. New export sales notably increased at the quickest pace in nearly a year, the Caixin China General Manufacturing PMI found. The Eurozone PMI also showed a slight improvement in manufacturing activity, with Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, taking a glass-half-full view in his analysis of the PMI survey results. “Things are looking up,” de la Rubia wrote. “The PMI has increased for the third month in a row ... a significant part of this movement may have to do with the frontloading of orders from the US ahead of the tariffs, which means some backlash is to be expected in the coming months. “However, given the geopolitical developments, there is also increasing speculation that the defense sector will expand significantly over the next few years, with direct and indirect positive effects on the industry.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a9cf3dff-bcf4-43fd-82e7-9db527bd4aee"></dynamic-object></div>The uncertainty was playing out in the contracting of air cargo space. While the main online marketplaces contract space directly with airlines, forwarders handle the general air cargo business of shippers. Zhang said just under 45% of Asia-Europe westbound volumes were being bought by forwarders on the spot market, an increase from last year that demonstrates a level of caution. “If there was confidence of significant upward pressure to come, you may expect a higher percentage of seasonal agreements as freight forwarders look to lock in lower rates with airlines so they can then sell to shippers at a higher price down the line,” she noted. <h3>Flexible contracts are key </h3>The key to navigating the unsettled air cargo market is having the flexibility to handle rapidly changing conditions, said Martin Habisreitinger, COO for airfreight at Hellmann Worldwide Logistics. “We are closely monitoring the evolving global landscape and its impact on demand volatility, particularly driven by trade wars and geopolitical challenges,” Habisreitinger told the Journal of Commerce. “To navigate this uncertainty and ensure continuity for our customers, we are actively working on flexible agreements with airlines and partners,” he added. “These agreements allow us to adapt to fluctuating demand and remain agile in our service offerings.” Habisreitinger said Hellmann was also diversifying routing options to mitigate the impact of capacity constraints on some trade lanes. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Air cargo rates on the trans-Pacific and trans-Atlantic were up again this week as shippers took to the air ahead of the April 2 rollout of US import tariffs on China and Europe. While there is little clarity on whether underlying demand is enough to prop up spot rates once the tariffs have been implemented, airlines and forwarders are benefiting from an unseasonal jump in rates and volume. The average Shanghai-North America rate of $5.40 per kilogram on Monday was up slightly on the previous week, the second consecutive week the price has topped $5/kg, according to the Baltic Air Index (BAI). Rates on other key lanes out of Asia to the US were also up, with large sequential weekly gains from Vietnam and India. North Europe to North America rates were up 2.5% from last week at $2.89/kg, with the index of outbound routes from Frankfurt increasing 8.3%. Outbound London rates were up 15.5% week over week, BAI data showed. Much of the air freight demand on the westbound trans-Atlantic routes is being driven by the automotive sector that is facing stiff tariffs on vehicles exported to the US . “Demand remains high due to restocking efforts in the US,” Loic Gay, global air freight leader at CEVA Logistics, told the Journal of Commerce. “Flights are expected to operate at full capacity and air freight rates will likely remain elevated, especially for main deck cargo space.” While rates rose on the US-bound routes, it was the Asia-Europe trade lane where the largest price gains were seen, according to rate benchmarking platform Xeneta. Data from Xeneta shows spot rates sold by airlines to forwarders on Asia-Europe rose 11% year over year this week to $4.28/kg. The first three weeks of March saw double-digit year-over-year growth in air cargo volume on the Asia-to-Europe trade, according to an update this week by Xeneta air freight analyst Wenwen Zhang. “This growing demand from Northeast Asia to Europe is driven largely by robust e-commerce volume and sits well above the levels seen 12 months ago in both chargeable weight per shipment and shipment count,” Zhang noted. Signs of future demand emerging There are encouraging signs of future air freight demand indicated by the Purchasing Managers Indexes (PMIs) produced by S&P Global, parent company of the Journal of Commerce. China’s manufacturing sector expanded at a faster rate in March with factory output growth accelerating on the back of a sustained rise in new orders. New export sales notably increased at the quickest pace in nearly a year, the Caixin China General Manufacturing PMI found. The Eurozone PMI also showed a slight improvement in manufacturing activity, with Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, taking a glass-half-full view in his analysis of the PMI survey results. “Things are looking up,” de la Rubia wrote. “The PMI has increased for the third month in a row ... a significant part of this movement may have to do with the frontloading of orders from the US ahead of the tariffs, which means some backlash is to be expected in the coming months. “However, given the geopolitical developments, there is also increasing speculation that the defense sector will expand significantly over the next few years, with direct and indirect positive effects on the industry.” The uncertainty was playing out in the contracting of air cargo space. While the main online marketplaces contract space directly with airlines, forwarders handle the general air cargo business of shippers. Zhang said just under 45% of Asia-Europe westbound volumes were being bought by forwarders on the spot market, an increase from last year that demonstrates a level of caution. “If there was confidence of significant upward pressure to come, you may expect a higher percentage of seasonal agreements as freight forwarders look to lock in lower rates with airlines so they can then sell to shippers at a higher price down the line,” she noted. Flexible contracts are key The key to navigating the unsettled air cargo market is having the flexibility to handle rapidly changing conditions, said Martin Habisreitinger, COO for airfreight at Hellmann Worldwide Logistics. “We are closely monitoring the evolving global landscape and its impact on demand volatility, particularly driven by trade wars and geopolitical challenges,” Habisreitinger told the Journal of Commerce. “To navigate this uncertainty and ensure continuity for our customers, we are actively working on flexible agreements with airlines and partners,” he added. “These agreements allow us to adapt to fluctuating demand and remain agile in our service offerings.” Habisreitinger said Hellmann was also diversifying routing options to mitigate the impact of capacity constraints on some trade lanes. Contact Greg Knowler at greg.knowler@spglobal.com .

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