<div class="phx-topic abstract-wrapper">Terminal truck manufacturer Capacity of Texas is expanding its own distribution capacity, adding 13 new dealers in the U.S., the company said Thursday.
 
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Terminal truck manufacturer Capacity of Texas is expanding its own distribution capacity, adding 13 new dealers in the U.S., the company said Thursday.

<div>Terminal truck manufacturer Capacity of Texas is expanding its own distribution capacity, adding 13 new dealers in the U.S., the company said Thursday.That dealership expansion, launched at the beginning of the year, generated more than 500 domestic and international orders for Capacity&amp;rsquo;s terminal yard equipment.Capacity&amp;rsquo;s expansion is another sign that freight demand remains solid, despite slow economic growth. <a>Trucking companies</a> reported steady demand in August.Longview, Texas-based Capacity builds several lines of terminal tractors for off-highway and highway use in ports, rail yards, warehouses and distribution centers. The company, a subsidiary of $1 billion Allied Specialty Vehicles, has more than 130...

Terminal truck manufacturer Capacity of Texas is expanding its own distribution capacity, adding 13 new dealers in the U.S., the company said Thursday. That dealership expansion, launched at the beginning of the year, generated more than 500 domestic and international orders for Capacity&rsquo;s terminal yard equipment. Capacity&rsquo;s expansion is another sign that freight demand remains solid, despite slow economic growth. Trucking companies reported steady demand in August. Longview, Texas-based Capacity builds several lines of terminal tractors for off-highway and highway use in ports, rail yards, warehouses and distribution centers. The company, a subsidiary of $1 billion Allied Specialty Vehicles, has more than 130 dealer outlets in the U.S. and Canada. The new dealers are located in Alabama, Arkansas, California, Florida, Hawaii, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, Texas and Virginia. Contact William B. Cassidy at wcassidy@joc.com . Follow him on Twitter at @wbcassidy_joc

Trucking News

Truckload

Terminal Truck Maker Expands Distribution Network

<div class="phx-topic abstract-wrapper">US ports and support infrastructure like warehouses and rail connections aren’t better equipped to handle import surges than they were during the pandemic when record volumes drove congestion to historic highs, carrier executives said this week.</div>

US ports and support infrastructure like warehouses and rail connections aren’t better equipped to handle import surges than they were during the pandemic when record volumes drove congestion to historic highs, carrier executives said this week.

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<div class="phx-topic">Container line executives warn that the inevitable rebound in Asian imports that will come at some point after the expected plunge in volumes linked to US tariffs may overwhelm major US ports because the supporting systems aren’t significantly better prepared than they were during the pandemic. The timing and scale of the rebound isn’t yet known. But import volumes from Asia are expected to recover eventually either because tariffs are eased or cargo owners ultimately decide there’s no relief coming and eat the higher costs due to a need to replenish inventories. “Regardless of whether the demand will go up two times or come back to a level of about eight weeks ago, the system is not fundamentally better than it was five years ago,” Charles van der Steene, president of Maersk North America, said at the Georgia International Trade Conference this week. “Right now...volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided.” Like during the pandemic, the sharpest limits to capacity during an import surge will be less at the marine terminals and more outside the truck gates. There, importers and consignees could face limited availability of warehousing and chassis, while a rush of international intermodal could sap rail car supply, carrier executives told the conference. “If our terminals start working at 70%, 80%, 90% capacity and beyond on a regular basis for weeks, the system will crumble,” said Fabio Santucci, president of US operations for Mediterranean Shipping Co. (MSC). Santucci added that if import dwell times at marine terminals exceed 10 days, ports can’t dig out of backlogs. <h3>‘Uncertainty’ the key word </h3>Stuart Sandlin, Hapag-Lloyd's North America president, fears a rise in abandoned containers as some US exporters walk away from Chinese contracts due to 125% retaliatory Chinese tariffs on low-value US commodities. Even more alarming would be if US importers begin to abandon higher-value cargo, something he said would signal a potential wave of bankruptcies. Some smaller US importers are already struggling with backing a larger surety bond thanks to higher US tariff costs. Estimates of the plunge in China bookings from carriers and forwarders range from 30% to up to 50%. The resumption of shipping last week from China by Walmart, Target and other big box retailers after they paused US shipments earlier in the month suggests a rebound is already building, executives at two major carriers told the Journal of Commerce. “I think the key word is ‘uncertainty,’” Santucci told the conference. “Sixty to 70% of customers are reevaluating shipment out of China. They’re either pausing [or] they’ve asked for shipments to be brought back to China.” He said customers are requesting changes to import and inland delivery destinations while containers “are on the water,” adding there’s been a spike in requests to hold shipments at transshipment ports before being loaded onto US-bound vessels. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Container line executives warn that the inevitable rebound in Asian imports that will come at some point after the expected plunge in volumes linked to US tariffs may overwhelm major US ports because the supporting systems aren’t significantly better prepared than they were during the pandemic. The timing and scale of the rebound isn’t yet known. But import volumes from Asia are expected to recover eventually either because tariffs are eased or cargo owners ultimately decide there’s no relief coming and eat the higher costs due to a need to replenish inventories. “Regardless of whether the demand will go up two times or come back to a level of about eight weeks ago, the system is not fundamentally better than it was five years ago,” Charles van der Steene, president of Maersk North America, said at the Georgia International Trade Conference this week. “Right now...volumes are down [30%-40%] and if that goes up, the sheer surge will test the system and disruption cannot be avoided.” Like during the pandemic, the sharpest limits to capacity during an import surge will be less at the marine terminals and more outside the truck gates. There, importers and consignees could face limited availability of warehousing and chassis, while a rush of international intermodal could sap rail car supply, carrier executives told the conference. “If our terminals start working at 70%, 80%, 90% capacity and beyond on a regular basis for weeks, the system will crumble,” said Fabio Santucci, president of US operations for Mediterranean Shipping Co. (MSC). Santucci added that if import dwell times at marine terminals exceed 10 days, ports can’t dig out of backlogs. ‘Uncertainty’ the key word Stuart Sandlin, Hapag-Lloyd's North America president, fears a rise in abandoned containers as some US exporters walk away from Chinese contracts due to 125% retaliatory Chinese tariffs on low-value US commodities. Even more alarming would be if US importers begin to abandon higher-value cargo, something he said would signal a potential wave of bankruptcies. Some smaller US importers are already struggling with backing a larger surety bond thanks to higher US tariff costs. Estimates of the plunge in China bookings from carriers and forwarders range from 30% to up to 50%. The resumption of shipping last week from China by Walmart, Target and other big box retailers after they paused US shipments earlier in the month suggests a rebound is already building, executives at two major carriers told the Journal of Commerce. “I think the key word is ‘uncertainty,’” Santucci told the conference. “Sixty to 70% of customers are reevaluating shipment out of China. They’re either pausing [or] they’ve asked for shipments to be brought back to China.” He said customers are requesting changes to import and inland delivery destinations while containers “are on the water,” adding there’s been a spike in requests to hold shipments at transshipment ports before being loaded onto US-bound vessels. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Maritime

Container Shipping News

Port News

Trans-Pacific

Port infrastructure

North American ports

Container lines warn of congestion threat when Asia imports rebound

<div class="phx-topic abstract-wrapper">Direct services to Asia and the EU have pulled more resin cargoes away from Houston, but the Gulf Coast is still the main route to the South American market.</div>

Direct services to Asia and the EU have pulled more resin cargoes away from Houston, but the Gulf Coast is still the main route to the South American market.

<div class="phx-topic">While the Port of Houston still reigns as top gateway, resins shippers are increasingly tapping southeast US ports, thanks to their big-ship capacity and strong connectivity in east-west trades. However, President Donald Trump’s tariff actions risk cutting into the steady growth of US resin exports and have virtually shut off US exporters’ largest market, China, given the buyer’s 125% retaliatory tariffs. That is coming after a year of modest but steady growth; containerized US chemical and plastic resin exports expanded 1.2% in 2024, the third consecutive annual increase and in line with the sector’s five-year compound average growth of 2.1%, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Plastic resins, including polyethylene and polypropylene, represent 57% of US chemical exports. “It was a fairly decent year of growth,” said Shruthi Vangipuram, a senior research analyst at consultancy Wood Mackenzie. “Not extraordinary, but there were still major participants for US exports.” With almost all US production concentrated in the Gulf Coast region, resin traders and distributors heavily rely on Houston as their main export gateway. Houston handled about 41.8% of US chemical exports last year and has seen shipments increase at an average annual rate of 6.8% over the last five years, according to PIERS. The ports of Los Angeles and Long Beach still occupy the No. 2 spot for exports thanks to their proximity to China and high capacity. Even so, chemical exports out of the busiest US port complex have been in decline as shippers seek less congested gateways with easier rail access. Houston’s long-term export growth rates nearly match those of the ports of Charleston and Savannah, the third- and fourth-busiest export gateways for US chemicals in 2024. The two ports’ continued growth follows <a href="https://www.joc.com/article/new-plants-put-savannah-on-track-to-double-resin-exports-5236055">millions in investments</a> to set up nearby warehouses and facilities for packaging resins into shipping containers. <h3>‘Outgrowing’ the Gulf </h3>An ocean logistics manager for a global resins distributor and trader told the Journal of Commerce that an increasing share of his company’s exports are moving through Southeast ports thanks to the diversity of container services and routes for exports. While Houston still has a solid lead in north-south shipments, bigger vessels calling the Southeast allow more capacity on east-west trades. “We have been sending more rail cars to Savannah,” the source said. The company is moving cargoes destined for Asia, Europe, the Mediterranean and Africa through Savannah and those headed to Latin America through Houston, he added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="298da152-273a-4ab2-8500-4925940e4b0c"></dynamic-object></div>Houston is working to add vessel capacity through its “Project 11,” which entails widening and dredging the Houston Ship Channel. Ships will have bi-directional navigation on the channel, allowing for faster berth calls. But with the channel’s depth at about 46 feet, larger post-Panamax vessels will still be somewhat limited in their ability to call Houston. “The resin business has already outgrown Houston,” the logistics manager said. “There’s just not enough capacity.” North-south trades, however, likely still managed to push Houston’s export volumes higher in 2024. Chemical volumes from the US to Brazil, for example, grew 22% last year. Vangipuram said Argentina and Colombia are also growing consumers of US resins. “Latin America is the [resins] export destination of choice for the US,” Vangipuram said. But the north-south resin trade out of the US Gulf poses its own challenges, the ocean logistics manager said, particularly with alliance carriers and those that have slot exchange deals for capacity. Because of port congestion in Brazil, many ships in north-south trades have been off schedule. Ocean carriers try to make up for the time by skipping calls at transshipment ports in the Caribbean and South America, but that can leave cargo booked through slot swaps or alliances stranded. “If the ships are coming a week late out of Brazil and the carrier has to make up time, what they are going to do is omit the other carrier’s transshipment port,” the logistics manager said. He said the cargo rolls and delays were most common at the ports of Kingston, Jamaica, and Cartagena, Colombia. With direct services to the other two largest US resins markets, Asia and Europe, shipments out of Southeast ports are not seeing similar issues. But overseas retaliation to the Trump administration’s tariffs is likely to have a major impact on the resins trade this year. After Trump put a 90-day pause on 20% reciprocal tariffs on goods from the European Union, the trading bloc similarly backed down from its own retaliatory measures. While the EU may exempt US resins from any retaliatory duties due to the region’s dependence on imports, the logistics manager said a prolonged trade war could favor resin producers in the Middle East. “Our team in Europe said that resins won’t be on the list for retaliation against US,” the manager said. “But no one has showed me anything yet that resins have been exempted. Until then, we’re being very cautious.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

While the Port of Houston still reigns as top gateway, resins shippers are increasingly tapping southeast US ports, thanks to their big-ship capacity and strong connectivity in east-west trades. However, President Donald Trump’s tariff actions risk cutting into the steady growth of US resin exports and have virtually shut off US exporters’ largest market, China, given the buyer’s 125% retaliatory tariffs. That is coming after a year of modest but steady growth; containerized US chemical and plastic resin exports expanded 1.2% in 2024, the third consecutive annual increase and in line with the sector’s five-year compound average growth of 2.1%, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Plastic resins, including polyethylene and polypropylene, represent 57% of US chemical exports. “It was a fairly decent year of growth,” said Shruthi Vangipuram, a senior research analyst at consultancy Wood Mackenzie. “Not extraordinary, but there were still major participants for US exports.” With almost all US production concentrated in the Gulf Coast region, resin traders and distributors heavily rely on Houston as their main export gateway. Houston handled about 41.8% of US chemical exports last year and has seen shipments increase at an average annual rate of 6.8% over the last five years, according to PIERS. The ports of Los Angeles and Long Beach still occupy the No. 2 spot for exports thanks to their proximity to China and high capacity. Even so, chemical exports out of the busiest US port complex have been in decline as shippers seek less congested gateways with easier rail access. Houston’s long-term export growth rates nearly match those of the ports of Charleston and Savannah, the third- and fourth-busiest export gateways for US chemicals in 2024. The two ports’ continued growth follows millions in investments to set up nearby warehouses and facilities for packaging resins into shipping containers. ‘Outgrowing’ the Gulf An ocean logistics manager for a global resins distributor and trader told the Journal of Commerce that an increasing share of his company’s exports are moving through Southeast ports thanks to the diversity of container services and routes for exports. While Houston still has a solid lead in north-south shipments, bigger vessels calling the Southeast allow more capacity on east-west trades. “We have been sending more rail cars to Savannah,” the source said. The company is moving cargoes destined for Asia, Europe, the Mediterranean and Africa through Savannah and those headed to Latin America through Houston, he added. Houston is working to add vessel capacity through its “Project 11,” which entails widening and dredging the Houston Ship Channel. Ships will have bi-directional navigation on the channel, allowing for faster berth calls. But with the channel’s depth at about 46 feet, larger post-Panamax vessels will still be somewhat limited in their ability to call Houston. “The resin business has already outgrown Houston,” the logistics manager said. “There’s just not enough capacity.” North-south trades, however, likely still managed to push Houston’s export volumes higher in 2024. Chemical volumes from the US to Brazil, for example, grew 22% last year. Vangipuram said Argentina and Colombia are also growing consumers of US resins. “Latin America is the [resins] export destination of choice for the US,” Vangipuram said. But the north-south resin trade out of the US Gulf poses its own challenges, the ocean logistics manager said, particularly with alliance carriers and those that have slot exchange deals for capacity. Because of port congestion in Brazil, many ships in north-south trades have been off schedule. Ocean carriers try to make up for the time by skipping calls at transshipment ports in the Caribbean and South America, but that can leave cargo booked through slot swaps or alliances stranded. “If the ships are coming a week late out of Brazil and the carrier has to make up time, what they are going to do is omit the other carrier’s transshipment port,” the logistics manager said. He said the cargo rolls and delays were most common at the ports of Kingston, Jamaica, and Cartagena, Colombia. With direct services to the other two largest US resins markets, Asia and Europe, shipments out of Southeast ports are not seeing similar issues. But overseas retaliation to the Trump administration’s tariffs is likely to have a major impact on the resins trade this year. After Trump put a 90-day pause on 20% reciprocal tariffs on goods from the European Union, the trading bloc similarly backed down from its own retaliatory measures. While the EU may exempt US resins from any retaliatory duties due to the region’s dependence on imports, the logistics manager said a prolonged trade war could favor resin producers in the Middle East. “Our team in Europe said that resins won’t be on the list for retaliation against US,” the manager said. “But no one has showed me anything yet that resins have been exempted. Until then, we’re being very cautious.” Contact Michael Angell at michael.angell@spglobal.com .

Supply chain

Tariffs jeopardize resin volume gains for US Southeast ports

<div class="phx-topic abstract-wrapper">Container lines saw a first-quarter demand boost from US shippers eager to bring in cargo before the April implementation of the Trump administration’s tariffs.</div>

Container lines saw a first-quarter demand boost from US shippers eager to bring in cargo before the April implementation of the Trump administration’s tariffs.

<div class="phx-topic">Cosco Shipping on Tuesday reported its highest first-quarter container volumes since 2021 as shippers frontloaded cargo ahead of the Trump administration’s tariffs against Chinese imports. The results echo those of other ocean carriers that will likely see volumes drop in the second quarter as the tariffs push container lines to cancel Asia-US services throughout May and into early June. Cosco reported total first-quarter volume across its container lines, including OOCL, of 6.48 million TEUs, up 7.5% from the same period last year. Total container shipping revenue for the quarter reached $7.2 billion, up 18% from a year ago. Net profit for Cosco’s container shipping business reached $1.6 billion, up 85%. The trans-Pacific market led the growth, with combined volumes on the trade reaching 1.2 million TEUs, up 16% from the first quarter of 2024. Cosco reported slower trans-Pacific volume growth of 11% relative to OOCL’s 23.8% gain. Overall trans-Pacific revenue for Cosco and OOCL reached $2.2 billion in the first quarter, up 25% from the year-prior quarter. On a per-TEU basis, Cosco saw trans-Pacific rates near $1,889, up 15% from a year ago. OOCL’s $1,591-per-TEU rate was down slightly from a year ago. Other Asian container lines also saw a first-quarter boost from heavy demand from shippers to bring in cargo before the April 9 implementation of President Donald Trump’s “reciprocal” tariffs that slapped a duty rate of 145% on most imports from China. <h3>Changing demand environment </h3>Taiwan’s Evergreen Marine, which is a partner with Cosco and OOCL in the Ocean Alliance, reported that total revenue for the first three months of 2025 rose 24% from a year earlier. Wan Hai Lines saw its first-quarter revenue rise 34% from a year ago. But ocean carriers face a much different demand environment in the second quarter after <a href="https://www.joc.com/article/trans-pacific-capacity-cuts-accelerating-amid-sharp-reduction-in-chinese-cargo-5992769">shippers canceled container bookings</a> en masse following Trump’s tariffs. In response, the carriers have slashed weekly sailings into the US West Coast. Cosco will be operating its 10,000-TEU Bohai service from China into Long Beach on a bi-weekly basis through the first week of June, according to recent schedules for the service. The 13,000-TEU Hibiscus Express service into Long Beach will also operate bi-weekly through May. Evergreen has also blanked a June sailing on its 8,000-TEU Hangzhou Bay Bridge service after having canceled three straight weeks of sailings in May. Ocean Alliance member CMA CGM has also effectively suspended its 9,000-TEU Pearl River Express service into Los Angeles for all of May. <h3>Big ship order for OOCL </h3>The first-quarter results came as OOCL parent and Cosco subsidiary Orient Overseas (International) confirmed a $3 billion order for 14 18,500-TEU methanol-enabled, dual-fuel container ships to be built by two Cosco-affiliated shipyards in China. The deal was announced in separate OOIL and Cosco announcements to the Hong Kong stock exchange. Nine of the ships will be built by Dalian Cosco KHI Ship Engineering Company, with the other five constructed by Nantong Cosco KHI Ship Engineering. The vessels are expected to be delivered to OOCL between the third quarter of 2028 and the third quarter of 2029. OOIL did not specifically mention whether deployment of the ships would be affected by the <a href="https://www.joc.com/article/cosco-slams-us-port-fees-as-other-carriers-reckon-with-potential-costs-5989606">United States Trade Representative’s plan to levy fees</a> on Chinese-built and owned ships beginning in October. Instead, the “vessels are versatile and suitable for a wide range of trade routes and terminals,” OOIL said. The carrier said the vessels will expand its existing fleet and replace aging tonnage, allowing it to “achieve more balanced development in its global service network and enhance its core competitiveness across both traditional and emerging markets.” Contact Michael Angell at <a href="mailto: michael.angell@spglobal.com">michael.angell@spglobal.com</a>. Special correspondent Keith Wallis contributed to this report. </div>

Cosco Shipping on Tuesday reported its highest first-quarter container volumes since 2021 as shippers frontloaded cargo ahead of the Trump administration’s tariffs against Chinese imports. The results echo those of other ocean carriers that will likely see volumes drop in the second quarter as the tariffs push container lines to cancel Asia-US services throughout May and into early June. Cosco reported total first-quarter volume across its container lines, including OOCL, of 6.48 million TEUs, up 7.5% from the same period last year. Total container shipping revenue for the quarter reached $7.2 billion, up 18% from a year ago. Net profit for Cosco’s container shipping business reached $1.6 billion, up 85%. The trans-Pacific market led the growth, with combined volumes on the trade reaching 1.2 million TEUs, up 16% from the first quarter of 2024. Cosco reported slower trans-Pacific volume growth of 11% relative to OOCL’s 23.8% gain. Overall trans-Pacific revenue for Cosco and OOCL reached $2.2 billion in the first quarter, up 25% from the year-prior quarter. On a per-TEU basis, Cosco saw trans-Pacific rates near $1,889, up 15% from a year ago. OOCL’s $1,591-per-TEU rate was down slightly from a year ago. Other Asian container lines also saw a first-quarter boost from heavy demand from shippers to bring in cargo before the April 9 implementation of President Donald Trump’s “reciprocal” tariffs that slapped a duty rate of 145% on most imports from China. Changing demand environment Taiwan’s Evergreen Marine, which is a partner with Cosco and OOCL in the Ocean Alliance, reported that total revenue for the first three months of 2025 rose 24% from a year earlier. Wan Hai Lines saw its first-quarter revenue rise 34% from a year ago. But ocean carriers face a much different demand environment in the second quarter after shippers canceled container bookings en masse following Trump’s tariffs. In response, the carriers have slashed weekly sailings into the US West Coast. Cosco will be operating its 10,000-TEU Bohai service from China into Long Beach on a bi-weekly basis through the first week of June, according to recent schedules for the service. The 13,000-TEU Hibiscus Express service into Long Beach will also operate bi-weekly through May. Evergreen has also blanked a June sailing on its 8,000-TEU Hangzhou Bay Bridge service after having canceled three straight weeks of sailings in May. Ocean Alliance member CMA CGM has also effectively suspended its 9,000-TEU Pearl River Express service into Los Angeles for all of May. Big ship order for OOCL The first-quarter results came as OOCL parent and Cosco subsidiary Orient Overseas (International) confirmed a $3 billion order for 14 18,500-TEU methanol-enabled, dual-fuel container ships to be built by two Cosco-affiliated shipyards in China. The deal was announced in separate OOIL and Cosco announcements to the Hong Kong stock exchange. Nine of the ships will be built by Dalian Cosco KHI Ship Engineering Company, with the other five constructed by Nantong Cosco KHI Ship Engineering. The vessels are expected to be delivered to OOCL between the third quarter of 2028 and the third quarter of 2029. OOIL did not specifically mention whether deployment of the ships would be affected by the United States Trade Representative’s plan to levy fees on Chinese-built and owned ships beginning in October. Instead, the “vessels are versatile and suitable for a wide range of trade routes and terminals,” OOIL said. The carrier said the vessels will expand its existing fleet and replace aging tonnage, allowing it to “achieve more balanced development in its global service network and enhance its core competitiveness across both traditional and emerging markets.” Contact Michael Angell at michael.angell@spglobal.com . Special correspondent Keith Wallis contributed to this report.

Container lines

Cosco reports strong Q1 trans-Pacific volumes amid rush to beat tariffs

<div class="phx-topic abstract-wrapper">Insufficient volumes, including on the lane between the Port of Virginia and Memphis, have forced the railroad to reallocate resources to areas where it believes container business will grow in the future.</div>

Insufficient volumes, including on the lane between the Port of Virginia and Memphis, have forced the railroad to reallocate resources to areas where it believes container business will grow in the future.

<div class="phx-topic">Norfolk Southern Railway (NS) will eliminate international intermodal service on more than 20 routes along the US East Coast, including trains between the Port of Virginia and the key inland hub of Memphis, due to insufficient container volumes. The service changes will take effect May 31, according to a notice NS sent to customers that was obtained by the Journal of Commerce. The railroad did not make a formal public announcement but confirmed the details. “By reallocating those resources, we’re reinforcing our broader network to better serve our customers and to ensure we are investing in growth where it’s most impactful,” Norfolk Southern said in a statement to the Journal of Commerce. The railroad said the services could be restored if a business case arises. Among the affected lanes are two notable routes: the Port of Virginia to Memphis and Chicago to Jacksonville. Norfolk Southern launched trains from Virginia to Memphis with <a href="https://www.joc.com/article/new-ns-norfolk-memphis-service-aims-to-grab-east-coast-cargo-shift-5202715">much fanfare in March 2023</a>, but the service never caught on among ocean carriers or shippers who had other options via the ports of Charleston and Savannah. “While we initially saw some interest from the international community for Port of Virginia-Memphis service, the volume ultimately was not strong enough to support the service sustainably over the long term,” NS said. “Our commitment to supporting international trade through the Port of Virginia remains strong, and we continue to focus on providing reliable, high-quality service for the lanes where customers need it most.” The Virginia Port Authority did not respond to requests for comment. <h3>Onward business to Puerto Rico affected </h3>NS will also discontinue service between Chicago and Jacksonville, which will impact onward business to Puerto Rico. Each year, Norfolk Southern and CSX Transportation move an estimated 16,000 to 22,000 ocean containers between Chicago and Jacksonville, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. While the lane was heavily utilized southbound into Florida, northbound demand remained limited. Jacksonville serves as the launching point for Jones Act services to Puerto Rico operated by Crowley Maritime, Tote Maritime and Trailer Bridge. “Ultimately, the low density of international volumes challenged our ability to provide the consistent and reliable service product that our customers expect,” NS said in its statement on the Chicago-Jacksonville service. “We have been in close communication with our ocean carrier partners to fully understand their needs and priorities. We’ve worked to ensure they have access to alternative service options that continue to support critical trade flows, including the important Puerto Rico market.” While Norfolk Southern will discontinue international trains, CSX will remain an option for shippers moving ocean boxes between Chicago and Jacksonville. NS will still operate domestic intermodal trains between the two cities for 53-foot containers or ocean boxes with local drayage arrangements from its Jacksonville terminal. The other lanes affected by the Norfolk Southern service changes handled minimal international container traffic. For example, international trains will no longer run between Atlanta and Chicago — a high-volume domestic intermodal route that is served by ports in Baltimore, New York-New Jersey and Virginia for ocean freight. NS will also terminate international service between the Port of Charleston and Huntsville, Alabama, although service will continue from Savannah. The railroad also plans to convert the Norfolk Portlock Yard exclusively for domestic intermodal operations, shifting a small amount of remaining international cargo back to on-dock facilities within the Port of Virginia. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Norfolk Southern Railway (NS) will eliminate international intermodal service on more than 20 routes along the US East Coast, including trains between the Port of Virginia and the key inland hub of Memphis, due to insufficient container volumes. The service changes will take effect May 31, according to a notice NS sent to customers that was obtained by the Journal of Commerce. The railroad did not make a formal public announcement but confirmed the details. “By reallocating those resources, we’re reinforcing our broader network to better serve our customers and to ensure we are investing in growth where it’s most impactful,” Norfolk Southern said in a statement to the Journal of Commerce. The railroad said the services could be restored if a business case arises. Among the affected lanes are two notable routes: the Port of Virginia to Memphis and Chicago to Jacksonville. Norfolk Southern launched trains from Virginia to Memphis with much fanfare in March 2023 , but the service never caught on among ocean carriers or shippers who had other options via the ports of Charleston and Savannah. “While we initially saw some interest from the international community for Port of Virginia-Memphis service, the volume ultimately was not strong enough to support the service sustainably over the long term,” NS said. “Our commitment to supporting international trade through the Port of Virginia remains strong, and we continue to focus on providing reliable, high-quality service for the lanes where customers need it most.” The Virginia Port Authority did not respond to requests for comment. Onward business to Puerto Rico affected NS will also discontinue service between Chicago and Jacksonville, which will impact onward business to Puerto Rico. Each year, Norfolk Southern and CSX Transportation move an estimated 16,000 to 22,000 ocean containers between Chicago and Jacksonville, according to a Journal of Commerce analysis of data from the US Surface Transportation Board. While the lane was heavily utilized southbound into Florida, northbound demand remained limited. Jacksonville serves as the launching point for Jones Act services to Puerto Rico operated by Crowley Maritime, Tote Maritime and Trailer Bridge. “Ultimately, the low density of international volumes challenged our ability to provide the consistent and reliable service product that our customers expect,” NS said in its statement on the Chicago-Jacksonville service. “We have been in close communication with our ocean carrier partners to fully understand their needs and priorities. We’ve worked to ensure they have access to alternative service options that continue to support critical trade flows, including the important Puerto Rico market.” While Norfolk Southern will discontinue international trains, CSX will remain an option for shippers moving ocean boxes between Chicago and Jacksonville. NS will still operate domestic intermodal trains between the two cities for 53-foot containers or ocean boxes with local drayage arrangements from its Jacksonville terminal. The other lanes affected by the Norfolk Southern service changes handled minimal international container traffic. For example, international trains will no longer run between Atlanta and Chicago — a high-volume domestic intermodal route that is served by ports in Baltimore, New York-New Jersey and Virginia for ocean freight. NS will also terminate international service between the Port of Charleston and Huntsville, Alabama, although service will continue from Savannah. The railroad also plans to convert the Norfolk Portlock Yard exclusively for domestic intermodal operations, shifting a small amount of remaining international cargo back to on-dock facilities within the Port of Virginia. Contact Ari Ashe at ari.ashe@spglobal.com .

Surface

Rail News

North-American rail

Intermodal providers

Norfolk Southern to drop international intermodal service on many USEC lanes

<div class="phx-topic abstract-wrapper">Chartered flights from China to the US have been canceled and air freight traffic has declined as Washington prepares to scrap the duty-free exemption for low-value goods shipped from China and Hong Kong.</div>

Chartered flights from China to the US have been canceled and air freight traffic has declined as Washington prepares to scrap the duty-free exemption for low-value goods shipped from China and Hong Kong.

<div class="phx-topic">E-commerce volumes shipped by air on the China to US trade lane have fallen sharply over the past two weeks ahead of the Trump administration’s May 2 elimination of the duty-free exemption for low-value shipments. Two of the largest Chinese online marketplaces, Temu and Shein, have told US customers that prices will increase from this week as Washington cancels the duty-free exemption for shipments under $800 imported from China and Hong Kong. The reaction from the air cargo market has been swift. Forwarders say chartered freighter capacity from China to the US has been canceled, and data from Netherlands-based air cargo analyst WorldACD shows volume from China and Hong Kong to the US last week fell for the fourth consecutive week. “Overall, e-commerce shipment volume has dropped by approximately 50% since mid-April compared to the same period last year,” Kathy Liu, vice president of global sales and marketing at Taiwan-based forwarder Dimerco Express Group, said in a market update Monday. “A lot of shippers have hit pause,” she added. “With the uncertainty around new tariffs between the US and China, many are holding back on placing new orders.” Major Chinese carriers, including Air China, China Eastern Airlines and China Southern Airlines, are also planning to cancel freighter services between China and the US “in the near future,” Dimerco noted, which would reduce the already limited capacity from China to the US. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f898c996-11b6-4f50-a739-75225f99a114"></dynamic-object></div>There was speculation in the air cargo market that there would be a rush to get shipments to the US in the air ahead of the May 2 de minimis policy changes, but no such moves have materialized, said Andy Schaefer, senior vice president and global head of air freight at forwarder Toll Group. “Both major e-commerce platforms, Temu and Shein, have already increased their pricing for several products which has resulted in lower volumes,” Schaefer told the Journal of Commerce, adding that chartered flights and block space agreements that forwarders hold with airlines on the trans-Pacific have already been canceled. “Companies sourcing products from China have reduced their shipping or are holding cargo at origin until the tariff situation with China has been resolved or a lower percentage has been agreed between the two countries,” he added. “Only items that show a low inventory in the US are being shipped for the time being.” <h3>Changing online fulfillment models </h3>Schaefer said Chinese e-commerce platforms began to change their business model in the fourth quarter of 2024, building distribution centers in North America to fulfill orders placed by US consumers. “Both Shein and Temu have also seen an increase in US companies joining their platform, effectively fulfilling orders locally,” he said. “As such, e-commerce has seen a decline in cargo demand over the past few months, and it is expected that this trend will continue.” The huge demand for e-commerce on the trans-Pacific filled hundreds of daily freighters leaving China, capacity that is being released into the market. Some of that capacity is being absorbed by US tariff exemptions for smartphones and other tech products imported from China, as well as from high demand in the semiconductor sector. “A lot of that capacity has shifted to destinations like Nuevo Laredo in Mexico and other parts of Latin America, where demand has actually gone up, especially out of Mexico,” Liu noted in the Dimerco update. While demand has fallen from China, the 90-day tariff exemption granted by the Trump administration to most of its other trading partners has seen strong export volumes continuing out of Taiwan and Southeast Asia. “We have seen a number of clients resume shipping after a brief pause. They are still actively shipping cargo to the US via air,” Emily Faulkner, the import operations and customs house brokerage director for AIT Worldwide Logistics, told the Journal of Commerce. That was supported by WorldACD data, which showed that although combined traffic for China and Hong Kong to the US last week was down 16% year over year, there were export gains elsewhere, with Vietnam to the US up 42%, Taiwan 30%, Thailand 24% and Japan 12%. Still, rates out of Asia are facing pressure from changes in demand and available capacity. After seven consecutive weeks of rising rates on the China/Hong Kong to US routes, the combined average spot rates fell 5% from the previous week to $4.72 per kilogram, WorldACD data shows. Despite the strong demand from Southeast Asia, the excess capacity in the market placed downward pressure on rate levels last week, with Vietnam rates down 28%, Singapore down 11%, Taiwan 9% and Thailand rates also down 9% compared with the previous week. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

E-commerce volumes shipped by air on the China to US trade lane have fallen sharply over the past two weeks ahead of the Trump administration’s May 2 elimination of the duty-free exemption for low-value shipments. Two of the largest Chinese online marketplaces, Temu and Shein, have told US customers that prices will increase from this week as Washington cancels the duty-free exemption for shipments under $800 imported from China and Hong Kong. The reaction from the air cargo market has been swift. Forwarders say chartered freighter capacity from China to the US has been canceled, and data from Netherlands-based air cargo analyst WorldACD shows volume from China and Hong Kong to the US last week fell for the fourth consecutive week. “Overall, e-commerce shipment volume has dropped by approximately 50% since mid-April compared to the same period last year,” Kathy Liu, vice president of global sales and marketing at Taiwan-based forwarder Dimerco Express Group, said in a market update Monday. “A lot of shippers have hit pause,” she added. “With the uncertainty around new tariffs between the US and China, many are holding back on placing new orders.” Major Chinese carriers, including Air China, China Eastern Airlines and China Southern Airlines, are also planning to cancel freighter services between China and the US “in the near future,” Dimerco noted, which would reduce the already limited capacity from China to the US. There was speculation in the air cargo market that there would be a rush to get shipments to the US in the air ahead of the May 2 de minimis policy changes, but no such moves have materialized, said Andy Schaefer, senior vice president and global head of air freight at forwarder Toll Group. “Both major e-commerce platforms, Temu and Shein, have already increased their pricing for several products which has resulted in lower volumes,” Schaefer told the Journal of Commerce, adding that chartered flights and block space agreements that forwarders hold with airlines on the trans-Pacific have already been canceled. “Companies sourcing products from China have reduced their shipping or are holding cargo at origin until the tariff situation with China has been resolved or a lower percentage has been agreed between the two countries,” he added. “Only items that show a low inventory in the US are being shipped for the time being.” Changing online fulfillment models Schaefer said Chinese e-commerce platforms began to change their business model in the fourth quarter of 2024, building distribution centers in North America to fulfill orders placed by US consumers. “Both Shein and Temu have also seen an increase in US companies joining their platform, effectively fulfilling orders locally,” he said. “As such, e-commerce has seen a decline in cargo demand over the past few months, and it is expected that this trend will continue.” The huge demand for e-commerce on the trans-Pacific filled hundreds of daily freighters leaving China, capacity that is being released into the market. Some of that capacity is being absorbed by US tariff exemptions for smartphones and other tech products imported from China, as well as from high demand in the semiconductor sector. “A lot of that capacity has shifted to destinations like Nuevo Laredo in Mexico and other parts of Latin America, where demand has actually gone up, especially out of Mexico,” Liu noted in the Dimerco update. While demand has fallen from China, the 90-day tariff exemption granted by the Trump administration to most of its other trading partners has seen strong export volumes continuing out of Taiwan and Southeast Asia. “We have seen a number of clients resume shipping after a brief pause. They are still actively shipping cargo to the US via air,” Emily Faulkner, the import operations and customs house brokerage director for AIT Worldwide Logistics, told the Journal of Commerce. That was supported by WorldACD data, which showed that although combined traffic for China and Hong Kong to the US last week was down 16% year over year, there were export gains elsewhere, with Vietnam to the US up 42%, Taiwan 30%, Thailand 24% and Japan 12%. Still, rates out of Asia are facing pressure from changes in demand and available capacity. After seven consecutive weeks of rising rates on the China/Hong Kong to US routes, the combined average spot rates fell 5% from the previous week to $4.72 per kilogram, WorldACD data shows. Despite the strong demand from Southeast Asia, the excess capacity in the market placed downward pressure on rate levels last week, with Vietnam rates down 28%, Singapore down 11%, Taiwan 9% and Thailand rates also down 9% compared with the previous week. Contact Greg Knowler at greg.knowler@spglobal.com .

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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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