<div class="phx-topic abstract-wrapper">After a difficult first quarter of declining container volumes, the Northwest Seaport Alliance wants to incorporate the best features of both landlord and operating ports to better meet the needs of its exporter and importer customers.</div>

After a difficult first quarter of declining container volumes, the Northwest Seaport Alliance wants to incorporate the best features of both landlord and operating ports to better meet the needs of its exporter and importer customers.

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<div class="phx-topic">The Northwest Seaport Alliance of Seattle and Tacoma (NWSA) wants to take a more active role in managing cargo handling, a move that would allow it to perform some functions as an operator at some of its marine terminals while maintaining its traditional landlord role at other terminals. Alliance CEO John Wolfe said such a hybrid model, a mixture of operating and landlord-leased terminals, would allow the port to be more responsive and bring a uniformity among its two container terminals in Seattle and three in Tacoma. Seeing its import market share bleed to Southern California and over the northern border to Canada, the alliance is looking for new ways to set itself apart on the competitive West Coast of North America. “There is an opportunity for us where we can draw closer to the operation so we can get a more consistent, reliable import and export operation, and that’s what our customers expect of us,” Wolfe told the Journal of Commerce. By standardizing as much of NWSA’s container terminal operations as possible — such as trucker appointment systems, ERDs (earliest return dates) of containers to the terminals, and expediting the movement of containers upon discharge from the vessel to on-dock intermodal trains — the port will improve its time-to-market advantage over the other West Coast ports. “We can separate ourselves from the typical landlord port,” Wolfe said. West Coast ports, as well as New York-New Jersey, are landlord ports that build the terminals and lease them to private sector terminal operators. Ports along the Southeast US coast and in Houston are operating ports, meaning they manage the facilities and hire the International Longshoremen’s Association (ILA) labor. The NWSA is struggling with declining import volumes that have <a href="https://www.joc.com/article/western-canadian-ports-push-ipi-advantage-to-grow-q1-imports-from-asia-6221449">dropped much more than volumes at other West Coast ports</a> through the first four months of 2026. Imports in Seattle-Tacoma fell 20.6% year over year through April versus declines of 0.8% in Los Angeles, 5.3% in Long Beach and 5.2% in Oakland, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. By contrast, Western Canadian ports experienced import gains in the first quarter — 9% in Vancouver and 7.8% in Prince Rupert, according to Sea-Intelligence Maritime Analysis. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0a8f5d0b-629a-4cd9-8ea2-72c7dd137b63"></dynamic-object></div>All the ports on North America’s West Coast must remove friction in their supply chains and speed their delivery of containers to inland destinations due to the changing nature of imports from Asia, said Dan Smith, principal at the consulting firm Tioga Group. Exports from China and North Asia are shifting steadily to Southeast Asia and the Indian subcontinent, which improves the competitive position of those ports, Smith said. “Part of what’s going on is a loss of West Coast market share to the Southeast and Gulf ports,” he said. “There’s nothing the West Coast can do about those geopolitical factors.” <h3>Intermodal rail speed to Chicago is crucial </h3>The principal US destination for intermodal cargo moving through North American West Coast ports is Chicago. Jeff Bellerud, NWSA’s chief operating officer, said the Pacific Northwest already has a vessel transit time advantage from Asia over Los Angeles-Long Beach due to the shorter ocean distance. NWSA’s efforts now are directed at reducing container dwell times on the terminals and the time it takes to work the ships and load and send out eastbound intermodal trains from the on-dock rail yards. The NWSA is collaborating with carriers to stow high-priority rail-destined containers on vessels in Asia so they are the first to be discharged from the ships when they dock in Seattle-Tacoma. Port staff is also working with the individual terminal operators to prioritize the movement of intermodal containers. Wolfe said Husky Terminal in Tacoma provides a good example of the port’s evolving role as a hybrid landlord-operating port. Husky hires the International Longshore and Warehouse Union (ILWU) labor that works the vessel, yard and gate. The port authority has an arrangement with the IILWU to dispatch the dockworkers to the on-dock rail operation to ensure there is sufficient labor there. “It’s a strong partnership that results in that speed-to-market that’s so important,” Wolfe said. “As we look to the future, we’re going to continue to go to our terminal operators and work with them in partnership to provide best-in-class service.” Mark Sisson, vice president and senior port planning analyst at the infrastructure engineering and consulting firm AECOM, said that from an operational perspective, it makes sense for the terminal to handle the vessel, yard and gate operations and for the port to work the rail operation if that’s what’s necessary to get intermodal trains to depart quicker. “But they will need buy-in from all five terminals (in Seattle and Tacoma),” Sisson said. “I assume the private terminal operators like to be doing what they’re doing. To give away activity they’ve historically controlled, to give this away to somebody else, it seems like a difficult sell.” Getting buy-in from all NWSA terminals on gate hours is another issue the port is struggling with. SSA Marine, which operates the two container terminals in Seattle, in April began to close one of the facilities on Mondays and the other on Fridays, an arrangement that is continuing into June. Port managers told SSA that is not the message NWSA wants to send to importers, exporters and truckers when it comes to customer service. The port wants <a href="https://www.joc.com/article/nwsa-knocks-ssa-for-gate-closures-at-its-seattle-terminals-6204335">all of its container terminals to offer consistent day shifts</a> five days each week. SSA declined to comment this week. Smith said SSA dropped one day shift at each of its terminals because cargo volumes are down, and it will be difficult for the port to convince SSA to re-instate the gates unless there is a clear indication new trans-Pacific vessel strings will develop and volumes will increase. “It will be tough to convince SSA to stay open if they can’t recover their costs,” Tioga Group’s Smith said. <h3>Single port-wide trucker appointment system a goal </h3>The NWSA is also working with its terminal operators to participate in a single port-wide approach to trucker appointments. The terminals all participate in eModal’s CargoSprint product, but each of the terminals uses a slightly different functionality, Bellerud said. That means truckers and their customers have to search five different screens to find what they are looking for, he said. Smith, however, said trucker appointment systems are an issue for all West Coast ports because the trucking community has one view of what appointments are meant to accomplish and the terminal operators come at the issue from an entirely different perspective. The terminals see appointment systems as a way to manage truck traffic by leveling it off throughout the day. Truckers want a more flexible appointment system that recognizes the fact that traffic conditions and delays within the supply chain frequently make it difficult for drivers to keep to their appointed time. They want the flexibility to immediately re-book their arrival on the same day when those delays occur, Smith said. “Yes, it would be nice to standardize them or have them on one portal, but a higher priority is actually getting more flexibility into the appointment systems,” he said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.  </div>

The Northwest Seaport Alliance of Seattle and Tacoma (NWSA) wants to take a more active role in managing cargo handling, a move that would allow it to perform some functions as an operator at some of its marine terminals while maintaining its traditional landlord role at other terminals. Alliance CEO John Wolfe said such a hybrid model, a mixture of operating and landlord-leased terminals, would allow the port to be more responsive and bring a uniformity among its two container terminals in Seattle and three in Tacoma. Seeing its import market share bleed to Southern California and over the northern border to Canada, the alliance is looking for new ways to set itself apart on the competitive West Coast of North America. “There is an opportunity for us where we can draw closer to the operation so we can get a more consistent, reliable import and export operation, and that’s what our customers expect of us,” Wolfe told the Journal of Commerce. By standardizing as much of NWSA’s container terminal operations as possible — such as trucker appointment systems, ERDs (earliest return dates) of containers to the terminals, and expediting the movement of containers upon discharge from the vessel to on-dock intermodal trains — the port will improve its time-to-market advantage over the other West Coast ports. “We can separate ourselves from the typical landlord port,” Wolfe said. West Coast ports, as well as New York-New Jersey, are landlord ports that build the terminals and lease them to private sector terminal operators. Ports along the Southeast US coast and in Houston are operating ports, meaning they manage the facilities and hire the International Longshoremen’s Association (ILA) labor. The NWSA is struggling with declining import volumes that have dropped much more than volumes at other West Coast ports through the first four months of 2026. Imports in Seattle-Tacoma fell 20.6% year over year through April versus declines of 0.8% in Los Angeles, 5.3% in Long Beach and 5.2% in Oakland, according to PIERS, a sister company of the Journal of Commerce within S&P Global. By contrast, Western Canadian ports experienced import gains in the first quarter — 9% in Vancouver and 7.8% in Prince Rupert, according to Sea-Intelligence Maritime Analysis. All the ports on North America’s West Coast must remove friction in their supply chains and speed their delivery of containers to inland destinations due to the changing nature of imports from Asia, said Dan Smith, principal at the consulting firm Tioga Group. Exports from China and North Asia are shifting steadily to Southeast Asia and the Indian subcontinent, which improves the competitive position of those ports, Smith said. “Part of what’s going on is a loss of West Coast market share to the Southeast and Gulf ports,” he said. “There’s nothing the West Coast can do about those geopolitical factors.” Intermodal rail speed to Chicago is crucial The principal US destination for intermodal cargo moving through North American West Coast ports is Chicago. Jeff Bellerud, NWSA’s chief operating officer, said the Pacific Northwest already has a vessel transit time advantage from Asia over Los Angeles-Long Beach due to the shorter ocean distance. NWSA’s efforts now are directed at reducing container dwell times on the terminals and the time it takes to work the ships and load and send out eastbound intermodal trains from the on-dock rail yards. The NWSA is collaborating with carriers to stow high-priority rail-destined containers on vessels in Asia so they are the first to be discharged from the ships when they dock in Seattle-Tacoma. Port staff is also working with the individual terminal operators to prioritize the movement of intermodal containers. Wolfe said Husky Terminal in Tacoma provides a good example of the port’s evolving role as a hybrid landlord-operating port. Husky hires the International Longshore and Warehouse Union (ILWU) labor that works the vessel, yard and gate. The port authority has an arrangement with the IILWU to dispatch the dockworkers to the on-dock rail operation to ensure there is sufficient labor there. “It’s a strong partnership that results in that speed-to-market that’s so important,” Wolfe said. “As we look to the future, we’re going to continue to go to our terminal operators and work with them in partnership to provide best-in-class service.” Mark Sisson, vice president and senior port planning analyst at the infrastructure engineering and consulting firm AECOM, said that from an operational perspective, it makes sense for the terminal to handle the vessel, yard and gate operations and for the port to work the rail operation if that’s what’s necessary to get intermodal trains to depart quicker. “But they will need buy-in from all five terminals (in Seattle and Tacoma),” Sisson said. “I assume the private terminal operators like to be doing what they’re doing. To give away activity they’ve historically controlled, to give this away to somebody else, it seems like a difficult sell.” Getting buy-in from all NWSA terminals on gate hours is another issue the port is struggling with. SSA Marine, which operates the two container terminals in Seattle, in April began to close one of the facilities on Mondays and the other on Fridays, an arrangement that is continuing into June. Port managers told SSA that is not the message NWSA wants to send to importers, exporters and truckers when it comes to customer service. The port wants all of its container terminals to offer consistent day shifts five days each week. SSA declined to comment this week. Smith said SSA dropped one day shift at each of its terminals because cargo volumes are down, and it will be difficult for the port to convince SSA to re-instate the gates unless there is a clear indication new trans-Pacific vessel strings will develop and volumes will increase. “It will be tough to convince SSA to stay open if they can’t recover their costs,” Tioga Group’s Smith said. Single port-wide trucker appointment system a goal The NWSA is also working with its terminal operators to participate in a single port-wide approach to trucker appointments. The terminals all participate in eModal’s CargoSprint product, but each of the terminals uses a slightly different functionality, Bellerud said. That means truckers and their customers have to search five different screens to find what they are looking for, he said. Smith, however, said trucker appointment systems are an issue for all West Coast ports because the trucking community has one view of what appointments are meant to accomplish and the terminal operators come at the issue from an entirely different perspective. The terminals see appointment systems as a way to manage truck traffic by leveling it off throughout the day. Truckers want a more flexible appointment system that recognizes the fact that traffic conditions and delays within the supply chain frequently make it difficult for drivers to keep to their appointed time. They want the flexibility to immediately re-book their arrival on the same day when those delays occur, Smith said. “Yes, it would be nice to standardize them or have them on one portal, but a higher priority is actually getting more flexibility into the appointment systems,” he said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com . 

Port News

Rail News

Surface

North American ports

Marine terminals

Intermodal providers

Maritime

Seattle-Tacoma evolving toward hybrid landlord-operating port model

<div class="phx-topic abstract-wrapper">The coming legislation is part of a larger effort by Prime Minister Mark Carney to double non-US exports within the decade and boost supply chain resilience by investing in ports and curbing freight disruptions.</div>

The coming legislation is part of a larger effort by Prime Minister Mark Carney to double non-US exports within the decade and boost supply chain resilience by investing in ports and curbing freight disruptions.

<div class="phx-topic">A series of federal consultations in Canada this month have laid the groundwork for new supply chain-focused legislation seeking to reduce labor disruption at seaports and other transport modes. The <a href="https://www.joc.com/article/canadian-review-of-labor-laws-linked-to-hoped-for-longshore-peace-us-diversification-6211387">consultations by the federal government</a> on transportation labor, ports and digitalization lasted mere weeks, reflecting the speed of the current government and its intentions for legislation anticipated to be introduced as soon as mid-June, according to three sources familiar with the matter. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6229023_0.1.jpg"></img></div> The legislation is part of a larger effort by Prime Minister Mark Carney to double non-US exports within the decade and boost supply chain resilience by investing in ports and curbing freight disruptions. “They’re moving at the speed of Carney,” said one of the sources, referring to the prime minister’s aggressive approach to reform and investment. The source added that the government’s first meaningful attempt to reform Canada’s labor code in three decades was “unprecedented.” Still, Canadian labor groups are warning against any attempt to have port workers designated as essential employees, thus crippling their ability to strike and employers’ ability to lock them out. “Unifor has and will engage in good faith in this flawed process, but we can hear the dog whistles of union-busting weaved throughout the government’s questions and reference documents,” Lana Payne, the union’s national president, said in a statement.   But one source tied to federal labor relations said the legislation is unlikely to strip the right to strike from organized workers and instead to create a special mediator to guide contract negotiations through bumps and impasses. The mediator role was one of the recommendations to come out of a federal study on Canadian West Coast ports. Such an individual would get involved in negotiations from the beginning and provide recommendations publicly when negotiations grind down, according to the labor relations source. How much power this mediator would have to force arbitration, however, isn’t yet clear. The federal study of West Coast ports labor was triggered by a 13-day work stoppage in 2023 at the ports of Vancouver and Prince Rupert, which was followed in late 2024 with a <a href="https://www.joc.com/article/bc-montreal-ports-set-to-reopen-under-orders-from-canadas-labor-chief-5792214">10-day strike and then lockout</a>. The disruptions were two of 16 that have impacted the transportation sector since 2019, according to Canada’s Ministry of Transportation. The current contract between the International Longshore and Warehouse Union (ILWU) and British Columbia employers expires in March 2027, with formal negotiations expected to begin in November, according to the labor relations source. <h3>Increase borrowing limits of ports </h3>Through the supply chain legislation, port employer interests also want to enshrine into law that the ILWU can only negotiate with employers as a group rather than individually. The Canadian West Coast isn’t recognized in Canada’s labor code as a common geography similar to the East Coast with the ports of Halifax, Montral and Saint John. The union during past contentious negotiation cycles has threatened to complicate contract talks by negotiating with each of the West Coast’s more than one dozen employers rather than collectively with the British Columbia Maritime Employers Association. Out of the consultations focused on ports, backers hope the legislation that follows will allow ports to increase their borrowing abilities. It costs tens of thousands of dollars and takes at least a year for port authorities to increase their borrowing limits, said Daniel-Robert Gooch, president and CEO of the Association of Canadian Port Authorities. His group proposes rather than enforcing a strict borrowing limit, a debt-to-income ratio should be imbedded in the constitution, providing flexibility to faster-growing ports. Port authorities also want a freer hand to engage in activities outside their land and waterway such as being able to sell unused, prime downtown acreage, Gooch said. “If Vancouver is challenged [borrowing for] projects, then surely, just about every other port in the country that is much smaller than Vancouver probably faces the same challenge to a degree,” said Peter Xotta, CEO of the Vancouver Fraser Port Authority. <h3>Fussing over fees </h3>In addition to wanting labor reform, ocean carriers and marine terminal operators want the Canadian legislation to inject more transparency into its leases with tenants, particularly as it pertains to special fees. The Canada Transportation Agency on Feb. 13 dismissed a request by the Shipping Federation of Canada to intervene against Vancouver Fraser Port Authority’s <a href="https://www.joc.com/article/montreal-joins-vancouver-in-levying-empty-container-fee-6089012">empty container fee</a>. Gooch, representing port authorities, downplayed how much more transparency is needed in terms of port fees, arguing the current system to challenge these fees is sufficient. Xotta said that tenants need to be able to understand and challenge fees, but it can’t hamstring the port authority’s ability to make a return on investment. The federal consultations also addressed potentially repealing the Shipping Conference Exemption Act, a move that ocean carriers and terminal operators support if the limited antitrust exemption allowing operating alliances remains. That protection could be granted by the government via a policy statement, according to one source close to the shipping industry’s thinking. The consultations tied to digitalization have been focused on harmonizing systems and could potentially lead to legislation requiring the creation of a maritime single window, a digital platform for the clearing of ships, cargo and crews. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>.</div>

A series of federal consultations in Canada this month have laid the groundwork for new supply chain-focused legislation seeking to reduce labor disruption at seaports and other transport modes. The consultations by the federal government on transportation labor, ports and digitalization lasted mere weeks, reflecting the speed of the current government and its intentions for legislation anticipated to be introduced as soon as mid-June, according to three sources familiar with the matter. The legislation is part of a larger effort by Prime Minister Mark Carney to double non-US exports within the decade and boost supply chain resilience by investing in ports and curbing freight disruptions. “They’re moving at the speed of Carney,” said one of the sources, referring to the prime minister’s aggressive approach to reform and investment. The source added that the government’s first meaningful attempt to reform Canada’s labor code in three decades was “unprecedented.” Still, Canadian labor groups are warning against any attempt to have port workers designated as essential employees, thus crippling their ability to strike and employers’ ability to lock them out. “Unifor has and will engage in good faith in this flawed process, but we can hear the dog whistles of union-busting weaved throughout the government’s questions and reference documents,” Lana Payne, the union’s national president, said in a statement.   But one source tied to federal labor relations said the legislation is unlikely to strip the right to strike from organized workers and instead to create a special mediator to guide contract negotiations through bumps and impasses. The mediator role was one of the recommendations to come out of a federal study on Canadian West Coast ports. Such an individual would get involved in negotiations from the beginning and provide recommendations publicly when negotiations grind down, according to the labor relations source. How much power this mediator would have to force arbitration, however, isn’t yet clear. The federal study of West Coast ports labor was triggered by a 13-day work stoppage in 2023 at the ports of Vancouver and Prince Rupert, which was followed in late 2024 with a 10-day strike and then lockout . The disruptions were two of 16 that have impacted the transportation sector since 2019, according to Canada’s Ministry of Transportation. The current contract between the International Longshore and Warehouse Union (ILWU) and British Columbia employers expires in March 2027, with formal negotiations expected to begin in November, according to the labor relations source. Increase borrowing limits of ports Through the supply chain legislation, port employer interests also want to enshrine into law that the ILWU can only negotiate with employers as a group rather than individually. The Canadian West Coast isn’t recognized in Canada’s labor code as a common geography similar to the East Coast with the ports of Halifax, Montral and Saint John. The union during past contentious negotiation cycles has threatened to complicate contract talks by negotiating with each of the West Coast’s more than one dozen employers rather than collectively with the British Columbia Maritime Employers Association. Out of the consultations focused on ports, backers hope the legislation that follows will allow ports to increase their borrowing abilities. It costs tens of thousands of dollars and takes at least a year for port authorities to increase their borrowing limits, said Daniel-Robert Gooch, president and CEO of the Association of Canadian Port Authorities. His group proposes rather than enforcing a strict borrowing limit, a debt-to-income ratio should be imbedded in the constitution, providing flexibility to faster-growing ports. Port authorities also want a freer hand to engage in activities outside their land and waterway such as being able to sell unused, prime downtown acreage, Gooch said. “If Vancouver is challenged [borrowing for] projects, then surely, just about every other port in the country that is much smaller than Vancouver probably faces the same challenge to a degree,” said Peter Xotta, CEO of the Vancouver Fraser Port Authority. Fussing over fees In addition to wanting labor reform, ocean carriers and marine terminal operators want the Canadian legislation to inject more transparency into its leases with tenants, particularly as it pertains to special fees. The Canada Transportation Agency on Feb. 13 dismissed a request by the Shipping Federation of Canada to intervene against Vancouver Fraser Port Authority’s empty container fee . Gooch, representing port authorities, downplayed how much more transparency is needed in terms of port fees, arguing the current system to challenge these fees is sufficient. Xotta said that tenants need to be able to understand and challenge fees, but it can’t hamstring the port authority’s ability to make a return on investment. The federal consultations also addressed potentially repealing the Shipping Conference Exemption Act, a move that ocean carriers and terminal operators support if the limited antitrust exemption allowing operating alliances remains. That protection could be granted by the government via a policy statement, according to one source close to the shipping industry’s thinking. The consultations tied to digitalization have been focused on harmonizing systems and could potentially lead to legislation requiring the creation of a maritime single window, a digital platform for the clearing of ships, cargo and crews. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Transport, Trade and Regulation News

Longshore labor

Supply chain

Canada readies ambitious legislation to reform supply chain

<div class="phx-topic abstract-wrapper">Huge rail bottlenecks are being reported across the busy network, with carriers, forwarders and rail freight operators battling to keep cargo flowing as demand begins to build in an early start to peak season. </div>

Huge rail bottlenecks are being reported across the busy network, with carriers, forwarders and rail freight operators battling to keep cargo flowing as demand begins to build in an early start to peak season.

<div class="phx-topic">Rail freight operations on Germany’s inland corridors are severely disrupted with delays from ongoing construction on key routes aggravated by a fire this week that closed a main line and a derailment in the Port of Hamburg. Huge rail bottlenecks are being reported across the busy network, with carriers, forwarders and rail freight operators battling to keep cargo flowing as demand begins to build in an early start to peak season. “Trains are accumulating in all directions — from north to south and from east to west — effectively leading to a blockage of the entire network,” rail operator Metrans said in a customer advisory. “As a result of this situation, we have been forced to temporarily park some train sets,” the subsidiary of Hamburg terminal operator HHLA added. “Rail traffic is experiencing significant delays, and in some sections it has come to a complete standstill.” Hapag-Lloyd spokesperson Nils Haupt described the situation as “critical,” with rail freight impacted by construction on the main Hamburg-Berlin and Hannover-Hamburg lines. Disruptions have been exacerbated by this week’s fire in Hannover and by a train that derailed at Hamburg’s Container Terminal Altenwerder. “On the detour routes, there are increasing status issues due to the overload,” Haupt told the Journal of Commerce. “As a result, train drivers exceed their allowed driving times, and trains simply cannot continue until the personnel has been replaced. The situation is extremely tense.” The many trains that are outside their schedules must be repositioned before they can return to a normal rhythm, but Haupt said the measure created further train cancellations and capacity shortages. “At present, the full operational impact and duration of the resulting restrictions cannot yet be reliably assessed,” Hapag-Lloyd said in an advisory. “However, further delays, congestion, terminal bottlenecks and disruptions to rail operations in and around the Port of Hamburg are to be expected.” <h3>Missed vessel connections </h3>Matthias Knicky, head of sea logistics in Germany for Kuehne + Nagel, said the forwarder was doing what it could to replan shipper transport and keep cargo moving. “Severe disruptions across the German rail network are currently creating scheduling unpredictability, resulting in missed vessel connections at ports and delays for our customers,” Knicky said. A Maersk spokesperson said ongoing work to modernize Germany’s rail infrastructure was constraining the available track capacity. Decades of underinvestment and overdevelopment of rail services have left Germany’s extensive rail system overloaded and prone to breakdowns. Some key transit corridors are running at 150% of their planned capacity, and broken rails, points failures and damaged overhead line equipment frequently stall trains. When a particular line is blocked, infrastructure managers typically reroute trains to open lines, but with several key northern routes affected in this week’s disruption, that option was difficult. “The situation is being seriously complicated by restrictions on the main diversion route between Hannover and Hamburg, which is currently serving as an alternative to the Berlin-Hamburg corridor,” according to the Metrans advisory. “The infrastructure manager is rerouting trains via diversion routes across northern Germany, with nighttime transit slots primarily allocated to freight trains,” it added. “However, it is becoming evident that these measures are insufficient.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Rail freight operations on Germany’s inland corridors are severely disrupted with delays from ongoing construction on key routes aggravated by a fire this week that closed a main line and a derailment in the Port of Hamburg. Huge rail bottlenecks are being reported across the busy network, with carriers, forwarders and rail freight operators battling to keep cargo flowing as demand begins to build in an early start to peak season. “Trains are accumulating in all directions — from north to south and from east to west — effectively leading to a blockage of the entire network,” rail operator Metrans said in a customer advisory. “As a result of this situation, we have been forced to temporarily park some train sets,” the subsidiary of Hamburg terminal operator HHLA added. “Rail traffic is experiencing significant delays, and in some sections it has come to a complete standstill.” Hapag-Lloyd spokesperson Nils Haupt described the situation as “critical,” with rail freight impacted by construction on the main Hamburg-Berlin and Hannover-Hamburg lines. Disruptions have been exacerbated by this week’s fire in Hannover and by a train that derailed at Hamburg’s Container Terminal Altenwerder. “On the detour routes, there are increasing status issues due to the overload,” Haupt told the Journal of Commerce. “As a result, train drivers exceed their allowed driving times, and trains simply cannot continue until the personnel has been replaced. The situation is extremely tense.” The many trains that are outside their schedules must be repositioned before they can return to a normal rhythm, but Haupt said the measure created further train cancellations and capacity shortages. “At present, the full operational impact and duration of the resulting restrictions cannot yet be reliably assessed,” Hapag-Lloyd said in an advisory. “However, further delays, congestion, terminal bottlenecks and disruptions to rail operations in and around the Port of Hamburg are to be expected.” Missed vessel connections Matthias Knicky, head of sea logistics in Germany for Kuehne + Nagel, said the forwarder was doing what it could to replan shipper transport and keep cargo moving. “Severe disruptions across the German rail network are currently creating scheduling unpredictability, resulting in missed vessel connections at ports and delays for our customers,” Knicky said. A Maersk spokesperson said ongoing work to modernize Germany’s rail infrastructure was constraining the available track capacity. Decades of underinvestment and overdevelopment of rail services have left Germany’s extensive rail system overloaded and prone to breakdowns. Some key transit corridors are running at 150% of their planned capacity, and broken rails, points failures and damaged overhead line equipment frequently stall trains. When a particular line is blocked, infrastructure managers typically reroute trains to open lines, but with several key northern routes affected in this week’s disruption, that option was difficult. “The situation is being seriously complicated by restrictions on the main diversion route between Hannover and Hamburg, which is currently serving as an alternative to the Berlin-Hamburg corridor,” according to the Metrans advisory. “The infrastructure manager is rerouting trains via diversion routes across northern Germany, with nighttime transit slots primarily allocated to freight trains,” it added. “However, it is becoming evident that these measures are insufficient.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

International ports

Disrupted operations leave Germany’s northern rail network in chaos

<div class="phx-topic abstract-wrapper">Shareholder rights law firm Hagens Berman said it is continuing an investigation into whether the intermodal provider “misled investors about having prepared its financial statements consistent with relevant accounting rules.”</div>

Shareholder rights law firm Hagens Berman said it is continuing an investigation into whether the intermodal provider “misled investors about having prepared its financial statements consistent with relevant accounting rules.”

<div class="phx-topic">The chief operating officer and chief financial officer of intermodal provider Hub Group have left the company as it continues reconciling a $77 million accounting error that has drawn scrutiny from regulators and shareholder attorneys. Hub Group’s lead director Peter McNitt and audit committee chair Gary Yablon said the board views the integrity of the company’s financial statements as critical to its future. McNitt said the company’s audit committee conducted a full review of Hub Group’s finances. “We are taking corrective actions, including enhancing our financial reporting processes and making changes to the company’s leadership team,” he said in a statement Thursday. “We will continue to prioritize finalizing our financial statements and becoming current with the filing of our periodic reports with the SEC.” The changes to Hub’s leadership team resulted in the departures of COO Brian Meents and CFO Kevin Beth, the company said. Hub first disclosed accounting irregularities in February, when Beth told investors an error had resulted in an understatement of purchased transportation expenses and accounts payable during the first nine months of 2025. But the full scope of the issue became clearer May 12, when the company filed a Form 8-K with the US Securities and Exchange Commission disclosing that prior financial statements could no longer be relied upon. In that filing, Hub Group said its 2023 and 2024 annual financial statements “should no longer be relied upon” and that it “expects to conclude it did not maintain effective disclosure controls and procedures and internal control over financial reporting” during both years. The company said Meents and Beth will remain available in consulting roles following their departures. Hub Group also announced that Todd Heeter will immediately become interim CFO and treasurer for at least six months, with the term subject to extension while the company conducts a nationwide search for a permanent CFO. The COO position is being eliminated, with those responsibilities reassigned elsewhere within the company. Heeter founded the Heeter Group, which provides corporate financial leadership services, including CFO and chief accounting officer roles for public and private companies. Hub Group noted that Heeter has previously served in interim CFO and senior financial leadership positions. <h3>Law firm investigating </h3>Despite the accounting disclosures, shareholder scrutiny and executive shakeup, Hub Group said it remains financially sound and positioned for growth. “We remain focused on executing our strategy and serving our customers,” Hub CEO Phil Yeager said in the statement. “In the second quarter of 2026 to date, we executed a successful bid season and saw balanced demand trends and stronger pricing as well as increased opportunity for over-the-road conversion.” Yeager said the company also secured significant new business in logistics, while brokerage volumes reflected efforts to improve profitability and increase revenue per load. Hub plans to file its 2025 annual report, including restated results for the affected periods, on or before Sept. 14, the deadline to regain compliance with Nasdaq filing requirements. The company also plans to file first-quarter 2026 results by that date. Hub, meanwhile, could face litigation related to its financial disclosures. Shareholder rights law firm Hagens Berman, based in San Francisco, said it is continuing an investigation into whether the company “misled investors about having prepared its financial statements consistent with relevant accounting rules.” “Now that we know that Hub Group’s admitted improper accounting goes all the way back to fiscal 2023, we’re investigating whether the company may have ... understated expenses and monitoring what additional financial statement accounts may have been misstated,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation. The law firm said Hub Group’s stock price has declined $14.71 per share, or 28%, since Feb. 5, when the company first disclosed the accounting issues, erasing approximately $890 million in market capitalization. The firm also called on potential whistleblowers with non-public information about Hub Group to come forward and consider participating in the SEC whistleblower program. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

The chief operating officer and chief financial officer of intermodal provider Hub Group have left the company as it continues reconciling a $77 million accounting error that has drawn scrutiny from regulators and shareholder attorneys. Hub Group’s lead director Peter McNitt and audit committee chair Gary Yablon said the board views the integrity of the company’s financial statements as critical to its future. McNitt said the company’s audit committee conducted a full review of Hub Group’s finances. “We are taking corrective actions, including enhancing our financial reporting processes and making changes to the company’s leadership team,” he said in a statement Thursday. “We will continue to prioritize finalizing our financial statements and becoming current with the filing of our periodic reports with the SEC.” The changes to Hub’s leadership team resulted in the departures of COO Brian Meents and CFO Kevin Beth, the company said. Hub first disclosed accounting irregularities in February, when Beth told investors an error had resulted in an understatement of purchased transportation expenses and accounts payable during the first nine months of 2025. But the full scope of the issue became clearer May 12, when the company filed a Form 8-K with the US Securities and Exchange Commission disclosing that prior financial statements could no longer be relied upon. In that filing, Hub Group said its 2023 and 2024 annual financial statements “should no longer be relied upon” and that it “expects to conclude it did not maintain effective disclosure controls and procedures and internal control over financial reporting” during both years. The company said Meents and Beth will remain available in consulting roles following their departures. Hub Group also announced that Todd Heeter will immediately become interim CFO and treasurer for at least six months, with the term subject to extension while the company conducts a nationwide search for a permanent CFO. The COO position is being eliminated, with those responsibilities reassigned elsewhere within the company. Heeter founded the Heeter Group, which provides corporate financial leadership services, including CFO and chief accounting officer roles for public and private companies. Hub Group noted that Heeter has previously served in interim CFO and senior financial leadership positions. Law firm investigating Despite the accounting disclosures, shareholder scrutiny and executive shakeup, Hub Group said it remains financially sound and positioned for growth. “We remain focused on executing our strategy and serving our customers,” Hub CEO Phil Yeager said in the statement. “In the second quarter of 2026 to date, we executed a successful bid season and saw balanced demand trends and stronger pricing as well as increased opportunity for over-the-road conversion.” Yeager said the company also secured significant new business in logistics, while brokerage volumes reflected efforts to improve profitability and increase revenue per load. Hub plans to file its 2025 annual report, including restated results for the affected periods, on or before Sept. 14, the deadline to regain compliance with Nasdaq filing requirements. The company also plans to file first-quarter 2026 results by that date. Hub, meanwhile, could face litigation related to its financial disclosures. Shareholder rights law firm Hagens Berman, based in San Francisco, said it is continuing an investigation into whether the company “misled investors about having prepared its financial statements consistent with relevant accounting rules.” “Now that we know that Hub Group’s admitted improper accounting goes all the way back to fiscal 2023, we’re investigating whether the company may have ... understated expenses and monitoring what additional financial statement accounts may have been misstated,” said Reed Kathrein, the Hagens Berman partner leading the firm’s investigation. The law firm said Hub Group’s stock price has declined $14.71 per share, or 28%, since Feb. 5, when the company first disclosed the accounting issues, erasing approximately $890 million in market capitalization. The firm also called on potential whistleblowers with non-public information about Hub Group to come forward and consider participating in the SEC whistleblower program. Contact Dan Ronan at contactdanronan@gmail.com .

Hub Group COO, CFO leave company after $77 million accounting error

<div class="phx-topic abstract-wrapper">A Canadian bitcoin miner that faced customs delays bringing specialty cooling towers into the US from China alleges Zim and the Port of Houston charged unfair per-diem fees.</div>

A Canadian bitcoin miner that faced customs delays bringing specialty cooling towers into the US from China alleges Zim and the Port of Houston charged unfair per-diem fees.

<div class="phx-topic">A Canadian firm that brought containers from China specially designed to cool bitcoin mining machines is suing Zim Integrated Shipping Services and the Port of Houston for excessive per-diem charges after US Customs and Border Protection (CBP) held the containers three months past their free time. Toronto-based Sunnyside Digital and its Delaware-registered entity Down Quark Systems filed the complaint last week with the Federal Maritime Commission(FMC). The complaint alleges Zim has already charged the company $5,880 in demurrage on its containers, while the Port of Houston Authority as terminal operator charge assessed $917,458 in extended dwell fees for the containers. Along with restitution of those charges, Sunnyside Digital is asking the FMC to investigate and restrain Zim from pursuing another $7 million in demurrage it is trying to collect from Sunnyside. Zim has also filed a federal lawsuit against Sunnyside seeking another $708,153 in terminal storage charges. <h3>‘Bespoke’ containers </h3>The containers themselves were not standard dry containers, the complaint said. Rather, they were “bespoke, highly specialized/modified containers” built to serve as cooling systems for bitcoin mining machines. Sunnyside argued in the complaint that because these were not standard dry containers, they “do not fall within” the scope of Zim’s published tariff. Sunnyside also argued Houston’s <a href="https://www.joc.com/article/houston-to-start-charging-long-dwell-fee-from-feb-1-5224463">excessive dwell fee</a> did not adhere to the FMC’s incentive principle for prompting the timely removal of cargo. Sunnyside said the 147 containers from Shanghai were loaded on the 11,923-TEU Zim Canada on March 17, 2025, and reached Houston about a month later on Good Friday. Due to the holiday, Sunnyside had four days of free time starting the following Monday. However, between April 21 and 23, CBP said it would inspect nine of the containers, while putting a hold on the rest until the inspection was completed. Sunnyside said between April 23 and May 6, CBP provided no information about “the basis for the hold or inspection of the containers.” On May 7, CBP issued a formal notice of detention for the containers to Sunnyside. About a month later, Sunnyside said CBP would only release the containers if Sunnyside agreed to a different valuation and tariff classification for the cargo. Sunnyside submitted a bond to CBP on July 31 to release the containers. Customs holds and the resulting demurrage fees from ocean carriers and marine terminals have been an issue for some shippers. In 2023, the FMC’s National Shipper Advisory had <a href="https://www.joc.com/article/shipper-group-wants-more-fmc-action-on-dwell-fees-erds-5220538">sought for the agency to determine</a> that shippers should only be billed a portion of per-diem fees resulting from government holds. But the agency has yet to craft a rule addressing the issue. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

A Canadian firm that brought containers from China specially designed to cool bitcoin mining machines is suing Zim Integrated Shipping Services and the Port of Houston for excessive per-diem charges after US Customs and Border Protection (CBP) held the containers three months past their free time. Toronto-based Sunnyside Digital and its Delaware-registered entity Down Quark Systems filed the complaint last week with the Federal Maritime Commission(FMC). The complaint alleges Zim has already charged the company $5,880 in demurrage on its containers, while the Port of Houston Authority as terminal operator charge assessed $917,458 in extended dwell fees for the containers. Along with restitution of those charges, Sunnyside Digital is asking the FMC to investigate and restrain Zim from pursuing another $7 million in demurrage it is trying to collect from Sunnyside. Zim has also filed a federal lawsuit against Sunnyside seeking another $708,153 in terminal storage charges. ‘Bespoke’ containers The containers themselves were not standard dry containers, the complaint said. Rather, they were “bespoke, highly specialized/modified containers” built to serve as cooling systems for bitcoin mining machines. Sunnyside argued in the complaint that because these were not standard dry containers, they “do not fall within” the scope of Zim’s published tariff. Sunnyside also argued Houston’s excessive dwell fee did not adhere to the FMC’s incentive principle for prompting the timely removal of cargo. Sunnyside said the 147 containers from Shanghai were loaded on the 11,923-TEU Zim Canada on March 17, 2025, and reached Houston about a month later on Good Friday. Due to the holiday, Sunnyside had four days of free time starting the following Monday. However, between April 21 and 23, CBP said it would inspect nine of the containers, while putting a hold on the rest until the inspection was completed. Sunnyside said between April 23 and May 6, CBP provided no information about “the basis for the hold or inspection of the containers.” On May 7, CBP issued a formal notice of detention for the containers to Sunnyside. About a month later, Sunnyside said CBP would only release the containers if Sunnyside agreed to a different valuation and tariff classification for the cargo. Sunnyside submitted a bond to CBP on July 31 to release the containers. Customs holds and the resulting demurrage fees from ocean carriers and marine terminals have been an issue for some shippers. In 2023, the FMC’s National Shipper Advisory had sought for the agency to determine that shippers should only be billed a portion of per-diem fees resulting from government holds. But the agency has yet to craft a rule addressing the issue. Contact Michael Angell at michael.angell@spglobal.com .

Bitcoin miner hits Zim, Houston with FMC lawsuit on delayed boxes

<div class="phx-topic abstract-wrapper">Rather than single objections against the proposed transcontinental railroad, time is the real threat to this deal, writes analyst Paul Tonsager. </div>

Rather than single objections against the proposed transcontinental railroad, time is the real threat to this deal, writes analyst Paul Tonsager.

<div class="phx-topic">On May 28, <a href="https://www.joc.com/article/stb-accepts-upns-paperwork-buts-holds-on-merger-decision-6228099">the Surface Transportation Board (STB) accepted</a> the amended Union Pacific (UP) and Norfolk Southern (NS) merger application. This was the April refiling, submitted after the Board rejected the railroads’ first attempt in January. UP and NS will call the acceptance a milestone. It is the least important thing the Board did that day. The same decision held the entire proceeding in abeyance. No merits schedule. No environmental review. The Board ordered the railroads to supplement nine areas of the filing by July 27, and it will not start the review clock until it has that material and is satisfied with it. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6228199_0.1.jpg"></img></div>Clearing completeness means the filing was good enough to keep, not good enough to approve. The Board said in the same decision that several parts of the application are unclear or underdeveloped. So here is where this now stands, and it is not where the railroads wanted to be. The Board did two things it did not have to pair: it kept the application alive and refused to set a date for judging it. Discovery continues, so UP and NS keep working ... but working does not mean advancing. The Board is moving the chains, and, two filings in, the railroads still have not picked up a first down. That makes time the real threat to this deal, ahead of any single objection the opponents are raising. The Board did not need to find a fatal flaw. Keeping the calendar open is enough. The wait is not neutral. The railroads carry the cost of an $85 billion transaction sitting in limbo, while the opposition uses that time to organize its filings and line up allies in Congress. Competitors keep taking real freight in real time, with CPKC selling the single-line service the merged carrier does not yet exist to counter. Everybody waits, but nobody waits equally. The deal’s own structure makes the delay bite harder. There is no voting trust, so Norfolk Southern shareholders are not cashed out early. Instead, they wait for full STB approval to be paid, which puts the entire timeline on their backs. The agreement’s outside date of Jan. 28, 2028, extends automatically if the review runs long. Sounds like a safety valve? Well, it is the trap. The deal has no clean expiration and no forcing event. It does not die on a deadline but erodes; it creates a combination that is now likelier to fail from exhaustion than from a flat “no.” The case for benefits decays on the same clock. The payoff the railroads are selling — led by 2.1 million truckloads moved off the highway — is modeled from a close date. Every quarter that close slips right, the present value of those benefits falls. As a result, delay weakens the central exhibit the Board is supposed to weigh. On substance, the sharpest signal in the decision is a small one. The Board asked for the applicants’ workpapers as a standalone supplemental item, which, in plain terms, means it could not reproduce the railroads’ own numbers from what they filed. That is a pointed thing for a regulator to put in writing about a benefits case. The Board also pulled the St. Louis and Kansas City terminals into one request alongside the TTX railcar pool, on gateways and car supply — a sign it sees neutral access to shared infrastructure as a single unresolved question rather than a set of separate fixes. For shippers, the takeaway is direct. Do not build around an early close. The initial target the railroads set by the first half of 2027 is now unreachable. The safe assumption now is later and open-ended. If your routing or rate strategy assumes a combined UP-NS network by 2027, rebuild it without that assumption. I support this merger, <a href="https://www.joc.com/article/strategic-vision-of-up-ns-merger-must-meet-operational-reality-6139519">I have said so in this publication</a> and elsewhere. The transcontinental thesis is sound, truck conversion is real, and single-line service creates genuine value. That is exactly why the execution should worry supporters more than critics. The merits fight is winnable on the record. The July 27 supplement is the third attempt at a record this Board will act on. The first application was rejected outright; the second cleared completeness and was still parked, because the Board found too much of it underdeveloped to judge; and there is no clever third version. The Board has told the railroads twice what it needs, and anyone who has watched this agency knew the list before the first application was filed. So give it to them, put the real numbers and the methodology behind them on the record, and stop trying to win on anything but substance. Every month spent deciding what to hold back is a month the clock takes off the merits case that can actually carry it. The author holds no equity in either carrier and represents no Class I railroad in this transaction. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

On May 28, the Surface Transportation Board (STB) accepted the amended Union Pacific (UP) and Norfolk Southern (NS) merger application. This was the April refiling, submitted after the Board rejected the railroads’ first attempt in January. UP and NS will call the acceptance a milestone. It is the least important thing the Board did that day. The same decision held the entire proceeding in abeyance. No merits schedule. No environmental review. The Board ordered the railroads to supplement nine areas of the filing by July 27, and it will not start the review clock until it has that material and is satisfied with it. Clearing completeness means the filing was good enough to keep, not good enough to approve. The Board said in the same decision that several parts of the application are unclear or underdeveloped. So here is where this now stands, and it is not where the railroads wanted to be. The Board did two things it did not have to pair: it kept the application alive and refused to set a date for judging it. Discovery continues, so UP and NS keep working ... but working does not mean advancing. The Board is moving the chains, and, two filings in, the railroads still have not picked up a first down. That makes time the real threat to this deal, ahead of any single objection the opponents are raising. The Board did not need to find a fatal flaw. Keeping the calendar open is enough. The wait is not neutral. The railroads carry the cost of an $85 billion transaction sitting in limbo, while the opposition uses that time to organize its filings and line up allies in Congress. Competitors keep taking real freight in real time, with CPKC selling the single-line service the merged carrier does not yet exist to counter. Everybody waits, but nobody waits equally. The deal’s own structure makes the delay bite harder. There is no voting trust, so Norfolk Southern shareholders are not cashed out early. Instead, they wait for full STB approval to be paid, which puts the entire timeline on their backs. The agreement’s outside date of Jan. 28, 2028, extends automatically if the review runs long. Sounds like a safety valve? Well, it is the trap. The deal has no clean expiration and no forcing event. It does not die on a deadline but erodes; it creates a combination that is now likelier to fail from exhaustion than from a flat “no.” The case for benefits decays on the same clock. The payoff the railroads are selling — led by 2.1 million truckloads moved off the highway — is modeled from a close date. Every quarter that close slips right, the present value of those benefits falls. As a result, delay weakens the central exhibit the Board is supposed to weigh. On substance, the sharpest signal in the decision is a small one. The Board asked for the applicants’ workpapers as a standalone supplemental item, which, in plain terms, means it could not reproduce the railroads’ own numbers from what they filed. That is a pointed thing for a regulator to put in writing about a benefits case. The Board also pulled the St. Louis and Kansas City terminals into one request alongside the TTX railcar pool, on gateways and car supply — a sign it sees neutral access to shared infrastructure as a single unresolved question rather than a set of separate fixes. For shippers, the takeaway is direct. Do not build around an early close. The initial target the railroads set by the first half of 2027 is now unreachable. The safe assumption now is later and open-ended. If your routing or rate strategy assumes a combined UP-NS network by 2027, rebuild it without that assumption. I support this merger, I have said so in this publication and elsewhere. The transcontinental thesis is sound, truck conversion is real, and single-line service creates genuine value. That is exactly why the execution should worry supporters more than critics. The merits fight is winnable on the record. The July 27 supplement is the third attempt at a record this Board will act on. The first application was rejected outright; the second cleared completeness and was still parked, because the Board found too much of it underdeveloped to judge; and there is no clever third version. The Board has told the railroads twice what it needs, and anyone who has watched this agency knew the list before the first application was filed. So give it to them, put the real numbers and the methodology behind them on the record, and stop trying to win on anything but substance. Every month spent deciding what to hold back is a month the clock takes off the merits case that can actually carry it. The author holds no equity in either carrier and represents no Class I railroad in this transaction. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO) and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at paul.tonsager@multimodalsolutions.io .

North-American rail

Benefits of UP-NS merger erode on approval delay: analyst

<div class="phx-topic abstract-wrapper">Small carriers that practice pricing discipline and manage costs are turning a profit, but whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise.</div>

Small carriers that practice pricing discipline and manage costs are turning a profit, but whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise.

<div class="phx-topic">A regulatory crackdown is reshaping the US truckload market, leading to a supply-side recovery in spot and contract rates. Suddenly, small carriers that practice pricing discipline and manage costs are turning a profit, not just spinning their wheels. Whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise. Small fleet profitability comes down to two variables: spot rates and diesel prices. When those variables move together, carriers survive. When they diverge, trucks go dark. DAT Freight &amp; Analytics data tracking the estimated annual average gross profit for small fleets reveals a swing from $46,550 in June 2018 to a $5,700 annualized loss in May 2020 (based on all costs for a typical dry-van spot market carrier). That average rose to $110,200 in January 2022 and fell to $5,700 by October 2025. Estimated gross profit is now recovering, rising to $36,000 in April — completing a full cycle that took eight years to complete and wiped out thousands of small carriers along the way. To understand that cycle fully, and where we may be headed, start where the data does: the boom following the 2018 electronic logging device (ELD) mandate. <h3>Strong start in 2018 </h3>January 2018 opened with all-in DAT spot rates at $2.24 per mile and a small fleet gross profit of $43,700. Breakeven costs were a manageable $1.63 per mile, leaving a $0.33 per mile gross margin. But the real catalyst was still building. The US ELD mandate took full effect in April 2018, compressing available capacity overnight. All-in spot rates surged to $2.32 per mile in June. That September, carriers placed record numbers of new truck orders, betting the good times would last. They were wrong. The freight market cooled rapidly into the fourth quarter of 2018. New trucks ordered at the peak of the 2018 boom rolled off assembly lines and into a softening market. By 2019, the industry was sitting on a structural oversupply of capacity. The ELD boom seeded its own bust. <h3>Freight recession </h3>From June 2018 to January 2019, spot linehaul rates collapsed from $2.03 to $1.67 per mile as shippers who had frontloaded inventory ahead of the ELD deadline and US tariffs on China let demand normalize. Small fleet annual gross profit fell from $46,550 to $19,950 in six months, then dropped further to $3,800 by April 2019. Breakeven costs held steady at $1.62 to $1.65 per mile — but costs weren’t the problem; rates simply wouldn’t cooperate. This was a demonstration of how quickly a capacity shock reversal can gut small fleet margins. Then COVID-19 hit. April and May 2020 produced the only negative gross profit months in the dataset, with losses of $4,750 and $5,700, respectively, as all-in rates collapsed to $1.62 and $1.59 per mile while breakeven costs barely budged at $1.58 to $1.59 per mile. It was a brief but brutal reminder that breakeven isn’t the floor — it’s just where you stop making money and start burning it. <h3>Boom to bust </h3>Pandemic stimulus, inventory restocking and port congestion drove spot rates from $1.59 per mile on average in May 2020 to $3.11 per mile by January 2022. Small fleet gross profit surged to $110,200 — the highest in the data set. Then Russia invaded Ukraine in February 2022. Diesel spiked, pushing breakeven costs from $1.77 to $2.08 per mile in five months, a 17% jump. By October 2022, small fleet gross profit had collapsed 75% to $27,550. Spot linehaul rates bottomed around $1.54 to $1.65 per mile and flatlined for nearly two years. Gross profit hovered between $3,800 and $19,950 for 24 consecutive months, with most months in the $6,000 to $12,000 range. This is the period that drove capacity rationalization — small fleets exiting, authorities being revoked, and the industry slowly bleeding out excess trucks. It was the longest freight recession in a generation, and carriers that survived it earned what’s coming next. <h3>A new cycle </h3>What’s coming next is a supply-driven inflection in rates. Spot rates began climbing again in December 2025, with gross profit jumping to $29,450 as all-in rates hit $2.29 per mile. January and February 2026 continued the trend, with average gross profit hitting $30,400 and $32,300, respectively. Then the Iran war started. The national average retail diesel price surged above $5 per gallon, pushing owner-operator breakeven costs from $1.88 per mile in February to $2.09 per mile by early May, a spike eerily similar in magnitude to the 2022 Ukraine shock. But this time spot truckload rates are rising, too. May’s to-date all-in rate of $2.62 per mile is the highest since mid-2022, producing a gross profit of $25,000 despite the elevated fuel costs. The rate recovery and diesel spike are running a race, and right now, rates are keeping pace. Contact Dean Croke at <a href="mailto:dean.croke@dat.com">dean.croke@dat.com</a>.</div>

A regulatory crackdown is reshaping the US truckload market, leading to a supply-side recovery in spot and contract rates. Suddenly, small carriers that practice pricing discipline and manage costs are turning a profit, not just spinning their wheels. Whether they can maintain profitability will directly affect how much capacity is available to shippers and how sharply rates may rise. Small fleet profitability comes down to two variables: spot rates and diesel prices. When those variables move together, carriers survive. When they diverge, trucks go dark. DAT Freight & Analytics data tracking the estimated annual average gross profit for small fleets reveals a swing from $46,550 in June 2018 to a $5,700 annualized loss in May 2020 (based on all costs for a typical dry-van spot market carrier). That average rose to $110,200 in January 2022 and fell to $5,700 by October 2025. Estimated gross profit is now recovering, rising to $36,000 in April — completing a full cycle that took eight years to complete and wiped out thousands of small carriers along the way. To understand that cycle fully, and where we may be headed, start where the data does: the boom following the 2018 electronic logging device (ELD) mandate. Strong start in 2018 January 2018 opened with all-in DAT spot rates at $2.24 per mile and a small fleet gross profit of $43,700. Breakeven costs were a manageable $1.63 per mile, leaving a $0.33 per mile gross margin. But the real catalyst was still building. The US ELD mandate took full effect in April 2018, compressing available capacity overnight. All-in spot rates surged to $2.32 per mile in June. That September, carriers placed record numbers of new truck orders, betting the good times would last. They were wrong. The freight market cooled rapidly into the fourth quarter of 2018. New trucks ordered at the peak of the 2018 boom rolled off assembly lines and into a softening market. By 2019, the industry was sitting on a structural oversupply of capacity. The ELD boom seeded its own bust. Freight recession From June 2018 to January 2019, spot linehaul rates collapsed from $2.03 to $1.67 per mile as shippers who had frontloaded inventory ahead of the ELD deadline and US tariffs on China let demand normalize. Small fleet annual gross profit fell from $46,550 to $19,950 in six months, then dropped further to $3,800 by April 2019. Breakeven costs held steady at $1.62 to $1.65 per mile — but costs weren’t the problem; rates simply wouldn’t cooperate. This was a demonstration of how quickly a capacity shock reversal can gut small fleet margins. Then COVID-19 hit. April and May 2020 produced the only negative gross profit months in the dataset, with losses of $4,750 and $5,700, respectively, as all-in rates collapsed to $1.62 and $1.59 per mile while breakeven costs barely budged at $1.58 to $1.59 per mile. It was a brief but brutal reminder that breakeven isn’t the floor — it’s just where you stop making money and start burning it. Boom to bust Pandemic stimulus, inventory restocking and port congestion drove spot rates from $1.59 per mile on average in May 2020 to $3.11 per mile by January 2022. Small fleet gross profit surged to $110,200 — the highest in the data set. Then Russia invaded Ukraine in February 2022. Diesel spiked, pushing breakeven costs from $1.77 to $2.08 per mile in five months, a 17% jump. By October 2022, small fleet gross profit had collapsed 75% to $27,550. Spot linehaul rates bottomed around $1.54 to $1.65 per mile and flatlined for nearly two years. Gross profit hovered between $3,800 and $19,950 for 24 consecutive months, with most months in the $6,000 to $12,000 range. This is the period that drove capacity rationalization — small fleets exiting, authorities being revoked, and the industry slowly bleeding out excess trucks. It was the longest freight recession in a generation, and carriers that survived it earned what’s coming next. A new cycle What’s coming next is a supply-driven inflection in rates. Spot rates began climbing again in December 2025, with gross profit jumping to $29,450 as all-in rates hit $2.29 per mile. January and February 2026 continued the trend, with average gross profit hitting $30,400 and $32,300, respectively. Then the Iran war started. The national average retail diesel price surged above $5 per gallon, pushing owner-operator breakeven costs from $1.88 per mile in February to $2.09 per mile by early May, a spike eerily similar in magnitude to the 2022 Ukraine shock. But this time spot truckload rates are rising, too. May’s to-date all-in rate of $2.62 per mile is the highest since mid-2022, producing a gross profit of $25,000 despite the elevated fuel costs. The rate recovery and diesel spike are running a race, and right now, rates are keeping pace. Contact Dean Croke at dean.croke@dat.com .

Truckload

Fuel prices threaten small trucker profits, pose capacity risk for shippers

<div class="phx-topic abstract-wrapper">The application of emergency fuel charges amid the war in the Middle East is the latest episode in poorly thought-out ideas and “short-termism” by carriers that has hammered another nail in the coffin of trust between them and BCOs. </div>

The application of emergency fuel charges amid the war in the Middle East is the latest episode in poorly thought-out ideas and “short-termism” by carriers that has hammered another nail in the coffin of trust between them and BCOs.

<div class="phx-topic">Trust, like any other brand, takes a long time to build. It requires patience, competence, consistency, reliability, and the impression (not always reality) of being not too self-serving. On the other side of the equation, trust is fragile and, depending on the action, can erode over time or vanish in a puff of smoke. I will not attempt to speculate on individual carrier and beneficial cargo owner (BCO) relationships as they are both individualistic and often dependent on one-to-one relationships rather than structural business-to-business in the wider sense. And so to describe the state of BCO-carrier relationships broadly, there is a predominance of mistrust on both sides. Part of this is structural and dates back to the early days of container shipping where the rules were unclear and many of the actors came from a bulk shipping background where charter parties were the benchmark of BCO/carrier contractual and relationship behavior. I recall a venerable shipper, steeped in charter party fine details, insisting we had to position refrigerated containers AND a vessel into Rockhampton, Queensland (Australia), as this was a named port in the annual meat shippers’ negotiations with the Japan Shipping conference. Needless to say, we didn’t do so, much to his disgust. And so it continued through the years. Carriers slowly shifting from trying to manage providing a service and making a profit to maximizing profit, while shippers played at relationships, too. BCOs cashed in when markets crashed and tried to limit the damage when markets were high. Meanwhile, carriers abandoned their attempt to provide a service versus profit. Schedule reliability is laughably low by any measure despite the best efforts to constrain supply through blank sailings, abandoning the chassis market, schedule slippages, etc. All make complete commercial and financial sense, but all contribute to erosion of trust. Shippers have not helped this dynamic, either, with poor forecasting, “best estimate” of volumes, etc., giving many a low reliability standing with carriers. <h3>A ‘new low’ after the pandemic </h3>COVID-19 ushered in a new low, with carriers generating extraordinary profits and cash piles enough to placate their long-suffering shareholders, allowing them to engage in seemingly random excursions into tangential asset plays (aircraft, tankers etc.) while retaining enough cash for the inevitable cyclical downturn. The downturn did not arrive, but in its place we found the geopolitical mess of the war that led to the effective closing of the Strait of Hormuz with all its implications for shipping and seafarers. Which leads to the latest significant erosion of trust. While spot rates typically incorporate the bunker adjustment factor (BAF) and other surcharges into an all-in price (quote, not invoice), a BCO has two contract options for a BAF mechanism. They can choose the carrier-published rates (some BCOs have been coerced to use these), or they can use their own formulas. BAF mechanisms are usually set for a quarter with a tolerance for movement above or below a certain percentage. For example, if the BAF moves 2%, this would be considered an insufficient change to warrant the administration required, thus a threshold is typically set at 5%. However, in either case the mechanism has relied on one overriding truth. The calculation is made at an agreed point before the end of the quarter, and the new BAF (if beyond the threshold) is applied for the subsequent quarter. This means that any significant movement up or down within the current quarter will only be recovered in the subsequent quarter. <h3>‘When is a contract not a contract?’ </h3>Certain carriers have insisted that an emergency BAF is warranted. BCOs read the papers too and know there is a major price and supply issue. Many BCOs have asked for detailed clarification in order to get a sense of what is being asked. In some cases, a flat rate across trades was proposed, which makes no sense. Account managers providing the advice were in most cases unable to explain in any detail what was proposed. Another point of contention is the carrier assertion they are burning cash because of fuel while accumulating cash over time to cover at least three years of operations. As one BCO said to me: “When is a contract not a contract?” This latest episode in poorly thought-out ideas and “short-termism” by carriers has hammered another nail in the coffin of trust between them and BCOs. Surely not the final one? John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>. </div>

Trust, like any other brand, takes a long time to build. It requires patience, competence, consistency, reliability, and the impression (not always reality) of being not too self-serving. On the other side of the equation, trust is fragile and, depending on the action, can erode over time or vanish in a puff of smoke. I will not attempt to speculate on individual carrier and beneficial cargo owner (BCO) relationships as they are both individualistic and often dependent on one-to-one relationships rather than structural business-to-business in the wider sense. And so to describe the state of BCO-carrier relationships broadly, there is a predominance of mistrust on both sides. Part of this is structural and dates back to the early days of container shipping where the rules were unclear and many of the actors came from a bulk shipping background where charter parties were the benchmark of BCO/carrier contractual and relationship behavior. I recall a venerable shipper, steeped in charter party fine details, insisting we had to position refrigerated containers AND a vessel into Rockhampton, Queensland (Australia), as this was a named port in the annual meat shippers’ negotiations with the Japan Shipping conference. Needless to say, we didn’t do so, much to his disgust. And so it continued through the years. Carriers slowly shifting from trying to manage providing a service and making a profit to maximizing profit, while shippers played at relationships, too. BCOs cashed in when markets crashed and tried to limit the damage when markets were high. Meanwhile, carriers abandoned their attempt to provide a service versus profit. Schedule reliability is laughably low by any measure despite the best efforts to constrain supply through blank sailings, abandoning the chassis market, schedule slippages, etc. All make complete commercial and financial sense, but all contribute to erosion of trust. Shippers have not helped this dynamic, either, with poor forecasting, “best estimate” of volumes, etc., giving many a low reliability standing with carriers. A ‘new low’ after the pandemic COVID-19 ushered in a new low, with carriers generating extraordinary profits and cash piles enough to placate their long-suffering shareholders, allowing them to engage in seemingly random excursions into tangential asset plays (aircraft, tankers etc.) while retaining enough cash for the inevitable cyclical downturn. The downturn did not arrive, but in its place we found the geopolitical mess of the war that led to the effective closing of the Strait of Hormuz with all its implications for shipping and seafarers. Which leads to the latest significant erosion of trust. While spot rates typically incorporate the bunker adjustment factor (BAF) and other surcharges into an all-in price (quote, not invoice), a BCO has two contract options for a BAF mechanism. They can choose the carrier-published rates (some BCOs have been coerced to use these), or they can use their own formulas. BAF mechanisms are usually set for a quarter with a tolerance for movement above or below a certain percentage. For example, if the BAF moves 2%, this would be considered an insufficient change to warrant the administration required, thus a threshold is typically set at 5%. However, in either case the mechanism has relied on one overriding truth. The calculation is made at an agreed point before the end of the quarter, and the new BAF (if beyond the threshold) is applied for the subsequent quarter. This means that any significant movement up or down within the current quarter will only be recovered in the subsequent quarter. ‘When is a contract not a contract?’ Certain carriers have insisted that an emergency BAF is warranted. BCOs read the papers too and know there is a major price and supply issue. Many BCOs have asked for detailed clarification in order to get a sense of what is being asked. In some cases, a flat rate across trades was proposed, which makes no sense. Account managers providing the advice were in most cases unable to explain in any detail what was proposed. Another point of contention is the carrier assertion they are burning cash because of fuel while accumulating cash over time to cover at least three years of operations. As one BCO said to me: “When is a contract not a contract?” This latest episode in poorly thought-out ideas and “short-termism” by carriers has hammered another nail in the coffin of trust between them and BCOs. Surely not the final one? John McCauley, formerly a vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Another nail in the coffin of trust between carriers, clients

Shanghai to East Coast

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {US_East_Coast_YoY.formatNumber("##.#'%'")}

 Shanghai to West Coast

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{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {US_West_YoY.formatNumber("##.#'%'")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1,000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to US West and East Coast container spot rates (SSE)

Shanghai to US Coasts container spot rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">The move is likely to raise costs for forwarders and carriers as they devote more resources to ensure compliance with rate filing procedures, and it could hasten a wider shakeup in China’s logistics sector.</div>

The move is likely to raise costs for forwarders and carriers as they devote more resources to ensure compliance with rate filing procedures, and it could hasten a wider shakeup in China’s logistics sector.

<div class="phx-topic">Freight forwarders and ocean carriers are facing a widening crackdown by China's Transport Ministry and provincial authorities over the filing of ocean rate data, ostensibly as part of an effort to protect shippers from unclear pricing strategies, forwarders say. The move is likely to raise costs for forwarders and carriers as they devote more resources to ensure compliance with rate filing procedures. And it could hasten a wider shakeup in China's logistics sector, with increased consolidation and the demise of smaller, less-compliant operators, the forwarders said. The crackdown by Chinese authorities comes after nine carriers and seven non-vessel operating common carriers (NVOCCs) received fines or warning letters after Transport Ministry officials found discrepancies in rate data filed for international shipments at three gateway ports late last year. “Since the government has emphasized (that) enterprises must improve internal rate filing work systems and institutionalize accountability, with responsibility assigned to specific personnel, it may cost more for internal compliance costs, (and) force both large shipping lines and smaller forwarders to be more transparent," Cliff Xu, regional director of Greater China for the forwarder Rhenus Air &amp; Ocean, told the Journal of Commerce. “This would reduce the ability of non-compliant operators to undercut compliant competitors through opaque pricing strategies,” he added. “This may accelerate industry consolidation, with smaller and less-compliant operators struggling to survive.” Inspections last year focused on Guangzhou, Ningbo, and Qingdao. “We anticipate further expansion nationwide,” Xu said. “The logical next steps would include other major trade gateways such as Shanghai, Shenzhen, and Tianjin in future enforcement rounds. “The government has explicitly stated that it will increase the intensity of inspections on enterprises regarding the implementation of filed freight rates, and that both the central ministry and its authorized provincial transportation authorities will carry out these enforcement actions,” Xu added. Ocean Network Express (ONE), Hapag-Lloyd, CMA CGM, Mediterranean Shipping Co., Evergreen Marine (Asia), and Wan Hai Lines (Singapore) were among the carriers that received "administrative punishment" following the inspections between August and November last year. ONE said it was penalized due to a “filing inaccuracy in mid-2025.” “ONE has since addressed the relevant findings through appropriate follow-up and corrective actions,” a spokesperson for the carrier told the Journal of Commerce, not providing further details. “Our current operations remain unaffected, and we remain committed to full regulatory compliance.” Hapag-Lloyd declined to comment. “Please understand that we cannot comment on ongoing proceedings as a general matter,” a spokesperson for the carrier said. The seven forwarders that received “administrative punishment,” which can also include license suspension, include Huilida International Freight Forwarding (Guangzhou), the Qingdao branch of Xuda International Freight Forwarding (Shanghai), and Ningbo Port Southeast Logistics Group, according to a Transport Ministry statement on May 12. <h3>‘Significant increase’ in scrutiny </h3>The Transport Ministry made it mandatory for carriers and forwarders to file rate data and information to the Shanghai Shipping Exchange, as the ministry’s agent, in 2013. But forwarder FIBS Logistics said freight rate filing enforcement “was considered a bit of a toothless paper tiger” until 2024 when Shanghai’s municipal transport commission carried out a two-week inspection blitz on freight rate filing procedures. Those checks included copies of bills of lading, freight lists, bank accounts, invoices, and “financial accounting vouchers,” according to the notice issued by the commission shortly before the inspection regime started. It was at that time that FIBS put a dedicated person in charge of the local filings for all China contracts, a spokesperson for the company told the Journal of Commerce. “We have never actually been audited, nor did we really hear much about other forwarders getting audited,” the spokesperson said. “I guess only forwarders who never or just rarely update the filing system will be audited.” Xu from Rhenus Logistics said the company has seen “a significant increase in enforcement and systematic scrutiny” since 2024. “The authorities have moved beyond simple filing mandates to vigorously enforce compliance with filed rates,” he said. “This represents a clear step-change in regulatory oversight. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Freight forwarders and ocean carriers are facing a widening crackdown by China's Transport Ministry and provincial authorities over the filing of ocean rate data, ostensibly as part of an effort to protect shippers from unclear pricing strategies, forwarders say. The move is likely to raise costs for forwarders and carriers as they devote more resources to ensure compliance with rate filing procedures. And it could hasten a wider shakeup in China's logistics sector, with increased consolidation and the demise of smaller, less-compliant operators, the forwarders said. The crackdown by Chinese authorities comes after nine carriers and seven non-vessel operating common carriers (NVOCCs) received fines or warning letters after Transport Ministry officials found discrepancies in rate data filed for international shipments at three gateway ports late last year. “Since the government has emphasized (that) enterprises must improve internal rate filing work systems and institutionalize accountability, with responsibility assigned to specific personnel, it may cost more for internal compliance costs, (and) force both large shipping lines and smaller forwarders to be more transparent," Cliff Xu, regional director of Greater China for the forwarder Rhenus Air & Ocean, told the Journal of Commerce. “This would reduce the ability of non-compliant operators to undercut compliant competitors through opaque pricing strategies,” he added. “This may accelerate industry consolidation, with smaller and less-compliant operators struggling to survive.” Inspections last year focused on Guangzhou, Ningbo, and Qingdao. “We anticipate further expansion nationwide,” Xu said. “The logical next steps would include other major trade gateways such as Shanghai, Shenzhen, and Tianjin in future enforcement rounds. “The government has explicitly stated that it will increase the intensity of inspections on enterprises regarding the implementation of filed freight rates, and that both the central ministry and its authorized provincial transportation authorities will carry out these enforcement actions,” Xu added. Ocean Network Express (ONE), Hapag-Lloyd, CMA CGM, Mediterranean Shipping Co., Evergreen Marine (Asia), and Wan Hai Lines (Singapore) were among the carriers that received "administrative punishment" following the inspections between August and November last year. ONE said it was penalized due to a “filing inaccuracy in mid-2025.” “ONE has since addressed the relevant findings through appropriate follow-up and corrective actions,” a spokesperson for the carrier told the Journal of Commerce, not providing further details. “Our current operations remain unaffected, and we remain committed to full regulatory compliance.” Hapag-Lloyd declined to comment. “Please understand that we cannot comment on ongoing proceedings as a general matter,” a spokesperson for the carrier said. The seven forwarders that received “administrative punishment,” which can also include license suspension, include Huilida International Freight Forwarding (Guangzhou), the Qingdao branch of Xuda International Freight Forwarding (Shanghai), and Ningbo Port Southeast Logistics Group, according to a Transport Ministry statement on May 12. ‘Significant increase’ in scrutiny The Transport Ministry made it mandatory for carriers and forwarders to file rate data and information to the Shanghai Shipping Exchange, as the ministry’s agent, in 2013. But forwarder FIBS Logistics said freight rate filing enforcement “was considered a bit of a toothless paper tiger” until 2024 when Shanghai’s municipal transport commission carried out a two-week inspection blitz on freight rate filing procedures. Those checks included copies of bills of lading, freight lists, bank accounts, invoices, and “financial accounting vouchers,” according to the notice issued by the commission shortly before the inspection regime started. It was at that time that FIBS put a dedicated person in charge of the local filings for all China contracts, a spokesperson for the company told the Journal of Commerce. “We have never actually been audited, nor did we really hear much about other forwarders getting audited,” the spokesperson said. “I guess only forwarders who never or just rarely update the filing system will be audited.” Xu from Rhenus Logistics said the company has seen “a significant increase in enforcement and systematic scrutiny” since 2024. “The authorities have moved beyond simple filing mandates to vigorously enforce compliance with filed rates,” he said. “This represents a clear step-change in regulatory oversight. Contact Keith Wallis at keithwallis@hotmail.com .

Forwarding

Asia-Europe

China widens regulatory crackdown on filing of ocean transport rate data

<div class="phx-topic abstract-wrapper">Costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly BAFs.</div>

Costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly BAFs.

<div class="phx-topic">Fuel prices that rocketed higher since the war with Iran began on Feb. 28 have so far added $5.5 billion to the bunker costs of container lines, according to Sea-Intelligence Maritime Analysis. Ocean carriers have rolled out emergency fuel surcharges in an urgent bid to recover that increase in operating costs, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">estimated at up to $50 million a week by Hapag-Lloyd</a>. “It is clear that if the (Strait of) Hormuz crisis persists, and hence fuel prices remain elevated, the industry would become clearly loss-making, unless the added fuel costs translate into higher freight rates,” Alan Murphy, CEO of Sea-Intelligence, wrote in his weekly Sunday Spotlight newsletter. “Spot rates have indeed been on the rise these past couple of weeks, especially on the Asia-Europe trade, implying that the process of passing on the added fuel costs is under way,” Murphy added. Bunker costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly bunker adjustment factors (BAFs). <a href="https://www.joc.com/article/demand-rising-on-asia-europe-ocean-trade-as-july-bunker-hike-looms-6225813">Those costs will be passed on to shippers in the third quarter</a> beginning July 1. Murphy put the scale of the additional fuel costs for the three-month period through May in context, noting that the first-quarter financial results for 2026 implied combined industry-wide revenue of $61 billion and earnings before interest and taxes (EBIT) of $2.7 billion. <h3>Peace prospects spark oil price drop</h3>While oil prices have fallen to a two-week low amid hopes that Washington and Tehran were close to a peace deal, the fragility of the current ceasefire was illustrated Monday by renewed US strikes and return fire from Iranian positions. Very low-sulfur fuel oil (VLSFO) was trading at $782 per metric ton (mt) Monday, down 11% since a mid-May high, according to Ship &amp; Bunker. High-sulfur fuel oil (HSFO) is trading at a substantial discount to VLSFO at $628/mt, down 13% since mid-May. To arrive at a daily added fuel cost per-container for the industry from the Middle East war, Sea-Intelligence used an estimated fuel use of 70 million tons per year, with 47.2 million TEUs shipped in the first three months of 2026, according to Container Trades Statistics (CTS). “The CTS data period is not quite the same as the fuel premium period,” Murphy acknowledged. “However, as a ballpark estimate, this implies an added fuel cost on average of $117/TEU.” Whether a vessel was equipped with an exhaust scrubber or not would also influence the cost per container. “Vessels equipped with a scrubber can use the lower-priced (HSFO), whereas vessels without a scrubber need to purchase the more expensive VLSFO,” Murphy said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Fuel prices that rocketed higher since the war with Iran began on Feb. 28 have so far added $5.5 billion to the bunker costs of container lines, according to Sea-Intelligence Maritime Analysis. Ocean carriers have rolled out emergency fuel surcharges in an urgent bid to recover that increase in operating costs, estimated at up to $50 million a week by Hapag-Lloyd . “It is clear that if the (Strait of) Hormuz crisis persists, and hence fuel prices remain elevated, the industry would become clearly loss-making, unless the added fuel costs translate into higher freight rates,” Alan Murphy, CEO of Sea-Intelligence, wrote in his weekly Sunday Spotlight newsletter. “Spot rates have indeed been on the rise these past couple of weeks, especially on the Asia-Europe trade, implying that the process of passing on the added fuel costs is under way,” Murphy added. Bunker costs rose sharply following the start of the war, and although emergency fuel surcharges were quickly levied on spot shipments, cargo under contract was locked into quarterly bunker adjustment factors (BAFs). Those costs will be passed on to shippers in the third quarter beginning July 1. Murphy put the scale of the additional fuel costs for the three-month period through May in context, noting that the first-quarter financial results for 2026 implied combined industry-wide revenue of $61 billion and earnings before interest and taxes (EBIT) of $2.7 billion. Peace prospects spark oil price drop While oil prices have fallen to a two-week low amid hopes that Washington and Tehran were close to a peace deal, the fragility of the current ceasefire was illustrated Monday by renewed US strikes and return fire from Iranian positions. Very low-sulfur fuel oil (VLSFO) was trading at $782 per metric ton (mt) Monday, down 11% since a mid-May high, according to Ship & Bunker. High-sulfur fuel oil (HSFO) is trading at a substantial discount to VLSFO at $628/mt, down 13% since mid-May. To arrive at a daily added fuel cost per-container for the industry from the Middle East war, Sea-Intelligence used an estimated fuel use of 70 million tons per year, with 47.2 million TEUs shipped in the first three months of 2026, according to Container Trades Statistics (CTS). “The CTS data period is not quite the same as the fuel premium period,” Murphy acknowledged. “However, as a ballpark estimate, this implies an added fuel cost on average of $117/TEU.” Whether a vessel was equipped with an exhaust scrubber or not would also influence the cost per container. “Vessels equipped with a scrubber can use the lower-priced (HSFO), whereas vessels without a scrubber need to purchase the more expensive VLSFO,” Murphy said. Contact Greg Knowler at greg.knowler@spglobal.com .

Container Shipping News

Middle East war adds $5.5 billion to ocean carriers' bunker costs: Sea-Intelligence

<div class="phx-topic abstract-wrapper">Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away; those challenges seem to be growing, the AgTC conference heard this week. </div>

Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away; those challenges seem to be growing, the AgTC conference heard this week.

<div class="phx-topic">US agricultural shippers are facing increasing and costly challenges in getting their goods to global markets as the war in the Middle East and schedule changes by ocean carriers upset the cadence of their operations. “Container availability, schedule changes, rail delays from the interior of the country; these things can combine and create sort of a monster for us,” Christopher Jennum, global manager of export logistics and marketing at the Dairy Farmers of America, told the annual Agriculture Transportation Coalition (AgTC) conference this week in Tacoma. Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away. This makes it difficult for exporters to secure empty containers, plan their rail moves to the ports, and meet marine terminal requirements for the on-time delivery of their boxes. Shippers must commit to delivery of their containers weeks ahead of time. “They’re committing to an export window that hasn’t formed,” said Vijay Harrell, CEO of logistics provider Tradelanes. Additionally, ag exporters are operating in a transportation environment designed decades ago and not equipped to handle modern day disruptions such as the pandemic and now the war in the Middle East. “I think the system that has carried us this far is starting to show some wear and tear,” Ken O’Brien, CEO of Gemini Shippers Association, told AgTC. “The disruption we face has somehow fundamentally changed our industry.” That wear and tear has affected the reliability of service, while communication between carriers and their customers has been compromised and the ability to accurately forecast supply and demand has been degraded, he said. “Both (carriers and customers) have to do a better job as to how we forecast demand,” O’Brien said. The fact that ag exports originate across a vast heartland and are shipped through a number of gateways makes it difficult for ocean carriers to consistently provide the equipment and services their customers demand and need, said Patrick “PJ” McGrath, senior vice president for commercial at Hapag-Lloyd in North America. If all imports and exports went through either Los Angeles-Long Beach or New York-New Jersey, serving shippers in the interior would be easy and much less costly for the ocean carriers. They’re not, but there is a strategy, McGrath said. “So how do I look at each individual piece? It boils down to communication (between the parties),” he said. <h3>Communication among parties is crucial </h3>Carriers must do a better job of communicating disruptions in vessel scheduling and services, as well as the fuel surcharges they are implementing due to the war in the Middle East, said Irina Brown, cotton export specialist at Dunavant Global Logistics Group. “The biggest problem is managing communication during disruptions, but it is super hard when you have trouble receiving responses from carriers, especially during the past year,” Brown told AgTC. “We get responses from carriers that make no sense.” Rapidly rising fuel costs and accompanying surcharges, which vary from carrier to carrier, have become a huge cost burden for shippers, said Cynthia Tathwell, supply chain logistics specialist at Columbia Grain. “I’ve seen unjustified rises in rates and billing practices outside of published tariffs,” Tathwell said. “It’s a pattern across the industry.” She added that she has challenged these charges, which has its own set of problems, noting that disputes “equal time and money for both sides.” <h3>FMC ‘has teeth’ </h3>Ag exporters also face ongoing problems with transportation providers in the levying of detention fees for the late return of equipment to the marine terminal or railyard and demurrage charges for containers remaining at a marine terminal or railyard after free storage time has expired. Laura DiBella, chairman of the Federal Maritime Commission (FMC), told the ag shippers the agency is aware of these practices and will move to stop any unfair implementation of detention and demurrage fees. “You are going to see plenty more on that,” DiBella told AgTc. “We’re definitely taking a more aggressive stance.” Whether it’s addressing unfair detention and demurrage fees or fuel surcharge issues, the FMC has various investigatory and enforcement powers it will use to move against unfair practices, she said. “The FMC has teeth,” DiBella said. “It has very big teeth.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

US agricultural shippers are facing increasing and costly challenges in getting their goods to global markets as the war in the Middle East and schedule changes by ocean carriers upset the cadence of their operations. “Container availability, schedule changes, rail delays from the interior of the country; these things can combine and create sort of a monster for us,” Christopher Jennum, global manager of export logistics and marketing at the Dairy Farmers of America, told the annual Agriculture Transportation Coalition (AgTC) conference this week in Tacoma. Ag exporters have always faced logistical challenges because their crops are grown in the interior US and shipped through ports located hundreds of miles away. This makes it difficult for exporters to secure empty containers, plan their rail moves to the ports, and meet marine terminal requirements for the on-time delivery of their boxes. Shippers must commit to delivery of their containers weeks ahead of time. “They’re committing to an export window that hasn’t formed,” said Vijay Harrell, CEO of logistics provider Tradelanes. Additionally, ag exporters are operating in a transportation environment designed decades ago and not equipped to handle modern day disruptions such as the pandemic and now the war in the Middle East. “I think the system that has carried us this far is starting to show some wear and tear,” Ken O’Brien, CEO of Gemini Shippers Association, told AgTC. “The disruption we face has somehow fundamentally changed our industry.” That wear and tear has affected the reliability of service, while communication between carriers and their customers has been compromised and the ability to accurately forecast supply and demand has been degraded, he said. “Both (carriers and customers) have to do a better job as to how we forecast demand,” O’Brien said. The fact that ag exports originate across a vast heartland and are shipped through a number of gateways makes it difficult for ocean carriers to consistently provide the equipment and services their customers demand and need, said Patrick “PJ” McGrath, senior vice president for commercial at Hapag-Lloyd in North America. If all imports and exports went through either Los Angeles-Long Beach or New York-New Jersey, serving shippers in the interior would be easy and much less costly for the ocean carriers. They’re not, but there is a strategy, McGrath said. “So how do I look at each individual piece? It boils down to communication (between the parties),” he said. Communication among parties is crucial Carriers must do a better job of communicating disruptions in vessel scheduling and services, as well as the fuel surcharges they are implementing due to the war in the Middle East, said Irina Brown, cotton export specialist at Dunavant Global Logistics Group. “The biggest problem is managing communication during disruptions, but it is super hard when you have trouble receiving responses from carriers, especially during the past year,” Brown told AgTC. “We get responses from carriers that make no sense.” Rapidly rising fuel costs and accompanying surcharges, which vary from carrier to carrier, have become a huge cost burden for shippers, said Cynthia Tathwell, supply chain logistics specialist at Columbia Grain. “I’ve seen unjustified rises in rates and billing practices outside of published tariffs,” Tathwell said. “It’s a pattern across the industry.” She added that she has challenged these charges, which has its own set of problems, noting that disputes “equal time and money for both sides.” FMC ‘has teeth’ Ag exporters also face ongoing problems with transportation providers in the levying of detention fees for the late return of equipment to the marine terminal or railyard and demurrage charges for containers remaining at a marine terminal or railyard after free storage time has expired. Laura DiBella, chairman of the Federal Maritime Commission (FMC), told the ag shippers the agency is aware of these practices and will move to stop any unfair implementation of detention and demurrage fees. “You are going to see plenty more on that,” DiBella told AgTc. “We’re definitely taking a more aggressive stance.” Whether it’s addressing unfair detention and demurrage fees or fuel surcharge issues, the FMC has various investigatory and enforcement powers it will use to move against unfair practices, she said. “The FMC has teeth,” DiBella said. “It has very big teeth.” Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

US ag shippers navigate creaky supply chain not built for modern disruption

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<div class="phx-topic abstract-wrapper">Industry sources say operations have been affected by yard congestion and associated delays in inter-terminal transfer activity, which is an integral part of transshipment operations.</div>

Industry sources say operations have been affected by yard congestion and associated delays in inter-terminal transfer activity, which is an integral part of transshipment operations.

<div class="phx-topic">Sri Lanka’s Colombo Port has become another Asian container hub facing the pressure of supply chains squeezed by rerouted Middle East-bound containers. Industry sources in Colombo who spoke with the Journal of Commerce said terminal operations have been affected by yard congestion and associated delays in inter-terminal transfer (ITT) activity, which is an integral part of transshipment operations. Colombo is a key intermediate port in South Asia, especially for Indian East Coast shippers historically relying on transshipment connections. “Vessels are experiencing an average berthing delay of two to three days,” said an executive at a European liner who didn’t want to be identified. “Longer waits have a significant negative impact on our overall vessel operating costs.” Additionally, seasonal weather patterns along the Sri Lankan coast are posing operational challenges for carriers striving to keep their Colombo sailings on schedule. The bottlenecks have left some carriers announcing last-minute terminal changes for their regular service calls in Colombo. For example, the Gemini Cooperation has declared that its current week westbound and eastbound calls on the South India-Europe service known as the ME2 for Maersk and the IEX for Hapag-Lloyd will call Colombo’s South Asia Gateway Terminal (SAGT) instead of using the fixed-day berthing windows at the Colombo West International Terminal (CWIT). Adani Ports-managed CWIT opened to business in April 2025 with an ad-hoc Gemini network call. <h3>Colombo volumes up 20% since war began </h3>Maersk declined to comment on the vessel flow disruption at Colombo, which has seen volume gains of 20% since the Middle East war began on Feb. 28, rising from 636,084 TEUs in February to 736,094 TEUs in March and 761,096 TEUs in April, according to available data. The disruptive impact of unexpected transshipment volumes on port flows is widespread in the region as carriers diverted vessels away from the war zone. India’s busiest container hubs of <a href="https://www.joc.com/article/rising-container-dwells-hobble-vessel-flows-at-indias-nhava-sheva-mundra-ports-6220540">Nhava Sheva and Mundra have been plagued by clogged yards and considerable gate activity slowdowns</a> over the past month, an issue that continues to raise alarm bells through supply chain stakeholders and government circles. Responding to fresh government directives, Nhava Sheva is now pushing rail evacuations and green channel operations to ease freight delays, while the Indian Ports Association (IPA) is set to conduct an audit to measure the scale of yard congestion at the port. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Sri Lanka’s Colombo Port has become another Asian container hub facing the pressure of supply chains squeezed by rerouted Middle East-bound containers. Industry sources in Colombo who spoke with the Journal of Commerce said terminal operations have been affected by yard congestion and associated delays in inter-terminal transfer (ITT) activity, which is an integral part of transshipment operations. Colombo is a key intermediate port in South Asia, especially for Indian East Coast shippers historically relying on transshipment connections. “Vessels are experiencing an average berthing delay of two to three days,” said an executive at a European liner who didn’t want to be identified. “Longer waits have a significant negative impact on our overall vessel operating costs.” Additionally, seasonal weather patterns along the Sri Lankan coast are posing operational challenges for carriers striving to keep their Colombo sailings on schedule. The bottlenecks have left some carriers announcing last-minute terminal changes for their regular service calls in Colombo. For example, the Gemini Cooperation has declared that its current week westbound and eastbound calls on the South India-Europe service known as the ME2 for Maersk and the IEX for Hapag-Lloyd will call Colombo’s South Asia Gateway Terminal (SAGT) instead of using the fixed-day berthing windows at the Colombo West International Terminal (CWIT). Adani Ports-managed CWIT opened to business in April 2025 with an ad-hoc Gemini network call. Colombo volumes up 20% since war began Maersk declined to comment on the vessel flow disruption at Colombo, which has seen volume gains of 20% since the Middle East war began on Feb. 28, rising from 636,084 TEUs in February to 736,094 TEUs in March and 761,096 TEUs in April, according to available data. The disruptive impact of unexpected transshipment volumes on port flows is widespread in the region as carriers diverted vessels away from the war zone. India’s busiest container hubs of Nhava Sheva and Mundra have been plagued by clogged yards and considerable gate activity slowdowns over the past month, an issue that continues to raise alarm bells through supply chain stakeholders and government circles. Responding to fresh government directives, Nhava Sheva is now pushing rail evacuations and green channel operations to ease freight delays, while the Indian Ports Association (IPA) is set to conduct an audit to measure the scale of yard congestion at the port. Contact Bency Mathew at bencyvmathew@gmail.com .

Choked container yards strain terminal operations at Sri Lanka’s Colombo Port

<div class="phx-topic abstract-wrapper">The US maritime regulator said the ocean carrier will also refund third parties that paid detention bills and will limit future billing to shippers and consignees. </div>

The US maritime regulator said the ocean carrier will also refund third parties that paid detention bills and will limit future billing to shippers and consignees.

<div class="phx-topic">Maersk has reached an agreement with the US Federal Maritime Commission (FMC) to pay $1.9 million in civil penalties over the ocean carrier’s practices for billing for container detention. The agency said in a statement Tuesday it had reached a compromise agreement with Maersk related to allegations of it charging detention “against third parties who had not consented to be bound by the terms of Maersk’s bills of lading, service contracts, or tariffs.” Maersk paid the penalty, along with refunds to the third parties, but did not admit to violations of the US Shipping Act or FMC rules, the agency said. Maersk also agreed to end the practice and will limit detention billing to shippers, consignees, and others with a “beneficial interest” in the cargo as defined under the Shipping Act. While it was not disclosed when the billing practices took place, the FMC issued rules in 2024 that <a href="https://www.joc.com/article/stakeholders-sorting-out-per-diem-bills-under-new-fmc-rules-5192186">outlined how truckers or other third parties involved in ocean freight transportation should not be billed for detention and demurrage</a>. The move followed numerous complaints from drayage carriers about being forced to pay per diem bills at marine terminals before being allowed to retrieve containers or face a lockout for unpaid charges. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com.</a></div>

Maersk has reached an agreement with the US Federal Maritime Commission (FMC) to pay $1.9 million in civil penalties over the ocean carrier’s practices for billing for container detention. The agency said in a statement Tuesday it had reached a compromise agreement with Maersk related to allegations of it charging detention “against third parties who had not consented to be bound by the terms of Maersk’s bills of lading, service contracts, or tariffs.” Maersk paid the penalty, along with refunds to the third parties, but did not admit to violations of the US Shipping Act or FMC rules, the agency said. Maersk also agreed to end the practice and will limit detention billing to shippers, consignees, and others with a “beneficial interest” in the cargo as defined under the Shipping Act. While it was not disclosed when the billing practices took place, the FMC issued rules in 2024 that outlined how truckers or other third parties involved in ocean freight transportation should not be billed for detention and demurrage . The move followed numerous complaints from drayage carriers about being forced to pay per diem bills at marine terminals before being allowed to retrieve containers or face a lockout for unpaid charges. Contact Michael Angell at michael.angell@spglobal.com.

FMC collects civil penalty from Maersk on detention bills

<div class="phx-topic abstract-wrapper">Spot rates on the corridor hit their highest level of the year in the first half of May, but there are mixed views on whether demand will continue into the summer. </div>

Spot rates on the corridor hit their highest level of the year in the first half of May, but there are mixed views on whether demand will continue into the summer.

<div class="phx-topic">A demand recovery on the trans-Atlantic westbound trade that followed a lackluster first quarter has begun to slow, with the sharply higher rates flattening over the past two weeks. But the supply-demand picture is confusing. From a capacity perspective, expectations of a weakening market were not reflected in June’s vessel deployment plans by ocean carriers. Data from Xeneta’s eeSea shows planned capacity on the North Europe-US East Coast westbound trade in June will be 327,860 TEUs, up 10,000 TEUs from May. Yet US imports in April, the latest available data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global, show volume declining 11% year over year at 185,960 TEUs following a 2.8% drop in March. Spot rates on the corridor reached their highest level of the year in the first half of May, but there has been little upward movement since then, according to most rate indexes. North Europe to USEC spot rates have been stuck at $2,100 per FEU since the first week of May, although that rate is up 60% from late March, according to Platts, a sister company of the Journal of Commerce. Drewry’s World Container Index this week was at $2,453/FEU for the trade lane, up 65% compared with the last week of March. There are mixed industry views on what to expect from US import demand in June, although Hapag-Lloyd holds a positive view of the market heading into summer. “The projection for June is pretty good ... it’s coming from all different industries, excluding forestry,” a spokesperson for the carrier told the Journal of Commerce Wednesday. “Since May last year rates have been going down and a recovery was urgently needed,” the spokesperson added. “We saw a good March and a good April with strong volume growth, and the second half of May was a bit softer.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a18ac559-edc2-4292-b7d8-5dca37d16335"></dynamic-object></div>Philip Damas, managing director and head of Drewry Supply Chain Advisors, said the latest data reflected a moderating market. “We are not aware of strong demand flows on this route now; June is not typically a strong month for trans-Atlantic traffic,” Damas said. “We forecast a reduction in spot rates from Northern Europe to the US East Coast in June, ending the latest upswing period for spot rates.” <h3>Westbound vessels ‘getting lighter’ </h3>Peter Sand, chief analyst at rate benchmarking platform Xeneta, also highlighted a weakening trans-Atlantic market. “The carriers pulled capacity in January and convinced shippers that the market was tight,” he said. “[Capacity] is mostly back now and weak demand means there is no tight market on the trans-Atlantic.” An ocean freight executive at a global forwarder agreed that the market was softening after a strong couple of months. “We already see that vessels are getting lighter again and expect a calm summer,” the source told the Journal of Commerce. The executive said several of the forwarder’s customers had shipped higher volumes than usual over the past two months “for different reasons.” “Some customers said it was because of uncertainty over future Donald Trump and US Federal Reserve decisions,” he said. “Others said demand was returning to more normal in US markets and some people even talked about a shipment run due to the soccer World Cup.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8d2a87d6-d5a7-4df4-b8b7-7cb4a299dcc1"></dynamic-object></div>Damas said the strong spot rate increases on the trans-Atlantic that extended into May were mostly due to capacity reductions by the Ocean Alliance and higher bunker fuel charges. Meanwhile, very low-sulfur fuel oil (VLSFO) bunker prices in Rotterdam are currently trading at $725/metric ton, a 48% premium compared with the Feb. 27 price just before the war in the Middle East began, according to data from Ship &amp; Bunker. At the other end of the trans-Atlantic trade lane, VLSFO in New York is trading at $794/metric ton after hitting a record high of $862/metric ton on May 5. The current price is 50% higher since the start of the war, Ship &amp; Bunker data shows. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A demand recovery on the trans-Atlantic westbound trade that followed a lackluster first quarter has begun to slow, with the sharply higher rates flattening over the past two weeks. But the supply-demand picture is confusing. From a capacity perspective, expectations of a weakening market were not reflected in June’s vessel deployment plans by ocean carriers. Data from Xeneta’s eeSea shows planned capacity on the North Europe-US East Coast westbound trade in June will be 327,860 TEUs, up 10,000 TEUs from May. Yet US imports in April, the latest available data from PIERS, a sister company of the Journal of Commerce within S&P Global, show volume declining 11% year over year at 185,960 TEUs following a 2.8% drop in March. Spot rates on the corridor reached their highest level of the year in the first half of May, but there has been little upward movement since then, according to most rate indexes. North Europe to USEC spot rates have been stuck at $2,100 per FEU since the first week of May, although that rate is up 60% from late March, according to Platts, a sister company of the Journal of Commerce. Drewry’s World Container Index this week was at $2,453/FEU for the trade lane, up 65% compared with the last week of March. There are mixed industry views on what to expect from US import demand in June, although Hapag-Lloyd holds a positive view of the market heading into summer. “The projection for June is pretty good ... it’s coming from all different industries, excluding forestry,” a spokesperson for the carrier told the Journal of Commerce Wednesday. “Since May last year rates have been going down and a recovery was urgently needed,” the spokesperson added. “We saw a good March and a good April with strong volume growth, and the second half of May was a bit softer.” Philip Damas, managing director and head of Drewry Supply Chain Advisors, said the latest data reflected a moderating market. “We are not aware of strong demand flows on this route now; June is not typically a strong month for trans-Atlantic traffic,” Damas said. “We forecast a reduction in spot rates from Northern Europe to the US East Coast in June, ending the latest upswing period for spot rates.” Westbound vessels ‘getting lighter’ Peter Sand, chief analyst at rate benchmarking platform Xeneta, also highlighted a weakening trans-Atlantic market. “The carriers pulled capacity in January and convinced shippers that the market was tight,” he said. “[Capacity] is mostly back now and weak demand means there is no tight market on the trans-Atlantic.” An ocean freight executive at a global forwarder agreed that the market was softening after a strong couple of months. “We already see that vessels are getting lighter again and expect a calm summer,” the source told the Journal of Commerce. The executive said several of the forwarder’s customers had shipped higher volumes than usual over the past two months “for different reasons.” “Some customers said it was because of uncertainty over future Donald Trump and US Federal Reserve decisions,” he said. “Others said demand was returning to more normal in US markets and some people even talked about a shipment run due to the soccer World Cup.” Damas said the strong spot rate increases on the trans-Atlantic that extended into May were mostly due to capacity reductions by the Ocean Alliance and higher bunker fuel charges. Meanwhile, very low-sulfur fuel oil (VLSFO) bunker prices in Rotterdam are currently trading at $725/metric ton, a 48% premium compared with the Feb. 27 price just before the war in the Middle East began, according to data from Ship & Bunker. At the other end of the trans-Atlantic trade lane, VLSFO in New York is trading at $794/metric ton after hitting a record high of $862/metric ton on May 5. The current price is 50% higher since the start of the war, Ship & Bunker data shows. Contact Greg Knowler at greg.knowler@spglobal.com .

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