<div class="phx-topic abstract-wrapper">Basel III, a global standard that significantly increases the amount of capital and liquidity that lending institutions must maintain to support their operations, is likely to make trade finance less available and more costly in the foreseeable future.</div>

Basel III, a global standard that significantly increases the amount of capital and liquidity that lending institutions must maintain to support their operations, is likely to make trade finance less available and more costly in the foreseeable future.

<div>Basel III, a global standard that significantly increases the amount of capital and liquidity that lending institutions must maintain to support their operations, is likely to make trade finance less available and more costly in the foreseeable future.The Third Basel Accord increases the capital ratio to 4.5 percent, plus an additional 2.5 percent “buffer” for a total of 7 percent, nearly tripling the 2.5 percent required under the predecessor Basel II. Increased reserves result in less available funds for lending, and its cost is bound to increase as trade finance becomes more scarce.The G-20 Group agreed to the Basel III...

Basel III, a global standard that significantly increases the amount of capital and liquidity that lending institutions must maintain to support their operations, is likely to make trade finance less available and more costly in the foreseeable future. The Third Basel Accord increases the capital ratio to 4.5 percent, plus an additional 2.5 percent “buffer” for a total of 7 percent, nearly tripling the 2.5 percent required under the predecessor Basel II. Increased reserves result in less available funds for lending, and its cost is bound to increase as trade finance becomes more scarce. The G-20 Group agreed to the Basel III rules in November 2010. In December 2011, the Federal Reserve announced it would implement substantially all of Basel III. Although the overall objectives and time frames have been set, however, countries have some latitude as to how they’re implemented. Although Basel III’s goal is to avoid a worldwide financial sector meltdown, all lending operations don’t entail equal risk. The International Chamber of Commerce conducted a study of trade defaults and losses, and a Trade Finance Register compiling the experience of 18 of the world’s largest banks showed defaults and losses were surprisingly low, and were more than adequately covered by Basel II requirements. The European Union and U.S. trade communities are increasingly pressing their governments to delay or ease the burden of Basel III on trade finance. To this end, U.S. trade groups including the U.S. Chamber of Commerce, the National Association of Manufacturers and the U.S. Council for International Business on Nov. 1 sent a letter to Treasury Secretary Timothy Geithner. Although some tweaking is possible, Basel III is likely to be implemented. It’s ironic to see a trade finance squeeze on the horizon at the very time our government is committed to doubling exports. Contact Frank J. Reynolds. See all ARO Government-related content.

Annual Review & Outlook 2013: International Projects

<div class="phx-topic abstract-wrapper">Union Pacific sent a 6,000-plus page application to US regulators Friday seeking formal approval for its closely watched merger proposal with Norfolk Southern that would create the country’s first transcontinental railroad.</div>

Union Pacific sent a 6,000-plus page application to US regulators Friday seeking formal approval for its closely watched merger proposal with Norfolk Southern that would create the country’s first transcontinental railroad.

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<div class="phx-topic">Union Pacific Railroad on Friday filed its formal application with US regulators seeking approval for its proposed $85 billion acquisition of Norfolk Southern Railway, saying the deal would divert nearly 2 million truck movements from highways annually, including an estimated 1.36 million truckloads that would shift to intermodal rail. The application sent to the US Surface Transportation Board (STB) for the closely watched merger proposal that would create the country’s first transcontinental railroad exceeded 6,000 pages. UP CEO Jim Vena, speaking on an investor call Friday morning after the application was filed, said the intermodal figure, which represents an 11% increase over the combined UP-NS intermodal volume in 2023, would be converted from the truckload market. Vena also expects to win some freight from competitor BNSF Railway. “Customers will benefit from faster, more reliable service, improved asset utilization and a streamlined customer experience. Status quo isn't an option,” Vena said. “Adjustments to train routing and blocking patterns will reduce an estimated 2,400 daily railcar and container handlings per day...This eliminates the unnecessary touches that can lead to incidents [accidents] and delays.” The STB has 30 days to determine whether the filing is complete and satisfactory; a full review is expected to extend into 2027. The application comes days after <a href="https://www.joc.com/article/two-large-rail-unions-say-they-oppose-planned-up-ns-merger-6137046">two labor unions announced opposition</a> to the deal, though the rail industry’s largest union by membership has <a href="https://www.joc.com/article/major-rail-union-backs-up-ns-merger-after-job-protection-deal-6084510">publicly supported it</a>. If approved, the merger would enable new single-line intermodal routings with shorter transit times. The application highlights four intermodal corridors where an enlarged UP can achieve considerable growth: Northern California–New Jersey; Southern California–Pennsylvania/New Jersey; Southern California–Georgia/North Carolina; and Texas–East Coast. Intermodal trains from Southern California to Harrisburg, Pa., and Croxton (Newark), N.J., routed via Kansas City, would save 17 to 19 hours, according to UP’s application. Trains moving between Southern California and the Southeast via the Meridian Speedway would save three to four days compared with current routings that often move north to Memphis before turning south toward Atlanta. A major upgrade is an expedited Lathrop, Calif.–Croxton service with a sub-four-day transit time, a truck-like schedule that would be difficult for BNSF to match because its route is longer by mileage. The train would travel through Chicago, but have a seamless crew handoff rather than draying containers across the city between terminals. <h3>Other changes coming </h3>UP also said it would operate a daily Southern California–Northeast train routed through Kansas City. The approach follows UP’s opening of a new Kansas City terminal this summer and the launch of UP–NS <a href="https://www.joc.com/article/up-ns-joint-intermodal-service-to-link-west-coast-with-louisville-in-midwest-6080692">trains to Louisville</a> routed via Kansas City this fall, a service that would become single line if the merger were approved. UP said it would invest more than $2.1 billion in capital spending, including $136.6 million to upgrade NS’s tracks and siding between Kansas City and Butler, Ind., which industry observers have long cited as a chokepoint for high-speed, double-stack intermodal service into the Northeast. Another $172.3 million would be spent to upgrade NS’s line from New Orleans to Atlanta. The proposed merger would also consolidate intermodal operations between Chicago and Memphis. UP would close Norfolk Southern’s 63rd Street terminal in Chicago and shift traffic to UP’s Global 2 facility near O’Hare International Airport. In Memphis, Norfolk Southern’s Rossville terminal would be idled, and traffic rerouted to UP’s Marion terminal across the Mississippi River in Arkansas. Those are the types of consolidations that have heightened union concerns and fueled negotiations over job protections. But UP, in winning support for the deal from five unions, has offered job protections in return, with the railroad vowing that anyone who has a job after the deal is approved is protected against losing their job for any reason linked to the merger. UP’s application also said the company would invest $63.7 million at Port Laredo in Laredo, Texas, for additional parking and track capacity and $102.5 million in Houston to expand annual lift capacity there. It also acknowledged the possibility of reopening intermodal operations in Birmingham, Ala., and Greencastle, Pa., if necessary, to accommodate growth. NS operates in both markets but ceased handling intermodal business in both locations. The combined UP-NS railroad would launch a single-line service from Laredo to the East Coast. Trains originating in Laredo would move through Houston, New Orleans, Atlanta, Charlotte and Harrisburg before terminating in northern New Jersey. Today, an intermodal shipment from Texas to New Jersey moves via UP to Chicago and is then drayed across the city to Norfolk Southern. The proposed new route would bypass Chicago entirely. UP’s application also proposed an additional Laredo–Atlanta train that would be broken down and re-blocked into trains serving Cincinnati and Columbus, Ohio. <h3>Questions remain on Meridian Speedway </h3>The merger would push more intermodal traffic over the Meridian Speedway, a roughly 300-mile corridor linking Shreveport, La., and Meridian, Miss., which UP and NS say would cut as much as three days from a transit versus routings via Memphis to Atlanta. That would benefit shippers with cargo traveling between Southern California and Atlanta or Charlotte. But the application does not address <a href="https://www.joc.com/article/cpkc-slams-up-ns-on-meridian-congestion-merger-plans-6105932">the dispute</a> between Norfolk Southern and Canadian Pacific Kansas City (CPKC) tied to the Meridian corridor, including disagreements over train length. CPKC, which owns 75% of the Meridian joint venture with NS holding the balance, has limited UP and NS to 8,500-foot trains on the route, down from the 10,000- to 12,000-foot trains that were often permitted before Kansas City Southern was combined into CPKC. While the railroads reached a truce after Norfolk Southern complained to the STB in October, the underlying tension remains — and would become a complication for UP if the deal is approved. CPKC’s majority ownership of the Meridian Speedway joint venture gives it significant control over dispatching and operating practices along the corridor. CPKC has said it will not “subsidize” UP or NS operations by accepting longer trains that result in delays to its own trains. The issue raises questions about how UP would achieve its projected volume gains on Meridian, particularly given Norfolk Southern’s claim in its October STB filing that it has lost roughly 100,000 intermodal loads to trucking and other competitors since 2022. <h3>Competitors respond </h3>UP’s filing is likely to trigger a rush of commentary over the coming weeks. CPKC CEO Keith Creel has <a href="https://www.joc.com/article/up-ceo-says-ns-merger-filing-with-us-regulators-to-be-delayed-two-weeks-6127156">repeatedly attacked</a> the proposed transaction, arguing that the merger would make the US supply chain more fragile by concentrating more freight onto a single railroad, increasing the impact of a service disruption. “The proposed UP-NS merger, unprecedented in scale and scope, would radically and permanently change the US rail network,” CPKC said in a statement Friday morning after the UP filing was made. “If approved, the merger would pose extraordinary and far-reaching risks to customers, rail employees and broader supply chains.” BNSF CEO Katie Farmer also issued a statement in the aftermath of the filing, saying she doubts UP has met the necessary requirements to gain approval for the deal. “Applicants must now prove their deal will not only preserve but enhance competition, that it serves the public interest, and its purported benefits can’t be delivered through partnerships,” Farmer said. “BNSF is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval.” Schneider National is another company that will be closely watched. It partners with UP and CSX, rather than NS, and has not taken a public position on the deal. It is the third-largest US intermodal carrier after J.B. Hunt Transport Services and Hub Group. Vena said at the Journal of Commerce Inland Distribution Conference in October that Schneider would endorse the deal after thoroughly reviewing the application. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Union Pacific Railroad on Friday filed its formal application with US regulators seeking approval for its proposed $85 billion acquisition of Norfolk Southern Railway, saying the deal would divert nearly 2 million truck movements from highways annually, including an estimated 1.36 million truckloads that would shift to intermodal rail. The application sent to the US Surface Transportation Board (STB) for the closely watched merger proposal that would create the country’s first transcontinental railroad exceeded 6,000 pages. UP CEO Jim Vena, speaking on an investor call Friday morning after the application was filed, said the intermodal figure, which represents an 11% increase over the combined UP-NS intermodal volume in 2023, would be converted from the truckload market. Vena also expects to win some freight from competitor BNSF Railway. “Customers will benefit from faster, more reliable service, improved asset utilization and a streamlined customer experience. Status quo isn't an option,” Vena said. “Adjustments to train routing and blocking patterns will reduce an estimated 2,400 daily railcar and container handlings per day...This eliminates the unnecessary touches that can lead to incidents [accidents] and delays.” The STB has 30 days to determine whether the filing is complete and satisfactory; a full review is expected to extend into 2027. The application comes days after two labor unions announced opposition to the deal, though the rail industry’s largest union by membership has publicly supported it . If approved, the merger would enable new single-line intermodal routings with shorter transit times. The application highlights four intermodal corridors where an enlarged UP can achieve considerable growth: Northern California–New Jersey; Southern California–Pennsylvania/New Jersey; Southern California–Georgia/North Carolina; and Texas–East Coast. Intermodal trains from Southern California to Harrisburg, Pa., and Croxton (Newark), N.J., routed via Kansas City, would save 17 to 19 hours, according to UP’s application. Trains moving between Southern California and the Southeast via the Meridian Speedway would save three to four days compared with current routings that often move north to Memphis before turning south toward Atlanta. A major upgrade is an expedited Lathrop, Calif.–Croxton service with a sub-four-day transit time, a truck-like schedule that would be difficult for BNSF to match because its route is longer by mileage. The train would travel through Chicago, but have a seamless crew handoff rather than draying containers across the city between terminals. Other changes coming UP also said it would operate a daily Southern California–Northeast train routed through Kansas City. The approach follows UP’s opening of a new Kansas City terminal this summer and the launch of UP–NS trains to Louisville routed via Kansas City this fall, a service that would become single line if the merger were approved. UP said it would invest more than $2.1 billion in capital spending, including $136.6 million to upgrade NS’s tracks and siding between Kansas City and Butler, Ind., which industry observers have long cited as a chokepoint for high-speed, double-stack intermodal service into the Northeast. Another $172.3 million would be spent to upgrade NS’s line from New Orleans to Atlanta. The proposed merger would also consolidate intermodal operations between Chicago and Memphis. UP would close Norfolk Southern’s 63rd Street terminal in Chicago and shift traffic to UP’s Global 2 facility near O’Hare International Airport. In Memphis, Norfolk Southern’s Rossville terminal would be idled, and traffic rerouted to UP’s Marion terminal across the Mississippi River in Arkansas. Those are the types of consolidations that have heightened union concerns and fueled negotiations over job protections. But UP, in winning support for the deal from five unions, has offered job protections in return, with the railroad vowing that anyone who has a job after the deal is approved is protected against losing their job for any reason linked to the merger. UP’s application also said the company would invest $63.7 million at Port Laredo in Laredo, Texas, for additional parking and track capacity and $102.5 million in Houston to expand annual lift capacity there. It also acknowledged the possibility of reopening intermodal operations in Birmingham, Ala., and Greencastle, Pa., if necessary, to accommodate growth. NS operates in both markets but ceased handling intermodal business in both locations. The combined UP-NS railroad would launch a single-line service from Laredo to the East Coast. Trains originating in Laredo would move through Houston, New Orleans, Atlanta, Charlotte and Harrisburg before terminating in northern New Jersey. Today, an intermodal shipment from Texas to New Jersey moves via UP to Chicago and is then drayed across the city to Norfolk Southern. The proposed new route would bypass Chicago entirely. UP’s application also proposed an additional Laredo–Atlanta train that would be broken down and re-blocked into trains serving Cincinnati and Columbus, Ohio. Questions remain on Meridian Speedway The merger would push more intermodal traffic over the Meridian Speedway, a roughly 300-mile corridor linking Shreveport, La., and Meridian, Miss., which UP and NS say would cut as much as three days from a transit versus routings via Memphis to Atlanta. That would benefit shippers with cargo traveling between Southern California and Atlanta or Charlotte. But the application does not address the dispute between Norfolk Southern and Canadian Pacific Kansas City (CPKC) tied to the Meridian corridor, including disagreements over train length. CPKC, which owns 75% of the Meridian joint venture with NS holding the balance, has limited UP and NS to 8,500-foot trains on the route, down from the 10,000- to 12,000-foot trains that were often permitted before Kansas City Southern was combined into CPKC. While the railroads reached a truce after Norfolk Southern complained to the STB in October, the underlying tension remains — and would become a complication for UP if the deal is approved. CPKC’s majority ownership of the Meridian Speedway joint venture gives it significant control over dispatching and operating practices along the corridor. CPKC has said it will not “subsidize” UP or NS operations by accepting longer trains that result in delays to its own trains. The issue raises questions about how UP would achieve its projected volume gains on Meridian, particularly given Norfolk Southern’s claim in its October STB filing that it has lost roughly 100,000 intermodal loads to trucking and other competitors since 2022. Competitors respond UP’s filing is likely to trigger a rush of commentary over the coming weeks. CPKC CEO Keith Creel has repeatedly attacked the proposed transaction, arguing that the merger would make the US supply chain more fragile by concentrating more freight onto a single railroad, increasing the impact of a service disruption. “The proposed UP-NS merger, unprecedented in scale and scope, would radically and permanently change the US rail network,” CPKC said in a statement Friday morning after the UP filing was made. “If approved, the merger would pose extraordinary and far-reaching risks to customers, rail employees and broader supply chains.” BNSF CEO Katie Farmer also issued a statement in the aftermath of the filing, saying she doubts UP has met the necessary requirements to gain approval for the deal. “Applicants must now prove their deal will not only preserve but enhance competition, that it serves the public interest, and its purported benefits can’t be delivered through partnerships,” Farmer said. “BNSF is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval.” Schneider National is another company that will be closely watched. It partners with UP and CSX, rather than NS, and has not taken a public position on the deal. It is the third-largest US intermodal carrier after J.B. Hunt Transport Services and Hub Group. Vena said at the Journal of Commerce Inland Distribution Conference in October that Schneider would endorse the deal after thoroughly reviewing the application. Contact Ari Ashe at ari.ashe@spglobal.com

Rail News

North-American rail

UP, in merger filing, vows to convert millions of loads to intermodal annually

<div class="phx-topic abstract-wrapper">The carrier, as it sends a US-bound vessel through the region, said if security thresholds hold it will take a “stepwise approach” towards gradually resuming navigation on east-west services via the Suez Canal and Red Sea. </div>

The carrier, as it sends a US-bound vessel through the region, said if security thresholds hold it will take a “stepwise approach” towards gradually resuming navigation on east-west services via the Suez Canal and Red Sea.

<div class="phx-topic">Maersk has become the latest carrier to test Red Sea waters, routing a westbound 6,500-TEU vessel through the Bab al-Mandeb Strait at the southern, Houthi-controlled entrance to the waterway. But an advisory from the carrier Friday was quick to point out that this was not the start of a widescale return of its shipping services to the Red Sea, which has been largely off-limits to commercial shipping since attacks from Houthi militants operating in Yemen began two years ago. “While this is a significant step forward, it does not mean that we are at a point where we are considering a wider east-west network change back to the trans-Suez corridor,” Maersk said. The Singapore-flagged Maersk Sebarok on Maersk’s MECL service from India to the US East Coast departed Salalah in Oman earlier this week and sailed through the Bab al-Mandeb Strait Thursday en route to the Port of New Year and New Jersey. Maersk’s advisory said if security thresholds continue to be met, the carrier would continue its “stepwise approach” towards gradually resuming navigation on east-west services via the Suez Canal and Red Sea. “The first step is this initial sailing, followed by a limited number of additional trans-Suez sailings,” it said. “However, there are no planned sailings currently.” Maersk’s advisory on Friday comes after the carrier was forced to correct a Suez Canal Authority statement last month that said the carrier would be returning regular services to the waterway in December. In its own statement at the time, Maersk said transits through the Red Sea would only normalize "as soon as conditions allow, with safety of our crew as the top priority.” The new Maersk sailing follows the launch of a Red Sea-China Service by Thailand’s Regional Container Lines (RCL) last month. <a href="https://www.joc.com/article/one-returns-to-red-sea-under-slot-charter-deal-with-thailands-rcl-partners-6136866">Ocean Network Express (ONE)</a> and Taiwan’s Evergreen Marine are making tentative returns to the Red Sea cargo market under slot charter agreement with regional carriers, including RCL. CMA CGM <a href="https://www.joc.com/article/stretched-logistics-capacity-in-europe-threatened-by-red-sea-return-6129492">is set to resume a Suez-based rotation for its India-USEC “Indamex” service</a> from January, with the first westbound sailing under the “normal” itinerary known to be the 6,039-TEU CMA CGM Verdi, due to depart India’s Nhava Sheva Port Jan. 18 and transit the Suez Canal Feb. 8, available data indicates. The French carrier plans to switch over to a full Suez rotation for the Indamex in the second quarter of 2026 as it continues to realign capacity deployments. The resumption of shipping activity in the Red Sea is driven by a perceived improvement in the security situation given there have been no attacks on vessels since the Israel-Hamas ceasefire was signed in early October, with a corresponding decline in additional war risk maritime insurance premiums. <h3>Risk levels ‘tolerable’ </h3>With attacks paused, the de-escalation suggests operational risks for shipping companies have become more "tolerable" in the waterway, according to security advisory firm Ambrey. This has seen war risk premiums for ships sailing through the Red Sea falling to around 0.2% of hull value from 0.5% before the ceasefire, according to a UK-based insurer, the lowest level since the Houthi attacks on shipping began in late 2023. Still, while carriers may be willing to shoulder the lower premiums, getting support from cargo owners could be difficult, as <a href="https://www.joc.com/article/hapag-lloyd-nixes-suez-return-for-india-usec-loop-amid-customer-pushback-6137557">Hapag-Lloyd found out this week</a> when it asked customers for feedback on plans to route an India-US East Coast service through the Suez. “Expeditors [one of the carrier’s largest forwarders on the route] was unable to persuade many of its core shipper clients to sign on to a letter of intent framework that would have required them to absorb terrorism and war-risk liabilities for vessels transiting the Red Sea,” an India-based shipping executive with knowledge of the matter told the Journal of Commerce. Helge Neuman-Lezius, global head of full container loads (FCL) at Hellmann Worldwide Logistics, said insurance excluded coverage for cargo in the southern Red Sea and Bab al-Mandeb strait. “For that reason, we decided to not offer such routings until this passage is declared as safe,” he said. The supply chain director for a Hong Kong-based Asia–Europe shipper told the Journal of Commerce that a directive from their head office prohibited the use of services via the Red Sea and Suez because of difficulties in obtaining cargo insurance cover. DHL Global Forwarding said decisions on whether to return to the waterway would be jointly determined by carriers, forwarders and cargo owners. "We can see a scenario where certain carriers might be willing to pilot services through the Red Sea and, if this were to prove successful, others could follow suit in order to remain competitive, which along with the reduced transit times could mitigate the possibility of elevated insurance costs,” a DHL spokesperson said. Peter Sand, chief analyst with rate benchmarking platform Xeneta, said shippers were simply not interested in paying the current high war risk premiums. “Nevertheless, carriers need to take the first steps and illustrate that voyages can be performed safely,” Sand told the Journal of Commerce. “Later, they can return the services as well when insurance companies lower the premiums paid for cargo, ships and crew sailing through the area.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. Special correspondent Bency Mathew contributed to this report. </div>

Maersk has become the latest carrier to test Red Sea waters, routing a westbound 6,500-TEU vessel through the Bab al-Mandeb Strait at the southern, Houthi-controlled entrance to the waterway. But an advisory from the carrier Friday was quick to point out that this was not the start of a widescale return of its shipping services to the Red Sea, which has been largely off-limits to commercial shipping since attacks from Houthi militants operating in Yemen began two years ago. “While this is a significant step forward, it does not mean that we are at a point where we are considering a wider east-west network change back to the trans-Suez corridor,” Maersk said. The Singapore-flagged Maersk Sebarok on Maersk’s MECL service from India to the US East Coast departed Salalah in Oman earlier this week and sailed through the Bab al-Mandeb Strait Thursday en route to the Port of New Year and New Jersey. Maersk’s advisory said if security thresholds continue to be met, the carrier would continue its “stepwise approach” towards gradually resuming navigation on east-west services via the Suez Canal and Red Sea. “The first step is this initial sailing, followed by a limited number of additional trans-Suez sailings,” it said. “However, there are no planned sailings currently.” Maersk’s advisory on Friday comes after the carrier was forced to correct a Suez Canal Authority statement last month that said the carrier would be returning regular services to the waterway in December. In its own statement at the time, Maersk said transits through the Red Sea would only normalize "as soon as conditions allow, with safety of our crew as the top priority.” The new Maersk sailing follows the launch of a Red Sea-China Service by Thailand’s Regional Container Lines (RCL) last month. Ocean Network Express (ONE) and Taiwan’s Evergreen Marine are making tentative returns to the Red Sea cargo market under slot charter agreement with regional carriers, including RCL. CMA CGM is set to resume a Suez-based rotation for its India-USEC “Indamex” service from January, with the first westbound sailing under the “normal” itinerary known to be the 6,039-TEU CMA CGM Verdi, due to depart India’s Nhava Sheva Port Jan. 18 and transit the Suez Canal Feb. 8, available data indicates. The French carrier plans to switch over to a full Suez rotation for the Indamex in the second quarter of 2026 as it continues to realign capacity deployments. The resumption of shipping activity in the Red Sea is driven by a perceived improvement in the security situation given there have been no attacks on vessels since the Israel-Hamas ceasefire was signed in early October, with a corresponding decline in additional war risk maritime insurance premiums. Risk levels ‘tolerable’ With attacks paused, the de-escalation suggests operational risks for shipping companies have become more "tolerable" in the waterway, according to security advisory firm Ambrey. This has seen war risk premiums for ships sailing through the Red Sea falling to around 0.2% of hull value from 0.5% before the ceasefire, according to a UK-based insurer, the lowest level since the Houthi attacks on shipping began in late 2023. Still, while carriers may be willing to shoulder the lower premiums, getting support from cargo owners could be difficult, as Hapag-Lloyd found out this week when it asked customers for feedback on plans to route an India-US East Coast service through the Suez. “Expeditors [one of the carrier’s largest forwarders on the route] was unable to persuade many of its core shipper clients to sign on to a letter of intent framework that would have required them to absorb terrorism and war-risk liabilities for vessels transiting the Red Sea,” an India-based shipping executive with knowledge of the matter told the Journal of Commerce. Helge Neuman-Lezius, global head of full container loads (FCL) at Hellmann Worldwide Logistics, said insurance excluded coverage for cargo in the southern Red Sea and Bab al-Mandeb strait. “For that reason, we decided to not offer such routings until this passage is declared as safe,” he said. The supply chain director for a Hong Kong-based Asia–Europe shipper told the Journal of Commerce that a directive from their head office prohibited the use of services via the Red Sea and Suez because of difficulties in obtaining cargo insurance cover. DHL Global Forwarding said decisions on whether to return to the waterway would be jointly determined by carriers, forwarders and cargo owners. "We can see a scenario where certain carriers might be willing to pilot services through the Red Sea and, if this were to prove successful, others could follow suit in order to remain competitive, which along with the reduced transit times could mitigate the possibility of elevated insurance costs,” a DHL spokesperson said. Peter Sand, chief analyst with rate benchmarking platform Xeneta, said shippers were simply not interested in paying the current high war risk premiums. “Nevertheless, carriers need to take the first steps and illustrate that voyages can be performed safely,” Sand told the Journal of Commerce. “Later, they can return the services as well when insurance companies lower the premiums paid for cargo, ships and crew sailing through the area.” Contact Greg Knowler at greg.knowler@spglobal.com . Special correspondent Bency Mathew contributed to this report.

Container lines

Asia-Europe

Container Shipping News

Maritime

Maersk takes ‘significant step’ towards return to Red Sea transits

<div class="phx-topic abstract-wrapper">The acquisition of Malherbe will enable Geodis to develop the French road freight market for truckload and less-than-truckload, and to increase its presence in the agri-food and mass retail sectors. </div>

The acquisition of Malherbe will enable Geodis to develop the French road freight market for truckload and less-than-truckload, and to increase its presence in the agri-food and mass retail sectors.

<div class="phx-topic">French forwarder Geodis said Friday it has concluded an agreement to acquire road freight specialist Malherbe in a deal that will significantly expand the group’s trucking footprint in the country. The acquisition, terms of which were not disclosed, will enable Geodis to develop the French road freight market for truckload and less-than-truckload (LTL), and to increase its presence in the agri-food and mass retail sectors. “The integration of Malherbe will represent an essential strategic lever in building a more resilient and sustainable nationwide network,” Geodis CEO Marie-Christine Lombard said in a statement. The acquisition of Malherbe will place Geodis among the top three players in the French market for truckload and LTL, with combined revenue of €2 billion ($2.3 billion). The geographical and operational reach of the two companies’ operations will increase the density of Geodis’ national network in France, strengthen its position in the agri-food market and accelerate the growth of European road transport activities within its network, the forwarder said. Malherbe operates in France through an extensive network of 40 branch offices with its own fleet of about 1,500 trucks, employing more than 3,300 people nationwide. In support of its energy transition, Malherbe is gradually electrifying its fleet and installing charging infrastructure. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

French forwarder Geodis said Friday it has concluded an agreement to acquire road freight specialist Malherbe in a deal that will significantly expand the group’s trucking footprint in the country. The acquisition, terms of which were not disclosed, will enable Geodis to develop the French road freight market for truckload and less-than-truckload (LTL), and to increase its presence in the agri-food and mass retail sectors. “The integration of Malherbe will represent an essential strategic lever in building a more resilient and sustainable nationwide network,” Geodis CEO Marie-Christine Lombard said in a statement. The acquisition of Malherbe will place Geodis among the top three players in the French market for truckload and LTL, with combined revenue of €2 billion ($2.3 billion). The geographical and operational reach of the two companies’ operations will increase the density of Geodis’ national network in France, strengthen its position in the agri-food market and accelerate the growth of European road transport activities within its network, the forwarder said. Malherbe operates in France through an extensive network of 40 branch offices with its own fleet of about 1,500 trucks, employing more than 3,300 people nationwide. In support of its energy transition, Malherbe is gradually electrifying its fleet and installing charging infrastructure. Contact Greg Knowler at greg.knowler@spglobal.com .

Trucking News

Truckload

Surface

Geodis inks takeover deal to expand French trucking coverage

<div class="phx-topic abstract-wrapper">The private equity fund that operates New York-New Jersey’s largest marine terminal agreed to the Port Authority’s new requirement to carry the cost of maintaining berths and wharves. </div>

The private equity fund that operates New York-New Jersey’s largest marine terminal agreed to the Port Authority’s new requirement to carry the cost of maintaining berths and wharves.

<div class="phx-topic">Infrastructure fund Macquarie has renewed its lease of the largest container terminal at the Port of New York and New Jersey through 2063, agreeing to the port’s new terms for tenant terminals that include taking over the upkeep of its wharves and berths and pledging to increase capacity at the busiest East Coast seaport. The board of commissioners for the Port Authority of New York and New Jersey on Thursday voted to approve the amendment to Macquarie’s existing lease for Maher Terminals that was set to expire in 2030. The Port Authority entered negotiations for a new lease last year due to the expected liquidation date for the specific fund that owns Maher and the potential for a sale of the terminal to another operator. Investors in the fund, however, <a href="https://www.joc.com/article/macquarie-looks-to-keep-hold-on-ny-nj-terminal-amid-lease-talks-6043502">opted not to liquidate</a>. While <a href="https://www.joc.com/article/ssa-marine-looks-to-expand-into-new-us-ports-with-deal-for-ceres-5221078">the fund shed its stake in Ceres Terminals in 2023</a>, Macquarie still owns the Long Beach Container Terminal and ITS Terminal in Long Beach and has stakes in Yusen Terminals in Los Angeles and TraPac terminals, which operates in Los Angeles and Oakland. The Maher lease is the latest to be revamped by the Port Authority. Following <a href="https://www.joc.com/article/cma-cgm-adds-terminal-assets-in-new-yorknew-jersey-5217593">CMA CGM’s 2022 purchase of Global Container Terminals’ US assets</a>, the agency has changed the lease terms to move away from a flat annual rent with cost escalators to a rent that is based on actual container throughput, subject to an annual minimum. Terminals will also have to share with the Port Authority any excess demurrage revenue and commit to the agency’s environmental and sustainability goals. <a href="https://www.joc.com/article/apm-to-spend-500-million-to-enhance-cargo-handling-at-elizabeth-terminal-5969027">APM Terminals signed a similar lease agreement in March</a>, extending its tenancy of the Elizabeth Marine Terminal to 2062. <h3>Maher could face $2 billion in wharf maintenance costs</h3>Along with the new terms, the biggest financial burden for terminal operators under the new leases will be responsibility for maintaining their berths and wharves, which was previously handled by the Port Authority. Some of the berths and wharves at New York/New Jersey are 60 years old, with many of the wood pilings also being damaged by marine borer worms. Port Executive Director Beth Rooney said Thursday the combined bill for maintaining the berths and wharves at GCT, APM and Maher could reach $6 billion. With 10,000 linear feet of berth space, Maher could face as much as $2 billion in costs for berth and wharf maintenance. The new leases also include commitments to increase capacity as part of the Port Authority’s expectations that container volumes will double by 2050. Rooney said Maher committed to “demand induced” capacity improvements over the course of the new lease.Maher, which handled 1.8 million container lifts in 2024, is the largest terminal at the port with 450 acres of space. However, similar to other terminals in New Jersey, it is land constrained with little available acreage near the port. Despite the land constraints, Rooney said Maher could eventually double its capacity by switching over from using straddle carriers to rubber tire gantry cranes, which would allow higher density stacks. “By having a 33-year lease, it gives Maher the lanes they need to invest in additional infrastructure and equipment and amortize that cost,” Rooney said. “Our estimates are that within Maher’s footprint they could almost double the capacity of the terminal through densification.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Infrastructure fund Macquarie has renewed its lease of the largest container terminal at the Port of New York and New Jersey through 2063, agreeing to the port’s new terms for tenant terminals that include taking over the upkeep of its wharves and berths and pledging to increase capacity at the busiest East Coast seaport. The board of commissioners for the Port Authority of New York and New Jersey on Thursday voted to approve the amendment to Macquarie’s existing lease for Maher Terminals that was set to expire in 2030. The Port Authority entered negotiations for a new lease last year due to the expected liquidation date for the specific fund that owns Maher and the potential for a sale of the terminal to another operator. Investors in the fund, however, opted not to liquidate . While the fund shed its stake in Ceres Terminals in 2023 , Macquarie still owns the Long Beach Container Terminal and ITS Terminal in Long Beach and has stakes in Yusen Terminals in Los Angeles and TraPac terminals, which operates in Los Angeles and Oakland. The Maher lease is the latest to be revamped by the Port Authority. Following CMA CGM’s 2022 purchase of Global Container Terminals’ US assets , the agency has changed the lease terms to move away from a flat annual rent with cost escalators to a rent that is based on actual container throughput, subject to an annual minimum. Terminals will also have to share with the Port Authority any excess demurrage revenue and commit to the agency’s environmental and sustainability goals. APM Terminals signed a similar lease agreement in March , extending its tenancy of the Elizabeth Marine Terminal to 2062. Maher could face $2 billion in wharf maintenance costs Along with the new terms, the biggest financial burden for terminal operators under the new leases will be responsibility for maintaining their berths and wharves, which was previously handled by the Port Authority. Some of the berths and wharves at New York/New Jersey are 60 years old, with many of the wood pilings also being damaged by marine borer worms. Port Executive Director Beth Rooney said Thursday the combined bill for maintaining the berths and wharves at GCT, APM and Maher could reach $6 billion. With 10,000 linear feet of berth space, Maher could face as much as $2 billion in costs for berth and wharf maintenance. The new leases also include commitments to increase capacity as part of the Port Authority’s expectations that container volumes will double by 2050. Rooney said Maher committed to “demand induced” capacity improvements over the course of the new lease. Maher, which handled 1.8 million container lifts in 2024, is the largest terminal at the port with 450 acres of space. However, similar to other terminals in New Jersey, it is land constrained with little available acreage near the port. Despite the land constraints, Rooney said Maher could eventually double its capacity by switching over from using straddle carriers to rubber tire gantry cranes, which would allow higher density stacks. “By having a 33-year lease, it gives Maher the lanes they need to invest in additional infrastructure and equipment and amortize that cost,” Rooney said. “Our estimates are that within Maher’s footprint they could almost double the capacity of the terminal through densification.” Contact Michael Angell at michael.angell@spglobal.com .

Port infrastructure

Marine terminals

North American ports

Macquarie seals deal for new Maher lease at NY/NJ through 2063

<div class="phx-topic abstract-wrapper">The US’ de minimis program, which ended in May, allowed importers one shipment per day valued at $800 or less to clear customs duty-free and with minimal data elements. </div>

The US’ de minimis program, which ended in May, allowed importers one shipment per day valued at $800 or less to clear customs duty-free and with minimal data elements.

<div class="phx-topic">US Customs and Border Protection (CBP) has collected more than $1 billion in duties on low-value imports since the May end of the duty-free de minimis provision. The duties collected were generated from more than 246 million low-cost, US-bound shipments since the Trump administration began phasing out the de minimis provision, also known as Section 321 shipments, earlier this year, CBP said in a statement Wednesday. The US’ de minimis program allowed importers one shipment per day valued at $800 or less to clear customs duty-free and with minimal data elements. “Reaching the $1 billion milestone so quickly shows just how much revenue was slipping away under the old rules,” CBP Commissioner Rodney Scott said in the statement. “With this change, American businesses don’t have to compete with duty-free foreign goods, and CBP has stronger oversight of what comes into our country.” The Trump administration began phasing out the de minimis rule on May 2 on shipments from China and Hong Kong and extended the ban globally on Aug. 29. The value threshold of the de minimis provision was increased from $200 to $800 in 2016, based largely on lobbying from parcel integrators interested in facilitating more frictionless e-commerce cross-border shipments. The higher threshold has been cited as the key driver in the huge growth of those shipments, especially in tandem with CBP’s Type 86 entry program, which allowed de minimis shipments to be cleared faster if moved via intermediaries that partnered with the agency to provide more robust details on the characteristics of the shipments than normal Section 321 entries. Low-cost e-commerce giants such as China-based Shein and Temu have used the higher threshold to grow revenue exponentially during and after the pandemic. <h3>Safety element </h3>US customs brokers have long argued that raising the de minimis value threshold created more security vulnerability for CBP, given that the limited customs entries associated with 321 filings were not robust enough. Customs brokers lost revenue because of broader use of the de minimis rule, as those shipments did not require formal customs entry, a process that brokers generally charge a fee for. CBP in its statement touted the safety element of ending the de minimis rule, saying seizures of unsafe and non-compliant low-value goods have increased by 82%, including counterfeits, narcotics, faulty electronics and goods containing hazardous chemicals. “With increased visibility into data for these low-value shipments, we’re better equipped to detect and disrupt criminal networks from smuggling drugs, counterfeits, and other illegal items — making our country safer,” Susan Thomas, acting executive assistant commissioner for CBP’s Office of Trade, said in the statement. The amount collected in duties from shipments once protected under the de minimis provision is a fraction of the overall amount of tariff revenue collected by CBP in 2025. The Trump administration stated in recent court filings that it has collected more than $125 billion in tariffs since the White House announced global tariffs under the International Emergency Economic Powers Act in the spring. But the legality of those tariffs is being challenged before the US Supreme Court, and a ruling against the administration could trigger massive refunds to importers. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

US Customs and Border Protection (CBP) has collected more than $1 billion in duties on low-value imports since the May end of the duty-free de minimis provision. The duties collected were generated from more than 246 million low-cost, US-bound shipments since the Trump administration began phasing out the de minimis provision, also known as Section 321 shipments, earlier this year, CBP said in a statement Wednesday. The US’ de minimis program allowed importers one shipment per day valued at $800 or less to clear customs duty-free and with minimal data elements. “Reaching the $1 billion milestone so quickly shows just how much revenue was slipping away under the old rules,” CBP Commissioner Rodney Scott said in the statement. “With this change, American businesses don’t have to compete with duty-free foreign goods, and CBP has stronger oversight of what comes into our country.” The Trump administration began phasing out the de minimis rule on May 2 on shipments from China and Hong Kong and extended the ban globally on Aug. 29. The value threshold of the de minimis provision was increased from $200 to $800 in 2016, based largely on lobbying from parcel integrators interested in facilitating more frictionless e-commerce cross-border shipments. The higher threshold has been cited as the key driver in the huge growth of those shipments, especially in tandem with CBP’s Type 86 entry program, which allowed de minimis shipments to be cleared faster if moved via intermediaries that partnered with the agency to provide more robust details on the characteristics of the shipments than normal Section 321 entries. Low-cost e-commerce giants such as China-based Shein and Temu have used the higher threshold to grow revenue exponentially during and after the pandemic. Safety element US customs brokers have long argued that raising the de minimis value threshold created more security vulnerability for CBP, given that the limited customs entries associated with 321 filings were not robust enough. Customs brokers lost revenue because of broader use of the de minimis rule, as those shipments did not require formal customs entry, a process that brokers generally charge a fee for. CBP in its statement touted the safety element of ending the de minimis rule, saying seizures of unsafe and non-compliant low-value goods have increased by 82%, including counterfeits, narcotics, faulty electronics and goods containing hazardous chemicals. “With increased visibility into data for these low-value shipments, we’re better equipped to detect and disrupt criminal networks from smuggling drugs, counterfeits, and other illegal items — making our country safer,” Susan Thomas, acting executive assistant commissioner for CBP’s Office of Trade, said in the statement. The amount collected in duties from shipments once protected under the de minimis provision is a fraction of the overall amount of tariff revenue collected by CBP in 2025. The Trump administration stated in recent court filings that it has collected more than $125 billion in tariffs since the White House announced global tariffs under the International Emergency Economic Powers Act in the spring. But the legality of those tariffs is being challenged before the US Supreme Court, and a ruling against the administration could trigger massive refunds to importers. Contact Eric Johnson at eric.johnson@spglobal.com .

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Revenue from low-value shipment duties crosses $1 billion mark: CBP

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