<div class="phx-topic abstract-wrapper">In the quarter ended June 30, Celadon took a 20 percent hit to its bottom line. But Chairman and CEO</div>

In the quarter ended June 30, Celadon took a 20 percent hit to its bottom line. But Chairman and CEO

<div>In the quarter ended June 30, Celadon took a 20 percent hit to its bottom line. But Chairman and CEO Steve Russell maintained the strategy of growth through acquisition puts the long-haul truckload carrier in a position for rapid internal growth when the freight market improves. Net income of $5.1 million in the company's fourth fiscal quarter fell below the $6.4 million from the previous year. Revenue for the quarter, though, was up 4 percent to $131.7 million. Freight revenue, excluding fuel surcharges, was up 5 percent to $112.7 million. The full year ended June 30 was more successful with...

In the quarter ended June 30, Celadon took a 20 percent hit to its bottom line. But Chairman and CEO Steve Russell maintained the strategy of growth through acquisition puts the long-haul truckload carrier in a position for rapid internal growth when the freight market improves. Net income of $5.1 million in the company's fourth fiscal quarter fell below the $6.4 million from the previous year. Revenue for the quarter, though, was up 4 percent to $131.7 million. Freight revenue, excluding fuel surcharges, was up 5 percent to $112.7 million. The full year ended June 30 was more successful with revenue up 5 percent to $502.7 million and net income up 9 percent to $22.3 million. "Despite a more challenging environment during the June 2007 quarter, we continued to execute on our business model of growth through acquisition, diversification of customer base, limiting exposure to any particular customer or industry and managing our overall cost structure," said Russell. While the excess capacity in the truckload market has hurt many companies, Russell sees it as an advantage, lowering the price of acquired assets and improving the outlook for further growth. "Our acquisition of certain assets of Air Road Express in early June added new customers in lanes similar to Celadon's north-south focus," he said.

Trucking News

Celadon Profit Takes a Hit

<div class="phx-topic abstract-wrapper">CEO Jeremy Nixon said the investment, which could be valued at close to $1 billion, is part of ONE’s plan to reach 3 million TEUs in capacity by 2030. </div>

CEO Jeremy Nixon said the investment, which could be valued at close to $1 billion, is part of ONE’s plan to reach 3 million TEUs in capacity by 2030.

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<div class="phx-topic">Ocean Network Express (ONE) has increased its ownership stake in its largest provider of chartered tonnage, becoming the largest external shareholder of Poseidon Corp. in a transaction potentially valued at close to $1 billion. ONE said in a statement Tuesday it signed an agreement to acquire an additional stake in Poseidon, the parent company of Singapore-based container shipowner Seaspan, from existing shareholders. ONE said the purchase brings its stake in Poseidon to 48.9%. ONE did not say how much it paid for the additional stake. But Canadian insurance company Fairfax Financial said separately Tuesday that it sold about half of its stake in Poseidon for $1.91 billion, with half of that stake going to an existing Poseidon shareholder who will increase their ownership stake. The other half of Fairfax’s stake was sold to unidentified strategic investors. ONE CEO Jeremy Nixon said in the statement that the investment in Poseidon is part of the carrier’s plan to reach 3 million TEUs in capacity by 2030. ONE currently has a fleet of 281 ships amounting to 2.2 million TEUs. Of that, Seaspan has chartered some 43 container ships to ONE, amounting to about 417,000 TEUs in capacity. “Since our initial investment in 2023, Seaspan has achieved remarkable growth as the world’s leading tonnage platform,” Nixon said. “We are pleased to acquire this additional stake in Poseidon, which fully aligns with our ONE 2030 strategic growth plan.” <a href="https://www.joc.com/article/strategic-investment-underpins-ones-sustainable-profitability-target-nixon-5241768">Poseidon took a nearly one-third ownership stake in Seaspan in 2023 for $1.4 billion</a>. The group included Fairfax, investor David Sokol, and the Washington family, which originally owned Seaspan. Sokol and the Washington family pooled their existing shares to take Seaspan private that year. <h3>Tight supply-demand balance </h3>Speaking at the Journal of Commerce’s TPM26 conference in Long Beach last week, Nixon said it’s important for ONE to continue investing in new vessels because the global supply and demand balance remains tight. The trans-Pacific market is only expected to see slight growth this year, Nixon said. But north-south trade and intra-regional trades are growing at double-digit rates, keeping further pressure on ship supply. “The charter market is so tight. There are really no ships available,” Nixon said at TPM26. “Carriers have to be thinking all the time four, five, six years ahead.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Ocean Network Express (ONE) has increased its ownership stake in its largest provider of chartered tonnage, becoming the largest external shareholder of Poseidon Corp. in a transaction potentially valued at close to $1 billion. ONE said in a statement Tuesday it signed an agreement to acquire an additional stake in Poseidon, the parent company of Singapore-based container shipowner Seaspan, from existing shareholders. ONE said the purchase brings its stake in Poseidon to 48.9%. ONE did not say how much it paid for the additional stake. But Canadian insurance company Fairfax Financial said separately Tuesday that it sold about half of its stake in Poseidon for $1.91 billion, with half of that stake going to an existing Poseidon shareholder who will increase their ownership stake. The other half of Fairfax’s stake was sold to unidentified strategic investors. ONE CEO Jeremy Nixon said in the statement that the investment in Poseidon is part of the carrier’s plan to reach 3 million TEUs in capacity by 2030. ONE currently has a fleet of 281 ships amounting to 2.2 million TEUs. Of that, Seaspan has chartered some 43 container ships to ONE, amounting to about 417,000 TEUs in capacity. “Since our initial investment in 2023, Seaspan has achieved remarkable growth as the world’s leading tonnage platform,” Nixon said. “We are pleased to acquire this additional stake in Poseidon, which fully aligns with our ONE 2030 strategic growth plan.” Poseidon took a nearly one-third ownership stake in Seaspan in 2023 for $1.4 billion . The group included Fairfax, investor David Sokol, and the Washington family, which originally owned Seaspan. Sokol and the Washington family pooled their existing shares to take Seaspan private that year. Tight supply-demand balance Speaking at the Journal of Commerce’s TPM26 conference in Long Beach last week, Nixon said it’s important for ONE to continue investing in new vessels because the global supply and demand balance remains tight. The trans-Pacific market is only expected to see slight growth this year, Nixon said. But north-south trade and intra-regional trades are growing at double-digit rates, keeping further pressure on ship supply. “The charter market is so tight. There are really no ships available,” Nixon said at TPM26. “Carriers have to be thinking all the time four, five, six years ahead.” Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Trans-Pacific

Container Shipping News

Maritime

ONE boosts ownership stake in Seaspan parent Poseidon

<div class="phx-topic abstract-wrapper">Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.</div>

Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.

<div class="phx-topic">Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. <h3>Containers trapped inside Persian Gulf </h3>The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” <h3>Rates, volatility on the rise </h3>Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. Containers trapped inside Persian Gulf The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Rates, volatility on the rise Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

Asia-Europe

International ports

Waves of diverted containers swamping Middle East ports

<div class="phx-topic abstract-wrapper">Carriers have defended rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating when tonnage and equipment are tied up in the Middle East due to the war. </div>

Carriers have defended rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating when tonnage and equipment are tied up in the Middle East due to the war.

<div class="phx-topic">Indian and Chinese regulatory authorities are warning container lines against price gouging via surcharges tied to the war in the Middle East as ocean carriers levy additional fees in the thousands of dollars. China’s Ministry of Transport (MOT) <a href="https://xxgk.mot.gov.cn/jigou/syj/202603/t20260309_4201600.html">said in a Tuesday statement</a> that it has spoken to representatives of Maersk and Mediterranean Shipping Co. “regarding international shipping operations.” The ministry expressed concerns about the suspension of service from China to the Middle East, along with additional charges and higher rates being sought by carriers, two people familiar with the matter <a href="https://www.ft.com/content/2a6299a3-c25d-4b05-8f4b-9f745173cb1a">told The Financial Times</a>. Due to the war in the Middle East, the Gemini Cooperation of Maersk and Hapag-Lloyd is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services. Carriers have defended the rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating given that port congestion in the Middle East has tied up 2% of total container tonnage and <a href="https://www.joc.com/article/waves-of-diverted-containers-swamping-middle-east-ports-6183989">more than 200,000 TEUs of equipment are trapped</a> in the Persian Gulf. Maersk, for example, has imposed a $200-per-TEU surcharge for shipments from Asia to the Dar es Salaam, Tanzania, while surcharges from other lanes have been upward of $2,400 per TEU for shipments out of some parts of India. MSC on Tuesday announced it was seeking higher rates for shipments from the Far East to Europe, the Mediterranean and North Africa. Effective March 29, MSC, the largest container line by fleet tonnage, is setting freight-all-kinds (FAK) rates from Asia to North Europe at $2,820 per TEU. In October, MSC set FAK rates for the same trade at $1,620 per TEU. Maersk’s APM Terminals and MSC subsidiary Terminal Investments Limited took over the temporary operation of Panama’s Balboa and Christobal ports after Panama Ports Company, a subsidiary of Hoing Kong-listed subsidiary CK Hutchison Holdings had its 28-year concession nullified by Panama’s Supreme Court. <a href="https://www.joc.com/article/hutchison-seeks-2-billion-in-damages-from-panama-after-terminal-deal-canceled-6183273">China has been highly critical</a> of Panama's decision and has previously warned of severe consequences following the action. <h3>Protecting Indian interests </h3>Separately, Indian regulators on Tuesday warned ocean carriers not to engage in “predatory pricing” to the detriment of Indian importers and exporters. The Directorate General of Shipping specifically stressed the need to ensure transparency in freight charges to avoid potential disputes, adding that exporters and importers must know their logistics costs up front. The regulatory intervention follows complaints from shipper groups about carriers levying war risk surcharges, sometimes retroactively, in the range of $2,000 per TEU and $3,000 per FEU for dry boxes and up to $4,000 per refrigerated container. Sunil Vaswani, executive director of the CSLA, said carriers serving the India-Middle East trade imposed the surcharges to offset additional operating costs driven by the sudden closure of the Strait of Hormuz. “Despite the challenges, container lines are making every effort to assist the trade,” Vaswani explained. The subject of carrier surcharges and ancillary fees in container supply chains has been contentious for decades. And foreign carriers that typically enjoy a capacity fiefdom in the market <a href="https://www.joc.com/article/indias-surcharge-review-threatens-to-squeeze-container-lines-5207313">had resisted previous efforts by Indian logistics policymakers</a> to create a regulated pricing environment, with terminal handling charges at the heart of that acrimonious debate. The warnings from regulators echo <a href="https://www.joc.com/article/chinese-shipping-regulators-flex-muscles-to-protect-exporters-5197047">similar statements made by China’s MOT in September 2020</a>, when a pandemic-driven surge of imports from Asia soaked up all available outbound vessel space and sent container spot rates soaring. At the time, the ministry urged carriers to add capacity to trans-Pacific routes and refrain from aggressive rate hikes. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a> and Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Indian and Chinese regulatory authorities are warning container lines against price gouging via surcharges tied to the war in the Middle East as ocean carriers levy additional fees in the thousands of dollars. China’s Ministry of Transport (MOT) said in a Tuesday statement that it has spoken to representatives of Maersk and Mediterranean Shipping Co. “regarding international shipping operations.” The ministry expressed concerns about the suspension of service from China to the Middle East, along with additional charges and higher rates being sought by carriers, two people familiar with the matter told The Financial Times. Due to the war in the Middle East, the Gemini Cooperation of Maersk and Hapag-Lloyd is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services. Carriers have defended the rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating given that port congestion in the Middle East has tied up 2% of total container tonnage and more than 200,000 TEUs of equipment are trapped in the Persian Gulf. Maersk, for example, has imposed a $200-per-TEU surcharge for shipments from Asia to the Dar es Salaam, Tanzania, while surcharges from other lanes have been upward of $2,400 per TEU for shipments out of some parts of India. MSC on Tuesday announced it was seeking higher rates for shipments from the Far East to Europe, the Mediterranean and North Africa. Effective March 29, MSC, the largest container line by fleet tonnage, is setting freight-all-kinds (FAK) rates from Asia to North Europe at $2,820 per TEU. In October, MSC set FAK rates for the same trade at $1,620 per TEU. Maersk’s APM Terminals and MSC subsidiary Terminal Investments Limited took over the temporary operation of Panama’s Balboa and Christobal ports after Panama Ports Company, a subsidiary of Hoing Kong-listed subsidiary CK Hutchison Holdings had its 28-year concession nullified by Panama’s Supreme Court. China has been highly critical of Panama's decision and has previously warned of severe consequences following the action. Protecting Indian interests Separately, Indian regulators on Tuesday warned ocean carriers not to engage in “predatory pricing” to the detriment of Indian importers and exporters. The Directorate General of Shipping specifically stressed the need to ensure transparency in freight charges to avoid potential disputes, adding that exporters and importers must know their logistics costs up front. The regulatory intervention follows complaints from shipper groups about carriers levying war risk surcharges, sometimes retroactively, in the range of $2,000 per TEU and $3,000 per FEU for dry boxes and up to $4,000 per refrigerated container. Sunil Vaswani, executive director of the CSLA, said carriers serving the India-Middle East trade imposed the surcharges to offset additional operating costs driven by the sudden closure of the Strait of Hormuz. “Despite the challenges, container lines are making every effort to assist the trade,” Vaswani explained. The subject of carrier surcharges and ancillary fees in container supply chains has been contentious for decades. And foreign carriers that typically enjoy a capacity fiefdom in the market had resisted previous efforts by Indian logistics policymakers to create a regulated pricing environment, with terminal handling charges at the heart of that acrimonious debate. The warnings from regulators echo similar statements made by China’s MOT in September 2020 , when a pandemic-driven surge of imports from Asia soaked up all available outbound vessel space and sent container spot rates soaring. At the time, the ministry urged carriers to add capacity to trans-Pacific routes and refrain from aggressive rate hikes. Contact Mark Szakonyi at mark.szakonyi@spglobal.com and Bency Mathew at  bencyvmathew@gmail.com .

China, India warn carriers on higher pricing tied to Middle East conflict

<div class="phx-topic abstract-wrapper">Port stakeholders in Los Angeles acknowledge that redecking the Vincent Thomas Bridge will impact traffic over the next two years, but they say longer truck gates and a real-time communication system will minimize disruptions.</div>

Port stakeholders in Los Angeles acknowledge that redecking the Vincent Thomas Bridge will impact traffic over the next two years, but they say longer truck gates and a real-time communication system will minimize disruptions.

<div class="phx-topic">Long Beach, California — Port and marine terminal executives say they have a plan to minimize disruption during the two-year redecking of a key bridge at the entry of the Los Angeles harbor that includes keeping truck gates open longer and on weekends. The California Department of Transportation (Caltrans) <a href="https://www.joc.com/article/redecking-project-on-los-angeles-harbor-bridge-to-begin-in-early-2026-6105309">will close the 63-year-old Vincent Thomas Bridge</a>, which handles about 53,000 vehicles a day, including 3,400 heavy-duty trucks, in one direction from March 23 to Nov. 1, followed by a complete closure through November 2028. “I’ll be very clear on this one: we will do what it takes to keep the trucks moving,” Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said during the Journal of Commerce’s TPM26 conference last week. In addition to extra truck gates, port stakeholders in Los Angeles have been working with Caltrans for two years <a href="https://www.joc.com/article/la-port-stakeholders-warming-to-plan-to-mitigate-impact-of-bridge-project-6013847">to develop and improve a detour route</a> of surface streets that connect with major Southern California freeways. Local police agencies will provide continuous traffic control to respond to accidents and other events that disrupt traffic flow. A system of more than 40 Caltrans cameras — and more than 700 cameras throughout the ports’ six container terminals — will provide real-time information on traffic conditions, enabling terminal operators to respond immediately to delays, according to Port of Los Angeles Executive Director Gene Seroka. “We know that one trucker who has a problem — is delayed, misses an appointment — is a problem,” Seroka said. With 6,000 to 8,000 trucks operating in the harbor every day, an open line of communication among Caltrans, terminals and truckers will be crucial to ensuring minor disruptions don’t turn into prolonged congestion, said Matt Schrap, chief commercial officer of Forum Mobility and former CEO of the Harbor Trucking Association (HTA). “I don’t think there’s anyone in our industry who really knows exactly what’s going to happen, but we’re going to react appropriately,” Schrap told TPM26. The HTA must now impress upon ocean carriers the need for additional free time for container storage at the terminals if traffic disruptions related to the $1.5 billion redecking project delay pickups, he added. In the meantime, the port will continue to push its proposal to construct a new, taller bridge that would allow super-post Panamax vessels to call the Yusen Terminals, TraPac and West Basin terminals, Seroka said. “I want to make sure the 40% of our port’s capacity north of the bridge doesn’t go into obsolescence,” Seroka said. If the project moves forward, Caltrans will “help support it as much as we can,” Osama Megalla, assistant division chief-program/project manager and principal engineer for Caltrans District 7, said during the conference. “We’ll provide our expertise and oversight to make sure that the consultants are doing what they’re supposed to do, and construction is going well,” he said. Contact Bill Mongelluzzo at <a href="mailto: bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Long Beach, California — Port and marine terminal executives say they have a plan to minimize disruption during the two-year redecking of a key bridge at the entry of the Los Angeles harbor that includes keeping truck gates open longer and on weekends. The California Department of Transportation (Caltrans) will close the 63-year-old Vincent Thomas Bridge , which handles about 53,000 vehicles a day, including 3,400 heavy-duty trucks, in one direction from March 23 to Nov. 1, followed by a complete closure through November 2028. “I’ll be very clear on this one: we will do what it takes to keep the trucks moving,” Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said during the Journal of Commerce’s TPM26 conference last week. In addition to extra truck gates, port stakeholders in Los Angeles have been working with Caltrans for two years to develop and improve a detour route of surface streets that connect with major Southern California freeways. Local police agencies will provide continuous traffic control to respond to accidents and other events that disrupt traffic flow. A system of more than 40 Caltrans cameras — and more than 700 cameras throughout the ports’ six container terminals — will provide real-time information on traffic conditions, enabling terminal operators to respond immediately to delays, according to Port of Los Angeles Executive Director Gene Seroka. “We know that one trucker who has a problem — is delayed, misses an appointment — is a problem,” Seroka said. With 6,000 to 8,000 trucks operating in the harbor every day, an open line of communication among Caltrans, terminals and truckers will be crucial to ensuring minor disruptions don’t turn into prolonged congestion, said Matt Schrap, chief commercial officer of Forum Mobility and former CEO of the Harbor Trucking Association (HTA). “I don’t think there’s anyone in our industry who really knows exactly what’s going to happen, but we’re going to react appropriately,” Schrap told TPM26. The HTA must now impress upon ocean carriers the need for additional free time for container storage at the terminals if traffic disruptions related to the $1.5 billion redecking project delay pickups, he added. In the meantime, the port will continue to push its proposal to construct a new, taller bridge that would allow super-post Panamax vessels to call the Yusen Terminals, TraPac and West Basin terminals, Seroka said. “I want to make sure the 40% of our port’s capacity north of the bridge doesn’t go into obsolescence,” Seroka said. If the project moves forward, Caltrans will “help support it as much as we can,” Osama Megalla, assistant division chief-program/project manager and principal engineer for Caltrans District 7, said during the conference. “We’ll provide our expertise and oversight to make sure that the consultants are doing what they’re supposed to do, and construction is going well,” he said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Port infrastructure

North American ports

LA terminals to extend gates to mitigate disruption during bridge closure

<div class="phx-topic abstract-wrapper">A proposed universal tax on foreign-built ships would strain trade relations, raise the cost of doing business and stoke inflation, writes Reason Foundation policy analyst Jay Derr. </div>

A proposed universal tax on foreign-built ships would strain trade relations, raise the cost of doing business and stoke inflation, writes Reason Foundation policy analyst Jay Derr.

<div class="phx-topic">A new proposal from the Trump administration would impose a universal fee on foreign-built vessels entering US ports, adding another layer of cost to international trade at a time when the supply chain is already fragile. Yet the United States already imposes the Harbor Maintenance Tax (HMT) on incoming vessels, regardless of where they are built. This double taxation would harm already-strained relations with our trading partners by raising the cost of doing business in the country. Everyday Americans would ultimately bear these additional costs in the form of higher-priced goods. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6183829_0.1.png"></img></div>This idea is a perversion of a tonnage fee, initially proposed by the Clinton administration in 1999 as a remedy for longstanding problems with the HMT. But the Trump administration proposal does not aim to fix the problems with the HMT. Rather, the problems with the proposed universal fee on foreign vessels mirror those associated with the HMT. The HMT, when first implemented, was an ad valorem tax levied on all vessels, regardless of whether they were importing or exporting goods into the United States. However, the US Constitution flatly states that exports cannot be taxed in Article I, Section 9, Clause 5. As such, the Supreme Court ruled that the HMT could not be applied to exports. This shifted the financial burden for America’s port and navigability projects squarely onto importers’ shoulders. However, the Supreme Court did not rule out the implementation of a user fee, which is distinct from a tax. The test of a user fee was outlined in another Supreme Court case, Evansville Airport v. Delta Airlines. For a levied fee to be considered a user fee rather than a tax, it must pass what is now called the Evansville Test: it must not discriminate against interstate commerce, must be based on a fair approximation of use and must not be excessive. Congress never passed legislation to convert the harbor maintenance tax into a user fee, so the HMT remains an ad valorem tax that cannot be levied on exporters, giving exporters cheaper access to US port infrastructure compared with importers. The Trump administration says of its proposed universal tax: “As foreign-built vessels benefit from US market access, this policy ensures that they contribute to the long-term revitalization of America’s maritime capabilities.” This isn’t wrong in principle. Those who benefit from infrastructure ought to contribute to its maintenance. But those foreign vessels targeted by the administration’s fee already help fund maritime infrastructure through their HMT payments. Instead of this double taxation, the Trump administration should reform the HMT, which could be changed to a harbor maintenance fee. The new fee should be based on tonnage, not on whether the freight is on- or off-loaded, and be applied to the net or gross tonnage of the vessel, depending on the type of vessel. The weight of the cargo being moved on and off a ship has no bearing on the maintenance needs of the harbor itself, but the tonnage and capacity of the ship do. Net and gross tonnage serve as better proxies for the actual costs of services rendered during a port call and account for the vessel’s draft and the dredging depth required. These changes alone would allow a proposed harbor maintenance fee to pass the Evansville Test and satisfy the legal requirements for a fee. If enacted, exporters would once again pay to support the infrastructure they use, regardless of the vessel’s country of origin. The upcoming biennial Water Resources Development Act offers Congress an opportunity to reform the existing HMT into a proper user fee levied on both exports and imports. The best step to improve American maritime infrastructure is to modernize and reform the existing HMT, not to layer more poorly targeted taxes on top of it. Congress and the Trump administration should pursue solutions that expand maritime capacity without raising the cost of moving goods through American ports. Jay Derr is a transportation policy analyst at the Reason Foundation and author of the report, “Navigating port funding: Alternatives for reforming the Harbor Maintenance Trust Fund.” Contact him at <a href="mailto:jay.derr@reason.org">jay.derr@reason.org</a>. </div>

A new proposal from the Trump administration would impose a universal fee on foreign-built vessels entering US ports, adding another layer of cost to international trade at a time when the supply chain is already fragile. Yet the United States already imposes the Harbor Maintenance Tax (HMT) on incoming vessels, regardless of where they are built. This double taxation would harm already-strained relations with our trading partners by raising the cost of doing business in the country. Everyday Americans would ultimately bear these additional costs in the form of higher-priced goods. This idea is a perversion of a tonnage fee, initially proposed by the Clinton administration in 1999 as a remedy for longstanding problems with the HMT. But the Trump administration proposal does not aim to fix the problems with the HMT. Rather, the problems with the proposed universal fee on foreign vessels mirror those associated with the HMT. The HMT, when first implemented, was an ad valorem tax levied on all vessels, regardless of whether they were importing or exporting goods into the United States. However, the US Constitution flatly states that exports cannot be taxed in Article I, Section 9, Clause 5. As such, the Supreme Court ruled that the HMT could not be applied to exports. This shifted the financial burden for America’s port and navigability projects squarely onto importers’ shoulders. However, the Supreme Court did not rule out the implementation of a user fee, which is distinct from a tax. The test of a user fee was outlined in another Supreme Court case, Evansville Airport v. Delta Airlines. For a levied fee to be considered a user fee rather than a tax, it must pass what is now called the Evansville Test: it must not discriminate against interstate commerce, must be based on a fair approximation of use and must not be excessive. Congress never passed legislation to convert the harbor maintenance tax into a user fee, so the HMT remains an ad valorem tax that cannot be levied on exporters, giving exporters cheaper access to US port infrastructure compared with importers. The Trump administration says of its proposed universal tax: “As foreign-built vessels benefit from US market access, this policy ensures that they contribute to the long-term revitalization of America’s maritime capabilities.” This isn’t wrong in principle. Those who benefit from infrastructure ought to contribute to its maintenance. But those foreign vessels targeted by the administration’s fee already help fund maritime infrastructure through their HMT payments. Instead of this double taxation, the Trump administration should reform the HMT, which could be changed to a harbor maintenance fee. The new fee should be based on tonnage, not on whether the freight is on- or off-loaded, and be applied to the net or gross tonnage of the vessel, depending on the type of vessel. The weight of the cargo being moved on and off a ship has no bearing on the maintenance needs of the harbor itself, but the tonnage and capacity of the ship do. Net and gross tonnage serve as better proxies for the actual costs of services rendered during a port call and account for the vessel’s draft and the dredging depth required. These changes alone would allow a proposed harbor maintenance fee to pass the Evansville Test and satisfy the legal requirements for a fee. If enacted, exporters would once again pay to support the infrastructure they use, regardless of the vessel’s country of origin. The upcoming biennial Water Resources Development Act offers Congress an opportunity to reform the existing HMT into a proper user fee levied on both exports and imports. The best step to improve American maritime infrastructure is to modernize and reform the existing HMT, not to layer more poorly targeted taxes on top of it. Congress and the Trump administration should pursue solutions that expand maritime capacity without raising the cost of moving goods through American ports. Jay Derr is a transportation policy analyst at the Reason Foundation and author of the report, “Navigating port funding: Alternatives for reforming the Harbor Maintenance Trust Fund.” Contact him at jay.derr@reason.org .

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Reform HMT rather than taxing shipping more: analyst

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

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