<div class="phx-topic abstract-wrapper">The March PMI at 55.2 indicates that both the overall economy and the manufacturing sector are growi</div>

The March PMI at 55.2 indicates that both the overall economy and the manufacturing sector are growi

<div>The March PMI at 55.2 indicates that both the overall economy and the manufacturing sector are growing. However, a decline of 1.5 percentage points indicates some slowing in the manufacturing sector, according to a report released today from the Institute for Supply Management.New orders, production and employment are expanding, but deliveries are slowing as prices increase. "The manufacturing sector, led by continued strength in new orders and production, continued to grow in March," said Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee. "The first quarter is now complete, and the ISM data indicates that it was...

The March PMI at 55.2 indicates that both the overall economy and the manufacturing sector are growing. However, a decline of 1.5 percentage points indicates some slowing in the manufacturing sector, according to a report released today from the Institute for Supply Management. New orders, production and employment are expanding, but deliveries are slowing as prices increase. "The manufacturing sector, led by continued strength in new orders and production, continued to grow in March," said Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee. "The first quarter is now complete, and the ISM data indicates that it was a good quarter for U.S. manufacturing. Prices are still a major concern, particularly in the energy and metals markets. In general, manufacturing continues to experience a significant level of growth." Production picked up the pace of growth from a PMI of 57.4 in February to 57.5 in March, but other components of the survey showed softness. New orders grew but at a level 3.5 percentage points lower than a month earlier. Employment grew 2.5 percentage points slower than in February. Supplier deliveries to manufacturing organizations was slower for the 33rd consecutive month in March. ISM's Supplier Deliveries Index for March registered 53.1 percent, an increase of 0.9 percentage point when compared to February's seasonally adjusted reading of 52.2 percent. A reading above 50 percent indicates slower deliveries. Manufacturers' inventories declined in March for the 12th consecutive month, registering a PMI of 48.7, a faster rate than February's 49.6 percent. Customers' Inventories were at 48 percent, 0.5 percentage point lower than the 48.5 percent reported in February. Managers who responded to the survey believe their customers do not have sufficient inventories on hand.

Transport, Trade and Regulation News

PMI Shows Slowing Growth

<div class="phx-topic abstract-wrapper">Shippers stand to benefit on lanes where both western US railroads are vying for market share. </div>

Shippers stand to benefit on lanes where both western US railroads are vying for market share.

Feature image

<div class="phx-topic">Western US railroads BNSF Railway and Union Pacific Railroad are adding new intermodal services and expanding capacity in key domestic corridors as part of a broader effort to capture freight that might otherwise move on trucks. UP on Thursday announced an expedited intermodal service between Southern California’s Inland Empire and its Global 2 terminal in Chicago, set to begin Sept. 3. The train will operate five days per week and is designed to be 20% faster than existing lanes in a bid to attract time-sensitive freight now moving over the road, UP said. The announcement followed the formal opening of Union Pacific’s new intermodal terminal in Kansas City, which held a ribbon-cutting ceremony on Wednesday. The facility began operating in mid-July and now handles both international and domestic trains from Southern California. UP has introduced several other services in recent months, including a second train between Seattle and Chicago that began operating July 26 and a train linking Memphis and Dallas that launched in the spring. “We're committed to capturing the over-the-road traffic and see it as a long-term growth engine for us,” Kenny Rocker, UP’s vice president of marketing and sales, told the Journal of Commerce. “You've seen the commitment to our intermodal business at a broad level with these investments.” BNSF, meanwhile, has also expanded its service offerings, introducing a new international intermodal lane linking Salt Lake City with ports in Northern and Southern California. Its 43-acre terminal in Salt Lake City opened July 31 after six months of development and is intended to serve importers and exporters seeking alternatives to long-haul drayage. “Our Salt Lake City service boosts competition, it speaks to our growth mindset and strengthens Utah’s role in the global supply chain,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “It’s part of our shared vision of a more connected, sustainable, cost-efficient future for moving freight.” BNSF also launched an expedited train on July 10 between Los Angeles and Houston and is exploring further expansion. While Union Pacific seeks <a href="https://www.joc.com/article/up-looks-to-create-first-coast-to-coast-railroad-with-85-billion-ns-deal-6052288">regulatory approval</a> to acquire Norfolk Southern Railway, rival BNSF is working to strengthen its partnership with CSX Transportation. BNSF and CSX already operate expedited services from Southern California to Georgia, New Jersey and Ohio. While there are crew changes, there’s no work involved loading or unloading boxes, meaning the services operate largely like a single-line railroad. <h3>Competition gives shippers more options </h3>Shippers, meanwhile, stand to benefit on lanes where both railroads are vying for market share. BNSF has long held a transit-time advantage from Los Angeles to Chicago, Los Angeles to Kansas City and Seattle to Chicago; UP aims to close those gaps with its new service offerings. Conversely, BNSF is targeting corridors like Los Angeles to Houston, where UP currently has faster service. Each must convince shippers who are already committed to intermodal why their railroad is the best option. UP has targeted cost-sensitive shippers in Kansas City by shifting origin points away from Long Beach. The new Los Angeles-to-Kansas City train departs from City of Industry, avoiding the Alameda Corridor surcharges — $62 per TEU and $81 per domestic container — that made UP’s pricing less competitive in prior years. The new Los Angeles-to-Chicago service will originate in the Inland Empire, located within Southern California’s densest concentration of warehouses. While BNSF already serves the Inland Empire via its San Bernardino terminal, UP’s expansion gives shippers in the region another option for direct service to the Midwest. The Memphis-to-Dallas train is designed in part to support eastern railroads looking to move freight from the Northeast to Dallas via Memphis, and to reposition empty containers in Memphis heading to Mexico. UP said most laden cargo will not originate in Memphis, and most empty containers will travel beyond Dallas. Meanwhile, BNSF wants not only to close the transit time gap to Houston, but also to the US Southeast where an existing UP-NS joint service over the Meridian Speedway is the fastest option to cities like Atlanta, Charlotte and Jacksonville. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Western US railroads BNSF Railway and Union Pacific Railroad are adding new intermodal services and expanding capacity in key domestic corridors as part of a broader effort to capture freight that might otherwise move on trucks. UP on Thursday announced an expedited intermodal service between Southern California’s Inland Empire and its Global 2 terminal in Chicago, set to begin Sept. 3. The train will operate five days per week and is designed to be 20% faster than existing lanes in a bid to attract time-sensitive freight now moving over the road, UP said. The announcement followed the formal opening of Union Pacific’s new intermodal terminal in Kansas City, which held a ribbon-cutting ceremony on Wednesday. The facility began operating in mid-July and now handles both international and domestic trains from Southern California. UP has introduced several other services in recent months, including a second train between Seattle and Chicago that began operating July 26 and a train linking Memphis and Dallas that launched in the spring. “We're committed to capturing the over-the-road traffic and see it as a long-term growth engine for us,” Kenny Rocker, UP’s vice president of marketing and sales, told the Journal of Commerce. “You've seen the commitment to our intermodal business at a broad level with these investments.” BNSF, meanwhile, has also expanded its service offerings, introducing a new international intermodal lane linking Salt Lake City with ports in Northern and Southern California. Its 43-acre terminal in Salt Lake City opened July 31 after six months of development and is intended to serve importers and exporters seeking alternatives to long-haul drayage. “Our Salt Lake City service boosts competition, it speaks to our growth mindset and strengthens Utah’s role in the global supply chain,” Jon Gabriel, BNSF’s group vice president of consumer products, told the Journal of Commerce. “It’s part of our shared vision of a more connected, sustainable, cost-efficient future for moving freight.” BNSF also launched an expedited train on July 10 between Los Angeles and Houston and is exploring further expansion. While Union Pacific seeks regulatory approval to acquire Norfolk Southern Railway, rival BNSF is working to strengthen its partnership with CSX Transportation. BNSF and CSX already operate expedited services from Southern California to Georgia, New Jersey and Ohio. While there are crew changes, there’s no work involved loading or unloading boxes, meaning the services operate largely like a single-line railroad. Competition gives shippers more options Shippers, meanwhile, stand to benefit on lanes where both railroads are vying for market share. BNSF has long held a transit-time advantage from Los Angeles to Chicago, Los Angeles to Kansas City and Seattle to Chicago; UP aims to close those gaps with its new service offerings. Conversely, BNSF is targeting corridors like Los Angeles to Houston, where UP currently has faster service. Each must convince shippers who are already committed to intermodal why their railroad is the best option. UP has targeted cost-sensitive shippers in Kansas City by shifting origin points away from Long Beach. The new Los Angeles-to-Kansas City train departs from City of Industry, avoiding the Alameda Corridor surcharges — $62 per TEU and $81 per domestic container — that made UP’s pricing less competitive in prior years. The new Los Angeles-to-Chicago service will originate in the Inland Empire, located within Southern California’s densest concentration of warehouses. While BNSF already serves the Inland Empire via its San Bernardino terminal, UP’s expansion gives shippers in the region another option for direct service to the Midwest. The Memphis-to-Dallas train is designed in part to support eastern railroads looking to move freight from the Northeast to Dallas via Memphis, and to reposition empty containers in Memphis heading to Mexico. UP said most laden cargo will not originate in Memphis, and most empty containers will travel beyond Dallas. Meanwhile, BNSF wants not only to close the transit time gap to Houston, but also to the US Southeast where an existing UP-NS joint service over the Meridian Speedway is the fastest option to cities like Atlanta, Charlotte and Jacksonville. Contact Ari Ashe at ari.ashe@spglobal.com

Rail News

Intermodal providers

New and faster intermodal services put BNSF, UP on hunt for truck freight

<div class="phx-topic abstract-wrapper">Globalization is accelerating on the back of the commercial success of Chinese companies that are taking market share on the global stage, according to the Maersk CEO. </div>

Globalization is accelerating on the back of the commercial success of Chinese companies that are taking market share on the global stage, according to the Maersk CEO.

<div class="phx-topic">The rapid expansion of Chinese brands across a range of industrial and consumer verticals is changing the fabric of global trade and shaping up as a new driver of demand for container shipping, according to Maersk CEO Vincent Clerc. Clerc told analysts during a first-half earnings call Thursday that up until 2021, demand was mostly in line with consumption and anything that could be offshored by Western businesses “was already being offshored.” “Now we're seeing a different phase...China gaining market share on the world stage, not by producing stuff for Western companies, but by having its own companies going global,” Clerc said, pointing to electric vehicles, solar panels, wind turbines, chemicals, mobile phones and electronics. “I think the fabric of global trade is changing,” he added. “If you just look at the numbers, what we've seen in the last two and a half years is an acceleration of globalization on the back of huge commercial success from Chinese companies that are taking market share on the global stage.” Maersk certainly saw a decoupling from the North American market in its first-half demand where the contraction in US imports was more than offset by strong growth in imports into Europe, Latin America, Western and Central Asia, and Africa. <h3>‘Sluggish US market’ </h3>Trans-Pacific demand will be further influenced by sweeping new tariffs from the US that took effect Thursday, with taxes on most of its trading partners ranging from 10% to 50%. Clerc said there would be “a continued, sluggish US market” for the rest of the year, with China remaining the engine behind stronger demand growth. “The question is whether we are in a process of rebalancing global trade, where the US basically goes a certain way with a tariff regime and China continues to gain market share,” he said. “If they (China) do that on the back of the industrial successes that they're having, this could carry stronger market growth than anticipated for a few years.” While Clerc said the expansion of Chinese brands around the world was creating long-term demand, it could run into protectionism issues in various sectors if a country or a trading bloc’s industrial base felt threatened. “But what I know is that as long as the market works the way that the market works, there is a new driver in container demand that is adding a lot of upside potential to what we're doing, which is moving those goods,” he said. “And this is not something that is well-factored in the scenario models going forward.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The rapid expansion of Chinese brands across a range of industrial and consumer verticals is changing the fabric of global trade and shaping up as a new driver of demand for container shipping, according to Maersk CEO Vincent Clerc. Clerc told analysts during a first-half earnings call Thursday that up until 2021, demand was mostly in line with consumption and anything that could be offshored by Western businesses “was already being offshored.” “Now we're seeing a different phase...China gaining market share on the world stage, not by producing stuff for Western companies, but by having its own companies going global,” Clerc said, pointing to electric vehicles, solar panels, wind turbines, chemicals, mobile phones and electronics. “I think the fabric of global trade is changing,” he added. “If you just look at the numbers, what we've seen in the last two and a half years is an acceleration of globalization on the back of huge commercial success from Chinese companies that are taking market share on the global stage.” Maersk certainly saw a decoupling from the North American market in its first-half demand where the contraction in US imports was more than offset by strong growth in imports into Europe, Latin America, Western and Central Asia, and Africa. ‘Sluggish US market’ Trans-Pacific demand will be further influenced by sweeping new tariffs from the US that took effect Thursday, with taxes on most of its trading partners ranging from 10% to 50%. Clerc said there would be “a continued, sluggish US market” for the rest of the year, with China remaining the engine behind stronger demand growth. “The question is whether we are in a process of rebalancing global trade, where the US basically goes a certain way with a tariff regime and China continues to gain market share,” he said. “If they (China) do that on the back of the industrial successes that they're having, this could carry stronger market growth than anticipated for a few years.” While Clerc said the expansion of Chinese brands around the world was creating long-term demand, it could run into protectionism issues in various sectors if a country or a trading bloc’s industrial base felt threatened. “But what I know is that as long as the market works the way that the market works, there is a new driver in container demand that is adding a lot of upside potential to what we're doing, which is moving those goods,” he said. “And this is not something that is well-factored in the scenario models going forward.” Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

Container Shipping News

Trans-Pacific

Container lines

Chinese brand expansion changing ‘fabric’ of global trade: Clerc

<div class="phx-topic abstract-wrapper">Vincent Clerc said while the solid on-time performance levels had to be maintained before any commercial discussions would be held with customers, the time was coming. </div>

Vincent Clerc said while the solid on-time performance levels had to be maintained before any commercial discussions would be held with customers, the time was coming.

<div class="phx-topic">Rate premiums could be in the cards for Gemini Cooperation customers after partners Maersk and Hapag-Lloyd delivered on their target of 90%-plus schedule reliability in the first half of the year, Maersk CEO Vincent Clerc said Thursday. The Maersk executive was in a confident mood when he addressed analysts during a first-half earnings call, noting that in the five months since the first Gemini service was phased in, the reliability has been above 90%. “Any skeptics there might have been in the market about our ability to deliver the 90% schedule reliability are gone,” Clerc said. “But now we need to sustain this for a while, and then we need to move towards a more commercial discussion. I don't think customers have experienced this long enough that they're ready to entertain such a discussion, but it is something that is going to come.” Data from eeSea shows that Gemini Cooperation was leading reliability among the carrier alliances up to July, but its overall on-time performance recorded by the ocean visibility provider was 84%. Gemini’s best performance was on the Europe-North America trade, where it maintained above 90% reliability throughout June and July. The new Gemini networks, which were fully phased in by June, helped drive up Maersk’s second-quarter volume by 4.2% year over year to 3.2 million FEUs, which was also a 10% improvement on the first quarter. “Gemini does not increase the size of the fleet, but it increases the amount of capacity that we can offer every week, and that's the big part of the business case,” Clerc said. “That way we lower the unit cost by being able to load more volumes on the same size of fleet.” The increase in volume offset a 6.9% year-over-year drop in average freight rates to $2,259/FEU in the second quarter and a 9.6% decline in rates sequentially. That helped Maersk revenue in the second quarter grow 2.8% year over year to just over $13 billion, with growth reported in all the carrier’s business segments. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="008a8e1d-fe3e-4f4f-b8ad-0d13591dc98f"></dynamic-object></div>Ocean revenue increased 2.4% year over year to $8.6 billion, lifted by higher volumes and higher revenue from demurrage and detention. Logistics and services revenue was up 1% at $3.7 billion while terminals revenue in the second quarter of $1.3 billion was an increase of 20%, driven by higher volume, higher tariffs and higher storage revenue. Earnings before interest, taxes, amortization and depreciation (EBITDA) rose 8% to $2.3 billion in Q2, while EBIT declined 12% to $845 million, which the carrier attributed to “lower gains on sale of assets and higher depreciation linked to capacity increases.” After tax net profit fell 23% year over year in the second quarter to $639 million. For the first half, revenue increased 5% to $26.5 billion, EBITDA increased 34% to $5 billion and EBIT almost doubled to $2.1 billion. H1 after tax net profit of $1.8 billion was up 77% year over year. <h3>Full-year profit forecast raised </h3>The strong first half prompted Maersk to raise its full-year 2025 financial guidance, with EBITDA now expected to be between $8 billion and $9.5 billion, up from the previous forecast of $6 billion to $9 billion. The increased profit expectation is based on a boost in the carrier’s global container volume growth forecast, which has been raised to between 2% and 4%, up from a previous forecast of between minus 1% to 4%, with the improved demand coming from outside North America. Still, Clerc said achieving the upper range of the full-year outlook was heavily dependent on how the fourth quarter played out. “In the volume guidance, the 2% to 4% assumes a continued, sluggish US market for the rest of the year, but the question is how long will the strength of exports from China to the rest of the world continue,” he told analysts. Clerc said the average spot rate at the end of Q2 was 37% higher than at the end of Q1, and as long as the supporting rate environment held, the carrier’s profitability would continue. “If we suddenly see a sharp deceleration following the normal peak, or a bit of weakness from China to the rest of the world, then you could see more of an adjustment during the fourth quarter of spot rates,” he said. “Leading into contracts, that would not necessarily be great news.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Rate premiums could be in the cards for Gemini Cooperation customers after partners Maersk and Hapag-Lloyd delivered on their target of 90%-plus schedule reliability in the first half of the year, Maersk CEO Vincent Clerc said Thursday. The Maersk executive was in a confident mood when he addressed analysts during a first-half earnings call, noting that in the five months since the first Gemini service was phased in, the reliability has been above 90%. “Any skeptics there might have been in the market about our ability to deliver the 90% schedule reliability are gone,” Clerc said. “But now we need to sustain this for a while, and then we need to move towards a more commercial discussion. I don't think customers have experienced this long enough that they're ready to entertain such a discussion, but it is something that is going to come.” Data from eeSea shows that Gemini Cooperation was leading reliability among the carrier alliances up to July, but its overall on-time performance recorded by the ocean visibility provider was 84%. Gemini’s best performance was on the Europe-North America trade, where it maintained above 90% reliability throughout June and July. The new Gemini networks, which were fully phased in by June, helped drive up Maersk’s second-quarter volume by 4.2% year over year to 3.2 million FEUs, which was also a 10% improvement on the first quarter. “Gemini does not increase the size of the fleet, but it increases the amount of capacity that we can offer every week, and that's the big part of the business case,” Clerc said. “That way we lower the unit cost by being able to load more volumes on the same size of fleet.” The increase in volume offset a 6.9% year-over-year drop in average freight rates to $2,259/FEU in the second quarter and a 9.6% decline in rates sequentially. That helped Maersk revenue in the second quarter grow 2.8% year over year to just over $13 billion, with growth reported in all the carrier’s business segments. Ocean revenue increased 2.4% year over year to $8.6 billion, lifted by higher volumes and higher revenue from demurrage and detention. Logistics and services revenue was up 1% at $3.7 billion while terminals revenue in the second quarter of $1.3 billion was an increase of 20%, driven by higher volume, higher tariffs and higher storage revenue. Earnings before interest, taxes, amortization and depreciation (EBITDA) rose 8% to $2.3 billion in Q2, while EBIT declined 12% to $845 million, which the carrier attributed to “lower gains on sale of assets and higher depreciation linked to capacity increases.” After tax net profit fell 23% year over year in the second quarter to $639 million. For the first half, revenue increased 5% to $26.5 billion, EBITDA increased 34% to $5 billion and EBIT almost doubled to $2.1 billion. H1 after tax net profit of $1.8 billion was up 77% year over year. Full-year profit forecast raised The strong first half prompted Maersk to raise its full-year 2025 financial guidance, with EBITDA now expected to be between $8 billion and $9.5 billion, up from the previous forecast of $6 billion to $9 billion. The increased profit expectation is based on a boost in the carrier’s global container volume growth forecast, which has been raised to between 2% and 4%, up from a previous forecast of between minus 1% to 4%, with the improved demand coming from outside North America. Still, Clerc said achieving the upper range of the full-year outlook was heavily dependent on how the fourth quarter played out. “In the volume guidance, the 2% to 4% assumes a continued, sluggish US market for the rest of the year, but the question is how long will the strength of exports from China to the rest of the world continue,” he told analysts. Clerc said the average spot rate at the end of Q2 was 37% higher than at the end of Q1, and as long as the supporting rate environment held, the carrier’s profitability would continue. “If we suddenly see a sharp deceleration following the normal peak, or a bit of weakness from China to the rest of the world, then you could see more of an adjustment during the fourth quarter of spot rates,” he said. “Leading into contracts, that would not necessarily be great news.” Contact Greg Knowler at greg.knowler@spglobal.com .

High Gemini reliability lays groundwork for premium rate discussions: Maersk CEO

<div class="phx-topic abstract-wrapper">The spot and contract savings from domestic intermodal eroded in the second quarter compared with a year ago, while the fate of the third quarter depends largely on whether volume in Southern California keeps up to support peak season surcharges.</div>

The spot and contract savings from domestic intermodal eroded in the second quarter compared with a year ago, while the fate of the third quarter depends largely on whether volume in Southern California keeps up to support peak season surcharges.

<div class="phx-topic">US shippers saved an average of 17% on spot market freight and nearly 24% on contract loads in the second quarter by using domestic intermodal instead of long-haul trucking with tepid pricing continuing through midyear, according to the latest Journal of Commerce <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">Intermodal Savings Index</a> (ISI). Intermodal contract rates were flat in the second quarter compared with a year ago — up less than 1% excluding fuel, but down less than 1% including fuel, while contract truckload rates rose between 0% and 2%. North American railroads hauled 2.12 million domestic containers in the second quarter, up 2.6% compared with a year ago, according to the Intermodal Association of North America (IANA). While the Journal of Commerce forecast calls for domestic intermodal volume to decline between 1% and 4% year over year in the third quarter, Schneider National and Hub Group said there was an uptick in demand in July. “Near-term demand trends off the West Coast are strong and we are seeing indications of an early West Coast peak season,” Hub Group CEO Phil Yeager said during an Aug. 1 earnings call. “It remains unclear how long elevated import demand will persist as we are seeing variances in forecasts by customers.” The Spot ISI averaged 117.1 in the second quarter, down from 121.9 one year ago. The Contract ISI slipped to 124.2 compared with 125.7 one year ago. Index values above 100 indicate intermodal is the more cost-effective mode. The higher the index number, the greater the savings. For example, a spot ISI of 117.1 translates to a 17.1% savings on intermodal versus truckload and a contract ISI of 124.2 implies a 24.2% savings. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="18f45e44-8027-488a-8afc-87771e60ca91"></dynamic-object></div>In terms of raw dollars, intermodal shippers saved an average of $659 per container on the spot market in the second quarter and $789 per container on the contract market. Both totals were lower than a year ago, when intermodal shippers saved $722 per container on the spot market and $938 per container on the contract market. Spot intermodal rates rose 2 cents between April and June to $1.58 per mile, while spot truckload rates rose 5 cents to $1.89 during the same period, according to the ISI. The results are seasonally normal as freight demand increases between Memorial Day and July 4th. Contract truckload rates rose 2 cents to $1.97 per mile between April and June, while contract intermodal rates also rose 2 cents to $1.49 per mile during the period. <h3>Q3 pricing </h3>While J.B. Hunt Transport Services, the largest US domestic intermodal provider, announced a <a href="https://www.joc.com/article/jb-hunt-says-surcharges-necessary-to-maintain-peak-season-service-6044880">$1,500 per container surcharge</a> last month in Southern California, the broader industry has followed with smaller hikes. Spot intermodal rates from Southern California to Atlanta, Chicago, Dallas, and Memphis have risen between $300 and $500 per container since June 1, according to the ISI, but those rate increases are consistent with prior peak seasons, which typically start in the third quarter. Last year, peak season surcharges began in mid-August, not July. Hub Group and Schneider National confirmed they’ve also put in peak season surcharges. Similar to last year, however, their surcharges are close to the broader spot rate increases, not J.B. Hunt’s higher figure. The surcharges cover how much Hub and Schneider pay to railroads and drivers to reposition empty boxes. “Our intent there is really to be able to manage our operations … and to make sure that one or a small number of customers don’t completely disrupt our network,” Jim Filter, executive vice president of Schneider, said during a July 31 earnings call. Hub Group added that while it has implemented some surcharges, it has not incorporated “significant” surcharges into its third-quarter earnings guidance. Intermodal providers must be careful about the surcharge total if there isn’t a simultaneous increase in truck rates. From Los Angeles to Dallas and Kansas City, intermodal saves about $700 to $900 per container. If surcharges are too high, shippers might tender freight back to trucking. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription. </div>

US shippers saved an average of 17% on spot market freight and nearly 24% on contract loads in the second quarter by using domestic intermodal instead of long-haul trucking with tepid pricing continuing through midyear, according to the latest Journal of Commerce Intermodal Savings Index (ISI). Intermodal contract rates were flat in the second quarter compared with a year ago — up less than 1% excluding fuel, but down less than 1% including fuel, while contract truckload rates rose between 0% and 2%. North American railroads hauled 2.12 million domestic containers in the second quarter, up 2.6% compared with a year ago, according to the Intermodal Association of North America (IANA). While the Journal of Commerce forecast calls for domestic intermodal volume to decline between 1% and 4% year over year in the third quarter, Schneider National and Hub Group said there was an uptick in demand in July. “Near-term demand trends off the West Coast are strong and we are seeing indications of an early West Coast peak season,” Hub Group CEO Phil Yeager said during an Aug. 1 earnings call. “It remains unclear how long elevated import demand will persist as we are seeing variances in forecasts by customers.” The Spot ISI averaged 117.1 in the second quarter, down from 121.9 one year ago. The Contract ISI slipped to 124.2 compared with 125.7 one year ago. Index values above 100 indicate intermodal is the more cost-effective mode. The higher the index number, the greater the savings. For example, a spot ISI of 117.1 translates to a 17.1% savings on intermodal versus truckload and a contract ISI of 124.2 implies a 24.2% savings. In terms of raw dollars, intermodal shippers saved an average of $659 per container on the spot market in the second quarter and $789 per container on the contract market. Both totals were lower than a year ago, when intermodal shippers saved $722 per container on the spot market and $938 per container on the contract market. Spot intermodal rates rose 2 cents between April and June to $1.58 per mile, while spot truckload rates rose 5 cents to $1.89 during the same period, according to the ISI. The results are seasonally normal as freight demand increases between Memorial Day and July 4th. Contract truckload rates rose 2 cents to $1.97 per mile between April and June, while contract intermodal rates also rose 2 cents to $1.49 per mile during the period. Q3 pricing While J.B. Hunt Transport Services, the largest US domestic intermodal provider, announced a $1,500 per container surcharge last month in Southern California, the broader industry has followed with smaller hikes. Spot intermodal rates from Southern California to Atlanta, Chicago, Dallas, and Memphis have risen between $300 and $500 per container since June 1, according to the ISI, but those rate increases are consistent with prior peak seasons, which typically start in the third quarter. Last year, peak season surcharges began in mid-August, not July. Hub Group and Schneider National confirmed they’ve also put in peak season surcharges. Similar to last year, however, their surcharges are close to the broader spot rate increases, not J.B. Hunt’s higher figure. The surcharges cover how much Hub and Schneider pay to railroads and drivers to reposition empty boxes. “Our intent there is really to be able to manage our operations … and to make sure that one or a small number of customers don’t completely disrupt our network,” Jim Filter, executive vice president of Schneider, said during a July 31 earnings call. Hub Group added that while it has implemented some surcharges, it has not incorporated “significant” surcharges into its third-quarter earnings guidance. Intermodal providers must be careful about the surcharge total if there isn’t a simultaneous increase in truck rates. From Los Angeles to Dallas and Kansas City, intermodal saves about $700 to $900 per container. If surcharges are too high, shippers might tender freight back to trucking. Contact Ari Ashe at ari.ashe@spglobal.com . The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.

Trucking News

Truckload

North-American rail

Surface

Intermodal savings dipped in Q2; surcharges to factor into Q3 decisions

<div class="phx-topic abstract-wrapper">The reasons for the increase are largely tariff-related, sources say, as market participants adjust to the possibility of permanently higher tariff levels imposed by the Trump administration.</div>

The reasons for the increase are largely tariff-related, sources say, as market participants adjust to the possibility of permanently higher tariff levels imposed by the Trump administration.

<div class="phx-topic">Growing volumes of trans-Pacific eastbound spot cargo are being controlled at origin countries such as China as the impact of US tariffs bores deeply into shipping practices, sources tell the Journal of Commerce. The reasons for a noticeable increase in origin-controlled container trade are largely tariff-related, sources said, as parties to trade transactions adjust to possibly permanently higher tariff levels imposed by the Trump Administration. Origin-controlled cargo means the purchasing of ocean transportation is done by parties in exporting countries such as China, for example, rather than in the US. “At Toll Group, we are observing a slight upward trend in origin-controlled cargo,” said Marc Meier, Toll’s global head of ocean freight. “This trend appears to be influenced by factors such as the current supply and demand situation, where supply is notably higher than demand, as well as ongoing tariff discussions.” Meier said Toll’s origin-controlled cargo is now about 35% of its total cargo compared with 20% a few years ago. “We believe going forward, it might be 40-45%,” he said. Others see the trend also. “I have noticed a significant shift in the traditional mix of our smaller volume shippers where there is more Asia controlled/nominated shipments as a percent of our overall weekly bookings … this has been going on for the last five to six months,” said Kurt McElroy, executive vice president at the forwarder Kerry Apex. McElroy said the shift could be due to “smaller importers choosing to buy DDP [delivery duty paid] and leaving the duty uncertainty to the shipper.” “Volatile freight rates could also be a contributing factor in small importers’ decisions to have terms of sale [DDP or cost-insurance-freight], instead of typical [free-on-board] terms of sale,” he said. Under DDP terms, the seller bears all shipping and customs costs until it delivers the goods to the buyer, having cleared customs as the named place of destination. Another possible reason for growth in origin-controlled spot cargo is the growing ease of booking using online tools from carriers such as Maersk, Hapag Lloyd and CMA-CGM, who sources say are allocating greater amounts of their vessel space to online channels. McElroy said the volatile market could also be prompting large US retailers to seek DDP terms from their suppliers versus receiving such goods at origin and shipping them under their own contracts. “Big box retailers like Walmart, when ocean rates are not as volatile, will want to purchase FOB from their smaller suppliers and move under their own contract,” McElroy said. “Yet, when rates get volatile … on the upswing, and space tightens, along with duty uncertainty, Walmart will choose to have small suppliers ship to Walmart distribution centers CIF and not allow price increases. They have such leverage with smaller suppliers to accept these kind of terms.” <h3>Contract market shifting from US control? </h3> Few are seeing the contract market shift from US control, but some see it coming. “In the trans-Pacific trade, there has been a view that importers of goods into the USA were the major buyers of freight as they purchased goods from manufacturers in Asia FOB and controlled the import supply chain into the USA,” said Lian Hoon Lim, Singapore-based partner and managing director of Alix Partners, which has a long history in ocean freight. “So carriers naturally gave priority to marketing and selling freight to the ‘FOB buyer’ over the exporter in Asia who was labelled the ‘CIF buyer,’” he added. “Ten to 15 years ago that was very true for pretty much everything that came out of China, and that you could price up somewhat for FOB cargo vs. CIF.” But as Chinese companies emerge as sellers of goods under their own brand names, the ocean freight landscape will begin to change. “If you look at South Korea and Japan, as their exporting companies became big enough and more adventurous and spread their wings overseas, they established sales units in the US and Europe,” Lim said. “So instead of exporting their goods to third-party distributors, they sold to their own sales companies in the US and Europe. At that point the FOB vs. CIF issue becomes moot, because the control of the freight passes over to those companies and if their [headquarters] are in Japan or Korea or China, they are more likely to buy freight there versus at destination. “I can easily imagine that at some point in time, companies like Huawei saying we have a sales company in the US or Europe and that we should take control of long-distance shipments ourselves, and when that happens you can easily see the freight buying shifting from destination to origin,” Lim added. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Growing volumes of trans-Pacific eastbound spot cargo are being controlled at origin countries such as China as the impact of US tariffs bores deeply into shipping practices, sources tell the Journal of Commerce. The reasons for a noticeable increase in origin-controlled container trade are largely tariff-related, sources said, as parties to trade transactions adjust to possibly permanently higher tariff levels imposed by the Trump Administration. Origin-controlled cargo means the purchasing of ocean transportation is done by parties in exporting countries such as China, for example, rather than in the US. “At Toll Group, we are observing a slight upward trend in origin-controlled cargo,” said Marc Meier, Toll’s global head of ocean freight. “This trend appears to be influenced by factors such as the current supply and demand situation, where supply is notably higher than demand, as well as ongoing tariff discussions.” Meier said Toll’s origin-controlled cargo is now about 35% of its total cargo compared with 20% a few years ago. “We believe going forward, it might be 40-45%,” he said. Others see the trend also. “I have noticed a significant shift in the traditional mix of our smaller volume shippers where there is more Asia controlled/nominated shipments as a percent of our overall weekly bookings … this has been going on for the last five to six months,” said Kurt McElroy, executive vice president at the forwarder Kerry Apex. McElroy said the shift could be due to “smaller importers choosing to buy DDP [delivery duty paid] and leaving the duty uncertainty to the shipper.” “Volatile freight rates could also be a contributing factor in small importers’ decisions to have terms of sale [DDP or cost-insurance-freight], instead of typical [free-on-board] terms of sale,” he said. Under DDP terms, the seller bears all shipping and customs costs until it delivers the goods to the buyer, having cleared customs as the named place of destination. Another possible reason for growth in origin-controlled spot cargo is the growing ease of booking using online tools from carriers such as Maersk, Hapag Lloyd and CMA-CGM, who sources say are allocating greater amounts of their vessel space to online channels. McElroy said the volatile market could also be prompting large US retailers to seek DDP terms from their suppliers versus receiving such goods at origin and shipping them under their own contracts. “Big box retailers like Walmart, when ocean rates are not as volatile, will want to purchase FOB from their smaller suppliers and move under their own contract,” McElroy said. “Yet, when rates get volatile … on the upswing, and space tightens, along with duty uncertainty, Walmart will choose to have small suppliers ship to Walmart distribution centers CIF and not allow price increases. They have such leverage with smaller suppliers to accept these kind of terms.” Contract market shifting from US control? Few are seeing the contract market shift from US control, but some see it coming. “In the trans-Pacific trade, there has been a view that importers of goods into the USA were the major buyers of freight as they purchased goods from manufacturers in Asia FOB and controlled the import supply chain into the USA,” said Lian Hoon Lim, Singapore-based partner and managing director of Alix Partners, which has a long history in ocean freight. “So carriers naturally gave priority to marketing and selling freight to the ‘FOB buyer’ over the exporter in Asia who was labelled the ‘CIF buyer,’” he added. “Ten to 15 years ago that was very true for pretty much everything that came out of China, and that you could price up somewhat for FOB cargo vs. CIF.” But as Chinese companies emerge as sellers of goods under their own brand names, the ocean freight landscape will begin to change. “If you look at South Korea and Japan, as their exporting companies became big enough and more adventurous and spread their wings overseas, they established sales units in the US and Europe,” Lim said. “So instead of exporting their goods to third-party distributors, they sold to their own sales companies in the US and Europe. At that point the FOB vs. CIF issue becomes moot, because the control of the freight passes over to those companies and if their [headquarters] are in Japan or Korea or China, they are more likely to buy freight there versus at destination. “I can easily imagine that at some point in time, companies like Huawei saying we have a sales company in the US or Europe and that we should take control of long-distance shipments ourselves, and when that happens you can easily see the freight buying shifting from destination to origin,” Lim added. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Supply chain

Tariff realities prompt growth in ‘origin-controlled’ cargo on trans-Pacific

Use code TPM25GW995 at checkout to save $500 on first year of a Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Wide Box

SAVE ON A GOLD SUBSCRIPTION AND TPM26

Use code GTW695 at checkout and save $800 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Use code TPMGW595 at checkout to save $900 on first year of a Gold subscription and 20% on a TPM26 registration!

Upgrade Subscription - S/SP to Gold - Wide Box

UPGRADE TO GOLD FOR JUST $595

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code STS20 at checkout to save 20% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT/Anonymous to S/SP - Wide Box

SUBSCRIBE AND SAVE

At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: https://www.ssamarine.mx/

Photo 2.png

SSA Marine Mexico: True Commitment to Sustainability

SAVE ON A GOLD SUBSCRIPTION: Use code TPM25GW995 to save $500 on an annual Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Offer Box

UPGRADE TO GOLD AND SAVE: Use code GTW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription

SUBSCRIBE AND SAVE: Use code STSW20 to save 20% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT/Anonymous to S/SP - Offer Box

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

UPGRADE TO GOLD AND SAVE: Use code TPMGW595 at checkout to save $900 on first year of a Gold subscription and 20% on TPM26! 

Upgrade Subscription - S/SP to Gold - Offer Box

START A FREE TRIAL: Access Journal of Commerce content for 30 days

Free Trial - Offer Box

Free Trial

Monthly publication providing an editorial deep dive into global supply chain news

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland25

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

Intermodal Savings Index

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

Gateway

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

Discover the news and analysis of supply chain strategies, sourcing and trends covered by the Journal of Commerce. Comprehensive coverage includes customs, trade news, transport news and the latest information about trade regulations.

Stay informed with the latest regulation news and trade updates. Explore comprehensive transportation news and trade regulations today.

Transport, Trade and Regulation News | Journal of Commerce

The Journal of Commerce’s supply chain news and analysis impacting the management of end-to-end supply chains reports on supply chain strategies, cargo visibility, inventory trends, sourcing, customs certification and contract logistics. Supply chain news coverage also delves into refrigerated shipping advancements and management of inventory status, regulatory updates and government funding projects.

Our logistics technology news include logistics technology startups, solutions, and the impact of technology on logistics and supply chain management.

Logistics Technology News | Journal of Commerce

Logistics Technology News

A thorough cool cargoes news by Journal of Commerce. Learn about the latest trends in refrigerated cargo transportation, weight capacity, technology, and more.

Cool Cargo News | Journal of Commerce

Cool Cargo News

Journal of Commerce keeps you informed on the latest last mile news with comprehensive coverage of carriers, logistics, and last mile transportation solutions.

Last Mile News | Journal of Commerce

Last Mile News

Discover the latest industrial real estate news and trends. Covering projects, real estate supply chain, logistics, pricing, cross dock facilities, and more.

Industrial Real Estate News | Journal of Commerce

Industrial Real Estate News

Stay updated on supply chain strategies, cargo visibility, inventory trends and more with our comprehensive supply chain news and analysis.

Latest News

Intermodal Savings Index

SSA Marine Mexico: True Commitment to Sustainability

More News & Analysis

New and faster intermodal services put BNSF, UP on hunt for truck freight

Chinese brand expansion changing ‘fabric’ of global trade: Clerc

High Gemini reliability lays groundwork for premium rate discussions: Maersk CEO