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<div class="phx-topic abstract-wrapper"><p>The technology world used to be full of stock splits but the new one engineered by i2 Technologies s</p></div>

The technology world used to be full of stock splits but the new one engineered by i2 Technologies s

<div><p>The technology world used to be full of stock splits but the new one engineered by i2 Technologies speaks volumes about the state of the supply chain software market.</p><p></p><p></p><p>The Dallas-based mainstay of the enterprise planning software business approved a 1-for-25 reverse stock split to go into effect last week. It is a bid to get its per-share price up to a level for public listing on Wall Street but also a sign of the dramatic changes in a market that was supposed to change the world for shippers.</p><p></p><p></p><p>The move comes after a 2004 in which i2 posted $389 million in...

The technology world used to be full of stock splits but the new one engineered by i2 Technologies speaks volumes about the state of the supply chain software market. The Dallas-based mainstay of the enterprise planning software business approved a 1-for-25 reverse stock split to go into effect last week. It is a bid to get its per-share price up to a level for public listing on Wall Street but also a sign of the dramatic changes in a market that was supposed to change the world for shippers. The move comes after a 2004 in which i2 posted $389 million in revenue compared with $494.9 million at the end of fiscal year 2003, and $908 million in 2002. The company lost $2 million in the last quarter, better than the $49 million it lost in the fourth quarter of 2003 but also a sign of how i2, along with its peers, has slimmed down and changed its focus in order to survive. Less than 15 percent of its revenue came from software last year while $218 million came from services and maintenance, growing categories that include the supply chain consulting services that chief competitor Manugistics and other companies in the field are stressing. At Manugistics, Rockville, Md., third-quarter revenue for three months ending Nov. 30, 2004, declined almost 25 percent, to $45 million, from same quarter 2003 revenue of $59.9 million. Fiscal year 2004 revenue declined to $243 million from $272 million in fiscal 2003, and $319.8 million in fiscal 2002. AMR Research's Lora Cecere said upstarts such as Adexa, Logility and Webplan, as well as enterprise resource planning giant SAP, are outflanking i2 and Manugistics. "As companies renew the focus on their supply chains, the number and intensity of deals are increasing," she said, "but Manugistics and i2 are often not on the list." She said i2 is focusing on closed-loop control and master data management while Manugistics is working on scalability and security for supply chain planning applications. "Unfortunately for a buyer, the value is not obvious," Cecere said. "With the stress of declining revenue, both vendors have returned to their roots, adopting engineering jargon for a marketing message? (making) it harder for companies to connect the products to their business pain and thus give them a compelling reason to buy." Both companies are dearly in need of a shove in the right direction. Manugistics' employment has shrunk from 1,133 in February 2003 to approximately 725 in February 2005. Manugistics fired its president last summer, with a company spokesperson declaring CEO "Joe (Cowan) doesn't need a president." i2 was de-listed from the Nasdaq national stock market after its share price sank below $1. It plans to apply for re-listing if the reverse stock split keeps the price up. Meanwhile, Cecere said, ERP suite vendors such as SAP and new vendors "are winning at i2's and Manugistics' expense." SAP announced a 29 percent jump in fourth quarter 2004 earnings and plans to hire 3,000 new employees in 2005. Part of the problem is that anticipated growth in the supply chain execution management software market has not met expectations. ARC Advisory Group projected last year that the SCEM market - including smaller, new players - would grow from $3.3 billion in 2003 to $5.2 billion in 2008, while the supply chain planning market long dominated by i2, Manugistics and a few others would increase from $1.9 billion to $2.2 billion in the same period. Steve Banker, service director for supply management at ARC, said shippers bought too much supply chain planning software in the late 1990s and felt burned by its complexity and perceived slow return on investment. Meanwhile, SCEM sales haven't met expectations in part because buyers were concerned about having to choose between new vendors who might not be around in the long term and larger, established companies whose offerings seemed to trail the newcomers. Cecere said Manugistics and i2 still have a lot to offer. Compared with ERP suite vendors, the two are "significantly ahead" in scalability, master data management, what-if analysis, performance management and supply chain synchronization. Potential buyers should insist on conference room pilots where they can push these vendors past their engineering rhetoric to ensure there is a definable business return within two years, Cecere said.

Software's Downward Scalability

<div class="phx-topic abstract-wrapper"><p>The carrier consortium released details of its new network showing a slight uptick in port calls primarily from Southeast Asia and small rotation changes on the US East Coast.</p></div>

The carrier consortium released details of its new network showing a slight uptick in port calls primarily from Southeast Asia and small rotation changes on the US East Coast.

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<div class="phx-topic"><p>Carriers in the Ocean Alliance will be offering North American shippers more connections from Southeast Asia and the Indian subcontinent as part of their 2026 network. Ocean Alliance carriers will also make their first return to the Port of Jacksonville in seven years with a new call on their Gulf Coast service. </p><p>CMA CGM, Cosco Shipping and Evergreen Marine each announced this week the launch of the Ocean Alliance’s “Day 10” product covering 14 services to the North American West Coast and eight to the East Coast. The new network will go into effect as of April. </p><p>While the number of services to North America did not change compared to the alliance’s 2025 network, the 2026 network to and from the US and Canada does feature new port rotations that highlight the ongoing shift of US importers away from China. </p><p>The Port of Haiphong will see the biggest increase in North American connectivity. Calls to the Vietnamese port, where <a href="https://www.joc.com/article/cma-cgm-signs-deal-to-develop-600-million-haiphong-terminal-complex-6012131">CMA CGM plans to build a $600 million terminal</a>, will be added to four trans-Pacific services to North America, according to Cosco’s Day 10 schedule. </p><p>On the West Coast, those services include the Pacific Southwest 9 (PSW9) service to Long Beach and the Pacific Northwest 2 (PNW2) to the ports of Vancouver and Seattle. </p><p>Haiphong remains a call for Ocean Alliance’s PSW1 service into Long Beach. However, another Long Beach service, PSW10, that previously called Haiphong as part of the 2025 network, appears to have been dropped in favor of the Port of Laem Chabang in Thailand. Ocean Alliance’s 2025 network previously had no regular service between Southeast Asia and the Pacific Northwest. </p><p>On the East Coast, Haiphong will be added as a call to the USEC3 and 5 services. Haiphong was previously a call only on the Ocean Alliance’s USEC8 service into Norfolk as of 2025, but that call has been replaced with Vietnam’s Cai Mep as of the 2026 network.  </p><p>Laem Chabang will also be on the new rotation for the PSW7 service into Los Angeles. The Laem Chabang call appears to have replaced a call to Malaysia’s Port Klang featured on the 2025 network. </p><p>The transshipment port of Colombo in Sri Lanka will also be added to the USEC5 service that makes first call at Savannah, adding a second Ocean Alliance service from the Indian subcontinent along with the current USEC3 service rotation. </p><p>In addition, Ocean Alliance added Taiwan’s Kaohsiung as a backhaul on three West Coast trans-Pacific services, along with a westbound call to South Korea’s Busan. </p><p>Chinese port rotations will also see small changes in the 2026 network. The southern China port of Yangpu, across the Beibu Gulf from Haiphong, will be added to the front-haul for the PSW9 and PNW2 services to the West Coast. Tianjin will also be added to the PSW5 service, while Hong Kong will be added to the PNW2 service.</p><p>China’s Xiamen port will get a second service with a new call on the USEC4 service, adding to an existing call on the USEC2 service. But a previous Xiamen call on the USEC5 appears to have been dropped in favor of the new Haiphong call. </p><p>Amid the ongoing sourcing shift away from China, container volumes from Southeast Asia to the US saw year-over-year gains in every month last year, with 10 of those months seeing double-digit gains, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global.</p><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="021af9b6-860f-45a6-99eb-549dc05cabfe"></dynamic-object></div><h3>Jacksonville gets Far East service</h3><p>Jacksonville this year will be on the rotation for Ocean Alliance’s USEC6 service that covers the US Gulf Coast. The USEC6 previously featured a call to New Orleans, but it’s not included in the 2026 network. </p><p>While Jacksonville already has Asia services through the Premier Alliance, Mediterranean Shipping Co. and Zim Integrated Shipping, the <a href="https://www.joc.com/article/jaxport-optimistic-on-growth-despite-service-loss-5236112">Ocean Alliance has not been a regular caller to the port since 2019</a> when it dropped Jacksonville on the same service. </p><p>Other US rotation changes include dropping Charleston from the USEC4 service, while keeping the port on rotation for three other Ocean Alliance services. The USEC4 will replace the Charleston call with a call to Baltimore, but that port will be dropped from the USEC5 service. </p><p><i>Contact Michael Angell at </i><a href="mailto:michael.angell@spglobal.com"><i>michael.angell@spglobal.com</i></a> </p></div>

Carriers in the Ocean Alliance will be offering North American shippers more connections from Southeast Asia and the Indian subcontinent as part of their 2026 network. Ocean Alliance carriers will also make their first return to the Port of Jacksonville in seven years with a new call on their Gulf Coast service. CMA CGM, Cosco Shipping and Evergreen Marine each announced this week the launch of the Ocean Alliance’s “Day 10” product covering 14 services to the North American West Coast and eight to the East Coast. The new network will go into effect as of April. While the number of services to North America did not change compared to the alliance’s 2025 network, the 2026 network to and from the US and Canada does feature new port rotations that highlight the ongoing shift of US importers away from China. The Port of Haiphong will see the biggest increase in North American connectivity. Calls to the Vietnamese port, where CMA CGM plans to build a $600 million terminal , will be added to four trans-Pacific services to North America, according to Cosco’s Day 10 schedule. On the West Coast, those services include the Pacific Southwest 9 (PSW9) service to Long Beach and the Pacific Northwest 2 (PNW2) to the ports of Vancouver and Seattle. Haiphong remains a call for Ocean Alliance’s PSW1 service into Long Beach. However, another Long Beach service, PSW10, that previously called Haiphong as part of the 2025 network, appears to have been dropped in favor of the Port of Laem Chabang in Thailand. Ocean Alliance’s 2025 network previously had no regular service between Southeast Asia and the Pacific Northwest. On the East Coast, Haiphong will be added as a call to the USEC3 and 5 services. Haiphong was previously a call only on the Ocean Alliance’s USEC8 service into Norfolk as of 2025, but that call has been replaced with Vietnam’s Cai Mep as of the 2026 network. Laem Chabang will also be on the new rotation for the PSW7 service into Los Angeles. The Laem Chabang call appears to have replaced a call to Malaysia’s Port Klang featured on the 2025 network. The transshipment port of Colombo in Sri Lanka will also be added to the USEC5 service that makes first call at Savannah, adding a second Ocean Alliance service from the Indian subcontinent along with the current USEC3 service rotation. In addition, Ocean Alliance added Taiwan’s Kaohsiung as a backhaul on three West Coast trans-Pacific services, along with a westbound call to South Korea’s Busan. Chinese port rotations will also see small changes in the 2026 network. The southern China port of Yangpu, across the Beibu Gulf from Haiphong, will be added to the front-haul for the PSW9 and PNW2 services to the West Coast. Tianjin will also be added to the PSW5 service, while Hong Kong will be added to the PNW2 service. China’s Xiamen port will get a second service with a new call on the USEC4 service, adding to an existing call on the USEC2 service. But a previous Xiamen call on the USEC5 appears to have been dropped in favor of the new Haiphong call. Amid the ongoing sourcing shift away from China, container volumes from Southeast Asia to the US saw year-over-year gains in every month last year, with 10 of those months seeing double-digit gains, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Jacksonville gets Far East service Jacksonville this year will be on the rotation for Ocean Alliance’s USEC6 service that covers the US Gulf Coast. The USEC6 previously featured a call to New Orleans, but it’s not included in the 2026 network. While Jacksonville already has Asia services through the Premier Alliance, Mediterranean Shipping Co. and Zim Integrated Shipping, the Ocean Alliance has not been a regular caller to the port since 2019 when it dropped Jacksonville on the same service. Other US rotation changes include dropping Charleston from the USEC4 service, while keeping the port on rotation for three other Ocean Alliance services. The USEC4 will replace the Charleston call with a call to Baltimore, but that port will be dropped from the USEC5 service. Contact Michael Angell at michael.angell@spglobal.com

Container lines

Ocean Alliance adding Vietnam calls to North America for 2026

<div class="phx-topic abstract-wrapper"><p>Container flows at the railroad’s primary Appliance Park terminal slowed considerably in December and into January after it implemented a new appointment system for truck drivers to pick up import boxes.</p></div>

Container flows at the railroad’s primary Appliance Park terminal slowed considerably in December and into January after it implemented a new appointment system for truck drivers to pick up import boxes.

<div class="phx-topic"><p>Norfolk Southern Railway (NS) is reopening an idled terminal in Louisville, giving the railroad a second facility to support what is now a congested market.   </p><p>The Buechel Intermodal Facility will reopen on Jan. 26 as NS battles long truck turn times and congestion at Appliance Park, its primary terminal in Louisville. Appliance largely replaced the older Buechel facility that was built nearly 50 years ago. </p><p>Buechel briefly reopened in 2021 during the pandemic-related freight surge but was idled again as volumes cooled off. But container flows in Appliance Park slowed considerably in December and into January after Norfolk Southern implemented a new appointment system for truck drivers to pick up import boxes, which also coincided with the holidays and some construction on the property. Conditions at Appliance <a href="https://www.joc.com/article/drivers-battling-delays-at-norfolk-southern-terminal-in-louisville-6150589">deteriorated into early January,</a> with some drivers complaining of waits up to six hours. </p><p>“Right now, we target approximately 20 to 25 appointments per hour at Appliance Park and with the Buechel facility up and running, we’ll basically double the number of appointments available to drivers,” a NS spokesperson told the <i>Journal of Commerce</i>. </p><h2>NS says dwells improving </h2><p>The railroad said drive dwell times have dropped to about 30 minutes on average in the last 10 days, which coincides with NS opening a temporary satellite lot at a Louisville depot owned by drayage provider ContainerPort Group. </p><p>Once Buechel is re-opened, Norfolk Southern will restructure how international containers are handled in Louisville. All import loads will be taken to Buechel and put into container stacks, while all exports will be dropped off at Appliance Park. The move will allow ground crews to concentrate on a single direction for container flow at each terminal. </p><p>NS will conduct a soft launch this weekend before officially segmenting inbound and outbound ocean containers on Monday. </p><p>The Appliance Park and Buechel terminals are approximately three miles from one another, which Norfolk Southern said should make it relatively easy for truck drivers to perform a dual mission – dropping off an export container and then picking up an import box during the same trip. </p><p><i>Contact Ari Ashe at </i><a href="ari.ashe@spglobal.com "><i>ari.ashe@spglobal.com</i></a>.</p></div>

Norfolk Southern Railway (NS) is reopening an idled terminal in Louisville, giving the railroad a second facility to support what is now a congested market. The Buechel Intermodal Facility will reopen on Jan. 26 as NS battles long truck turn times and congestion at Appliance Park, its primary terminal in Louisville. Appliance largely replaced the older Buechel facility that was built nearly 50 years ago. Buechel briefly reopened in 2021 during the pandemic-related freight surge but was idled again as volumes cooled off. But container flows in Appliance Park slowed considerably in December and into January after Norfolk Southern implemented a new appointment system for truck drivers to pick up import boxes, which also coincided with the holidays and some construction on the property. Conditions at Appliance deteriorated into early January, with some drivers complaining of waits up to six hours. “Right now, we target approximately 20 to 25 appointments per hour at Appliance Park and with the Buechel facility up and running, we’ll basically double the number of appointments available to drivers,” a NS spokesperson told the Journal of Commerce. NS says dwells improving The railroad said drive dwell times have dropped to about 30 minutes on average in the last 10 days, which coincides with NS opening a temporary satellite lot at a Louisville depot owned by drayage provider ContainerPort Group. Once Buechel is re-opened, Norfolk Southern will restructure how international containers are handled in Louisville. All import loads will be taken to Buechel and put into container stacks, while all exports will be dropped off at Appliance Park. The move will allow ground crews to concentrate on a single direction for container flow at each terminal. NS will conduct a soft launch this weekend before officially segmenting inbound and outbound ocean containers on Monday. The Appliance Park and Buechel terminals are approximately three miles from one another, which Norfolk Southern said should make it relatively easy for truck drivers to perform a dual mission – dropping off an export container and then picking up an import box during the same trip. Contact Ari Ashe at ari.ashe@spglobal.com .

Norfolk Southern reopening second terminal in congested Louisville

<div class="phx-topic abstract-wrapper"><p>The deal will create a company with more than $5 billion in revenue across truckload brokerage, managed transportation services, and port-related offerings.</p></div>

The deal will create a company with more than $5 billion in revenue across truckload brokerage, managed transportation services, and port-related offerings.

<div class="phx-topic"><p>Freight broker Echo Global Logistics has acquired third-party logistics provider and drayage specialist ITS Logistics, the companies announced Wednesday.  </p><p>The deal, terms of which were not disclosed, gives privately held Echo, the fifth-largest brokerage in the US, a major network of drayage, intermodal and drop trailer assets. </p><p>The combined entity would create a company with $5.4 billion in revenue, Echo said in a statement. The deal is expected to close in the first half of this year. </p><p>“This acquisition represents a meaningful strategic opportunity for Echo and our customers,” Echo CEO Doug Waggoner said, calling ITS’ products “highly differentiated.” </p><p>“By applying Echo’s proprietary technology, advanced analytics, and growing AI capabilities to the ITS solution set, we will strengthen our value proposition for a broader range of customers,” Waggoner added. </p><p>Founded in 1999, ITS has grown to be a top 10 provider of drayage services. </p><p>“Echo's truckload brokerage scale, managed transportation platform, strong cross-border capabilities, and broad multimodal offering — combined with its technology platform and AI-driven innovation — will enable us to elevate our service offerings and provide enhanced value to our customers,” ITS CEO Scott Pruneau said in the statement. </p><p>Echo, which was taken private in 2021, said ITS will continue operating with its existing leadership team and customer-facing structure, but will hook into Echo’s technology platform, carrier network, and enterprise commercial capabilities. </p><p>ITS also has a robust truckload brokerage and dedicated truckload model that would integrate with Echo’s truckload and intermodal brokerage businesses. </p><p>The acquisition represents Chicago-based Echo’s biggest acquisition since its $420 million purchase of fellow broker Command Transportation in 2015. Its most recent acquisition came in August, when it bought California-based 3PL FreightSaver for an undisclosed amount. </p><p><i>Contact Eric Johnson at </i><a href="mailto:eric.johnson@spglobal.com"><i>eric.johnson@spglobal.com</i></a>.</p></div>

Freight broker Echo Global Logistics has acquired third-party logistics provider and drayage specialist ITS Logistics, the companies announced Wednesday. The deal, terms of which were not disclosed, gives privately held Echo, the fifth-largest brokerage in the US, a major network of drayage, intermodal and drop trailer assets. The combined entity would create a company with $5.4 billion in revenue, Echo said in a statement. The deal is expected to close in the first half of this year. “This acquisition represents a meaningful strategic opportunity for Echo and our customers,” Echo CEO Doug Waggoner said, calling ITS’ products “highly differentiated.” “By applying Echo’s proprietary technology, advanced analytics, and growing AI capabilities to the ITS solution set, we will strengthen our value proposition for a broader range of customers,” Waggoner added. Founded in 1999, ITS has grown to be a top 10 provider of drayage services. “Echo's truckload brokerage scale, managed transportation platform, strong cross-border capabilities, and broad multimodal offering — combined with its technology platform and AI-driven innovation — will enable us to elevate our service offerings and provide enhanced value to our customers,” ITS CEO Scott Pruneau said in the statement. Echo, which was taken private in 2021, said ITS will continue operating with its existing leadership team and customer-facing structure, but will hook into Echo’s technology platform, carrier network, and enterprise commercial capabilities. ITS also has a robust truckload brokerage and dedicated truckload model that would integrate with Echo’s truckload and intermodal brokerage businesses. The acquisition represents Chicago-based Echo’s biggest acquisition since its $420 million purchase of fellow broker Command Transportation in 2015. Its most recent acquisition came in August, when it bought California-based 3PL FreightSaver for an undisclosed amount. Contact Eric Johnson at eric.johnson@spglobal.com .

Surface

Drayage

Truck brokers

Broker Echo buys ITS Logistics to build drayage, intermodal presence

<div class="phx-topic abstract-wrapper"><p>Shippers should heed signs that ocean carriers have managed to keep the decline in Asia imports from sinking the market, reflecting a modicum of control and price restraint.</p></div>

Shippers should heed signs that ocean carriers have managed to keep the decline in Asia imports from sinking the market, reflecting a modicum of control and price restraint.

<div class="phx-topic"><p>It is a buyer’s market during this annual trans-Pacific service contract cycle, and importers of Asia-sourced goods — particularly smaller shippers — are under some of the strongest C-Suite pressure in years to reduce costs. But shippers should also heed signs that ocean carriers have managed to keep the decline in Asia imports from sinking the market, reflecting a modicum of control and price restraint.  </p><p>A few container line executives privately acknowledge what preliminary contract benchmark readings reflect: The starting point for contract rate levels is lower than during last year’s negotiation cycle. Demand is weaker than a year ago, and capacity is more plentiful as evidenced by the swelling order book.  </p><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6155716_0.1.jpg"></img></div><p>In the first two rounds of bids in this annual service contract cycle, tendered rates for Asia to the US West Coast were down approximately 25% from levels in January 2025, according to a Xeneta analysis. However, the tendered rates in this cycle have been rising since the beginning of the year, said Emily Stausbøll, senior analyst at Xeneta. </p><p>“We certainly expect that as more US shippers start tendering, they should be saving money compared to last year, but how much depends on shippers’ individual negotiations and whatever happens in the market over the next few months before many of those contracts are finalized,” Stausbøll said.  </p><h3>C-Suite calling  </h3><p>The pressure on logistics managers to cut costs has risen dramatically in less than a year, making it infeasible to simply pass on the additional costs to suppliers and/or suffer weaker margins. The US tariff rate on imports from China more than doubled to 47.5% between January and November 2025, according to the latest available analysis from the Peterson Institute for International Economics.  </p><p>No wonder then that a recent Goldman Sachs survey found that between April and August of last year, surveyed businesses passed 37% of higher tariff costs to consumers and 9% onto suppliers. The companies absorbed the remaining 51%, according to the study released in October.  </p><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a08410a8-0b00-4c48-9ef6-78b6354f0678"></dynamic-object></div><p>Small and medium-sized importers are ordering only what they know they can sell and taking an even harder look at their own transport costs, said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. </p><p>For example, shippers who booked before a general rate increase (GRI) was imposed but didn’t ship until after it was implemented have become more sensitive to the higher transport cost they’ve accrued, and often with one day or less of notice, he said. A cost difference of $50 per TEU matters more now.  </p><p>“It’s all about cost,” Kavas said. “The service reliability has not been too bad. There is an abundance of space. On the carrier side, there is not too much difference to the level of service.”   </p><p>In a down market, in which analysts expect US imports to barely register any growth in 2026 compared with 2025, some ocean carriers are targeting smaller shippers that they would have normally left to forwarders. One of Kavas’ customers, he said, was approached by a major carrier for annual volumes of no more than 1,000 TEUs. </p><h3>Holding the line so far  </h3><p>While volumes are plunging, pricing isn’t. US imports from China in December dropped 22.3% year over year while total volumes from Asia fell 6.1% in the same period, according to PIERS, a sister company of the <i>Journal of Commerce</i> within S&amp;P Global. </p><p>Yet container spot rates, as measured by Drewry, Platts and the Shanghai Shipping Exchange, have shown resilience, rising about 40% since early December. Implementing blank sailings and moderately-sized GRIs while holding the price line on freight-all-kind rates appears to have worked for carriers. </p><p>“Ocean carriers need another catalyst to keep the rates at certain levels, or they will continue to perform blank sailings which they have mastered,” Kavas said. “They are doing this in a very disciplined manner, and considering the number of carriers in the market at the moment, ocean freight rate fluctuations will continue to be present, but I don’t see rates are diving.” </p><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a2606c91-b30c-4219-b617-9491b44b6af1"></dynamic-object></div><p>Ocean carriers are adjusting further to expectations of reduced demand. Carriers will reduce the available capacity from Asia to North America to 2.5 million TEUs in the first quarter from 2.6 million TEUs in the fourth quarter, according to Xeneta forecasts and an analysis of blanked sailings, including those not announced by carriers.  </p><p>The semblance of carrier control on the trans-Pacific despite weakening volumes should give importers pause amid negotiations on annual contracts, which generally run from May 1 through April. The market may be down, but capacity discipline so far isn’t, and shippers who push too hard on contract rates or are too exposed to spot rates could end up paying if the market turns.  </p><p><i>Contact Mark Szakonyi at </i><a href="https://www.joc.com/article/mark.szakonyi@spglobal.com"><i>mark.szakonyi@spglobal.com</i></a>.</p></div>

It is a buyer’s market during this annual trans-Pacific service contract cycle, and importers of Asia-sourced goods — particularly smaller shippers — are under some of the strongest C-Suite pressure in years to reduce costs. But shippers should also heed signs that ocean carriers have managed to keep the decline in Asia imports from sinking the market, reflecting a modicum of control and price restraint. A few container line executives privately acknowledge what preliminary contract benchmark readings reflect: The starting point for contract rate levels is lower than during last year’s negotiation cycle. Demand is weaker than a year ago, and capacity is more plentiful as evidenced by the swelling order book. In the first two rounds of bids in this annual service contract cycle, tendered rates for Asia to the US West Coast were down approximately 25% from levels in January 2025, according to a Xeneta analysis. However, the tendered rates in this cycle have been rising since the beginning of the year, said Emily Stausbøll, senior analyst at Xeneta. “We certainly expect that as more US shippers start tendering, they should be saving money compared to last year, but how much depends on shippers’ individual negotiations and whatever happens in the market over the next few months before many of those contracts are finalized,” Stausbøll said. C-Suite calling The pressure on logistics managers to cut costs has risen dramatically in less than a year, making it infeasible to simply pass on the additional costs to suppliers and/or suffer weaker margins. The US tariff rate on imports from China more than doubled to 47.5% between January and November 2025, according to the latest available analysis from the Peterson Institute for International Economics. No wonder then that a recent Goldman Sachs survey found that between April and August of last year, surveyed businesses passed 37% of higher tariff costs to consumers and 9% onto suppliers. The companies absorbed the remaining 51%, according to the study released in October. Small and medium-sized importers are ordering only what they know they can sell and taking an even harder look at their own transport costs, said Serkan Kavas, executive vice president for imports at the forwarder MTS Logistics. For example, shippers who booked before a general rate increase (GRI) was imposed but didn’t ship until after it was implemented have become more sensitive to the higher transport cost they’ve accrued, and often with one day or less of notice, he said. A cost difference of $50 per TEU matters more now. “It’s all about cost,” Kavas said. “The service reliability has not been too bad. There is an abundance of space. On the carrier side, there is not too much difference to the level of service.” In a down market, in which analysts expect US imports to barely register any growth in 2026 compared with 2025, some ocean carriers are targeting smaller shippers that they would have normally left to forwarders. One of Kavas’ customers, he said, was approached by a major carrier for annual volumes of no more than 1,000 TEUs. Holding the line so far While volumes are plunging, pricing isn’t. US imports from China in December dropped 22.3% year over year while total volumes from Asia fell 6.1% in the same period, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Yet container spot rates, as measured by Drewry, Platts and the Shanghai Shipping Exchange, have shown resilience, rising about 40% since early December. Implementing blank sailings and moderately-sized GRIs while holding the price line on freight-all-kind rates appears to have worked for carriers. “Ocean carriers need another catalyst to keep the rates at certain levels, or they will continue to perform blank sailings which they have mastered,” Kavas said. “They are doing this in a very disciplined manner, and considering the number of carriers in the market at the moment, ocean freight rate fluctuations will continue to be present, but I don’t see rates are diving.” Ocean carriers are adjusting further to expectations of reduced demand. Carriers will reduce the available capacity from Asia to North America to 2.5 million TEUs in the first quarter from 2.6 million TEUs in the fourth quarter, according to Xeneta forecasts and an analysis of blanked sailings, including those not announced by carriers. The semblance of carrier control on the trans-Pacific despite weakening volumes should give importers pause amid negotiations on annual contracts, which generally run from May 1 through April. The market may be down, but capacity discipline so far isn’t, and shippers who push too hard on contract rates or are too exposed to spot rates could end up paying if the market turns. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Buyer’s market for US importers belies risks in contract talks

<div class="phx-topic abstract-wrapper"><p>As shippers realize that threats to service are not periodic but systemic, their focus on reliability will only intensify this year, writes Peter Tirschwell.</p></div>

As shippers realize that threats to service are not periodic but systemic, their focus on reliability will only intensify this year, writes Peter Tirschwell.

<div class="phx-topic"><p>This year will not be marked by freight rates collapsing due to overcapacity and shippers weary from tariff costs reaping a windfall in ocean freight discounts. Despite the largest order book in history and volumes expected to slow globally, that is not the scenario coming into focus for the year ahead, even if widespread Red Sea transits resume. </p><p>Rather, according to several sources in recent weeks, a different picture is emerging: Rates will likely moderate, perhaps by a few hundred dollars per container, and as shippers realize that threats to service are not periodic but systemic, their focus on reliability will only intensify this year.     </p><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6155383_0.1.jpg"></img></div><p>The year ahead, in other words, reflects long-term macro trends under way in containers: capacity tightening despite cyclicality due to infrastructure limitations and carrier actions to manage capacity, and shippers in response turning their focus away from rates and toward service to mitigate risk. </p><p>“For 2026 as we move into this bid season, it won’t be all about the ocean rates,” Chantal McRoberts of Drewry Supply Chain Advisers told a recent <i>Journal of Commerce</i> webinar focused on Asia port congestion.  </p><p>“We know that we’re in a more subdued demand environment. We know that the order book is large. We know that carriers are looking to secure volume, but the key to that is, what service are you providing? Shippers are definitely starting to factor that into their bid strategies,” she said. “The number one question that comes up from BCOs [beneficial cargo owners] is, putting the rates aside, I need a reliable provider or partner to work with. I still have to answer to the CFO. I still have to justify the cost, but I now also have to ensure that I'm procuring my ocean freight to deliver my product.” </p><p>According to eeSea, ocean reliability from Asia to the US West Coast has ranged between 42% and 48% since September. </p><h3>China ‘lacking port capacity’ </h3><p>Port congestion in China is a case in point about shippers’ growing concerns about the integrity of supply chains.  </p><p>Still the source of 36% of US imports in TEUs in 2025, (down from 40% in 2024), according to S&amp;P Global Market Intelligence, the country is encountering chronic congestion at Shanghai and Ningbo, its two largest ports, where ships typically are waiting two to three days outside the port. </p><p>The fundamental reason, according to Asia sources over the past two years, was that while China ambitiously built port capacity ahead of demand in the years after entering the World Trade Organization in 2001, expansion has slowed at a time when its exports are experiencing a growth spurt.  </p><p>“I know it’s a shocker, and it feels unnatural to hear it, but China is lacking port capacity. It’s as simple as that,” Nils Roche, founder of Solvens Advisory and recently deputy head of operations at Singapore-based carrier PIL, said on the <i>Journal of Commerce</i> webinar. </p><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="615c1430-acb8-4c73-9884-61992f08d1d3"></dynamic-object></div><p>Limited port capacity in China is being called upon to handle surging volumes growing out of a macro-China economic strategy to diversify away from the US and overcome weakness in other sectors such as real estate.  </p><p>China in November surpassed the $1 trillion trade surplus barrier for the first time. Its share of global exports grew from 33% to 37% between 2023 and 2025, Maersk told investors in November. Influenced by export growth, S&amp;P Global Market Intelligence in November raised Mainland China’s GDP growth forecast for 2025–27 by a quarter point, to 5.0%, 4.6% and 4.5%, respectively. “The upward adjustments primarily reflect a more positive assessment of export prospects,” S&amp;P Global said. </p><p>The intractable nature of port capacity limitations is further reflected in growing ship sizes and more containers needed to be moved per port call at ports that have not kept pace. </p><p>“The ships that you have today, they are not the ships that we had 10 years ago. If you think about it, I used to operate Panamaxes, and they were the rock stars,” Roche said, noting his skepticism that technology-driven productivity improvements can meaningfully expand capacity. “Now you have 18,000, 24,000-TEU ships coming into the ports. A Panamax calling a port is a port call, a 24,000-TEU ship calling a port, it's a major event.”   </p><p>The difficulty ports have in handling the volumes and ship sizes being thrown at them is confirmed by port performance data. The S&amp;P Global Port Performance data is based on vessel turnaround time and normalized by workload, with underlying data provided by carriers — in other words, how many hours a ship is spending in port to achieve a certain move count. The data shows ports on a global basis are operating well below pre-pandemic levels of performance. </p><p>Due to port capacity limitations, Roche says the industry should temper its expectations for the impact of a return to the Red Sea, if that occurs this year (although there is no guarantee it will).  </p><p>He said that if the Red Sea opens up, “we should not expect a massive influx of capacity, simply because the lack of capacity, or the bottleneck if you prefer, will be transferred from the ocean to the land.” </p><p>“I disagree with the narrative carried by analysts that shipping obeys 100% of the laws of supply and demand, and that more ships mean more supply ... it’s being half-blind to an entire ecosystem,” Roche said. </p><p>S&amp;P Global is the parent company of the <i>Journal of Commerce.</i></p><p><i>Contact Peter Tirschwell at </i><a href="mailto:peter.tirschwell@spglobal.com"><i>peter.tirschwell@spglobal.com</i></a>.</p></div>

This year will not be marked by freight rates collapsing due to overcapacity and shippers weary from tariff costs reaping a windfall in ocean freight discounts. Despite the largest order book in history and volumes expected to slow globally, that is not the scenario coming into focus for the year ahead, even if widespread Red Sea transits resume.  Rather, according to several sources in recent weeks, a different picture is emerging: Rates will likely moderate, perhaps by a few hundred dollars per container, and as shippers realize that threats to service are not periodic but systemic, their focus on reliability will only intensify this year. The year ahead, in other words, reflects long-term macro trends under way in containers: capacity tightening despite cyclicality due to infrastructure limitations and carrier actions to manage capacity, and shippers in response turning their focus away from rates and toward service to mitigate risk.  “For 2026 as we move into this bid season, it won’t be all about the ocean rates,” Chantal McRoberts of Drewry Supply Chain Advisers told a recent Journal of Commerce webinar focused on Asia port congestion.   “We know that we’re in a more subdued demand environment. We know that the order book is large. We know that carriers are looking to secure volume, but the key to that is, what service are you providing? Shippers are definitely starting to factor that into their bid strategies,” she said. “The number one question that comes up from BCOs [beneficial cargo owners] is, putting the rates aside, I need a reliable provider or partner to work with. I still have to answer to the CFO. I still have to justify the cost, but I now also have to ensure that I'm procuring my ocean freight to deliver my product.”  According to eeSea, ocean reliability from Asia to the US West Coast has ranged between 42% and 48% since September.  China ‘lacking port capacity’  Port congestion in China is a case in point about shippers’ growing concerns about the integrity of supply chains.   Still the source of 36% of US imports in TEUs in 2025, (down from 40% in 2024), according to S&P Global Market Intelligence, the country is encountering chronic congestion at Shanghai and Ningbo, its two largest ports, where ships typically are waiting two to three days outside the port.  The fundamental reason, according to Asia sources over the past two years, was that while China ambitiously built port capacity ahead of demand in the years after entering the World Trade Organization in 2001, expansion has slowed at a time when its exports are experiencing a growth spurt.   “I know it’s a shocker, and it feels unnatural to hear it, but China is lacking port capacity. It’s as simple as that,” Nils Roche, founder of Solvens Advisory and recently deputy head of operations at Singapore-based carrier PIL, said on the Journal of Commerce webinar. Limited port capacity in China is being called upon to handle surging volumes growing out of a macro-China economic strategy to diversify away from the US and overcome weakness in other sectors such as real estate.   China in November surpassed the $1 trillion trade surplus barrier for the first time. Its share of global exports grew from 33% to 37% between 2023 and 2025, Maersk told investors in November. Influenced by export growth, S&P Global Market Intelligence in November raised Mainland China’s GDP growth forecast for 2025–27 by a quarter point, to 5.0%, 4.6% and 4.5%, respectively. “The upward adjustments primarily reflect a more positive assessment of export prospects,” S&P Global said.  The intractable nature of port capacity limitations is further reflected in growing ship sizes and more containers needed to be moved per port call at ports that have not kept pace.  “The ships that you have today, they are not the ships that we had 10 years ago. If you think about it, I used to operate Panamaxes, and they were the rock stars,” Roche said, noting his skepticism that technology-driven productivity improvements can meaningfully expand capacity. “Now you have 18,000, 24,000-TEU ships coming into the ports. A Panamax calling a port is a port call, a 24,000-TEU ship calling a port, it's a major event.” The difficulty ports have in handling the volumes and ship sizes being thrown at them is confirmed by port performance data. The S&P Global Port Performance data is based on vessel turnaround time and normalized by workload, with underlying data provided by carriers — in other words, how many hours a ship is spending in port to achieve a certain move count. The data shows ports on a global basis are operating well below pre-pandemic levels of performance. Due to port capacity limitations, Roche says the industry should temper its expectations for the impact of a return to the Red Sea, if that occurs this year (although there is no guarantee it will).   He said that if the Red Sea opens up, “we should not expect a massive influx of capacity, simply because the lack of capacity, or the bottleneck if you prefer, will be transferred from the ocean to the land.”  “I disagree with the narrative carried by analysts that shipping obeys 100% of the laws of supply and demand, and that more ships mean more supply ... it’s being half-blind to an entire ecosystem,” Roche said.  S&P Global is the parent company of the Journal of Commerce.Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

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