<div class="phx-topic abstract-wrapper">Good highways and airports are critical to a strong economy, but are they more important than better</div>

Good highways and airports are critical to a strong economy, but are they more important than better

<div>Good highways and airports are critical to a strong economy, but are they more important than better education? Or more medical research? Rep. Bud Shuster seems to think so. As chairman of the House Transportation Committee, he is pushing a plan that would remove the transportation trust funds from the government's budget-review process. Congress should flatly reject this plan. Placing large portions of federal spending ''off-budget'' would make it harder for the government to balance its books and force even deeper cuts in other programs. Lawmakers are paid to make choices, and transportation spending should be subject to the same...

Good highways and airports are critical to a strong economy, but are they more important than better education? Or more medical research? Rep. Bud Shuster seems to think so. As chairman of the House Transportation Committee, he is pushing a plan that would remove the transportation trust funds from the government's budget-review process. Congress should flatly reject this plan. Placing large portions of federal spending ''off-budget'' would make it harder for the government to balance its books and force even deeper cuts in other programs. Lawmakers are paid to make choices, and transportation spending should be subject to the same choices as other federal programs. Rep. Shuster has been trying for more than a year now to pull transportation trust fund spending out of the budget debate. The reason is no mystery. Unencumbered by the caps that restrict many other programs, spending on transportation likely would rise under the Shuster plan - perhaps by as much as an additional $20 billion over the next five years.Supporters of this plan offer several arguments in their defense: Motorists are cheated, they say, when unspent gasoline taxes pile up in the Highway Trust Fund; the trust fund surplus is being hoarded to mask the federal deficit; and crumbling roads and bridges desperately need more federal spending. Each of these arguments is full of holes. Since the Highway Trust Fund was created in 1957, the government has actually spent $6 billion more on road programs than it has collected through gasoline taxes. The $19 billion surplus in the trust fund today is entirely made up of interest the government has been paying itself for the last 25 years. If this were real interest - the kind banks pay depositors - that would be one thing. But trust fund interest is really just an accounting entry, money the Treasury transfers from its right pocket to its left. Indeed, transportation programs have hardly been cheated. Since 1976, transportation spending has tripled, and has been in the middle range in terms of spending growth among federal programs. In fact, over the years, the government has taken about $38 billion from general tax revenues - not from the trust funds - to pay for roads in some economically depressed areas. Removing transportation spending from the budget process would set a dismal precedent. The federal government has more than 160 trust funds, and each almost certainly would demand ''off budget'' treatment if Rep. Shuster wins this fight. The budget-balancing process already is difficult enough because Congress and the president insist on keeping Social Security off the table. That's why a broad group of Republicans and Democrats are against the Shuster plan. So is Federal Reserve Chairman Alan Greenspan, who says the scheme ''would lead to fragmentation of the budgeting process . . . and could engender criticism in financial markets.'' Certainly, more money could be spent to improve roads and airports, but it need not all come from Washington. To its credit, Congress has developed programs that use federal dollars to leverage private capital for infrastructure improvements. Even more far-reaching ideas are now coming from some congressional Republicans, who would like to reduce the cumbersome federal role altogether and hand more responsibility and fund-raising to the states. When a similar approach was adopted for wastewater treatment plants some years ago, construction costs dropped dramatically. The House is expected to consider the Shuster trust fund plan next week. Lawmakers should vote it down, keep transportation ''on-budget'' and make the hard spending choices they're paid to make.

TRANSPORT SPENDING

<div class="phx-topic abstract-wrapper">Import volumes for September through December are expected to come in each month about 20% under the comparable 2024 levels, according to the latest Global Port Tracker, with tariff-linked frontloading one of the primary reasons.</div>

Import volumes for September through December are expected to come in each month about 20% under the comparable 2024 levels, according to the latest Global Port Tracker, with tariff-linked frontloading one of the primary reasons.

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<div class="phx-topic">US imports for the last four months of 2025 will show sharp year-over-year declines due to a combination of the frontloading that took place at the end of 2024 amid longshore labor concerns and this year’s early peak season driven by tariff deadlines, US retailers said Friday. The latest Global Port Tracker (GPT) from the National Retail Federation (NRF) and Hackett Associates made just minimal upgrades to import forecasts for September, October and November from projections made in July. Still, the NRF expects significant year-over-year reductions overall, with import volumes for September through December forecast to come in each month about 20% under the comparable 2024 levels <a href="https://www.joc.com/article/ila-usmx-reach-tentative-deal-that-avoids-another-port-strike-5919519">when shippers were working to move cargo ahead of a strike threat at East and Gulf coast ports.</a><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3f082f38-731c-4471-b484-2aa37e8ab119"></dynamic-object></div>The GPT’s updated forecast for September calls for 1.83 million TEUs in US imports, down 19.4% compared with 2.27 million TEUs in 2024. October is slated for 1.82 million TEUs, down 18.7% from the year-ago period, while November (1.71 million TEUs) and December (1.72 million TEUs) are projected to be down 20.8% and 19.2%, respectively, from 2024 levels. November’s forecast calls for the lowest month for US imports since April 2023. <h3>Tariff pressure </h3>Tariff-linked frontloading is also a significant factor in the severe year-over-year declines in imports. “Friends, allies and foes are all being hit by distortions in trade flows as importers try to second-guess tariff levels by pulling forward imports before the tariffs take effect,” Hackett Associates founder Ben Hackett said. “This, in turn, will certainly lead to a downturn in trade volumes by late September because inventories for the holiday season will already be in hand.” The latest GPT increased August import expectations to 2.2 million TEUs, up 5.8% from the 2.08 million TEUs forecast in July. Meanwhile, June’s actual volume of 1.96 million TEUs was almost 5% less than projected in the prior GPT. Imports for the first half of the year were up 3.6% compared with 2024 at 12.53 million TEUs — likely driven by tariff frontloading. The NRF forecasts US imports for all of 2025 will slide to 24.1 million TEUs, down 5.6% from 25.5 million TEUs last year. “While this forecast is preliminary, it shows the impact the tariffs and the [Trump] administration’s trade policy are having on the supply chain,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “Tariffs are beginning to drive up consumer prices, and fewer imports will eventually mean fewer goods on store shelves.” The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US imports for the last four months of 2025 will show sharp year-over-year declines due to a combination of the frontloading that took place at the end of 2024 amid longshore labor concerns and this year’s early peak season driven by tariff deadlines, US retailers said Friday. The latest Global Port Tracker (GPT) from the National Retail Federation (NRF) and Hackett Associates made just minimal upgrades to import forecasts for September, October and November from projections made in July. Still, the NRF expects significant year-over-year reductions overall, with import volumes for September through December forecast to come in each month about 20% under the comparable 2024 levels when shippers were working to move cargo ahead of a strike threat at East and Gulf coast ports. The GPT’s updated forecast for September calls for 1.83 million TEUs in US imports, down 19.4% compared with 2.27 million TEUs in 2024. October is slated for 1.82 million TEUs, down 18.7% from the year-ago period, while November (1.71 million TEUs) and December (1.72 million TEUs) are projected to be down 20.8% and 19.2%, respectively, from 2024 levels. November’s forecast calls for the lowest month for US imports since April 2023. Tariff pressure Tariff-linked frontloading is also a significant factor in the severe year-over-year declines in imports. “Friends, allies and foes are all being hit by distortions in trade flows as importers try to second-guess tariff levels by pulling forward imports before the tariffs take effect,” Hackett Associates founder Ben Hackett said. “This, in turn, will certainly lead to a downturn in trade volumes by late September because inventories for the holiday season will already be in hand.” The latest GPT increased August import expectations to 2.2 million TEUs, up 5.8% from the 2.08 million TEUs forecast in July. Meanwhile, June’s actual volume of 1.96 million TEUs was almost 5% less than projected in the prior GPT. Imports for the first half of the year were up 3.6% compared with 2024 at 12.53 million TEUs — likely driven by tariff frontloading. The NRF forecasts US imports for all of 2025 will slide to 24.1 million TEUs, down 5.6% from 25.5 million TEUs last year. “While this forecast is preliminary, it shows the impact the tariffs and the [Trump] administration’s trade policy are having on the supply chain,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “Tariffs are beginning to drive up consumer prices, and fewer imports will eventually mean fewer goods on store shelves.” The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com . 

Container Shipping News

Container lines

Trans-Atlantic

Trans-Pacific

North American ports

US retailers project big year-over-year import declines to close out 2025

<div class="phx-topic abstract-wrapper">The Chinese-Polish carrier won the rate-linked relief after US regulators had expressed initial concerns this spring about the Chinese government’s supposed control over the company. </div>

The Chinese-Polish carrier won the rate-linked relief after US regulators had expressed initial concerns this spring about the Chinese government’s supposed control over the company.

<div class="phx-topic">Chinese-Polish multipurpose vessel (MPV) operator Chipolbrok has received a three-year exemption to the so-called controlled-carrier requirement from US federal maritime regulators, allowing it to change tariff rates immediately rather than wait 30 days. Chipolbrok successfully sought the exemption after being <a href="https://www.joc.com/article/fmc-to-scrutinize-chipolbrok-citing-chinese-government-control-5987599">placed on the controlled carrier list by the Federal Maritime Commission (FMC) in April</a>, arguing that having to wait 30 days before changing tariff rates would prevent it from being competitive while harming US shippers — exporters, in particular. “While most cargo moves pursuant to service contracts, as a breakbulk, bulk, and project cargo carrier, Chipolbrok’s shipments move primarily by either tariff rates or charter-party arrangements,” the MPV carrier said in its petition to the FMC for an exemption, which was granted Thursday. Typically, controlled carriers are subject to increased scrutiny to ensure government-subsidized shipping companies don’t undercut competitors to gain access to the US market or disrupt trade. Still, the FMC found that the exemption for Chipolbrok will “neither substantially reduce competition nor be detrimental to commerce.” The exemption comes after a public comment period in May that was largely supportive of Chipolbrok, with seven comments in support of the MPV operator and four comments in opposition. Chipolbrok’s initial designation as a controlled carrier came after the FMC determined the Chinese government had more control of the company than its Polish counterpart, pointing to a headquarters in China and the fact there are more subsidiary units and executives in the Chinese part of the company. The FMC also noted that Chinese-owned carrier Cosco Shipping Group provides funding and other support to Chipolbrok. Cosco Shipping Lines, a subsidiary of COSCO Shipping Group, is on the FMC’s controlled carrier list, along with its Hong Kong-based subsidiary OOCL and South Korea-based HMM. Chipolbrok has an owned fleet of 32 multipurpose vessels ranging in size up to 62,000 deadweight tons (dwt) that operate semi-liner and tramp services; it also has four 38,000-dwt ships on order for delivery starting next year. In the US, the company operates through Houston-based Chipolbrok Americas, formed in 2004. Recent shipments by Chipolbrok have included components for LNG facilities along the Gulf of Mexico. Chipolbrok representatives in the US were not immediately available for comment. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

Chinese-Polish multipurpose vessel (MPV) operator Chipolbrok has received a three-year exemption to the so-called controlled-carrier requirement from US federal maritime regulators, allowing it to change tariff rates immediately rather than wait 30 days. Chipolbrok successfully sought the exemption after being placed on the controlled carrier list by the Federal Maritime Commission (FMC) in April , arguing that having to wait 30 days before changing tariff rates would prevent it from being competitive while harming US shippers — exporters, in particular. “While most cargo moves pursuant to service contracts, as a breakbulk, bulk, and project cargo carrier, Chipolbrok’s shipments move primarily by either tariff rates or charter-party arrangements,” the MPV carrier said in its petition to the FMC for an exemption, which was granted Thursday. Typically, controlled carriers are subject to increased scrutiny to ensure government-subsidized shipping companies don’t undercut competitors to gain access to the US market or disrupt trade. Still, the FMC found that the exemption for Chipolbrok will “neither substantially reduce competition nor be detrimental to commerce.” The exemption comes after a public comment period in May that was largely supportive of Chipolbrok, with seven comments in support of the MPV operator and four comments in opposition. Chipolbrok’s initial designation as a controlled carrier came after the FMC determined the Chinese government had more control of the company than its Polish counterpart, pointing to a headquarters in China and the fact there are more subsidiary units and executives in the Chinese part of the company. The FMC also noted that Chinese-owned carrier Cosco Shipping Group provides funding and other support to Chipolbrok. Cosco Shipping Lines, a subsidiary of COSCO Shipping Group, is on the FMC’s controlled carrier list, along with its Hong Kong-based subsidiary OOCL and South Korea-based HMM. Chipolbrok has an owned fleet of 32 multipurpose vessels ranging in size up to 62,000 deadweight tons (dwt) that operate semi-liner and tramp services; it also has four 38,000-dwt ships on order for delivery starting next year. In the US, the company operates through Houston-based Chipolbrok Americas, formed in 2004. Recent shipments by Chipolbrok have included components for LNG facilities along the Gulf of Mexico. Chipolbrok representatives in the US were not immediately available for comment. Contact Laura Robb at laura.robb@spglobal.com . 

Maritime

Breakbulk News

FMC grants ‘controlled-carrier’ exemption to MPV operator Chipolbrok

<div class="phx-topic abstract-wrapper">Following a July volume surge as US importers built inventory ahead of the sweeping US tariff rollout on Aug. 7, freighter airlines must now right-size capacity to match new demand levels. </div>

Following a July volume surge as US importers built inventory ahead of the sweeping US tariff rollout on Aug. 7, freighter airlines must now right-size capacity to match new demand levels.

<div class="phx-topic">The chaotic trans-Pacific trading environment is testing the ability of air cargo airlines to quickly shift capacity between trade corridors in support of rapid changes in Asian export volume. Following a volume surge in July as US importers built up inventory ahead of the sweeping rollout of tariffs on US trading partners Aug. 7, freighter airlines now face the challenge of right-sizing capacity to match new demand levels. C.H. Robinson wrote in a market update this week that international air freight markets were experiencing widespread capacity rationalization. “The fundamental challenge has been one of timing: With new demand in July, carriers increased capacity, but importers completed inventory building earlier than expected, leaving airlines with excess capacity they must now remove to maintain profitability,” the forwarder noted. C.H. Robinson said Asian carriers were particularly affected as the traditional peak season for electronics and consumer goods shipments to US and European markets has been disrupted by the frontloading cycle, forcing airlines to reassess capacity allocation across their networks. “Airlines had reduced flights and reallocated aircraft, expecting lower cargo demand after July 9 when higher US reciprocal tariffs were originally scheduled to take effect,” the forwarder wrote. “But when trade deal deadlines for most countries were pushed to Aug. 1 and China received a separate extension to Aug. [14] for negotiations, carriers found themselves with mismatched capacity,” it added. Contrary to the usual seasonal summer lull, July saw an unexpected 5% increase in global air cargo volume following a modest 1% gain in June, according to rate benchmarking platform Xeneta. The boost appeared to be driven in part by tariff-related frontloading, mode shift and persistent uncertainty, prompting businesses to expedite shipments, noted Niall van der Wouw, chief air freight analyst at Xeneta. The robust rise in volume helped lift the dynamic load factor, which Xeneta data shows has returned to last year’s 58% level. <h3>‘Piggybacking on the chaos’ </h3>“Air cargo is piggybacking on the chaos being caused by tariffs,” van der Wouw said in a market update this week. “While the growth in July will come as a pleasant surprise to many, this growth is not a consequence of increased trade. It is a sign of the creative ways companies are trying to circumvent the higher costs of tariffs.” Despite the increase in demand, air freight rates along the trans-Pacific corridor weakened markedly in July. Xeneta data shows spot rates from Southeast Asia to North America declined 16% year over year to $4.87 per kilogram as earlier capacity constraints eased. Rates from Northeast Asia to North America remained relatively flat at $4.81/kg, buoyed by robust demand out of Taiwan where spot rates climbed 9% year over year to $6.85/kg amid a surging appetite for AI and semiconductors. Rates out of China, however, told a different story. Spot rates to the US declined 11% to $4.26/kg, weighed down by the US elimination of duty-free access for low-value imports from China and Hong Kong, heightened tariffs and market uncertainty. Still, e-commerce continues to be one of the main drivers of global demand for air cargo, despite the US de minimis ban. For context, e-commerce shipments accounted for more than 50% of trans-Pacific air freight shipments last year. Cathay Pacific CEO and executive director Lam Siu Por told analysts during the carrier’s first-half earnings call this week that more than half of the shipments handled in the world’s busiest air cargo hub of Hong Kong during the first months of the year were believed to be e-commerce. “It’s very hard to tell which shipment is e-commerce or which one is traditional cargo, but e-commerce definitely makes up a good proportion of our export out of Hong Kong nowadays,” Lam said. “Some people say it’s probably close to half, if not more.” Data from air freight analyst Rotate shows China’s e-commerce exports to the US fell 44% in July year over year, even as e-commerce exports to all other countries recorded robust growth of nearly 50%. Xeneta data for June shows China-to-Europe e-commerce volumes rose 90% year over year, supported by a shift in capacity from the tariff-hit trans-Pacific trade lane. <h3>De minimis ban extended to all US trading partners </h3>The current challenge for air cargo operators is to assess the impact of President Donald Trump’s executive order last week extending the US’ de minimis ban to all its trading partners from Aug. 29. Under the “De Minimis Executive Order,” all goods that are shipped through the international postal network are subject to a tariff equal to the effective reciprocal tariff rate applicable to the country of origin of the product: a flat rate of $80 per item for countries with an effective reciprocal tariff rate of less than 16%, $160 per item for countries with a tariff rate between 16% and 25%, or $200 per item for countries with a tariff rate above 25%. “The latest executive order that extends the suspension of de minimis exemptions to affect all points of origin will add complexity to international trade in e-commerce, which typically would fall below the previously established $800 limit,” Glyn Hughes, director-general of The International Air Cargo Association, told the Journal of Commerce. Hughes said market calculations assessed that more than 1.2 billion shipments fell under the US’ de minimis limit during 2024. He added that the operational implementation of duties to all low-value shipments previously exempted would add additional cost and complexity. “We can expect demand to suffer, and markets will continue to shift,” Hughes said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The chaotic trans-Pacific trading environment is testing the ability of air cargo airlines to quickly shift capacity between trade corridors in support of rapid changes in Asian export volume. Following a volume surge in July as US importers built up inventory ahead of the sweeping rollout of tariffs on US trading partners Aug. 7, freighter airlines now face the challenge of right-sizing capacity to match new demand levels. C.H. Robinson wrote in a market update this week that international air freight markets were experiencing widespread capacity rationalization. “The fundamental challenge has been one of timing: With new demand in July, carriers increased capacity, but importers completed inventory building earlier than expected, leaving airlines with excess capacity they must now remove to maintain profitability,” the forwarder noted. C.H. Robinson said Asian carriers were particularly affected as the traditional peak season for electronics and consumer goods shipments to US and European markets has been disrupted by the frontloading cycle, forcing airlines to reassess capacity allocation across their networks. “Airlines had reduced flights and reallocated aircraft, expecting lower cargo demand after July 9 when higher US reciprocal tariffs were originally scheduled to take effect,” the forwarder wrote. “But when trade deal deadlines for most countries were pushed to Aug. 1 and China received a separate extension to Aug. [14] for negotiations, carriers found themselves with mismatched capacity,” it added. Contrary to the usual seasonal summer lull, July saw an unexpected 5% increase in global air cargo volume following a modest 1% gain in June, according to rate benchmarking platform Xeneta. The boost appeared to be driven in part by tariff-related frontloading, mode shift and persistent uncertainty, prompting businesses to expedite shipments, noted Niall van der Wouw, chief air freight analyst at Xeneta. The robust rise in volume helped lift the dynamic load factor, which Xeneta data shows has returned to last year’s 58% level. ‘Piggybacking on the chaos’ “Air cargo is piggybacking on the chaos being caused by tariffs,” van der Wouw said in a market update this week. “While the growth in July will come as a pleasant surprise to many, this growth is not a consequence of increased trade. It is a sign of the creative ways companies are trying to circumvent the higher costs of tariffs.” Despite the increase in demand, air freight rates along the trans-Pacific corridor weakened markedly in July. Xeneta data shows spot rates from Southeast Asia to North America declined 16% year over year to $4.87 per kilogram as earlier capacity constraints eased. Rates from Northeast Asia to North America remained relatively flat at $4.81/kg, buoyed by robust demand out of Taiwan where spot rates climbed 9% year over year to $6.85/kg amid a surging appetite for AI and semiconductors. Rates out of China, however, told a different story. Spot rates to the US declined 11% to $4.26/kg, weighed down by the US elimination of duty-free access for low-value imports from China and Hong Kong, heightened tariffs and market uncertainty. Still, e-commerce continues to be one of the main drivers of global demand for air cargo, despite the US de minimis ban. For context, e-commerce shipments accounted for more than 50% of trans-Pacific air freight shipments last year. Cathay Pacific CEO and executive director Lam Siu Por told analysts during the carrier’s first-half earnings call this week that more than half of the shipments handled in the world’s busiest air cargo hub of Hong Kong during the first months of the year were believed to be e-commerce. “It’s very hard to tell which shipment is e-commerce or which one is traditional cargo, but e-commerce definitely makes up a good proportion of our export out of Hong Kong nowadays,” Lam said. “Some people say it’s probably close to half, if not more.” Data from air freight analyst Rotate shows China’s e-commerce exports to the US fell 44% in July year over year, even as e-commerce exports to all other countries recorded robust growth of nearly 50%. Xeneta data for June shows China-to-Europe e-commerce volumes rose 90% year over year, supported by a shift in capacity from the tariff-hit trans-Pacific trade lane. De minimis ban extended to all US trading partners The current challenge for air cargo operators is to assess the impact of President Donald Trump’s executive order last week extending the US’ de minimis ban to all its trading partners from Aug. 29. Under the “De Minimis Executive Order,” all goods that are shipped through the international postal network are subject to a tariff equal to the effective reciprocal tariff rate applicable to the country of origin of the product: a flat rate of $80 per item for countries with an effective reciprocal tariff rate of less than 16%, $160 per item for countries with a tariff rate between 16% and 25%, or $200 per item for countries with a tariff rate above 25%. “The latest executive order that extends the suspension of de minimis exemptions to affect all points of origin will add complexity to international trade in e-commerce, which typically would fall below the previously established $800 limit,” Glyn Hughes, director-general of The International Air Cargo Association, told the Journal of Commerce. Hughes said market calculations assessed that more than 1.2 billion shipments fell under the US’ de minimis limit during 2024. He added that the operational implementation of duties to all low-value shipments previously exempted would add additional cost and complexity. “We can expect demand to suffer, and markets will continue to shift,” Hughes said. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Air Cargo

Air cargo carriers face capacity challenge as tariff frontloading ends

<div class="phx-topic abstract-wrapper">But standing in the way of accelerated margin improvement is the volatile North American market to which the carrier is heavily exposed in logistics. </div>

But standing in the way of accelerated margin improvement is the volatile North American market to which the carrier is heavily exposed in logistics.

<div class="phx-topic">The slowly improving profit margins of the logistics and services division that underpin Maersk’s integrated end-to-end strategy continue to frustrate CEO Vincent Clerc. But the chief executive vowed that the division’s target operating profit margin of “above 6%” will be reached by the end of the year. “The message here is clear ... we are progressing, but we are not satisfied with where we are,” Clerc told analysts on the carrier’s second-quarter earnings call Thursday. Although second-quarter earnings before interest and taxes (EBIT) of $175 million in the logistics and services segment were up 23% year over year, the EBIT margin grew sequentially by just 0.7% to 4.8%, still short of Maersk’s 6% target. “I look at being above 6% as an important proxy for having a business that is humming and that is ready to integrate businesses and realize significant cost synergies and cost savings,” Clerc said. “So that’s why we’re going to stay put until we’re there.” Maersk launched its integrated strategy in 2017 and has been trying to pull in a greater share of shipper-direct volume with the aim of providing end-to-end control of customers’ cargo. It is a model that has <a href="https://www.joc.com/article/tpm24-industry-veteran-sees-little-value-in-ocean-carriers-integrating-logistics-services-5241059">drawn criticism from global forwarders</a> who regard their asset-light approach as better-suited to the complexities of global trade. Second-quarter revenue of $3.6 billion in the logistics business was up 5.2% compared with the first quarter, while gross profit was up 6.4% at $1.2 billion. Although the segment was trending in the right direction, “from a pace perspective, I would wish for more pace,” Clerc said. It is a sentiment the Maersk executive has expressed regularly following quarterly results. But standing in the way of accelerated margin improvement is the volatile North American market to which Maersk is heavily exposed in logistics. North America is the carrier’s single-largest region for logistics and where second-quarter revenue was down 8% year over year. <h3>Push for diversified logistics portfolio </h3>Analysts point out that a slowdown in US demand in the second half will make it difficult for Maersk to improve revenue in its logistics segment and increase the EBIT margin. “Over the past few quarters, Maersk’s focus has moved to improving the margin rather than growing revenue in its logistics business,” the transportation analyst for a global bank told the Journal of Commerce. “Exiting warehouse leases where possible and getting rid of ultra-low paying customers is essentially driving margins at the moment.” Jeff Wong, an analyst at CFRA Research, said for logistics and services margins to meaningfully improve on a sustained basis, stronger volumes would be required. ”While high disruption continues to drive a need for more enhanced solutions and services, it’s also being offset by the ongoing uncertainty, which is suppressing overall activity and volumes,” he said. “I think the 6% target is a stretch for the full year, but could be attainable in Q4, where we should see higher activity during the holiday season,” he added. Still, Clerc remains convinced that having a more diversified portfolio in logistics, from a geographical, vertical and product perspective, makes sense for Maersk considering the supply chain challenges faced by its customers. He said customers were headed into a more fragmented world and a supply chain in need of significant retooling and reengineering to meet changing trade flows. “It means that for the next decade, I’m actually quite optimistic for what the current direction of travel means because it will open a lot of opportunities for us, and we’re going to need that to expand the footprint that we have,” Clerc said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The slowly improving profit margins of the logistics and services division that underpin Maersk’s integrated end-to-end strategy continue to frustrate CEO Vincent Clerc. But the chief executive vowed that the division’s target operating profit margin of “above 6%” will be reached by the end of the year. “The message here is clear ... we are progressing, but we are not satisfied with where we are,” Clerc told analysts on the carrier’s second-quarter earnings call Thursday. Although second-quarter earnings before interest and taxes (EBIT) of $175 million in the logistics and services segment were up 23% year over year, the EBIT margin grew sequentially by just 0.7% to 4.8%, still short of Maersk’s 6% target. “I look at being above 6% as an important proxy for having a business that is humming and that is ready to integrate businesses and realize significant cost synergies and cost savings,” Clerc said. “So that’s why we’re going to stay put until we’re there.” Maersk launched its integrated strategy in 2017 and has been trying to pull in a greater share of shipper-direct volume with the aim of providing end-to-end control of customers’ cargo. It is a model that has drawn criticism from global forwarders who regard their asset-light approach as better-suited to the complexities of global trade. Second-quarter revenue of $3.6 billion in the logistics business was up 5.2% compared with the first quarter, while gross profit was up 6.4% at $1.2 billion. Although the segment was trending in the right direction, “from a pace perspective, I would wish for more pace,” Clerc said. It is a sentiment the Maersk executive has expressed regularly following quarterly results. But standing in the way of accelerated margin improvement is the volatile North American market to which Maersk is heavily exposed in logistics. North America is the carrier’s single-largest region for logistics and where second-quarter revenue was down 8% year over year. Push for diversified logistics portfolio Analysts point out that a slowdown in US demand in the second half will make it difficult for Maersk to improve revenue in its logistics segment and increase the EBIT margin. “Over the past few quarters, Maersk’s focus has moved to improving the margin rather than growing revenue in its logistics business,” the transportation analyst for a global bank told the Journal of Commerce. “Exiting warehouse leases where possible and getting rid of ultra-low paying customers is essentially driving margins at the moment.” Jeff Wong, an analyst at CFRA Research, said for logistics and services margins to meaningfully improve on a sustained basis, stronger volumes would be required. ”While high disruption continues to drive a need for more enhanced solutions and services, it’s also being offset by the ongoing uncertainty, which is suppressing overall activity and volumes,” he said. “I think the 6% target is a stretch for the full year, but could be attainable in Q4, where we should see higher activity during the holiday season,” he added. Still, Clerc remains convinced that having a more diversified portfolio in logistics, from a geographical, vertical and product perspective, makes sense for Maersk considering the supply chain challenges faced by its customers. He said customers were headed into a more fragmented world and a supply chain in need of significant retooling and reengineering to meet changing trade flows. “It means that for the next decade, I’m actually quite optimistic for what the current direction of travel means because it will open a lot of opportunities for us, and we’re going to need that to expand the footprint that we have,” Clerc said. Contact Greg Knowler at greg.knowler@spglobal.com .

Maersk CEO vows to reach logistics profit margin target by year-end

<div class="phx-topic abstract-wrapper">The new rule, a second attempt at requiring the so-called ABC test for workers in the state, has drawn opposition from multiple groups, with port trucking among the affected industries.</div>

The new rule, a second attempt at requiring the so-called ABC test for workers in the state, has drawn opposition from multiple groups, with port trucking among the affected industries.

<div class="phx-topic">A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period on Wednesday over a proposed rule that would require use of the so-called “ABC” test for determining whether a worker is a full-time employee or an independent contractor.The ABC test, which looks at factors such as the kind of work, how it’s done and who supervises it, undergirds <a href="https://www.joc.com/article/trucker-classification-effort-ripe-for-national-expansion-5197032">California’s AB5 law</a> passed in 2019. AB5 imposed a higher hurdle on the state’s trucking industry for using independent owner-operators as drivers. That same year, <a href="https://www.joc.com/article/njs-classification-bill-dead-for-now-but-will-return-senator-5196905">New Jersey’s legislature failed to pass a similar law</a> codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group — Save Independent Work — said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors. As with the earlier attempted legislation, the Labor Department’s proposed rule drew opposition from the state’s drayage carriers, which rely on about 8,300 independent contractor drivers at the Port of New York and New Jersey. Lisa Yakomin, president of the Association of Bi-State Motor Carriers, said during public testimony in Trenton in June the rule would “paralyze the regional supply chain.” “Previous attempts to enshrine the Labor Department’s narrow application of the ABC test have been soundly rejected by the state legislature,” Yakomin said during her testimony. “This new rulemaking ignores that opposition and bypasses the authority of our state’s elected legislative representatives.” Other port stakeholders joined to oppose the new rule, including the Shipping Association of New York and New Jersey and the Maritime Association of the Port of New York and New Jersey (MAPONYNJ), which said disrupting the business model for port truckers would hurt supply chains.“Rather than protecting independent contractors, the proposal would effectively eliminate their ability to operate,” MAPONYNJ said in its comments. The proposed rule did draw support from the groups aligned with labor unions, such as the Economic Policy Institute and Human Rights Watch, which highlighted how delivery and rideshare drivers in Texas only earn about $5 per hour due to being classified as independent contractors. <h3>No timeline for decision</h3>The decision to adopt the rule rests largely with Robert Asaro-Angelo, the state’s labor commissioner and an appointee of New Jersey Gov. Phil Murphy, a Democrat.There is no timeline for when Asaro-Angelo must decide on whether to implement the rule. Bi-State’s Yakomin told the Journal of Commerce a decision on the rule is an overhang for port truckers as the outgoing Murphy administration may try to push it through during a lame duck session“If Asaro-Angelo wants to move forward, there’s nothing we can do,” Yakomin said. “It would take some legislation to roll back some of the test.”However, Yakomin said that this second attempt at implementing the ABC test has drawn more opposition from other New Jersey legislators, especially Democratic legislators who have typically been friendlier to unions and other labor groups. State Sen. Angela McKnight, a Democrat representing the area around the marine terminal in Bayonne, said in a letter to the Labor Department this month the proposed rule “could have serious unintended economic consequences” at the NY-NJ port and could “push drivers to relocate to less restrictive states.” Democratic State Sen. John Burzichelli, who took over the seat vacated by the senator who sponsored the original ABC legislation in 2019, also said in comments about the rule that he’s heard from constituents that the rule would be “detrimental.”“It’s great to see how many legislators have expressed concerns about the rule,” Yakomin said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period on Wednesday over a proposed rule that would require use of the so-called “ABC” test for determining whether a worker is a full-time employee or an independent contractor. The ABC test, which looks at factors such as the kind of work, how it’s done and who supervises it, undergirds California’s AB5 law passed in 2019. AB5 imposed a higher hurdle on the state’s trucking industry for using independent owner-operators as drivers. That same year, New Jersey’s legislature failed to pass a similar law codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group — Save Independent Work — said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors. As with the earlier attempted legislation, the Labor Department’s proposed rule drew opposition from the state’s drayage carriers, which rely on about 8,300 independent contractor drivers at the Port of New York and New Jersey. Lisa Yakomin, president of the Association of Bi-State Motor Carriers, said during public testimony in Trenton in June the rule would “paralyze the regional supply chain.” “Previous attempts to enshrine the Labor Department’s narrow application of the ABC test have been soundly rejected by the state legislature,” Yakomin said during her testimony. “This new rulemaking ignores that opposition and bypasses the authority of our state’s elected legislative representatives.” Other port stakeholders joined to oppose the new rule, including the Shipping Association of New York and New Jersey and the Maritime Association of the Port of New York and New Jersey (MAPONYNJ), which said disrupting the business model for port truckers would hurt supply chains. “Rather than protecting independent contractors, the proposal would effectively eliminate their ability to operate,” MAPONYNJ said in its comments. The proposed rule did draw support from the groups aligned with labor unions, such as the Economic Policy Institute and Human Rights Watch, which highlighted how delivery and rideshare drivers in Texas only earn about $5 per hour due to being classified as independent contractors. No timeline for decision The decision to adopt the rule rests largely with Robert Asaro-Angelo, the state’s labor commissioner and an appointee of New Jersey Gov. Phil Murphy, a Democrat. There is no timeline for when Asaro-Angelo must decide on whether to implement the rule. Bi-State’s Yakomin told the Journal of Commerce a decision on the rule is an overhang for port truckers as the outgoing Murphy administration may try to push it through during a lame duck session “If Asaro-Angelo wants to move forward, there’s nothing we can do,” Yakomin said. “It would take some legislation to roll back some of the test.” However, Yakomin said that this second attempt at implementing the ABC test has drawn more opposition from other New Jersey legislators, especially Democratic legislators who have typically been friendlier to unions and other labor groups. State Sen. Angela McKnight, a Democrat representing the area around the marine terminal in Bayonne, said in a letter to the Labor Department this month the proposed rule “could have serious unintended economic consequences” at the NY-NJ port and could “push drivers to relocate to less restrictive states.” Democratic State Sen. John Burzichelli, who took over the seat vacated by the senator who sponsored the original ABC legislation in 2019, also said in comments about the rule that he’s heard from constituents that the rule would be “detrimental.” “It’s great to see how many legislators have expressed concerns about the rule,” Yakomin said. Contact Michael Angell at michael.angell@spglobal.com .

Drayage

Trucking labor

New Jersey’s proposed worker classification rule hangs over port truckers

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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/

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