<div class="phx-topic abstract-wrapper">Initial sales of its stereo speakers in Japan in 1976 were disappointing for Bose Corp. Its </div>

Initial sales of its stereo speakers in Japan in 1976 were disappointing for Bose Corp. Its

<div>Initial sales of its stereo speakers in Japan in 1976 were disappointing for Bose Corp.Its U.S. management was having difficulty communicating with Japanese consumers, who were unimpressed by the large speakers Bose was offering, the same speakers that sold briskly in the United States.So Bose revamped its operations, bringing in a Japanese manager who persuaded the company to begin selling smaller, less expensive speakers better adapted to the cramped living spaces of most Japanese. Today, Bose has 20 percent of the Japanese market.That is one example of how U.S. businesses can succeed in Japan if they're willing to spend the...

Initial sales of its stereo speakers in Japan in 1976 were disappointing for Bose Corp. Its U.S. management was having difficulty communicating with Japanese consumers, who were unimpressed by the large speakers Bose was offering, the same speakers that sold briskly in the United States.So Bose revamped its operations, bringing in a Japanese manager who persuaded the company to begin selling smaller, less expensive speakers better adapted to the cramped living spaces of most Japanese. Today, Bose has 20 percent of the Japanese market. That is one example of how U.S. businesses can succeed in Japan if they're willing to spend the time and money to develop a quality product modified to Japanese tastes, said Kasuhiko Takatsu, public affairs director for the Japan External Trade Organization, a trade promotion group. If U.S. businesses took the time to work within the Japanese trading system, rather than allowing the system to defeat them without even trying, they would find plenty of export opportunities, Mr. Takatsu said. There are trade barriers to overcome in Japan, but few U.S. companies bother to commit the time and money required to break through, said Raymond Pilgrim, president and chief executive of Tuscarora Marketing Group, a trading company in Columbia, S.C. "I get tired of all the Japanese-bashing by American companies," Mr. Pilgrim said at the 1989 Florida Governor's Conference on World Trade and Investment. "Should the Japanese change their entire distribution system to make it easy for us? I don't think so." Japan, a cash-rich society in which 89 percent of the population can be described as middle-class, provides great potential for exporters of quality merchandise once they learn how to circumvent the barriers, Mr. Pilgrim said. Product quality and adaptability are two of the keys to successful entry into Japan, Mr. Takatsu said. "Contrary to what you have heard, Japan offers opportunities for U.S. companies with innovative, quality products," Mr. Takatsu said. However, he added, the trade friction between the United States and Japan has led many U.S. businesses to the belief that trying to sell their goods in Japan would be a waste of time. Therefore, they haven't done what needs to be done in order to compete in the Japanese market. "That is truly unfortunate," he said. Mr. Takatsu noted that Japan's trade surplus with the United States fell to about $50 billion in 1988 from 1987's $67 billion surplus. Although the rate of decline has slowed this year, he said that's primarily because U.S. consumer demand remains strong. "What is important is that we work together" to bring U.S.-Japan trade into better balance, the Jetro official said. "Our common interests are more important than any individual issue." Working in favor of U.S. companies is the strength of Japanese consumer demand and the currency advantage still enjoyed by the United States, Mr. Takatsu said. That's especially true for companies making products in the health care and leisure fields, he said, explaining that Japan's population is aging and a leisure activity boom is under way. U.S. products introduced to Japan probably will have to be modified to suit Japanese tastes, as will marketing schemes, Mr. Takatsu suggested. Another example cited by Mr. Takatsu is Johnson & Johnson, which initially experienced slow sales of its baby powder in Japan until the company discovered that mothers thought the pink color was too bright and the scent too strong. So Johnson & Johnson went to a white, less heavily scented powder and now has a major share of the market.

Maritime

US FIRMS TOLD RIGHT GOODS CAN CRACK JAPAN'S MARKET

<div class="phx-topic abstract-wrapper">Container shipping has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity, attendees at TPM26 were told. </div>

Container shipping has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity, attendees at TPM26 were told.

Feature image

<div class="phx-topic">A slide presented at TPM26 on March 2 by Maersk’s global head of ocean product said it all. The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6185926_0.1.jpg"></img></div>The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes points to effective capacity management by carriers. “With very volatile demand, we actually see a utilization which is quite stable,” said the Maersk executive, Johan Sigsgaard. “And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of (blank sailings).” In other words, as of 2026, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity. Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper, and must consider multiple forms of brakes on capacity. “We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive vice president for imports at MTS Logistics in New York, who attended TPM26. “Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels. “With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added. <h3>‘Growing relevance’ of capacity post-COVID </h3>Carriers took their first steps towards capacity management at scale during the 2008-09 financial crisis when they laid up around 10% of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10% drop in global volumes. Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020 including COVID-19, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market. All that means is that despite a record order book amounting to around 35% of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID due to the growing relevance of the capacity side of the equation. The industry is experiencing an “illusion of a normal down cycle,” Flexport’s global head of ocean, Trine Nielsen, told TPM26 on March 2. “We do have the macro volatility layer, as we call it, and I think just the past week and a half (of the Middle East war and Supreme Court tariff ruling)...is the perfect proof of how quickly the world changes.” Nielsen added: “We do have what we call micro volatility, and we see this becoming more and more frequent. One aspect is the capacity management, dealing with blank sailings, dealing with (cargo) rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we're in.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

A slide presented at TPM26 on March 2 by Maersk’s global head of ocean product said it all. The slide showed just two lines: heavy volatility in volumes over a period of time, and more or less flat vessel utilization over the same time period. The conclusion: Consistent vessel utilization levels in the face of much more volatile volumes points to effective capacity management by carriers. “With very volatile demand, we actually see a utilization which is quite stable,” said the Maersk executive, Johan Sigsgaard. “And of course, the balance between the two is the deployment adjustments that are made on a week-to-week basis, either in the form of ship size adjustments or in the form of (blank sailings).” In other words, as of 2026, the carrier industry has come a long way in mastering the art of blank sailings, redeployments, slow steaming and other forms of proactive capacity management, mitigating the impact of much-discussed overcapacity. Many others have noticed what amounts to a fundamental shift from the pre-COVID state of the industry and a likely long-term reality of the market going forward. The new reality is that the industry can no longer be understood in terms of supply and demand on paper, and must consider multiple forms of brakes on capacity. “We see this very clearly in the market on a day-to-day basis,” said Serkan Kavas, executive vice president for imports at MTS Logistics in New York, who attended TPM26. “Since the COVID cargo surge ended, carriers have become much more disciplined in managing capacity through blank sailings and vessel deployment to maintain rate levels. “With excess supply still present, capacity management will remain one of the most important tools carriers rely on over the next few years, regardless of how volatile the macro environment is,” he added. ‘Growing relevance’ of capacity post-COVID Carriers took their first steps towards capacity management at scale during the 2008-09 financial crisis when they laid up around 10% of global tonnage, according to industry analyst Lars Jensen. At the same time, they jointly agreed to engage in systemwide slow steaming in response to a 10% drop in global volumes. Blank sailings began as a regular carrier tactic around 2013. Capacity was further removed due to a series of macro shocks that began in 2020 including COVID-19, the attacks on shipping in the Red Sea, the Panama Canal drought, and most recently the war with Iran. Growing systemic port congestion is another factor pulling more capacity off the market. All that means is that despite a record order book amounting to around 35% of the existing fleet, which has caused several financial analysts to be downbeat on carrier stocks, the downside risks for carriers are much less severe and more manageable than prior to COVID due to the growing relevance of the capacity side of the equation. The industry is experiencing an “illusion of a normal down cycle,” Flexport’s global head of ocean, Trine Nielsen, told TPM26 on March 2. “We do have the macro volatility layer, as we call it, and I think just the past week and a half (of the Middle East war and Supreme Court tariff ruling)...is the perfect proof of how quickly the world changes.” Nielsen added: “We do have what we call micro volatility, and we see this becoming more and more frequent. One aspect is the capacity management, dealing with blank sailings, dealing with (cargo) rollings, equipment issues that, of course, are becoming even more difficult considering the macro environment that we're in.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Container lines

Ocean carriers employ effective capacity management despite market volatility

<div class="phx-topic abstract-wrapper">The weakness has continued into 2026, with Taiwan’s biggest carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year.</div>

The weakness has continued into 2026, with Taiwan’s biggest carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year.

<div class="phx-topic">Evergreen Marine on Friday said its net profits for 2025 were almost halved from the year prior, falling 48% to $2.2 billion from $4.2 billion in 2024. In a filing with the Taiwan stock exchange, the carrier revealed its operating revenues have continued to slide in the first two months of this year, following an 18% decline in full-year 2025 revenues. Evergreen, the largest of Taiwan’s “Big Three” carriers <a href="https://www.joc.com/article/yang-ming-wan-hai-boost-combined-order-book-with-12-new-ships-6185215">who reported 2025 results this week</a>, said its revenues last year came in at $12.2 billion, down from $15 billion in 2024. And the weakness has continued into 2026, with the carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year. Evergreen said freight rates on all the major trades declined last year, according to data from the Shanghai Shipping Exchange. The biggest falls were on Asia-US West Coast, with rates crashing 52% year over year to $2,188 per TEU, and Asia-US East Coast, which saw a 50% decline to $3,033/TEU, according to SSE data carried on the Journal of Commerce’s Gateway platform. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="066706ac-45f2-46c0-9bd0-a6a626d6b972"></dynamic-object></div>Evergreen gave no further details in its exchange filing. But in a presentation late last year, it said average revenue per TEU started to fall last August while monthly liftings remained steady at around 930,000 TEUs. In separate filing Friday, Evergreen said it is spending more than $247 million to lease 98,796 containers from seven leasing companies and Gaining Enterprise, an Evergreen affiliate. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Evergreen Marine on Friday said its net profits for 2025 were almost halved from the year prior, falling 48% to $2.2 billion from $4.2 billion in 2024. In a filing with the Taiwan stock exchange, the carrier revealed its operating revenues have continued to slide in the first two months of this year, following an 18% decline in full-year 2025 revenues. Evergreen, the largest of Taiwan’s “Big Three” carriers who reported 2025 results this week , said its revenues last year came in at $12.2 billion, down from $15 billion in 2024. And the weakness has continued into 2026, with the carrier reporting that combined revenue of $1.9 billion for January and February was down 23% from the same period last year. Evergreen said freight rates on all the major trades declined last year, according to data from the Shanghai Shipping Exchange. The biggest falls were on Asia-US West Coast, with rates crashing 52% year over year to $2,188 per TEU, and Asia-US East Coast, which saw a 50% decline to $3,033/TEU, according to SSE data carried on the Journal of Commerce’s Gateway platform. Evergreen gave no further details in its exchange filing. But in a presentation late last year, it said average revenue per TEU started to fall last August while monthly liftings remained steady at around 930,000 TEUs. In separate filing Friday, Evergreen said it is spending more than $247 million to lease 98,796 containers from seven leasing companies and Gaining Enterprise, an Evergreen affiliate. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Evergreen’s 2025 profits nearly halved on sharp freight rate declines 

<div class="phx-topic abstract-wrapper">With liquefied natural gas flows at a standstill in the Strait of Hormuz, a near-doubling of LNG export capacity in the US is set to drive breakbulk and project cargo activity into the next decade.</div>

With liquefied natural gas flows at a standstill in the Strait of Hormuz, a near-doubling of LNG export capacity in the US is set to drive breakbulk and project cargo activity into the next decade.

<div class="phx-topic">As historic shipping disruptions in the Middle East squeeze global oil and natural gas supplies, a slew of projects is setting up the US to expand its role as the world’s top liquefied natural gas (LNG) exporter while continuing to generate breakbulk and project cargo activity. Approximately one-fifth of global LNG flows through the Strait of Hormuz, which remains shut and where multiple cargo ships came under attack this week. Meanwhile, in the US — which is already the world’s largest LNG exporter — LNG export capacity is expected to nearly double in the next five years, while overall natural gas production is on pace to reach record highs, according to recent analyses by the US Energy Information Administration (EIA). Michael Mørland, Atlantic project cargo director for Norwegian multipurpose vessel (MPV) operator G2 Ocean, told the Journal of Commerce that LNG capacity expansion in the US has generated significant breakbulk and project flows over the past 10 years. “We expect this development to continue into the next decade, regardless of short-term geopolitical disruptions,” he said Mørland added that larger LNG production units, further expansions, and more efficient technologies are in the works to meet the growing energy demand from AI data centers and ongoing shifts in the US power mix. But because LNG mega-projects are capital-intensive with extended lead time, the interruptions in the Middle East are unlikely to influence final investment decisions (FIDs) for new US projects, he said. “Since the typical sourcing locations for cargo are not based in the Middle East and remain unaffected, we do not currently expect significant changes in cargo volumes or movement patterns outside the region,” Mørland said, explaining that it would take at least six to 18 months for those changes to show up because of the extended timeframe needed for project cargo manufacturing and contracting. <h3>US set to almost double LNG export capacity </h3>The US has eight operating LNG export terminals, and export capacity is expected to nearly double by 2031, according to a Feb. 24 analysis by the EIA. In 2025, US developers signed sale and purchase agreements (SPA) for 5.2 billion cubic feet per day (Bcf/d) of LNG from planned export facilities — the highest volume of SPAs since 2022, according to a March 3 EIA report. SPAs are necessary to secure a final investment decision for LNG terminal construction. Developers reached FIDs on four US LNG projects in 2025: the first phase of the Woodside Louisiana LNG and CP2 projects, and the second phase of the Rio Grande and Port Arthur projects. The four projects will begin operations between 2029 and 2031 and will bring a combined 7.2 Bcf/d in LNG export capacity under construction. That comes as overall natural gas production in the US is set to reach record highs in 2026 and 2027, according to the EIA. Production is set to increase by 2% to an average of 120.8 Bcf/d in 2026 and then grow to 122.3 Bcf/d in 2027. In 2026, US developers plan to add 6.3 gigawatts of natural gas-fired capacity, over 80% of which is planned for locations across Texas, Oklahoma, Ohio, Tennessee and Florida. Edwin Peh, project cargo director for Pacific and global capital projects for G2 Ocean, told the Journal of Commerce that the MPV operator anticipates higher demand for breakbulk and project cargo transportation to support the natural gas-fired capacity additions. “G2 Ocean is receiving inquiries for such shipments and has already shipped turbines and generators for gas-fired power plant projects,” he said. Peh said it’s still too early to detect any shifts in project cargo movement resulting from shipping disruptions in the Middle East. “The market is closely monitoring the evolving situation, including fluctuating bunker prices, while shippers evaluate whether they need additional time and cost buffers for higher insurance premiums and potentially longer transit times,” he said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

As historic shipping disruptions in the Middle East squeeze global oil and natural gas supplies, a slew of projects is setting up the US to expand its role as the world’s top liquefied natural gas (LNG) exporter while continuing to generate breakbulk and project cargo activity. Approximately one-fifth of global LNG flows through the Strait of Hormuz, which remains shut and where multiple cargo ships came under attack this week. Meanwhile, in the US — which is already the world’s largest LNG exporter — LNG export capacity is expected to nearly double in the next five years, while overall natural gas production is on pace to reach record highs, according to recent analyses by the US Energy Information Administration (EIA). Michael Mørland, Atlantic project cargo director for Norwegian multipurpose vessel (MPV) operator G2 Ocean, told the Journal of Commerce that LNG capacity expansion in the US has generated significant breakbulk and project flows over the past 10 years. “We expect this development to continue into the next decade, regardless of short-term geopolitical disruptions,” he said Mørland added that larger LNG production units, further expansions, and more efficient technologies are in the works to meet the growing energy demand from AI data centers and ongoing shifts in the US power mix. But because LNG mega-projects are capital-intensive with extended lead time, the interruptions in the Middle East are unlikely to influence final investment decisions (FIDs) for new US projects, he said. “Since the typical sourcing locations for cargo are not based in the Middle East and remain unaffected, we do not currently expect significant changes in cargo volumes or movement patterns outside the region,” Mørland said, explaining that it would take at least six to 18 months for those changes to show up because of the extended timeframe needed for project cargo manufacturing and contracting. US set to almost double LNG export capacity The US has eight operating LNG export terminals, and export capacity is expected to nearly double by 2031, according to a Feb. 24 analysis by the EIA. In 2025, US developers signed sale and purchase agreements (SPA) for 5.2 billion cubic feet per day (Bcf/d) of LNG from planned export facilities — the highest volume of SPAs since 2022, according to a March 3 EIA report. SPAs are necessary to secure a final investment decision for LNG terminal construction. Developers reached FIDs on four US LNG projects in 2025: the first phase of the Woodside Louisiana LNG and CP2 projects, and the second phase of the Rio Grande and Port Arthur projects. The four projects will begin operations between 2029 and 2031 and will bring a combined 7.2 Bcf/d in LNG export capacity under construction. That comes as overall natural gas production in the US is set to reach record highs in 2026 and 2027, according to the EIA. Production is set to increase by 2% to an average of 120.8 Bcf/d in 2026 and then grow to 122.3 Bcf/d in 2027. In 2026, US developers plan to add 6.3 gigawatts of natural gas-fired capacity, over 80% of which is planned for locations across Texas, Oklahoma, Ohio, Tennessee and Florida. Edwin Peh, project cargo director for Pacific and global capital projects for G2 Ocean, told the Journal of Commerce that the MPV operator anticipates higher demand for breakbulk and project cargo transportation to support the natural gas-fired capacity additions. “G2 Ocean is receiving inquiries for such shipments and has already shipped turbines and generators for gas-fired power plant projects,” he said. Peh said it’s still too early to detect any shifts in project cargo movement resulting from shipping disruptions in the Middle East. “The market is closely monitoring the evolving situation, including fluctuating bunker prices, while shippers evaluate whether they need additional time and cost buffers for higher insurance premiums and potentially longer transit times,” he said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Port News

Energy projects

Project cargo

Breakbulk ports

Breakbulk News

Middle East shipping disruptions boost US position as top LNG exporter

<div class="phx-topic abstract-wrapper">Long-sought regulatory reforms within the Canadian trucking industry could tighten capacity and cause cross-border rates to rise. </div>

Long-sought regulatory reforms within the Canadian trucking industry could tighten capacity and cause cross-border rates to rise.

<div class="phx-topic">The Canadian government is moving to crack down on controversial labor practices in the country’s trucking industry, a move that could reshape the sector, increase fleet costs and ultimately result in tighter capacity and higher rates for shippers. The issues — including driver classification, tax policy, safety and training standards, and immigration — are often referred to collectively by the controversial label “Driver Inc.” and echo similar debates in the US since 2019. The dispute has simmered for more than a decade, but received renewed attention after Mark Carney became Canada’s prime minister last year. Stricter enforcement of the “Driver Inc.” issues could limit access to the lowest-cost trucking capacity that has been available in recent years in Canada, potentially pushing transportation rates higher for shippers. But whether the capacity needle really moves largely depends on how vigorously and thoroughly the Canadian government cracks down on “Driver Inc.” One issue is the classification of drivers as employees versus independent contractors, a question that has been fiercely debated in California, Illinois and New Jersey. Another issue centers on how immigrant drivers are integrated into Canada’s trucking industry, particularly regarding training standards and highway safety. In the US, a similar concern has been raised over “CDL mills,” where fraudulent or low-quality trucking schools provide minimal instruction before putting drivers on highways. A third issue involves tax policy and the treatment of drivers operating as independent contractors. For shippers, the “Driver Inc.” debate ultimately comes down to the cost structure of trucking companies. Fleets that classify drivers as independent contractors operate with lower costs because they avoid payroll taxes, overtime requirements and benefit obligations. And those lower costs translate into lower truckload rates for Canadian shippers. <h3>Dispute over the ‘new generation’ in Canadian trucking </h3>The Canadian Trucking Alliance (CTA) argues that some carriers misclassify drivers as independent contractors and provide inadequate safety training. Part of the controversy stems from a longstanding tax policy loophole. The Canada Revenue Agency (CRA), Canada’s equivalent of the US Internal Revenue Service, imposed a moratorium in 2011 on enforcement actions related to T4A tax filings, a form similar to the US 1099 used for independent contractors. The moratorium was lifted earlier this month. “The carrier benefited from not having to pay overtime and all the other responsibilities, which gave them about a 30% pricing advantage in the marketplace,” said Stephen Laskowski, CTA’s president, said. “All we're looking for is fair competition, where carriers compete on service price and other matters all while complying with regulatory and tax requirements.” Laskowski said the issue is tied to broader concerns involving driver safety, immigration fraud, forced labor and organized cargo theft. But Tejpreet Dulat, spokesperson for the Canada Truck Operators Association (CTOA), said many immigrant drivers prefer being an independent contractor because it allows them to choose when to work, which loads they haul and which carriers they serve. The argument echoes <a href="https://www.joc.com/article/brokerage-model-offers-post-ab5-path-in-california-5234932">the debate in California surrounding AB5</a>, which reshaped the rules governing employee versus contractor status. “We see the gig economy now; the new generation is taking over the trucking industry,” Dulat said. “The gig economy workers want to manage their own schedules. Some truck drivers have young families. They prefer shorter routes because they want to be back home on the second or third day. If they work on the payroll, they don't have this luxury.” Dulat also said the CTOA supports lifting the moratorium on issuing T4As but is concerned that many small carriers need additional time to establish payroll systems required under the new rules. As of March 2, carriers paying more than $500 to an independent contractor must issue a T4A or face financial penalties. Dulat added that his group supports stronger safety and training standards across the trucking industry. “Whether you are an immigrant driver or are Canadian born, you have to follow the same driving rules,” he said. “There should be no compromise on strong safety standards. Road safety is very important.” <h3>Political dimensions </h3>There are also political dimensions to the dispute between the two trucking groups. Dulat, who joined the CTOA last December, is a donor to Canada’s Liberal Party and to Carney, according to the Journal de Montréal. Xavier Barsalou-Duval, a Quebec member of Parliament who has raised concerns about the “Driver Inc.” model, questioned in a December letter whether Dulat’s position could influence the pace of reforms. Canada’s House of Commons Standing Committee on Transport, Infrastructure and Communities last month concluded a series of hearings examining the “Driver Inc.” matter. The committee is preparing a report, entitled The Changing Landscape of Truck Drivers in Canada, that is due to be published this spring and will propose policy recommendations to Parliament. Canada’s Council of Ministers Responsible for Transportation and Highway Safety, which includes Transport Minister Steven MacKinnon, agreed last month to stricter enforcement of driver classification, tax compliance, and safety and training standards in the country’s commercial trucking industry. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The Canadian government is moving to crack down on controversial labor practices in the country’s trucking industry, a move that could reshape the sector, increase fleet costs and ultimately result in tighter capacity and higher rates for shippers. The issues — including driver classification, tax policy, safety and training standards, and immigration — are often referred to collectively by the controversial label “Driver Inc.” and echo similar debates in the US since 2019. The dispute has simmered for more than a decade, but received renewed attention after Mark Carney became Canada’s prime minister last year. Stricter enforcement of the “Driver Inc.” issues could limit access to the lowest-cost trucking capacity that has been available in recent years in Canada, potentially pushing transportation rates higher for shippers. But whether the capacity needle really moves largely depends on how vigorously and thoroughly the Canadian government cracks down on “Driver Inc.” One issue is the classification of drivers as employees versus independent contractors, a question that has been fiercely debated in California, Illinois and New Jersey. Another issue centers on how immigrant drivers are integrated into Canada’s trucking industry, particularly regarding training standards and highway safety. In the US, a similar concern has been raised over “CDL mills,” where fraudulent or low-quality trucking schools provide minimal instruction before putting drivers on highways. A third issue involves tax policy and the treatment of drivers operating as independent contractors. For shippers, the “Driver Inc.” debate ultimately comes down to the cost structure of trucking companies. Fleets that classify drivers as independent contractors operate with lower costs because they avoid payroll taxes, overtime requirements and benefit obligations. And those lower costs translate into lower truckload rates for Canadian shippers. Dispute over the ‘new generation’ in Canadian trucking The Canadian Trucking Alliance (CTA) argues that some carriers misclassify drivers as independent contractors and provide inadequate safety training. Part of the controversy stems from a longstanding tax policy loophole. The Canada Revenue Agency (CRA), Canada’s equivalent of the US Internal Revenue Service, imposed a moratorium in 2011 on enforcement actions related to T4A tax filings, a form similar to the US 1099 used for independent contractors. The moratorium was lifted earlier this month. “The carrier benefited from not having to pay overtime and all the other responsibilities, which gave them about a 30% pricing advantage in the marketplace,” said Stephen Laskowski, CTA’s president, said. “All we're looking for is fair competition, where carriers compete on service price and other matters all while complying with regulatory and tax requirements.” Laskowski said the issue is tied to broader concerns involving driver safety, immigration fraud, forced labor and organized cargo theft. But Tejpreet Dulat, spokesperson for the Canada Truck Operators Association (CTOA), said many immigrant drivers prefer being an independent contractor because it allows them to choose when to work, which loads they haul and which carriers they serve. The argument echoes the debate in California surrounding AB5 , which reshaped the rules governing employee versus contractor status. “We see the gig economy now; the new generation is taking over the trucking industry,” Dulat said. “The gig economy workers want to manage their own schedules. Some truck drivers have young families. They prefer shorter routes because they want to be back home on the second or third day. If they work on the payroll, they don't have this luxury.” Dulat also said the CTOA supports lifting the moratorium on issuing T4As but is concerned that many small carriers need additional time to establish payroll systems required under the new rules. As of March 2, carriers paying more than $500 to an independent contractor must issue a T4A or face financial penalties. Dulat added that his group supports stronger safety and training standards across the trucking industry. “Whether you are an immigrant driver or are Canadian born, you have to follow the same driving rules,” he said. “There should be no compromise on strong safety standards. Road safety is very important.” Political dimensions There are also political dimensions to the dispute between the two trucking groups. Dulat, who joined the CTOA last December, is a donor to Canada’s Liberal Party and to Carney, according to the Journal de Montréal. Xavier Barsalou-Duval, a Quebec member of Parliament who has raised concerns about the “Driver Inc.” model, questioned in a December letter whether Dulat’s position could influence the pace of reforms. Canada’s House of Commons Standing Committee on Transport, Infrastructure and Communities last month concluded a series of hearings examining the “Driver Inc.” matter. The committee is preparing a report, entitled The Changing Landscape of Truck Drivers in Canada, that is due to be published this spring and will propose policy recommendations to Parliament. Canada’s Council of Ministers Responsible for Transportation and Highway Safety, which includes Transport Minister Steven MacKinnon, agreed last month to stricter enforcement of driver classification, tax compliance, and safety and training standards in the country’s commercial trucking industry. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Truckload

Truck brokers

Surface

Canada’s ‘Driver Inc.’ crackdown could push trucking rates higher

<div class="phx-topic abstract-wrapper">The Hong Kong-based carrier ended the year with a $1.5 billion net profit, but that was a 41% drop from the robust earnings of the previous year.</div>

The Hong Kong-based carrier ended the year with a $1.5 billion net profit, but that was a 41% drop from the robust earnings of the previous year.

<div class="phx-topic">Trade tensions and US tariffs weighed heavily on the 2025 financial results of OOCL, with the ocean carrier reporting Thursday sharp declines across all its earnings metrics for the year. In an uncertain policy environment characterized by extreme market volatility, Hong Kong-headquartered OOCL saw its 2025 revenue fall 9.3% year over year to $9.7 billion. Earnings before interest and taxes (EBIT) fell 42% to $1.5 billion and net profit was down 41%, also to $1.5 billion. The carrier’s volume for the year rose 4% to 7.9 million TEUs. “Tariff measures and trade tensions continued to weigh heavily on the container shipping industry, most notably on the trans‑Pacific trade, driving sharp fluctuations in both cargo volumes and freight rates,” OOCL said in its earnings announcement. “At the same time, policy adjustments and frontloading disrupted the usual post-Lunar New Year seasonal patterns.” One of the carrier’s priorities for 2026 is to accelerate the vertical expansion of its supply chain, building an end-to-end product offering customized solutions such as international order processing, cargo management, warehousing, and distribution services. OOCL took delivery of nine new 16,828-TEU container vessels in 2025, and this year will see the first of a seven-ship order for 24,000-TEU dual-fuel methanol-capable vessels as well as six 13,580-TEU conventional fuel vessels chartered from Seaspan Corporation. The 16,828-TEU fleet has strengthened OOCL’s presence on the trans‑Pacific and indirectly enabled the resumption of the LL3 service on the Asia-Europe trade, which had been suspended due to capacity shortages. <h3>Structural overcapacity adds rate pressure </h3>But even as OOCL significantly adds capacity to its fleet, the Cosco Shipping Holdings subsidiary painted a somber picture in its outlook, warning of structural overcapacity in container shipping that will add downward pressure to rates. It is a valid concern. Just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year. That will be followed by 2.3 million TEUs of capacity due for delivery in 2027 and 3.4 million TEUs in 2028, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="994022ec-453b-46eb-b729-fcd589a9082d"></dynamic-object></div>There is <a href="https://www.joc.com/article/yang-ming-wan-hai-boost-combined-order-book-with-12-new-ships-6185215">no sign of carriers pausing ship orders, either</a>. A record 4.8 million TEUs of new ship capacity was ordered in 2025, and that momentum has carried into 2026 with another 290,000 TEUs ordered in January, according to maritime consultancy Drewry. OOCL made no mention of the Middle East war in its earnings statement, but pointed to “ongoing geopolitical tensions” and “fluctuations in economic policies” that will continue to disrupt supply chains and reshape global trade patterns. “While strengthening our east-west service networks, we are also adapting to shifts in global trade patterns, seizing new growth opportunities, accelerating investment in emerging markets and striving to achieve a more balanced global presence to mitigate risks arising from individual regional markets,” OOCL said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Trade tensions and US tariffs weighed heavily on the 2025 financial results of OOCL, with the ocean carrier reporting Thursday sharp declines across all its earnings metrics for the year. In an uncertain policy environment characterized by extreme market volatility, Hong Kong-headquartered OOCL saw its 2025 revenue fall 9.3% year over year to $9.7 billion. Earnings before interest and taxes (EBIT) fell 42% to $1.5 billion and net profit was down 41%, also to $1.5 billion. The carrier’s volume for the year rose 4% to 7.9 million TEUs. “Tariff measures and trade tensions continued to weigh heavily on the container shipping industry, most notably on the trans‑Pacific trade, driving sharp fluctuations in both cargo volumes and freight rates,” OOCL said in its earnings announcement. “At the same time, policy adjustments and frontloading disrupted the usual post-Lunar New Year seasonal patterns.” One of the carrier’s priorities for 2026 is to accelerate the vertical expansion of its supply chain, building an end-to-end product offering customized solutions such as international order processing, cargo management, warehousing, and distribution services. OOCL took delivery of nine new 16,828-TEU container vessels in 2025, and this year will see the first of a seven-ship order for 24,000-TEU dual-fuel methanol-capable vessels as well as six 13,580-TEU conventional fuel vessels chartered from Seaspan Corporation. The 16,828-TEU fleet has strengthened OOCL’s presence on the trans‑Pacific and indirectly enabled the resumption of the LL3 service on the Asia-Europe trade, which had been suspended due to capacity shortages. Structural overcapacity adds rate pressure But even as OOCL significantly adds capacity to its fleet, the Cosco Shipping Holdings subsidiary painted a somber picture in its outlook, warning of structural overcapacity in container shipping that will add downward pressure to rates. It is a valid concern. Just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year. That will be followed by 2.3 million TEUs of capacity due for delivery in 2027 and 3.4 million TEUs in 2028, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. There is no sign of carriers pausing ship orders, either . A record 4.8 million TEUs of new ship capacity was ordered in 2025, and that momentum has carried into 2026 with another 290,000 TEUs ordered in January, according to maritime consultancy Drewry. OOCL made no mention of the Middle East war in its earnings statement, but pointed to “ongoing geopolitical tensions” and “fluctuations in economic policies” that will continue to disrupt supply chains and reshape global trade patterns. “While strengthening our east-west service networks, we are also adapting to shifts in global trade patterns, seizing new growth opportunities, accelerating investment in emerging markets and striving to achieve a more balanced global presence to mitigate risks arising from individual regional markets,” OOCL said. Contact Greg Knowler at greg.knowler@spglobal.com .

Volatile shipping market drags down OOCL’s 2025 financial results

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