Featured Headlines:
Shippers Are Grabbing Their Pitchforks
Your IOR Just Got the "Are You Still There?" Email
Escape Room: OFAC Sanctions Edition
Duty Calls…and So Does Interest
Europe Swipes Left on De Minimis
Never Waste a Good Crisis
- Ocean carriers have mastered the art of turning “what if?” into “pay up.” Here’s what happened…
- Iran threatened to close the Strait of Hormuz. Cable news reached DEFCON 1. Ocean carriers reached for the surcharge templates.
- Emergency bunker surcharges appeared almost immediately, based largely on where fuel prices might go, not necessarily what carriers were paying that week.
- Conveniently, much of the fuel already propelling those vessels had been purchased earlier through long-term contracts, hedges, or previous bunkering. Apparently “future fuel bills” arrive before future fuel does.
- The irony? Less than 10% of global seaborne trade by volume actually moves through Hormuz. Oil and LNG dominate that traffic. Most container ships never come close.
- By value, Hormuz absolutely matters because energy prices ripple through the global economy. But judging from carrier pricing, you’d think every container from Shanghai to Savannah had to squeeze through a five-mile-wide checkpoint.
- Importers did exactly what rational businesses do when warned of shortages and higher prices, they shipped early, booked aggressively, and front-loaded inventories before the next announcement landed.
- Spot rates surged. Capacity suddenly became “tight.” Funny how capacity develops seasonal allergies every contract season. (Ahhhhchoo!)
- Then came Wall Street’s favorite surprise.
- Maersk raised its expected 2026 EBITDA from $4.5 billion to $8-10 billion, comfortably above what analysts expected only hours earlier.
- Bernstein analyst Alex Irving publicly questioned whether the strength reflected genuine demand or customers simply rushing cargo ahead of additional fuel surcharges. That’s a remarkably polite way of asking whether fear became essential to pricing strategy.
- To be fair, carriers faced real uncertainty. Fuel markets were volatile. Insurance costs rose. Nobody knew exactly what Iran might do. (Gee, did poor Q1 margins play a role?!)
- But uncertainty cuts both ways. Customers absorbed immediate surcharges based on projected costs, while shareholders are now celebrating very real profits.
- Ocean shipping has developed an extraordinary business model: every geopolitical crisis is an operational emergency on Monday and an earnings upgrade by Friday.
- Pandemic? Record profits. Red Sea attacks? Record profits. Canal restrictions? Great profits. Iran? Rate guidance doubled. If a volcano erupts near Singapore next month, somebody will already be drafting the Emergency Geological Adjustment Factor (EGAF)!!
Shippers Are Grabbing Their Pitchforks
- The chickens have come home to roost. US agricultural exporters say they’re getting mighty tired of learning about new ocean freight charges only after stumbling across tariff updates buried on obscure third-party websites.
- Making hay while the sun shines. Exporters argue carriers have been quick to capitalize on front-loading demand, higher fuel costs, and tightening vessel space by layering on new surcharges (you don’t say?!).
- That dog won’t hunt. The Agriculture Transportation Coalition (AgTC) has asked the Federal Maritime Commission to tighten the rules so carriers must notify customers directly whenever rates or surcharges change.
- We didn’t just fall off the turnip truck. Current regulations generally treat website postings as legal notices, even if the affected shipper never actually sees it.
- Plowing around the stump. Instead of emailing customers, many carriers rely on tariff publishing systems that require shippers to constantly monitor multiple websites just to avoid surprise charges.
- A hard row to hoe. Agricultural exporters already face thin margins, unpredictable overseas markets, equipment shortages, and sailing disruptions. Unexpected fees simply make an already difficult season untenable.
- You reap what you sow. AgTC warns that when shippers discover new charges after bookings are made, planning suffers, trust erodes, and supply chains become even less predictable.
- Not worth a hill of beans. Exporters say a 30-day notice requirement doesn’t provide much protection if that notice is effectively tacked on a fence post down yonder in a data dump where few customers would ever think to look.
- Till the cows come home. AgTC wants direct electronic notifications email, EDI, customer portals, text messages, just about anything more direct
- Madder than a wet hen. The coalition is asking the FMC to issue new regulations (or Congress to amend the Shipping Act) so carriers must communicate rate changes directly instead of relying solely on tariff postings.
- When the rooster crows, everybody on the farm ought to listen. Agriculture exporters may be leading the charge, but importers should watch this closely. If the FMC tightens notification rules, the benefits would likely extend well beyond the farm gate.
- Even the best farm dog can’t fetch what nobody bothered to throw. If carriers want transparency, exporters say it’s time to stop hiding rate increases in the weeds.
Evergreen May Get Pruned
- This week, Taiwanese prosecutors arrived at Evergreen Marine armed with search warrants instead of welcome baskets. They raided company offices, ten additional locations, and the homes of nine suspects as part of an insider trading investigation.
- Authorities are examining a NT$13.35 billion (US$417 million) related-party transaction from 2023 to determine whether confidential information may have given certain investors unusually green thumbs.
- If the allegations prove true, somebody may have confused inside information with plant intelligence. Unfortunately, neither tends to flourish under regulatory sunlight.
- Evergreen says the investigation has no material impact on operations and continues business as usual while prosecutors sift through documents rather than shipping containers.
- After riding the pandemic freight boom to record profits, Evergreen knows that spectacular financial growth often attracts extra attention. Regulators are now examining whether anyone may have been harvesting profits before the market knew the crop was ready.
- There was a time when competitors were green with envy as Evergreen minted cash by the billions. These days, those competitors are just relieved someone else is making these shocking headlines.
Your IOR Just Got the "Are You Still There?" Email
- Like every streaming service, shopping app, and forgotten social media account before it, CBP is beginning a little digital housekeeping.
- In response to the Administration’s ongoing customs enforcement initiatives, U.S. Customs and Border Protection (CBP) announced it will deactivate Importer of Record (IOR) numbers in ACE that have not been used to file an entry in at least one year and have no outstanding post-entry activity.
- Fortunately, this isn’t a permanent breakup. Deactivated IOR numbers can be reactivated—but waiting until your next shipment is ready to move probably isn’t the strategy we’d recommend.
- Importers should first verify the status of their IOR number through the ACE Portal. If reactivation is needed, CBP recommends coordinating with your customs broker to help avoid processing delays.
- Most reactivations can be completed electronically through the Automated Broker Interface (ABI). If that isn’t an option, importers may submit an updated CBP Form 5106 with an “IOR Reactivation Request” to the appropriate Center for manual processing.
- One catch: ACE account access delays and current CBP workloads mean reactivations may take several weeks.
- Oh, and if your IOR only comes out of retirement every now and then, now’s a good time to make sure they’re still awake before your next shipment arrives.
- Read the full FR notice here: EO 14411 – Strengthening Customs Enforcement
- Related reading: Shap Talk | Your IOR Application Has Been Selected for Additional Screening
Escape Room: OFAC Sanctions Edition
- Getting placed on a sanctions list is difficult. Getting off one has historically involved even more paperwork.
- The Office of Foreign Assets Control (OFAC) recently launched a new Reconsideration Portal designed to streamline requests for removal from OFAC-administered sanctions lists, including the Specially Designated Nationals (SDN) List.
- The portal also allows users to request a courtesy document identifying the unclassified sources that supported an OFAC designation.
- Rather than exchanging rounds of follow-up questions after a petition is submitted, the new system walks applicants through the information OFAC needs upfront, helping reduce unnecessary delays in the review process.
- Applicants should expect to provide information such as the applicable sanctions listing, OFAC Unique ID, designation date, contact information, request type, and the basis for seeking reconsideration. OFAC estimates the process takes about one hour to complete.
- While the new portal won’t guarantee a faster outcome, it should make the road to reconsideration a little more straightforward—and a little less like searching for the exit with the lights turned off.
- OFAC also notes that additional guidance on the updated petitions process will be added to its website in the coming weeks.
- Related reading: Shap Talk | OFAC Just Published the Drivers Manual
Duty Calls…and So Does Interest
- U.S. Customs and Border Protection (CBP) has published its updated quarterly IRS interest rates for customs duty overpayments and underpayments, effective July 1 through September 30, 2026.
- Compared to last quarter, every rate increased by one percentage point.
- Here’s where things now stand:
| Corporations | Non-Corporations | |
| Overpayments | 6% | 7% |
| Underpayments | 7% | 7% |
- While nobody enjoys paying interest on duty shortfalls, the increase also means importers receiving duty refunds may see slightly larger interest payments from CBP.
- It’s not exactly a high-yield savings account—but we’ll take good news wherever we can find it.
Call Me Israel
- To open Moby Dick, Herman Melville wrote, “Call me Ishmael.” This week, the shipping industry answered, “Call me Israel.” Between Israel Katz, Israel Hayom, Israel Israel, and Israel itself, we’re afraid our frisky readers may accuse us of stuttering!
- Hapag’s $4.2 billion voyage to acquire ZIM has hit rough seas. Israel’s Defense Minister, Israel Katz, has formally opposed the move, arguing the deal does not adequately protect Israel’s national security interests.
- Prime Minister Benjamin Netanyahu has reportedly expressed similar concerns, although the objections have not yet been formally communicated to the buyers.
- The transaction already received overwhelming shareholder approval, but Israel’s government retains the final say through its special “Golden Share” authority.
- As we said, everybody is named Israel. Seriously.
- The country of Israel is named Israel.
- The story was first reported by Israel Hayom.
- Defense Minister, Israel Katz, opposes the deal.
- Economy Minister, Israel Israel, opposed it last month. (Okay, okay, we made that one up, darn it!)
- ZIM has always been more than just another container line. Founded in 1945, before the modern State of Israel officially existed, ZIM was created to ensure a national merchant fleet capable of supporting the country’s economy and security.
- While privatized decades later, Israel retained a special “Golden Share” that allows the government to intervene when strategic national interests are involved, exactly what’s happening now.
- More lease than fleet.
- Unlike MSC, CMA CGM, or Evergreen, ZIM owns relatively few of its vessels and instead charters roughly 90% of its operating fleet on long-term leases.
- The asset-light strategy kept capital requirements low, modernized the fleet quickly, and gave management flexibility, but it also left ZIM highly exposed when freight rates collapsed while charter costs remained stubbornly high.
- So why sell now?
- COVID generated record profits that allowed ZIM to pay some of the industry’s richest shareholder dividends, but earnings have since normalized alongside freight markets.
- Hapag-Lloyd’s offer represented a substantial premium over ZIM’s trading price, making the proposal difficult for shareholders (and the Board) to ignore despite today’s political headwinds.
- Hapag-Lloyd suddenly became the aggressive one?
- The normally conservative German carrier has been busy since launching the Gemini Cooperation with Maersk, proving the quieter half of the partnership is perfectly capable of writing a very large check.
- Whether Gemini’s junior partner ultimately lands ZIM now appears to depend less on financing than on Israeli politics.
- The “Z Factor” finally explained?
- ZIM’s long-running advertising campaign never quite answered what the mysterious “Z Factor” actually was.
- Apparently, one possible definition is “$4.2 billion!”
- “Call me Israel.” It may not be Melville’s greatest opening line, but for one week in global shipping, it fits surprisingly well.
Europe Swipes Left on De Minimis
- Direct freighter capacity from China to Europe dropped 22% in just 48 hours after the European Union (UN) officially swiped left on its duty-free de minimis exemption on July 1. No counseling. No trial separation. Just “it’s over.”
- Shipments under €150 now face duties plus a flat €3 handling fee, leaving Chinese e-commerce sellers to discover what happens when a long-term tariff-free situationship suddenly ends.
- The UK, meanwhile, is still saying, “It’s complicated.” Britain plans to end its own de minimis regime in October 2028: recently moved up by six months, but hardly an urgent breakup.
- Despite predictions that freighters would immediately rebound toward British airports, UK airfreight volumes have remained remarkably steady and frankly boring.
- Switzerland and Norway have become the logistics equivalent of “seeing someone else,” with some shippers already testing duty-free alternatives while they last.
- Logistics UK’s Ben Fletcher argues Britain should simply end the relationship now, warning that dragging out the breakup only creates more cost, confusion, and awkward logistics.
- If this all sounds familiar, it should. The U.S. already made its own de minimis de maximis decision about a year ago, and Europe’s breakup suggests duty-free romance may be falling out of fashion on both sides of the Atlantic (and beyond?).
Sliding Into UP's DMs
- Maersk, the profiteering buccaneer, has quietly shifted roughly 1,000 TEUs per week of inland cargo out of San Pedro Bay from longtime partner BNSF onto UP, proving that even century-old logistics relationships occasionally entertain a new admirer.
- One of our writers must be heartbroken and dealing with some heavy feelings, loyal readers! How many dating metaphors can we write?!
- Company sources insist the move is “temporary,” which is exactly what people say right before changing their relationship status.
- Whether the fling lasts remains to be seen. Western rail agreements often come with volume commitments, financial penalties, or exclusivity provisions that discourage spending too many nights across town.
- BNSF isn’t saying a word publicly, but somewhere there’s almost certainly a meeting titled, “So…who IS Union Pacific?”
Ghosted at Sea
- Slow steaming, Gulf disruptions, and front-loaded imports have combined to create a genuine trans-Pacific space squeeze, leaving containers spending considerably more quality time at sea.
- Vessel diversions continue stretching transit times just as retailers tighten delivery windows, turning “urgent shipment” from an exception into a lifestyle.
- More than half of consumer-packaged goods companies surveyed report increasing pressure from major retailers to hit narrower delivery windows.
- Apparently, “We’ll be there when we get there” isn’t an acceptable supply chain strategy.
Trucking's Hot Girl Summer
- While everyone watches the ports, trucking has quietly become the belle of the ball.
- Spot rates surged heading into Independence Day to their strongest levels since the pandemic, and this time holiday freight isn’t carrying all the blame.
- DAT reports July spot rates averaging about 12 cents per mile above contract pricing, the first monthly crossover in years, while contract rates themselves remain more than 10% above last summer.
- After years of being taken for granted, trucking has suddenly remembered it can be selective.
