Featured Headlines:
Pier Pressure at the Box Office
Another Swing of the 301 Hammer
Domestic Disturbances: Sit Down, Study Up and Pay Up
Pier Pressure at the Box Office
- Rotterdam is Europe’s biggest port, yet globally it is but a celebrated character actor in compelling community theater.
- Rotterdam handled 13.8 million TEU in 2024. Shanghai handled 51.5 million, nearly four Rotterdams.
- Shanghai is less a port than a sovereign nation whose religion is metal rectangles, typically 20 to 40 feet long.
- Rotterdam does counter with oil, chemicals, bulk and energy. It is Europe’s first port, refinery, warehouse and panic room, with complimentary (and yummy!) stroopwafels during geopolitical emergencies!
- China did not win the port rankings. China bought the studio, fired the director and replaced the cast with cranes.
- Seven mainland Chinese ports ranked among the world’s 13 busiest, combining for 217 million TEU, nearly 16 Rotterdams.
- Add Hong Kong, and China claimed eight Top 20 spots. Hong Kong anonymously requested not to be added. Please don’t tell China!
- The rankings resemble a Chinese port directory interrupted by Singapore, Busan and an anxious European asking nervously about subtitles.
- More than 40% of Top 100 port traffic was Chinese. Even China’s %#@*!ing statistics are Made in China.
- Shanghai is Avatar, Titanic and Avengers combined, except the blue people are containers. One waits an entire career to write lines like that, gang!
- Shanghai became the first port to surpass 50 million TEU in a year, roughly 140,000 per day.
- It handled more containers than America’s ten busiest ports combined.
- Singapore is the world’s greatest supporting actor annnnnddddddd location scout.
- It lacks Shanghai’s manufacturing hinterland but possesses the Strait of Malacca, birthplace of the cliché “location, location, location.”
- Singapore became rich by standing in the ocean with a barker yelling, “Step this way; you’ll want to change ships right here.”
- Ports hired robots because apparently longshoremen were insufficiently terrifying.
- Shanghai’s Yangshan uses automated vehicles and remote cranes. Singapore adds driverless transporters and electrified yard equipment.
- Rotterdam is building a “digital twin” of its ships, infrastructure, weather and water. TBH, I feel like Claude is my digital twin. TMI?
- AI assigns berths, sequences cranes, predicts failures and begins every answer with, “That’s a great question.”
- The 2036 rankings will feature new stars, old franchises and one improbable reboot.
- Tanger Med is Africa’s breakout performer, blessed with superb geography and the irritating confidence of someone who knows the camera adores her.
- Vietnam’s Cai Mep and Hai Phong should rise as manufacturing diversifies from China.
- India’s Mundra is preparing a Bollywood entrance involving 700 dancers, 54 gantry cranes and no explanations whatsoever. Jai Ho! Balle Balle!
- Port Klang, Tanjung Pelepas and Jebel Ali will thrive wherever cargo must change ships, documents or national identity.
- China may surrender some share, but nobody casually replaces 200 million TEU and an industrial ecosystem with its own gravitational pull, one that makes the Industrial Revolution look “artisanal.”
- By 2076, Hollywood will release Fast & Furious 43: Tokyo Drayage.
- Ports are where world events stop being television and start invoicing you.
- Wars become fuel surcharges. Sanctions become customs holds. Tariffs become sourcing shifts. Storms become blank sailings.
- Every crisis reaches the waterfront wearing a reflective vest, carrying a clipboard and calling its new fee “temporary.”
- Ports are global trade’s box office. China owns the multiplex, Singapore runs concessions, Rotterdam produces important independent films about chemicals, and AI has confidently just sent your New Zealand container to Paraguay!
Freight Expectations
- The Shanghai Containerized Freight Index (SCFI) fell 3.3% last week to 3,080, its second consecutive decline. (Remember, scholars, the index captures points, not dollars!)
- Before importers plan the wedding breakfast, the SCFI remains up roughly 120% in 2026.
- Like Pip, we have received Great Expectations from a mysterious benefactor. Unlike Pip, ours appears to be a cartel of ocean carriers hiding in the marshes.
- Who owns the SCFI?
- The Shanghai Shipping Exchange publishes it. The Exchange was approved by China’s State Council and jointly established by the Ministry of Transport and Shanghai’s municipal government.
- Thus, the SCFI is absolutely connected to the Chinese government. It is not an independent private consultancy like Drewry.
- Our Dickensian verdict: credible, useful and government-connected. Trust it as Pip should have trusted Jaggers, carefully and with a solicitor present.
- Why is Drewry’s $4,547 WCI so much higher?
- It isn’t, at least not in the way the two headline numbers suggest.
- Drewry’s figure is an estimated price per 40-foot container across eight major east-west routes. The SCFI is an index, not a dollar price, and its individual routes use a mixture of TEUs and FEUs.
- Different units, routes, weights and methodologies. Dickens had fewer characters to keep straight!
- How Great were our Expectations?
- The SCFI reached 3,327 on July 3, its highest point of 2026 and the past 12 months.
- It began the year near 1,400 and fell to approximately 1,251 in February before more than doubling.
- The all-time record remains 5,110, reached in January 2022 during the pandemic’s magnificent experiment in charging £20,000 to deliver Pip’s waistcoat.
- As Dickens wrote, “Take nothing on its looks; take everything on evidence.” Especially a carrier’s explanation of its latest surcharge. Thanks, Chuck!
- Why is America so bloody expensive?
- Shanghai to New York is the reigning Abel Magwitch of the WCI at roughly $7,900 per FEU, menacing, mysterious and financing ocean carriers’ Great Expectations.
- Shanghai to Los Angeles is $6,275, although Shanghai to Genoa narrowly beats it at $6,300. Rotterdam looks almost reasonable at $4,900.
- The premium reflects enormous import demand, early peak-season buying, tariff frontloading, blank sailings, equipment imbalance and carriers removing capacity precisely when Pip arrives in town with money in his pocket.
- USEC also adds distance, Panama or Cape exposure and greater network cost.
- Pip began poor, became rich, behaved foolishly and discovered the money came from a deeply unsettling source. Rarely has a Victorian novel so perfectly described transpacific spot rates!
- “I have been bent and broken, but I hope into a better shape,” said Pip. Every importer says the same after opening the freight invoice. The “better” shape is usually fetal.
- In Dickens, Pip eventually learns that wealth does not confer virtue. In shipping, we are still awaiting that chapter.
Another Swing of the 301 Hammer
- When it comes to trade enforcement, Section 301 has become one of Washington’s favorite tools for the job. This week, the hammer swung toward Brazil.
- The Office of the U.S. Trade Representative (USTR) announced a new 25% Section 301 tariff on most Brazilian imports, effective July 22, 2026.
- Covered merchandise entered for consumption on or after the effective date must be reported under new HTSUS 9903.05.01.
- A limited in-transit exception is available for qualifying ocean shipments that were already loaded aboard their final vessel before the effective time and entered by July 29. (Sorry, air freight and border crossings—you’ll have to sit this one out.)
- USTR also established several exemptions, including certain civil aircraft and parts, designated pharmaceutical products, humanitarian donations, most Chapter 98 entries, and products already covered under specified Section 232 tariffs.
- As with any good toolbox, using the wrong part can create bigger problems. Several exclusions contain product-specific limitations, making careful HTS classification review especially important.
- USTR said the action follows its investigation into Brazilian trade practices involving digital trade, intellectual property, anti-corruption enforcement, ethanol market access, and illegal deforestation.
- Importers should review upcoming shipments, determine whether an exemption or in-transit provision applies, and evaluate the impact on landed costs and customs bond sufficiency.
- Read our ShapFlash for a deeper dive, along with the full USTR notice.
The Dustiest Tool in the Box
- Every toolbox has that one mysterious tool sitting in the bottom drawer. You don’t use it for years, nobody remembers exactly what it’s for…until suddenly it’s the only thing that fits the job.
- Enter Section 338 of the Tariff Act of 1930.
- President Trump issued three proclamations invoking Section 338 for the first known time, imposing an additional 50% tariff on certain Canadian imports beginning August 19, 2026.
- Each proclamation responds to a different Canadian trade measure:
- Dairy Products: Canada’s dairy tariff-rate quotas.
- Alcoholic Beverages: Restrictions affecting imports and sales of U.S. alcoholic beverages.
- Motor Vehicles: Canada’s 25% tariff on certain U.S.-made vehicles that do not qualify for duty-free treatment under USMCA.
- The affected products are identified in the annexes accompanying each proclamation, making HTS classification review critical.
- One reason this action has attracted so much attention is that Section 338 contains no built-in sunset or periodic review process, making it unlike many of the trade authorities importers are accustomed to following.
- We’re continuing to review the annexes and monitoring implementation guidance from CBP and other agencies as additional details emerge.
- Read the Presidential Proclamations here.
The 232 Torque Wrench
- Not every tool in the trade toolbox is built to tighten the screws. Sometimes it’s designed for precision adjustments.
- President Trump recently issued a proclamation proposing targeted reductions to certain Section 232 aluminum tariffs for companies that commit to expanding U.S. primary aluminum production.
- Rather than applying broadly, the proposal focuses on companies investing in projects such as:
- Building new primary aluminum production facilities.
- Expanding existing production capacity.
- Modernizing aging facilities to improve output and efficiency.
- To qualify, construction on approved projects must begin no later than January 20, 2029.
- While additional implementation details are still expected, the proposal signals that Section 232 may continue evolving beyond simple tariff increases by incorporating incentives for long-term domestic manufacturing investment.
- Like any good torque wrench, the goal isn’t maximum pressure—it’s applying exactly the right amount where it counts.
- Review the Presidential Proclamation here.
Making Weight
- Extreme heat forces cargo aircraft to make weight before they can make altitude (or the metaphorical wrestling team for that matter!).
- Warm air is less dense, leaving wings with fewer air molecules to push downward and engines with less oxygen to produce thrust.
- This raises “density altitude.” In practical terms, a brutally hot airport behaves as though Atlas quietly moved it uphill.
- Bernoulli duly reports that faster air lowers pressure above the wing. Newton then enters the locker room to remind everyone that wings also create lift by forcing air downward. Isaac wrestles at 131 and Bernie at 108!
- Thinner air means the aircraft must run faster and farther before leaving the mat.
- The takeoff roll grows longer, while acceleration, engine performance and climbing ability all decline.
- The freighter must still clear obstacles and satisfy strict engine-out climb requirements or risk being pinned to the tarmac.
- Modern engines are immensely powerful, but horsepower cannot take down runway length, brake limits or gravity.
- When the aircraft fails its weigh-in, something must go.
- Total takeoff weight includes the aircraft, crew, equipment, fuel and cargo.
- Long transpacific flights require substantial fuel, plus mandatory reserves. That weight is difficult to simply sweat away.
- The cargo therefore becomes aviation’s expendable pound. It may be bumped, divided among later flights or rerouted through an intermediate fuel stop.
- The strange result is an aircraft departing with empty cargo space because it has reached its weight limit. The hold has room; the wings have rendered a dissenting opinion.
- Before we continue with the super-sexy science, having a lower weight restriction is bad for shippers. Space becomes tight, rates go up, cargo gets bumped. Ta da!
- Asia creates an especially interesting commercial matchup.
- Most major Asian gateways have long runways and sit near sea level, which softens the penalty.
- However, intense summer heat combined with long, fuel-heavy outbound flights can leave operators very little weight flexibility.
- Dense exports such as machinery, electronics and automotive components feel the squeeze first. Pillows are unlikely to be cut from the roster.
- Carriers can schedule cooler nighttime departures, split shipments, accept a fuel stop or leave freight perspiring beside the runway.
- Heat does not necessarily make aircraft carry more fuel. It reduces how much total weight they can safely lift.
- Because the fuel cannot easily be sacrificed, cargo is sent to the sauna.
- NASA estimates that even modest heat-related restrictions can remove several tons from a large aircraft’s combined payload-and-fuel allowance.
- In airfreight’s summer wrestling tournament, Mother Nature controls the scale, gravity officiates and cargo rarely wins the appeal.
The Oprah "Winfees" Show
- Ocean carriers have unveiled low water, peak season, canal and emergency fuel surcharges almost simultaneously. Oprah “Winfees” has entered the freight market, and everybody is getting something (not cars, money, or lavish gifts, y’all!).
- Maersk begins the show with a Low Water Surcharge for Montreal and Halifax, effective August 1 until further notice.
- Cargo from Europe, the UK, Norway, Türkiye, Israel, Egypt and beyond gets $150 per 20-footer and $300 per 40- or 45-footer.
- “You get low water! You get low water! Everybody gets low water!”
- MSC enters stage right with a Peak Season Surcharge from Northern Europe to the United States, Puerto Rico and the Bahamas, effective August 15 by gate-in date.
- The gifts range from $600 for a 20-foot dry container to $1,200 for reefer and special equipment.
- Unlike Oprah’s audience, nobody is crying because they received a sedan!
- MSC then opens another envelope: a $100-per-TEU Panama Canal Surcharge from Asia to the US East and Gulf Coasts, effective August 19.
- Apparently, maintaining a 51-mile ditch now requires the financial discipline of a hotel minibar.
- CMA CGM joins the festivities with an Emergency Fuel Surcharge of $65 to $165 per container, effective August 1, citing renewed Hormuz hostilities and rising bunker costs.
- No purchase necessary. Well, except the purchase of ocean freight.
- Maersk returns for the encore nobody requested: revised emergency contingency charges, updated inland fuel and energy charges, and another peak season surcharge from Northern Europe to the United States.
- SPOT or non-SPOT, every shipper leaves with a tote bag. Unfortunately, the tote bag contains an invoice.
Domestic Disturbances: Sit Down, Study Up and Pay Up
- Chicago’s Chassis Cha-Cha
- Chicago intermodal volumes are dancing, but the chassis supply has two left feet. Combined BNSF and UP volume is up 11.6% year over year, while Southern California-origin freight has risen 9.7%.
- That has equipment tightening at BNSF’s Elwood terminal and UP’s Global IV in Joliet. FlexiVan says it heard the music early and pre-positioned chassis; DCLI is pulling idle equipment back onto the dance floor.
- Nobody has been left standing quite yet, but the music is getting faster and everybody has one hand on a chassis.
- California’s 11,000-Driver Pop Quiz
- The California DMV found “irregularities” in thousands of written-test results, bureaucratic for “your answers were suspiciously inspired.”
- Roughly 11,000 license holders now have 30 days to retake the test without help from their unusually knowledgeable imaginary friends.
- Skip the makeup exam and the DMV will not merely lower your grade. It will cancel your license and send you directly to study hall, presumably by bus.
- The $2.34 Mile-High Club
- The average cost to operate a truck reached $2.34 per mile in 2025, up 3.4% and the highest total ATRI has recorded since 2016.
- Removing fuel does not remove the pain. Nonfuel costs climbed 4.2% to $1.85 per mile. Tolls rose 13.2%, repairs and maintenance 8.6%, driver benefits 6.6%, and tires 6.4%.
- Driver wages reached 81.8 cents per mile, proving that even the person pushing the shopping cart costs more.
- Fleets arrived at checkout hoping somebody had a coupon. The cashier laughed, the tires squealed, and the receipt kept printing.
