Good morning.

After years of topping the American Transportation Research Institute’s list of the nation’s worst freight bottlenecks, the I-95 and SR-4 interchange in Fort Lee, New Jersey, has slipped to second place.

Taking the top spot is the I-294 at the I-290/I-88 interchange in Chicago’s western suburbs. ATRI’s annual bottleneck report warns that congestion across these critical freight nodes is worsening, raising delays, costs and reliability risks for truck-borne supply chains.

Let’s dive into today’s edition.

The Trump administration has released the long-awaited Maritime Action Plan to reverse decades of decline in U.S. shipbuilding and commercial shipping capacity.

Foreign Fees: A key proposal of the action plan is to impose fees on cargo arriving at American ports aboard foreign-built vessels — a move designed to level the cost structure between domestic and overseas shipyards while creating a dedicated revenue stream to fund maritime investment.

Other Key Details: Beyond fees, the policy framework proposes establishing maritime prosperity zones to attract private capital to shipyards, ports, and vessel-manufacturing ecosystems. It also calls for establishing a Maritime Security Trust Fund to finance ship construction, fleet expansion, mariner training, and supply-chain resilience programs.

The maritime plan did not outline how or when fees on cargo carried by foreign-built ships would be implemented. However, it estimates that such charges could generate between $66 billion and $1.5 trillion over a decade.

The Port of Los Angeles expects container volumes to remain soft in early 2026 after traffic fell 12% in January, reflecting weaker import demand and lingering trade policy uncertainty. Port officials said the decline was partly driven by heavy front-loading of shipments in 2025, when companies rushed cargo ahead of tariffs

What happened? The Port of Los Angeles handled about 812,000 twenty-foot equivalent units (TEUs) in January across imports, exports, and empty containers, a decline of roughly 112,000 TEUs — or about 12% — compared with the 924,000 TEUs recorded in January 2025.

What’s next: Despite the slowdown, the port does not foresee a sharp collapse in volumes, expecting declines of less than 10% in the first quarter before stabilisation later in 2026. Order activity remains steady, but weaker consumer confidence and subdued U.S.–China trade flows continue to weigh on cargo outlook.

Hapag-Lloyd agreed to acquire ZIM in a $4.2 billion all-cash transaction, valuing the Israeli carrier at $35 per share, a 58% premium to its last closing price of $22.20. The deal ends ZIM’s months-long strategic review and is expected to close by the end of 2026.

Powerful Pact: The acquisition adds more than 704,000 TEUs of container capacity, lifting Hapag-Lloyd’s total fleet to nearly 3.1 million TEUs, according to Alphaliner. The deal significantly expands chartered capacity, with ZIM contributing roughly 99 chartered vessels. Hapag-Lloyd’s share of chartered ships will rise from 39% to 52% of its fleet.

Deal Details: As part of the transaction, ZIM’s operations will be split. Hapag-Lloyd will take control of international operations, while the Israeli private equity firm FIMI Opportunity Funds will form a joint venture with Hapag-Lloyd to operate “New ZIM,” which will manage domestic and regional routes. The structure preserves Israel’s “golden share” in ZIM, safeguarding national security interests.

Until closing, both companies will continue operating independently, with collaboration limited to existing vessel-sharing and slot agreements.

Micron Technology is embarking on a $200 billion U.S. expansion to address what executives describe as the most severe memory-chip supply crunch in more than four decades, driven by surging demand from artificial intelligence data centers.

Memory Power: At its headquarters in Boise, Idaho, Micron is investing $50 billion to expand its campus with two new semiconductor fabrication plants. The first facility is expected to begin producing DRAM wafers in mid-2027, with both fabs operational by the end of 2028. Separately, the company has broken ground on a $100 billion complex near Syracuse, New York

Chip Crunch: AI workloads are driving a surge in demand for high-bandwidth memory used alongside advanced chips from Nvidia and AMD. Micron says it can meet only about half to two-thirds of demand from key customers, with its latest HBM chips sold out through year-end.

Analysts expect shortages in advanced memory to persist into 2026 and potentially beyond, as hyperscale data center construction continues at an aggressive pace.

U.S. manufacturing output rose 0.6% in January, marking the strongest monthly gain in nearly a year and exceeding economists’ expectations. The increase followed flat production in December and pushed factory output 2.4% higher than a year earlier, according to Federal Reserve data.

Broader Gains: The gains were broad-based across both durable and nondurable goods. Machinery, electronics, and motor vehicle production strengthened, while chemicals, plastics, and paper manufacturing also advanced, pointing to improving activity across core industrial segments.

Positive Signs: Economists say the rebound offers cautious optimism for a sector weighed down by tariffs, high interest rates, and job losses in 2025. At the same time, spending tied to artificial intelligence is emerging as a key support, with analysts expecting tech-driven investment and potential tax relief to gradually lift wider manufacturing demand.

The United States has proposed a price-floor system for critical minerals to stabilise markets and protect Western producers from price swings driven by Chinese oversupply. Officials said multiple U.S. agencies designed the framework and are now discussing it with allied nations as part of a broader effort to secure supply chains.

What’s the deal? Price floors would guarantee producers a minimum return, encouraging private investment in mining and processing outside China. The idea gained momentum after Washington convened more than 50 countries at a recent critical minerals summit focused on reducing dependence on Chinese resources.

What to expect? Key details remain unclear, including how prices would be set, enforced, and funded. The mechanism is expected to sit within a U.S.-led alliance known as Pax Silica, reflecting a growing shift toward coordinated industrial policy to build resilient critical mineral supply chains across Western economies.

Global container spot rates fell for a fifth consecutive week, signalling persistent softness across major East–West trade lanes. The Drewry World Container Index slipped about 1% to roughly $1,933 per 40-foot container, with modest declines across transpacific and Asia–Europe routes as cargo volumes remained subdued ahead of Lunar New Year factory shutdowns.

Key Details: On the transpacific corridor, Shanghai–Los Angeles rates dropped to around $2,214 per FEU, while Shanghai–New York pricing eased to about $2,800. Carriers attempted to stabilise the market by announcing 57 blank sailings over the next two weeks.

Asia–Europe pricing also weakened, with Shanghai–Rotterdam and Mediterranean lanes recording larger percentage declines. Analysts say the earlier-than-usual downturn suggests the seasonal peak passed sooner this year, raising the likelihood of continued softening through the late-winter lull.

A bipartisan group of U.S. senators has introduced the Last Sale Valuation Act, which targets a decades-old customs rule that allows importers to calculate tariffs based on the first transaction price in complex global supply chains. The proposal would instead base duties on the final sale price paid by the U.S. importer, aligning tariff valuation with the real commercial value of goods.

Unfair Loophole: The current “first sale” rule is widely used in apparel and retail sourcing, where products often pass through intermediaries before reaching U.S. buyers.

Lawmakers argue the practice effectively lowers declared values and reduces tariff payments — a legal workaround that critics say disadvantages domestic manufacturers and undermines trade enforcement, especially as tariffs have increased under current policy.

What’s Next: If passed, the legislation could raise duty collections, reshape sourcing economics, and push retailers to reconsider multi-tier procurement structures that rely on intermediary pricing strategies.

Beef prices in the United States have surged roughly 15% year over year, outpacing most grocery categories and pushing uncooked ground beef to record highs.

Key Reasons: The primary driver is a historic contraction in the US cattle herd, now at its smallest level since the early 1950s. Years of drought, higher feed and borrowing costs, and weak incentives to retain cattle for breeding have reduced supply. Many producers are opting to sell animals earlier for immediate returns rather than rebuilding herds, extending the supply squeeze.

Will the Prices Come Down? Analysts say herd rebuilding would not meaningfully affect retail supply until around 2028, keeping prices elevated. Policymakers are exploring imports and competition measures in meat processing, but structural constraints across ranching, input costs and climate conditions suggest beef inflation may persist