☕ Warm Water, Hot Rates | Cargoccino 5.20.26
The Hormuz closure is a Q3 invoice problem — most shippers won't see it until it's already hit. A court ruled Section 122 unlawful, but the refund only goes to those who file in time. Air freight stopped being a viable tariff workaround and became its own cost problem. And the last neutral terminal at the Port of New York and New Jersey is about to have an owner with a cargo preference.
Top of the Cup: Fuel Surcharges Are Now a Q3 Problem
Bunker surcharges adjust quarterly with one month's notice, which means the current oil spike from the Hormuz closure won't show up on many invoices until Q3. Q2 contracts that looked manageable when they were signed may no longer be the problem. Most importer finance teams are modeling freight costs off contracted rates, not off what the surcharge adjustment cycle is about to deliver. The lag between the oil shock and the invoice is exactly long enough for the overrun to be a surprise.
Carriers have already signaled surcharge increases are coming on Pacific lanes. Shippers who aren't tracking the adjustment calendar and stress-testing Q3 landed costs may have to explain budget variances they had weeks to see coming.
Why it matters: Surcharge overruns land as invoice line items that look legitimate and often go unpaid without a fight. Systematic invoice auditing is how you catch them before they're absorbed.
Source: Supply Chain Dive
Section 122 Is Ruled Unlawful — But You're Still Paying
On May 7, the Court of International Trade struck down the 10% Section 122 import surcharge as exceeding statutory authority. The problem is the ruling only covers three named plaintiffs. Everyone else keeps paying the surcharge while the DOJ appeals, and the tariff is set to expire anyway on July 24 — meaning most importers will never see a refund unless they act now. The window to file protests and preserve refund rights is open, but liquidation deadlines don't wait for appellate timelines.
There's also a larger issue: the administration is already building Section 301 and Section 232 replacements designed to survive the same legal challenges. The Section 122 loss is a procedural win for importers, but a new tariff instrument is coming before July 24.
Why it matters: Importers who paid Section 122 duties and haven't filed protests are leaving recoverable money on the table. Clean entry data is what makes those claims viable.
Source: Bloomberg
Air Cargo Rates Are Up 30% and Not Coming Down Soon
Jet fuel is near double last year's price, and air carriers have revised surcharges upward across the board. Asia-to-North America spot rates are up mid-to-high double digits. The supply constraint is real — rerouted flights burn more fuel, reduce payload capacity, and tighten available lift at the same time. That combination doesn't resolve quickly even if the Hormuz situation improves.
For importers who shifted to air freight as a tariff mitigation strategy, the math has fundamentally changed. Air was viable when ocean costs were elevated and speed justified the premium. With jet fuel where it is, the premium is no longer a tradeoff — it's a compounding cost on top of an already stressed landed cost model.
Why it matters: Air freight invoices are especially prone to surcharge stacking — fuel, security, capacity, and handling fees added on top of base rates. Without line-item visibility, the total cost is invisible until it's already spent.
Source: Supply Chain Dive
The Last Independent Terminal at NY-NJ Is for Sale
Maher Terminals — the largest facility at the Port of New York and New Jersey at roughly a third of the port's container capacity — is being prepped for sale. It's the last non-carrier-owned terminal at the port following CMA CGM's 2023 acquisition of the Bayonne and Howland Hook facilities. If a major ocean carrier acquires Maher, every significant terminal at one of the country's busiest import gateways will be carrier-controlled.
That's not a neutral outcome for importers. Carrier-owned terminals create structural advantages for affiliated cargo and structural friction for everyone else — on berth priority, drayage access, and fee structures. Shippers with significant East Coast volume through NY-NJ should be watching who buys this and what it means for their terminal access and costs.
Why it matters: Terminal control is the next frontier of carrier leverage after rate and surcharge control. It's harder to dispute and harder to see on an invoice — but the cost shows up.
Source: JOC
☕ What’s brewing at BlueCargo?
Upcoming Events: 2026 AgTC Annual Meeting, DPW 2026 NYC
Grant is in Tacoma this week for the 2026 AgTC Annual Meeting (May 18–21). If you're attending, reach out to set up some time.
We'll also be attending DPW in NYC June 3-4; to connect, reach out to Kawas.
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