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How Chinese Software Companies Succeed Abroad: Comparing Client-Following, Agent Partnerships, and Local Subsidiaries

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How Chinese Software Companies Succeed Abroad: Comparing Client Following, Agent Partnerships, And Local Subsidiaries

In-depth Analysis of Overseas Expansion Models for Chinese Software Enterprises

Driven by the global digitalization trend, the software industry has become a focal point of global economic competition. After accumulating rich experience and technical strength in the domestic market, Chinese software enterprises are actively seeking to expand into overseas markets to enhance their international competitiveness and market share.

The choice of overseas expansion models is crucial for enterprises’ success in overseas markets, as different models have their respective characteristics and applicable scenarios. This article deeply analyzes three main models for Chinese software enterprises to go global: expanding alongside clients, partnering with local agents, and relying on local subsidiary operations. It explores their core logics, typical cases, advantages, and challenges, aiming to provide valuable references for the overseas expansion of Chinese software enterprises.

Expanding Alongside Clients – Deeply Bound to the Industrial Chain

Core Logic

With the global layout of Chinese manufacturing and the vigorous development of cross-border e-commerce, many Chinese enterprises have established factories or expanded their businesses overseas. Software enterprises follow these clients abroad, providing supporting software solutions such as Warehouse Management Systems (WMS) and Enterprise Resource Planning (ERP). The core of this model lies in closely centering on clients’ overseas business needs, forming a collaborative development pattern of “where clients are, services follow.” By extending the good cooperative relationship established with clients domestically to overseas markets, it achieves deep integration of software services with clients’ businesses, meets clients’ personalized needs in different regions, and jointly addresses challenges in overseas markets.

Typical Cases

Haofang WMS and Xiaomi: As a global renowned smartphone brand, Xiaomi has invested heavily in the Indian market. Haofang WMS provided a professional WMS for Xiaomi’s overseas warehouse in Bangalore, India. Through the implementation of this system, Xiaomi’s delivery time in India was significantly shortened from the original 7-10 days to 2-3 days. The efficient logistics and distribution services greatly enhanced the competitiveness of Xiaomi’s products in the Indian market, helping Xiaomi become the smartphone brand with the largest market share in India. Haofang WMS also accumulated rich industry experience and customer reputation in the Indian market through cooperation with Xiaomi, laying a solid foundation for further expanding into India and surrounding markets.
SIS Global and CIMC Group: As a global leading supplier of logistics and energy equipment, CIMC Group has a large and complex semi-trailer export project in the Middle East. SIS Global provided an integrated WMS + TMS (Transportation Management System) solution for CIMC Lighthouse’s project in the Middle East. The solution supports multi-warehouse collaborative operations and realizes full-process traceability of cross-border logistics. After implementation, the order processing efficiency of CIMC Group’s Middle East project increased by approximately 40%, effectively reducing logistics costs and improving customer satisfaction. Through cooperation with CIMC Group, Juling Supply Chain successfully entered the Middle East market, demonstrating the service capabilities of Chinese software enterprises in complex cross-border projects.

Advantages and Challenges

Advantages:

Clear customer needs: Due to the existing cooperation foundation with clients domestically, software enterprises have an in-depth understanding of clients’ business processes and requirements. In overseas projects, clients’ needs are relatively clear, reducing the costs of requirement research and communication, and enabling projects to be implemented more quickly.
Replicable domestic success experience: The experience and solutions accumulated by software enterprises in serving similar clients domestically can be partially replicated to overseas projects. This helps reduce project implementation risks, improve project success rates, and quickly adapt to some of the needs of overseas clients.
Close cooperative relationship: In-depth cooperation with clients overseas can further strengthen the strategic partnership between the two sides. Software enterprises can continue to provide services as clients’ businesses expand, achieving common growth, and attract more cooperation opportunities from peer enterprises through clients’ word-of-mouth promotion.

Challenges:

Adaptation to overseas local regulations: Regulatory policies vary greatly across different countries and regions. For example, India’s BIS certification has strict requirements for product quality and safety standards. Software enterprises need to ensure that their products and services comply with local regulations, which may involve product function adjustments, tedious certification procedures, and in-depth research on local regulations, increasing the enterprise’s operational costs and time costs.
Differences in supply chain ecosystems: Overseas supply chain ecosystems differ significantly from those in China, including logistics infrastructure, supplier systems, labor markets, and other aspects. Software enterprises need to quickly adapt to these differences and optimize their software solutions to ensure good compatibility with the local supply chain ecosystem. For example, in regions with relatively backward logistics infrastructure, special designs for WMS system distribution strategies may be required.

Expanding via Agents – Leveraging Local Resources to Penetrate Markets

Core Logic

Cooperating with local overseas agents is an effective way for Chinese software enterprises to quickly enter target markets. Local agents have rich channel resources, in-depth industry experience, and localized service capabilities. By establishing cooperative relationships with agents, software enterprises can leverage their advantages in the local market to promote software products to target customer groups. Agents are responsible for product promotion, sales, and localized services, while software enterprises focus on product research and development and technical support, complementing each other’s advantages to jointly 开拓 overseas markets.

Typical Cases

FLUX: FLUX successfully promoted its WMS products to the Australian market through cooperation with Australian agent networks. Relying on their familiarity with the local market, agents accurately positioned target customers, such as manufacturing and logistics warehousing enterprises. Through localized marketing and services, FLUX WMS quickly gained market recognition in Australia, with the number of customers increasing and market share gradually expanding.
Best Software and Southeast Asian Agents: In the Southeast Asian market, Best Software closely cooperated with local agents to promote WMS systems. For the work habits of Southeast Asian employees, agents carried out a work order-based transformation of the system. This transformation reduced the system’s learning cost by approximately 60%, enabling employees to get started with the use more quickly. The good user experience has brought an excellent result of a customer retention rate of over 90%, and Best Software has gained a firm foothold in the Southeast Asian market with the help of agents.

Advantages and Challenges

Advantages:

Lower market entry costs: Compared with setting up branches independently, cooperating with agents can greatly reduce market entry costs. Software enterprises do not need to invest a lot of funds in overseas office space rental, personnel recruitment and training, etc., reducing initial capital pressure and operational risks.
Avoid cultural differences risks: Local agents have a deep understanding of local culture, business habits, and market needs, and can better communicate and cooperate with local customers. Software enterprises can 借助 the localized advantages of agents to avoid market promotion and customer service problems caused by cultural differences and improve product acceptance.
Rapid market coverage: Agents have mature channel resources and sales networks, which can quickly promote software products to all corners of the target market. Software enterprises can reach many potential customers in a short time, improving brand awareness and market share.

Challenges:

Uneven technical capabilities of agents: The technical strength and service levels of different agents vary. Some agents may not have an in-depth technical understanding of software products, and cannot accurately convey product value in the process of product promotion and service, or even affect the customer experience due to technical problems. Software enterprises need to establish strict agent screening mechanisms to ensure that agents have certain technical capabilities and service levels.
Construction of training and support systems: In order to ensure that agents can effectively promote and service software products, software enterprises need to establish a sound training and support system. This includes product technical training, sales skills training, and continuous technical support for agents. The construction of training and support systems requires a lot of investment in human, material, and time costs, and needs to be continuously optimized and updated to adapt to product upgrades and market changes.

Relying on Subsidiaries – Localized Operations to Build Barriers

Core Logic

Establishing wholly-owned subsidiaries in target markets is an important strategy for Chinese software enterprises to achieve deep localized operations. Through subsidiaries, enterprises can realize comprehensive localization of research and development, sales, and services. In terms of research and development, carry out customized development and optimization of products according to local market needs and user habits; in terms of sales, form a localized sales team, deeply understand local customer needs, and formulate targeted marketing strategies; in terms of services, establish a localized service team to provide customers with timely and efficient technical support and after-sales services. This model helps enterprises deeply integrate into the local industrial chain, enhance brand influence, and build long-term and stable market competition barriers.

Typical Cases

FLUX Southeast Asia Branch: FLUX set up a branch in the Philippines, focusing on the 3PL (Third-Party Logistics) market. Relying on the rich scenario experience accumulated in the logistics software field, the branch has an in-depth understanding of the business needs of local 3PL enterprises and provides them with customized software solutions. Through localized operations and services, FLUX Southeast Asia Branch has become the preferred partner of local leading enterprises and occupies an important position in the 3PL market in the Philippines and surrounding areas.
JD Logistics’ European Self-Operated Warehouses: JD Logistics has set up self-operated warehouses in Germany and Poland and provides customized WMS services through local teams. The local team has an in-depth understanding of the needs of European customers and has carried out targeted optimization of the WMS system, such as meeting the strict data security and privacy regulations in Europe. In 2024, JD Logistics’ revenue in the European market increased by 120% year-on-year, and customers covered international logistics providers such as DHL and DB Schenker. Through localized operations, JD Logistics has established a good brand image in the European market and enhanced its market competitiveness.

Advantages and Challenges

Advantages:

Deep control over service quality: By setting up branches, software enterprises can directly manage sales and service teams to ensure the consistency and stability of service quality. Enterprises can quickly adjust service strategies according to local customer needs, provide more personalized and professional services, and improve customer satisfaction.
Rapid response to customer needs: Localized teams can more timely understand customer needs and market changes and quickly respond to customer feedback and problems. Compared with enterprises headquartered domestically, branches have obvious advantages in communication efficiency and decision-making speed, and can better meet local customers’ requirements for service timeliness.
Enhance brand influence: Localized operations help enterprises integrate into the local community and business environment and enhance brand awareness and reputation locally. By participating in local industry activities, establishing cooperative relationships with local enterprises, etc., enterprises can enhance their brand image, establish a good corporate citizen image, and thus gain broader recognition and support in the local market.

Challenges:

High initial investment: Setting up branches requires a lot of funds for office space rental, personnel recruitment and training, market promotion, etc. In addition, it is also necessary to deal with complex administrative procedures such as local registration and tax declaration, with high initial operating costs and a long capital recovery period.
Data compliance issues: Different countries and regions have different regulatory requirements for data security and privacy protection. For example, the EU’s GDPR (General Data Protection Regulation) has strict provisions on enterprises’ data collection, storage, use, and transmission. Software enterprises need to ensure that their business operations comply with local data compliance requirements, which may involve system architecture adjustments, data security technology upgrades, and the establishment of compliance processes, increasing the enterprise’s operational difficulty and cost.
Localized talent recruitment: Recruiting suitable localized talent is the key to the operation of branches. In some regions, there may be problems such as a shortage of software technical talents and fierce talent competition. Enterprises need to formulate attractive compensation and benefits policies and talent development plans to attract and retain excellent localized talents, and at the same time, they need to solve problems such as cultural integration to ensure the efficient collaboration of the team.

Conclusion

In the process of going global, the three models of “expanding alongside clients,” “expanding via agents,” and “relying on local subsidiary operations” for Chinese software enterprises each have their own advantages and disadvantages. Enterprises should flexibly choose suitable overseas expansion models according to their own strategic goals, product characteristics, resource strength, and the specific conditi

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The Digital Backbone of the Warehouse: Trends Shaping the 2026 WMS Market

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The Digital Backbone Of The Warehouse: Trends Shaping The 2026 Wms Market

The Warehouse Management Systems (WMS) market continues to grow, driven by e-commerce growth, increasing fulfillment complexity, faster delivery expectations, and the need for real-time operational visibility. Organizations are investing in WMS to improve inventory accuracy, throughput, and responsiveness to customer demand. Suppliers are driving WMS progress by implementing capabilities that allow customers to see their warehouse operations digitally, respond to disruptions more quickly, and address labor shortages before they arise.

WMS is shifting from a transactional system of record to a coordination layer across warehouse execution, orchestrating workflows across people, automation, and digital systems. This reflects broader changes in supply chain execution, where integration with robotics, AI, and adjacent systems is now a baseline expectation. ARC research reinforces this view: WMS providers are increasingly expected to manage both manual and automated processes holistically, rather than operate in isolation from material handling systems or automation layers.

Key Trends Redefining the WMS Landscape

Automation as a Core Requirement: Warehouse automation is no longer an add-on; it is a central requirement shaping WMS development. Systems must integrate with robotics, autonomous mobile robots (AMRs), and material handling equipment while balancing human and machine workflows. Learning from past decisions, recommending new ones, and looking into the future to identify anticipated disruptions before they occur.
AI-Driven Execution and Decision Support: AI is increasingly embedded into WMS platforms to support predictive analytics, dynamic slotting, and operational decision-making. In many cases, this includes agent-based tools that help diagnose issues and simulate potential outcomes. Chatbots and agents allow warehouse operators to access information and data faster, reducing the time spent making decisions. Increasingly, companies are releasing solutions on a low-code platform that can be easily customized to an organization’s specific needs.
Convergence Across Supply Chain Execution, WMS is increasingly part of a broader execution ecosystem that includes transportation, yard, labor, and order management. Vendors are positioning their solutions as part of integrated platforms rather than standalone applications. AI is playing a role in the de-siloing of systems. When systems are unified and data is accessible, AI can perform traditional processes, such as stock-out scenarios, which require the ability to see into multiple systems, such as inventory, shipping, and warehousing, much faster than a supply chain planner.

The Challenge: Evaluating a Blurred Market

As these trends converge, the WMS market is becoming more difficult to define and evaluate:

Functional overlap between WMS, WES, robotics platforms, and planning systems
Increasing variation in how vendors describe similar capabilities
Expansion of WMS into adjacent execution domains

This creates a disconnect between traditional market analysis and how buyers actually evaluate solutions. From ARC’s perspective, many of the legacy ways of analyzing the market, such as segmentation by tier or deployment type, do not fully explain how solutions differ in real-world performance or how they are evolving. In response, ARC is shifting its research methodology to better reflect how buyers evaluate technology today. Rather than focusing primarily on market size, segmentation, and historical growth, the approach is placing greater emphasis on:

Functional capabilities (e.g., receiving, picking, optimization, labor management)
Technical architecture (modularity, scalability, cloud readiness, interoperability)
Integration with automation and execution systems
AI capabilities and data utilization
Execution quality and measurable performance impact

This approach aligns with ARC’s internal research scope for WMS, which includes both core execution processes (receiving, put-away, picking, shipping) and add-on modules such as labor management, analytics, and optimization. The shift reflects a broader goal: moving beyond describing the market to understanding solution performance and differentiation at a deeper level.

The Role of the ARC Market Map

To support this shift, ARC has introduced the Market Map as a core analytical framework. The Market Map provides a structured, visual representation of supplier positioning in the WMS market, enabling more consistent and transparent evaluation across vendors.

Evaluation Framework

Suppliers are assessed across two primary dimensions:

Solution Capabilities (Execution Today)
Includes:

Functional capabilities across warehouse processes
Technical architecture (cloud, scalability, interoperability)
Integration with automation and adjacent systems
Execution quality and support services

Strategic Vision (Future Positioning)
Includes:

Product roadmap and innovation strategy
Corporate direction and ecosystem alignment
Customer base and growth trajectory

These dimensions are equally weighted and supported by a structured scoring model that incorporates multiple sub-criteria across both capability and strategy dimensions. The Market Map reflects ARC’s view that the WMS market is no longer defined solely by functionality; it is defined by how well solutions integrate across the warehouse ecosystem. WMS solutions are being compared on their ability to support automation and AI-driven execution, and how well the vendors are prepared for future supply chain demands. As markets grow and technology progresses, we also need to develop new ways to analyze and understand market dynamics. By combining both current capabilities and long-term strategy, the framework provides a more complete view of vendor positioning than traditional market rankings.

Vendor Outreach

ARC has been conducting market research for over 30 years, and we, too, have changed and adapted with the times and technology. From pen and paper to an online market analysis platform that allows for dynamic visualizations. We have adapted and progressed alongside the clients we serve, which is why we are looking forward to delivering our first batch of Market Maps this summer.

We are currently speaking with Vendors in the Warehouse Management System market. Learning about each solution’s differentiators, functional capabilities, and much more. If you’d like to be added to our vendor list and included in our WMS Market Map research, please reach out to (gsimon@arcweb.com).

Manhattan Associates
Blue Yonder
Oracle
SAP

Körber (HighJump / Infios)
Infor
Microsoft (Dynamics 365)
NetSuite

Epicor
Acumatica
Tecsys
Made4net

Mecalux
Generix Group
Deposco
Logiwa

ShipHero
3PL Central (Extensiv)
Infoplus
Cadre Technologies

The post The Digital Backbone of the Warehouse: Trends Shaping the 2026 WMS Market appeared first on Logistics Viewpoints.

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Help Shape the Supply Chain Decision Intelligence Market Map

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Help Shape The Supply Chain Decision Intelligence Market Map

As AI, visibility, planning, risk, and orchestration platforms converge, Logistics Viewpoints is developing an analyst-defined Market Map to clarify where decision-making value is emerging — and supplier participation is now welcome.

Supply chain technology markets are becoming harder to evaluate. Established software categories still matter, but they no longer explain where much of the new differentiation is emerging. Planning systems are adding orchestration. Visibility platforms are moving into exception management and recommendation engines. Risk platforms are becoming operating signal layers. Enterprise application vendors are embedding AI across broader suites. Specialized providers are using external data, event intelligence, and analytics to help companies respond faster to disruption.

For buyers, the result is a more complicated evaluation environment. For suppliers, the challenge is positioning. Many companies now use similar language — AI, orchestration, control tower, resilience, visibility, automation, intelligence — while solving different problems at different layers of the operating model.

That is why Logistics Viewpoints is developing the Supply Chain Decision Intelligence Market Map, an analyst-defined view of one of the most important emerging layers in supply chain technology.

Supplier participation is now welcome. If your company is listed below, or if your company is active in supply chain decision intelligence, AI-enabled decision support, orchestration, event intelligence, risk, resilience, control towers, visibility, planning intelligence, or related areas, this is the time to engage. Participation helps ensure that your capabilities are understood accurately before the Market Map is finalized.

The Market Map is designed to clarify the layer above and across core supply chain systems where data is interpreted, signals are connected, tradeoffs are evaluated, and better operating decisions are made. This is not intended to be another logo landscape. The purpose is to define the market, establish boundaries, organize the provider landscape, and create a more disciplined basis for buyer and supplier conversations.

Why Decision Intelligence Matters

For decades, supply chain technology was organized around familiar application categories: ERP, WMS, TMS, planning, procurement, order management, visibility, and execution platforms. Those systems remain essential. But they do not fully explain where value is moving.

The most important shift is the emergence of an intelligence layer that helps companies understand what is changing, why it matters, what options are available, and what action should be taken. That is the practical meaning of Supply Chain Decision Intelligence.

The category includes technologies that materially improve how supply chain decisions are made across planning, execution, coordination, disruption response, risk management, logistics, sourcing, fulfillment, and multi-enterprise operations. It is broader than a single application category, but it is not a catch-all for every vendor using AI language.

The governing test is straightforward: does the technology improve decision quality in a meaningful supply chain operating context?

A dashboard is not decision intelligence. A transactional execution system is not decision intelligence simply because it stores operational data. A generic AI platform is not automatically part of the category unless it is materially tied to supply chain decision-making. The Market Map is intended to hold that boundary.

Providers Currently Under Review

The Supply Chain Decision Intelligence Market Map is being developed around a curated set of providers whose capabilities appear to intersect with this emerging intelligence layer. Providers currently under review include:

Altana
Blue Yonder
Coupa
e2open
Everstream
FourKites
Interos
Kinaxis
Manhattan
o9
Oracle
Overhaul
project44
SAP

These companies do not all compete in the same way. That is precisely why the market needs structure.

Some are associated with planning, scenario analysis, and decision optimization. Some are stronger in logistics visibility, event data, transportation intelligence, or control tower capabilities. Some focus on supplier risk, trade intelligence, resilience, or multi-enterprise network coordination. Some are broad enterprise application providers extending intelligence across large installed bases. Others are more specialized providers focused on risk signals, shipment intelligence, orchestration, or external operating context.

The analytical value of the Market Map comes from making those differences visible. A buyer evaluating supply chain decision intelligence should not treat all of these providers as interchangeable. Nor should suppliers be forced into legacy categories that obscure their actual role in decision support.

Why Suppliers Should Participate

Supplier participation matters because this market is still being defined.

Many providers have capabilities that cross legacy category lines. A company may be known for visibility but now offer decision automation. A planning vendor may increasingly support cross-functional orchestration. A risk platform may function as an operating intelligence layer. A network provider may support decision-making across parties, geographies, and systems.

If those distinctions are not understood clearly, suppliers risk being positioned too narrowly, grouped with adjacent providers that solve different problems, or evaluated only through outdated category labels.

Participation gives suppliers an opportunity to clarify:

How their platform improves supply chain decision-making
Where their capabilities sit relative to planning, execution, visibility, risk, and orchestration
What data, AI, analytics, workflow, or network capabilities support decision quality
Which use cases best demonstrate enterprise value
How their solution differs from adjacent providers that may sound similar in the market

This is especially important in a category where language has become crowded. “AI,” “control tower,” “visibility,” “orchestration,” “resilience,” and “decision intelligence” can mean very different things depending on the provider. The Market Map process is intended to separate substance from terminology.

For suppliers, the benefit is not promotional placement. It is accurate market understanding. A well-informed Market Map helps buyers better understand the provider landscape — and helps suppliers avoid being misread by the market.

Inclusion and Exclusion Logic

The Market Map will focus on technologies that contribute directly to better supply chain decisions.

Relevant capabilities include decision-support layers, orchestration and coordination tools, AI and advanced analytics tied to operating decisions, control towers with real decision depth, context and event intelligence, scenario modeling, cross-functional intelligence environments, and selected enabling infrastructure where the connection to decision quality is explicit.

This includes technologies that help enterprises interpret signals from internal systems and external operating environments. Shipment delays, supplier risk, demand shifts, geopolitical events, inventory constraints, transportation disruption, port congestion, regulatory exposure, and weather events become more useful when they are connected to decisions.

Clear exclusions are equally important. Core systems of record are not included simply because they are important. ERP, WMS, TMS, planning, procurement, and asset management systems belong in the discussion only when they demonstrate a meaningful intelligence layer above the transactional core.

Pure execution tools without decision depth also remain outside the center of the category. The same applies to horizontal BI tools, generic enterprise AI platforms, and narrow point solutions with limited strategic relevance.

These technologies may be useful. Some may even enable decision intelligence. But enablement is not the same as category membership. The objective is not to reward every AI message in the market. The objective is to identify where real decision-making value is emerging.

Why This Is Commercially Important

Decision intelligence is becoming one of the more important ways to understand the next stage of supply chain technology. The market is not moving simply toward more software. It is moving toward more interpretation, more coordination, more contextual awareness, and more decision support across fragmented operating environments.

That shift has implications for both buyers and suppliers. Buyers need a better way to compare providers whose capabilities cut across traditional categories. Suppliers need a more disciplined way to explain where they fit and why they matter. Analysts need a framework that can separate category substance from marketing language.

The Supply Chain Decision Intelligence Market Map is designed to provide that structure.

It will not answer every selection question. No market map can. But it can help buyers ask better questions, compare providers more intelligently, and understand which capabilities are truly central to decision improvement. It can also help suppliers understand how their market position may be perceived within a broader, analyst-defined framework.

Participation Is Welcome

Logistics Viewpoints welcomes supplier participation in the Supply Chain Decision Intelligence Market Map process.

If your company is listed above, participation can help ensure that Logistics Viewpoints has the most accurate understanding of your capabilities, positioning, and role in the market. If your company is not listed but is active in supply chain decision intelligence, AI-enabled supply chain decision support, orchestration, event intelligence, resilience, control tower capabilities, planning intelligence, visibility, supplier risk, trade intelligence, or related areas, we welcome the opportunity to understand where you fit.

Participation does not mean guaranteed positioning, endorsement, or favorable treatment. The value of the Market Map depends on analytical discipline. But supplier input can materially improve the quality of the research, sharpen category boundaries, and ensure that relevant capabilities are understood before the map is finalized.

For suppliers active in this market, non-participation carries a practical risk: your company may still be evaluated based on available information, but without the benefit of your most current explanation of strategy, capability depth, roadmap direction, and customer value proposition.

Next Step

Logistics Viewpoints is developing the Supply Chain Decision Intelligence Market Map as part of a broader Market Maps portfolio for supply chain technology buyers and providers.

To request the Executive Summary, discuss the Supplier Selection Guide, or explore participation in a Supplier Spotlight, contact Logistics Viewpoints.

If you are one of the suppliers listed above, or if your company is active in this market, we welcome your participation in the process.

The post Help Shape the Supply Chain Decision Intelligence Market Map appeared first on Logistics Viewpoints.

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Hormuz tension keeps pressure on rates; Section 122 invalidated – May 12, 2026 Update

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Hormuz tension keeps pressure on rates; Section 122 invalidated – May 12, 2026 Update

Published: May 12, 2026

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Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 4%.

Asia-US East Coast prices (FBX03 Weekly) increased 1%.

Asia-N. Europe prices (FBX11 Weekly) increased 10%.

Asia-Mediterranean prices(FBX13 Weekly) decreased 5%.

Air rates – Freightos Air Index

China – N. America weekly prices stayed level.

China – N. Europe weekly prices decreased 3%.

N. Europe – N. America weekly prices decreased 3%.

Analysis

The US paused its Operation Freedom, designed to support vessel transits out of the Strait of Hormuz – and which sparked renewed US-Iran exchanges of fire as well as Iranian missile attacks on Gulf states last week – less than two days after its launch.

Even amid sporadic military engagement, US-Iran negotiations continue, though the sides remain far apart, with President Trump stating that he may restart the operation if negotiations stall. In the meantime, Iran announced the creation of a Persian Gulf Strait Authority through which vessels are required to request permission – and possibly pay – to pass through the strait.

Maersk CEO Vincent Clerc estimates that elevated fuel prices due to the closure has the carrier facing $500M per month in additional costs. He also reports that Maersk has so far been able to pass those costs on to customers via higher freight rates.

Freightos Baltic Index container price behavior has varied by lane, however, with transpacific rates up about $1,000/FEU compared to before the war, while Asia – Europe prices that climbed by a few hundred dollars per FEU in March have mostly slipped back to pre-war levels. Asia – N. Europe rates climbed by 10% last week to $2,850/FEU, but prices so far this week are trending down, similar to rate behavior to the Mediterranean earlier this month.

Carriers are planning additional, likely modest, increases for mid-month. In preparation, they are stepping up blanked sailings – with reports of east-west service space getting tight and some containers being rolled – to support higher spot rates during what is still a low demand stretch, and hoping peak season demand picks up to support prices later in the year.

The latest National Retail Federation US ocean import volume report projects June arrivals to be 2% lower than May, with volumes increasing 4% month on month in July before easing slightly in August and further in September. If these estimates materialize, transpacific peak season will be a muted one relative to recent years, with the July peak 8% lower than last year’s tariff driven burst, but also 6% lower than the August peak in 2024.

The NRF suggests that this relative weakness reflects importer caution due to current economic uncertainty. Maersk’s Clerc also suggests that a coming downturn in ocean demand due to higher consumer prices is possible and could make this year’s H2 challenging and possibly loss-making for carriers still facing elevated fuel costs.

Elevated jet fuel prices are contributing to global air cargo rates that are 30% higher than before the war and year on year. Higher costs are pushing some volumes away from the skies when feasible, including some Asia – Europe shippers opting for ocean-air services via West Coast US ports.

Overall though, the market is stabilizing as air space closures decrease and capacity from Gulf carriers continues to recover. Jet fuel prices have also leveled out after coming down from April highs as the market has shifted sourcing for jet fuel – and energy exports more generally – to the extent possible to account for the Persian Gulf export drop, and as demand for fuel has also eased as carriers scrap unprofitable flights.

Freightos Air Index rates decreased slightly or were level on most major lanes last week. Prices out of China were stable at $5.47/kg to N. America and dipped 3% to $5.16/kg to Europe. While China – US rates are now back to pre-war levels, prices to Europe remain 50% higher, but down 15% from their peak in April. S. Asia – Europe rates were stable at $4.66/kg last week – a level 80% higher than in February – but down 10% from a month ago. SEA – Europe prices meanwhile were up double digits last week to a new high of $5.74/kg.

In trade war news, President Trump and China’s Xi Jinping are set to meet in Beijing later this week for a summit aimed at stabilizing the US-China trade relationship – whose status quo will expire in November – but complicated by the Iran war.

US tariffs on China are lower at the moment than before the US Supreme Court invalidated Trump’s IEEPA-based tariffs in February. The White House replaced IEEPA duties with a 10% global tariff based on Section 122 that is set to expire in late July, with the administration working to replace the 122 duty with Section 301-based IEEPA-like tariffs by then.

Last week though, the US Court of International Trade ruled that the president’s use of Section 122 was invalid. The ruling and the court-required refunds were limited to the specific plaintiffs in the case, but open the door for other businesses to sue as well. The White House has appealed the ruling and asked that the tariffs stay in place during the appeals process or until they expire, but these developments do set the stage for another possible widespread tariff refund.

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Judah Levine

Head of Research, Freightos Group

Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group’s FBX Weekly Freight Update and other research on what’s happening in the industry from shipper behaviors to the latest in logistics technology and digitization.

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