This report, which was initially launched in the third quarter of 2017, is comprised of data on freight shipping volumes and spending on both a national and regional basis. The report’s data is based on the actual transaction payment date and the highest-volume domestic freight modes of truckload and less-than-truckload, and is seasonally and calendar adjusted. Its historical data goes back to 2010, with a base point of 100, and its index point for each subsequent quarter marks that quarter’s volume in relation to the preceding quarter. U.S. Bank Freight Payment's business processes more than $46 billion in annual freight payments for some of the world’s largest corporations and government agencies.

The report’s third quarter shipment index value, at 75.4, was up 0.4% compared to the second quarter and rose 0.5% annually, with the first quarter and the third quarter representing the only annual gains over the last four years, with the second quarter down 2.8% annually.

“Overall, results show little momentum, consistent with flat freight-related economic indicators,” the report observed. “Consumer spending remained resilient as households used savings and increased borrowing. Inflation-adjusted retail sales rose 0.5% from the second quarter and 1.4% from a year earlier. These conditions help explain the modest quarterly and annual increase in Q3.”

And the report added that manufacturing activity grew modestly, up 0.2% quarter over quarter and 1.2% year over year, driven primarily by AI, defense, and commercial aircraft production. However, excluding these sectors, it said manufacturing was flat, while food manufacturing declined. Construction activity also remained weak, with housing starts falling, despite significant growth in data center construction. Overall, economic growth was concentrated in a few specialized industries rather than broad-based manufacturing and construction activity, limiting overall freight demand, it said.

Looking at spending, the third quarter index spend value, at 242.4, increased 5.2% over the first quarter and was up 32.1% annually.

“Shipper spending rose sharply in the third quarter, driven by higher rates and elevated diesel prices,” the report stated. “Rates are increasing due to tighter capacity as federal and state safety officials continue with more enforcement of driver rules and regulations, and carriers are not adding capacity.  Diesel prices increased further from already elevated second-quarter levels. The EIA’s third quarter average diesel price increased approximately 4% from the second quarter and prices climbed sharply in September, reaching $6.53. Overall, freight volumes remained soft while shipper spending increased.”

On a regional basis, shipments saw a 3.1% sequential decrease and a 2.1% annual decrease in the Western U.S.; a 2.5% sequential decline and a 2.4% annual gain in the Midwest; a 1.4% sequential gain and a 2.8% annual increase in the Northeast; a 2.9% sequential increase and a 2.6% annual decrease in the Southwest; and a 4.7% sequential increase and a 0.0 annual flat reading in the Southeast. The report explained higher rates, diesel prices, and fuel surcharges drove up regional shipper spending.

Bob Costello, American Trucking Associations Chief Economist and the report’s lead author, wrote in the report that three trends shaped the third-quarter truck freight market: tightened capacity put upward pressure on rates, elevated diesel prices increased shipper costs, and freight volumes remained uneven.

“By both quarter-over-quarter and year-over-year measures, the third quarter may have been the strongest of 2026,” wrote Costello. “However, freight activity remained subdued, with regional results pointing to a market that varied considerably across the country. That may seem surprising given continued reports of strength in the broader U.S. economy. However, overall economic growth does not necessarily reflect conditions in the goods-producing sectors that drive truck freight demand. While parts of the goods economy remain strong, as discussed below, broader economic momentum may overstate the outlook for freight activity. This disconnect was evident in the U.S. Bank National Shipments Index, which increased slightly from both the second quarter and a year earlier. Shipments did not decline, but growth remained limited.”

Freight brokers and technology providers are increasingly turning to automated matching, pricing, booking, and carrier-vetting tools to improve efficiency and keep operating costs in check. At the same time, regulatory changes and concerns over liability are putting a greater emphasis on carrier networks and compliance.

These developments are also changing the competitive landscape, as larger providers look to technology and scale to strengthen their market positions, while smaller players face mounting challenges.

Joining Logistics Management this year to discuss these developments and help shippers better understand where the DFM market stands and where it may be headed are Evan Armstrong, president of Armstrong & Associates; Ben Gordon, managing partner of Cambridge Capital and BGSA Holdings; and Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence.

Logistics Management (LM): How do you view the current state of the digital freight matching market?

Lee Klaskow: I think the evolution of the digital freight matching market is accelerating. Advances in AI and machine learning are rapidly expanding what these platforms can do, while a tighter freight market and changing regulatory and legal environment are making the technology increasingly valuable.

DFM is moving beyond simply matching a truck with a load. It’s increasingly about using AI, data, and automation to find the right truck at the right price, while ensuring that carrier meets increasingly important safety and compliance standards. As capacity tightens, access to qualified capacity becomes more important, increasing the value of large, dense carrier networks.

At the same time, AI is automating more of the transaction—from pricing and carrier selection to booking and tracking—allowing brokers to handle more freight per employee and lower the cost to serve.

Ultimately, technology, scale and risk management are converging. DFM is becoming less of a stand-alone product and more of the technology powering freight brokerage. That should improve productivity and outcomes for shippers and carriers, while accelerating consolidation as scale becomes increasingly important.

Evan Armstrong: Digital freight matching has evolved from standalone applications to the integration of AI into the freight brokerage workflow. Leading domestic transportation management third-party logistics providers [3PLs] are now using what we call intelligent capacity management systems. This includes proprietary or bolt-on DFM solutions such as Parade and Mudflap, as well as AI agents that handle quoting, booking, check calls, and payment collection.

According to A&A's 3PL database, out of 706 listed 3PLs that report using a transportation management system [TMS], 416 operate a proprietary system, and 58 specifically use Parade. Productivity is our key metric, with a benchmark minimum of 15 loads per person per day [LPPD] for spot-sourced truckloads, and a target of at least $1.5 million in gross revenue per employee per year.

Last year, some freight brokers leveraging DFM and voice AI surpassed 40 LPPD, and many more are progressing toward that goal. C.H. Robinson’s upcoming $5.8 billion acquisition of RXO is a strategic move that anticipates that AI-driven productivity will scale with increased volume.

Ben Gordon: A year ago, I called it battered and bruised. Today it’s a survivors’ market. The recession has turned into a capacity cycle. Tender rejections have held around 14% for months, about double the ~7% equilibrium, and contract rates are roughly 20% above last year.

Uber Freight’s bookings grew 25% in the second quarter, and as Evan just mentioned, C.H. Robinson just agreed to buy RXO, the largest brokerage deal ever. The market is healthier, and much more concentrated. But this is mainly good news for large brokers, and not necessarily for DFMs.

LM: A year ago, rates were lower and there was excess capacity. Now rates are up and capacity is tighter, for reasons including federal CDL initiatives and the Supreme Court Montgomery v. Caribe verdict. How much of an impact have these shifts had on the DFM marketplace?

Armstrong: The situation is significant. Capacity is tightening on the supply side, rather than due to a surge in demand. Various factors—such as the enforcement of English-language proficiency requirements, the non-domiciled CDL rule, and drivers sidelined by the Drug and Alcohol Clearinghouse—are removing drivers from the road.

According to the American Trucking Associations (ATA), spot truckload rates increased by 41.9% year over year in August. In a tight market, digital freight matching shifts from being a cost-cutting tool to a capacity-finding tool. Freight broker-posted spot rates on Truckstop were up 43.1% year over year for the week ended October 2, with dry van up 50.4%.

Additionally, the case of Montgomery v. Caribe added a second requirement: the carriers that a platform identifies must also be defensible selections for freight brokers. This outcome benefits freight brokers with extensive, well-vetted carrier networks and automated matching systems. Those purchasing spot capacity manually are experiencing compressed gross margins, as buy rates are rising faster than contractual sell rates.

Gordon: A tight market is the best stress test a platform can get. When rates are soft, matching is about price. When capacity is tight, it’s about access: who can find a truck at 4 p.m. on Friday? That rewards deep carrier networks and good data, and it exposes thin ones. The capacity decline started about three years ago, but now the government is tightening the supply side too, thanks to crackdowns on illegal immigrant drivers as well as the Supreme Court ruling.

Klaskow: It’s been significant. A tighter freight market generally increases the value of digital freight matching because finding the right capacity at the right price becomes more difficult. When trucks were plentiful, matching technology was primarily about efficiency and lowering the cost to serve. Today it’s increasingly about access to quality capacity, speed, and risk management.

Federal initiatives around CDLs and driver qualifications are removing, or potentially sidelining, some capacity, while the Montgomery decision is causing brokers and shippers to be more selective about the carriers they use. FMCSA's 2026 non-domiciled CDL rule significantly narrowed eligibility for those credentials, while regulators have also moved to make English-language proficiency violations an out-of-service issue.

That changes the DFM proposition. The best platform isn't necessarily the one that can simply find the cheapest available truck anymore. It needs to identify capacity that is available, compliant, safe, and appropriate for the shipment—and document how that decision was made.

I think that benefits companies with large carrier networks, robust data, and sophisticated vetting technology. It also raises the barriers to entry for smaller brokers and DFM providers.

LM: Looking at the CDL initiatives and the Montgomery verdict, what are the respective biggest takeaways of each for industry stakeholders?

Klaskow: The biggest takeaway from the CDL initiatives is capacity. Federal policy is increasing scrutiny around who is qualified to operate a commercial vehicle. Also, the closing of driving schools also limits the number of CDL holders entering the industry. We believe the changes are structural and should result in longer rate cycles.

The biggest takeaway from Montgomery is liability and carrier selection. The Supreme Court unanimously ruled that state-law negligent-hiring claims against freight brokers can fall under the FAAAA’s motor-vehicle-safety exception. In other words, brokers can no longer rely on federal preemption as a broad shield against these types of negligent-selection claims.

That potentially changes the economics of brokerage. Brokers will likely spend more on carrier vetting, compliance, technology, and insurance, and they may become much more reluctant to use carriers with questionable safety records. This could hurt smaller carriers and smaller brokers that lack the compliance infrastructure or financial resources.

Ultimately, we believe Montgomery could accelerate consolidation. C.H. Robinson’s pending acquisition wasn’t a huge surprise, and we suspect to see more large deals. Scale allows larger brokers to spread technology, compliance, legal, and insurance costs across significantly more loads.

Armstrong: Verifying a carrier’s operating authority and insurance is no longer sufficient. Shippers and freight brokers also need to be confident that the driver arriving to pick up a load is qualified and legally authorized to operate. Otherwise, the shipment could be stopped during a roadside inspection. As these requirements receive greater scrutiny, expect capacity to remain tight and qualified carriers to command higher rates.

At the same time, the Supreme Court’s unanimous ruling in May that federal law does not preempt state negligent-selection claims against freight brokers has made carrier selection an even more significant liability concern. Both developments underscore the need for a documented, repeatable vetting process before a load is offered, covering carrier identity, operating authority, insurance, safety records, and driver qualifications.

A&A’s Freight Broker Carrier Vetting & Compliance Guide outlines this process. We recommend integrating carrier vetting directly into the digital freight matching algorithm rather than treating it as a separate onboarding step.

Gordon: In terms of CDL, about 200,000 drivers hold non-domiciled CDLs, and DOT expects nearly all to be out of the industry within two years. Existing licenses run until expiration, so this is a slow squeeze, not a cliff. Plan for structurally higher carrier costs.

In terms of Montgomery, the Court ruled 9-0 on May 14 that negligent-selection suits against brokers can proceed in state court. It isn’t automatic liability, but carrier vetting is now a basis for litigation, and insurers are treating it as an underwriting event.

In sum, one rule thins the herd, and the other makes you accountable for who’s in it. Both push freight toward vetted carriers and brokers with data. And both cause inflation.

LM: The consensus a year ago was that some DFM companies were leaving the marketplace. Do you still see that being the case today, or are you seeing more entrants coming into the market?

Klaskow: I think you're going to continue seeing both entry and exit, but the bar for success is getting higher.

There will always be entrepreneurs and technology companies attracted to freight because it’s a massive, fragmented industry with a lot of inefficiencies that technology can potentially solve. AI has lowered the cost of developing some tools and created new opportunities around pricing, matching, automation, and carrier qualification.

At the same time, I think it’s becoming harder to build a stand-alone DFM business at meaningful scale. Network density matters. Proprietary data matters. Carrier relationships matter. Increasingly, compliance and risk-management capabilities matter as well.

So, there will continue to be new ideas and entrants, but I would expect more of the successful niche technologies to ultimately become features within larger platforms or acquisition targets rather than develop into large independent DFM companies.

We said last year that companies standing still risk being displaced by someone with a better mousetrap. That remains true, but today I would add that even a better mousetrap needs scale and distribution.

Armstrong: I would say both. Consolidation among stand-alone digital freight brokerages has continued, and scale is concentrating at the top. C.H. Robinson and RXO combined generated $17.4 billion in 2025 gross DTM revenue, 13.6% of the $128.3 billion U.S. DTM market, and 2.2 times the next largest provider.

The new entrants are mostly technology vendors selling into existing freight brokers, not new digital freight brokerages. Venture capital has shifted toward agentic AI providers. HappyRobot raised a $150 million Series C at a $1.2 billion valuation, and Augment has raised $110 million. New freight brokerages will keep forming because shippers buy on service and relationships, but without more than $100 million in freight spend, most will rent their technology rather than build it.

Gordon: Last year I said some would exit. They did, and now the story is consolidation. Convoy went to Flexport, Transfix sold its brokerage to NFI, and now C.H. Robinson and RXO are combining. The new entrants are a different species, like AI-native roll-ups like Fura, which has bought seven brokerages. Capital is backing AI-run operating platforms. We expect to see more.

LM: What types of stakeholders are making the move into this segment and why?

Armstrong: We're seeing interest from several groups, including venture-backed AI vendors developing voice and email agents for carrier sales, check calls, appointment scheduling, and accounts receivable. Private equity firms are also attracted to the asset-light freight brokerage model and the potential for automation to expand margins as the market recovers.

Strategic acquirers are another important group. Larger freight brokers are using M&A to add freight volume that can be handled through their existing automation platforms, which is the thinking behind C.H. Robinson’s agreement to acquire RXO. Load board and freight payment providers are also expanding into carrier vetting, fraud prevention, and pricing.

In our buy-side engagements, we now evaluate a target’s technology stack, loads handled per person per day, and carrier compliance program alongside its financials, as these factors increasingly drive post-acquisition value.

Gordon: We’re also seeing interest from three main groups, starting with large freight brokers looking to improve productivity through AI and automation. C.H. Robinson, for example, is targeting approximately $300 million in synergies by applying its “Lean AI” model to RXO.

Software and data consolidators are also entering the market, attracted by the value of broker transaction data, while roll-up sponsors see opportunity in a highly fragmented industry with roughly 28,000 brokers, many of which still rely on manual processes.

We're seeing a similar strategy play out in adjacent sectors. Triumph's $160 million acquisition of Greenscreens.ai reflects that same thinking from the fintech side: whoever controls pricing and capacity data ultimately controls the customer relationship.

Klaskow: We’re seeing a similar dynamic, with several groups converging on the DFM market. Traditional freight brokers continue to invest heavily in proprietary technology, as automation can lower transaction costs and allow employees to manage considerably more freight. These investments are increasingly becoming table stakes.

Load-board and marketplace companies are also expanding their capabilities in matching, payments, visibility, compliance, and analytics. DAT, for example, has continued integrating automated matching through its Convoy Platform, while Truckstop has introduced AI-enabled tools designed to simplify load searches and broker interactions for carriers. Software providers, TMS companies, and AI startups are also drawn to the market, recognizing how much of the freight brokerage process can still be automated.

What's changing is that the opportunity now extends well beyond simply matching a truck with a load. It's the combination of matching, data, workflow automation, and risk management where I believe we'll see significant investment going forward.

LM: Who are the biggest, or most important, players in this space, and what makes them stand out?

Gordon: We're seeing many of the same players as last year, although the lines between them are becoming increasingly blurred. Large platforms such as Uber Freight and the combined C.H. Robinson/RXO bring significant capital, data, and carrier network density to the market.

Then there are the technology and infrastructure providers, including Greenscreens.ai, Parade, load boards, and TMS providers, which supply many of the tools and capabilities that support digital freight matching.

We're also seeing AI-native challengers and fast followers, including Fura, as well as our own Pallet and Everest, which are bringing together best-of-breed technologies to compete in this evolving market. Ultimately, the winner will be the company with the best carrier network and the best data.

Klaskow: DAT and Truckstop remain critical players because of the breadth of their carrier networks, load-board liquidity, and the enormous amount of market data they generate.

On the brokerage side, C.H. Robinson stands out for its scale, technology investments, and extensive proprietary data. Its agreement to acquire RXO is a good example of where we believe the industry is headed.

The transaction would create an even denser North American freight network, with C.H. Robinson expecting roughly $300 million in net run-rate cost synergies within two years, including productivity gains from applying its Lean AI operating model to RXO. The company also cited the expanded proprietary dataset as an opportunity to improve AI-enabled sales, matching, and procurement.

J.B. Hunt is another important player, as its asset-backed model provides access to capacity and data across multiple transportation modes. Large private brokers such as Arrive Logistics have also invested heavily in technology while maintaining the personal relationships that remain essential to freight brokerage.

I continue to believe the winning model is technology working alongside people, not replacing them. As we noted last year, the human connection among brokers, carriers, and shippers will remain critical even as workflows become more digital. If anything, recent developments have only reinforced that view.

Armstrong: Among freight brokerage 3PLs, the largest players include C.H. Robinson, J.B. Hunt, TQL, and RXO, which hold the top four positions in A&A’s 2025 ranking of domestic transportation managers and freight brokers by gross DTM revenue. Uber Freight remains the most visible digital-native freight brokerage. These companies stand out for their investments in automated quoting, digital freight matching for spot-market shipments, and book-it-now load execution capabilities for carriers.

Small and mid-sized 3PLs are working to close the technology gap by building capabilities around their existing transportation management systems, whether that's McLeod, MercuryGate (Infios), or a proprietary platform. They're incorporating tools such as Parade for capacity management, Greenscreens for pricing, Highway for carrier identity verification and fraud prevention, Descartes MacroPoint and project44 [LSP44] for visibility, and AI agent providers such as HappyRobot and LSP44 to automate workflows.

While these technologies are helping smaller providers compete, the gap between the top-tier players and the rest of the market continues to widen.

LM: Do you think shipper usage and adoption of DFM technology has increased or decreased over the last year?

Klaskow: Increased—although I think the definition of adoption is changing. A few years ago, people often talked about digital freight matching as a distinct product: put a load into an app, match it with a truck and transact digitally.

Today the technology is increasingly disappearing into the workflow. Matching algorithms are being embedded into TMS platforms and brokerage systems, with AI helping price loads, identify carriers, automate outreach, schedule appointments, and track freight.

So, I don't think shippers necessarily wake up saying they want to use more DFM. They want better service, lower transportation costs, more visibility, faster execution, and reliable capacity. Increasingly, digital matching and AI are simply the technologies operating underneath those outcomes.

As capacity tightens, these tools become even more important because the costs of making a poor matching decision increase.

Armstrong: Adoption has increased, although much of that growth has been indirect. Most shippers still manage contractual carriers and freight brokers through lane-by-lane routing guides, turning to spot-market quotes from brokers when tenders are rejected.

As rejection rates rise in a tightening market, more freight moves to the spot market, and shippers are relying on brokers that can automatically quote and cover shipments. Larger shippers are also integrating API-connected spot quoting into their transportation management systems (TMS) and making more freight available for automated bidding.

We've also seen significant growth in visibility, with shippers increasingly requiring real-time tracking through platforms such as project44, FourKites, and Descartes MacroPoint as a condition for tendering freight. Brokers are using that same tracking data to identify available capacity. Ultimately, shippers aren't purchasing digital freight matching (DFM) for its own sake. They're looking for reliable capacity, quality service, and competitive pricing.

Gordon: I agree, and we're seeing increased adoption across logistics technology, not just DFM. Echo's survey of 1,024 shippers found that carrier adoption was leveling off, while shipper interest in automation and AI increased notably. Tightening capacity is a major driver, as shippers look for greater certainty through instant pricing, automated tendering, and better visibility.

The Montgomery ruling adds another consideration, with shippers increasingly focused on how their brokers vet carriers and document that process. Even with these developments, most shippers continue to access DFM capabilities through their freight brokers rather than directly.

LM: Where do you see the DFM market in the next three-to-five years?

Armstrong: Within three to five years, most spot truckloads at leading freight brokers will be quoted, matched, booked, and tracked with minimal human touch, and AI agents will handle carrier calls, check calls, and documentation. People will focus on exceptions, shipper relationships, and carrier development.

We expect top performers to run well above 40 loads per person per day, with productivity gaps directly reflected in valuations. Freight brokerage will keep consolidating around firms with scale, clean carrier networks, and proprietary data. The open question is whether mid-sized freight brokers keep pace by assembling best-of-breed AI tools around their TMS, or become acquisition targets for those that did.

Gordon: Last year, I said DFM and traditional brokerage would merge into one market, and we're already seeing that happen. By 2030, if not sooner, I don't believe DFM will even be a separate category. It will simply be how freight brokerage operates.

I expect a handful of AI-driven platforms to control much of the volume, with automated agents handling routine booking and carrier communications while people focus on exceptions, relationships, and risk management. Carrier vetting and fraud prevention data will also become increasingly important competitive advantages following Montgomery, while niche specialists in areas such as cold chain, LTL, and cross-border freight will continue to thrive.

Ultimately, brokers will compete on revenue per employee, and that's where the C.H. Robinson/RXO synergy calculations come into play.

Klaskow: I think we're going to see significantly more freight priced, matched, tendered, and tracked with little or no human intervention. AI will dramatically improve broker productivity, allowing individual employees to manage considerably more loads while lowering the industry's cost to serve.

But that doesn't mean brokers will disappear. Instead, people will spend less time handling repetitive transactions and more time managing exceptions, complex freight, and customer relationships.

I also expect consolidation to accelerate. The combination of AI, the Montgomery ruling, and an increasingly complicated compliance environment makes scale more important than ever. Larger platforms have the resources to invest in technology, maintain deeper carrier networks, collect more data, and spread compliance, legal, and insurance costs across a greater volume of transactions.

C.H. Robinson's proposed acquisition of RXO is a good example of where things may be headed, with the companies pointing to greater network density, expanded proprietary data, and AI-driven productivity as key benefits.

Looking three to five years ahead, I expect fewer major brokerage and DFM platforms, but those that remain will be considerably more sophisticated. At that point, digital freight matching may no longer be viewed as a separate category. It will simply be how freight moves.

After years of stagnant rates, rising operating costs and intense competition, thousands of carriers have exited the market. That capacity reduction is now helping to shift pricing power back toward the carriers that remain, with both spot and contract rates beginning to rise.

In fact, the recent State of Logistics Report (SoL) concluded that approximately 89,000 carriers have exited the TL market since 2022, following an influx of new entrants during the pandemic-era freight boom.

The result is an increasingly supply-driven recovery. Truckload capacity has left the market, while pricing is “firming even as demand remains mixed,” according to the report. The SoL also concluded that truckload demand can no longer be viewed as one national market, with pricing and capacity availability increasingly determined by regional rather than national conditions.

“We believe the truckload market is already exceeding carrier capacity,” says Kent Williams, executive vice president for sales and marketing for Averitt Express. Like many large less-than-truckload (LTL) carriers, Averitt also operates a smaller truckload division of approximately 550 tractors, in addition to more than 850 power units in its dedicated contract carriage unit.

The shift is also widening the pricing gap between over-the-road truckload and intermodal, giving rail-based providers an opportunity to compete for long-haul freight.

“I think we’re in the early innings of the freight recovery,” says Old Dominion Freight Line chief financial officer Adam Satterfield. Like many large LTL carriers, ODFL also operates a sizeable truckload operation.

Jim Filter, president and CEO of Schneider National, the nation’s third-largest truckload carrier, also sees meaningful opportunity ahead as the available driver pool tightens.

“We would now categorize the market as driver-constrained,” Filter told analysts on a recent earnings call. “The long-haul driver population in the U.S. sits well below long-term averages, and near the lowest levels seen over the last decade. However, we believe roughly half of the non-compliant capacity is left, with the remaining impacted supply expected to exit through next year.”

That tightening capacity, combined with higher diesel fuel costs and tariffs shaping freight demand, suggests truckload shippers could face higher transportation costs next year. The key question is whether the emerging recovery represents a temporary correction—or a more structural change in the truckload market.

Let’s go inside the numbers to examine the forces driving the rebound and how truckload executives are responding to a market that is beginning to tilt back in their favor.

A “supply-driven” recovery

Bob Costello, chief economist and senior vice president for the American Trucking Associations (ATA), agrees that the freight recession can largely be traced back to the pandemic period. What’s less certain is when—and how strongly—the truckload freight market will recover.

According to Costello, if the recovery is measured strictly by freight volumes, the TL sector is probably through its worst days. The bigger question is how robust the recovery will ultimately be.

“We’re in a supply-driven recovery,” Costello said on a recent newsmakers podcast produced by ATA. “It’s a unique time. We’ve had situations like this before, but they’re not very common.”

The roots of the truckload slump that began in mid-2022 are relatively easy to trace. During the pandemic freight boom, a surge of new entrants came into the market, reflected in the number of new operating authorities issued by the Department of Transportation.

For a time, those new entrants prospered. But as freight demand normalized, the truckload sector was left with excess capacity—and the market has been working through that imbalance ever since.

That capacity didn’t disappear overnight. Economists say it has slowly been whittled away as carriers exited the market and other pressures reduced the available supply of trucks and drivers.

The resulting reduction in supply has coincided with rising trucking rates, particularly in the volatile spot market. Spot-market TL rates were up 60% year over year in midsummer compared with 2025, while longer-term contract rates rose 15% over the same period.

“There are always fluctuations in rates, but the general trend has been up,” says Kendra Phillips, vice president of transportation management for Ryder System.

More recently, government actions and tougher enforcement have added another layer of pressure on capacity.

Customs and Border Protection (CBP) has increased enforcement involving undocumented immigrants, while more than 3,000 Mexican-born drivers have lost U.S. entry visas as the Department of Transportation (DOT) expands data-sharing with CBP in an effort to crack down on cabotage—the illegal hauling of domestic freight within the United States by foreign carriers.

Other enforcement efforts, including increased scrutiny of non-domiciled drivers and possible changes involving drug-and-alcohol database requirements, could further reduce available TL capacity.

The impact is beginning to show up in freight operations. “This has caused some shipments that shippers would have preferred to move as one truckload move to be converted into multiple LTL shipments,” says Averitt’s Williams. “Accordingly, this has caused our average weight per LTL shipment to increase recently.”

The tightening has also made compliant, experienced drivers more difficult to find.

“It’s impacting driver availability,” says Phillips. “It had been loose, but the supply tightened this year. I’m sure we’ll feel the tightening of supply of drivers.”

By nearly any measure, TL supply has left the market. Carriers are seeing more freight opportunities not necessarily because there is significantly more freight to haul, but because there are fewer fleets competing for it.

“We’ve never had a supply-driven recovery before,” adds Phillips. “Nobody knows exactly how it will play out. It’s an interesting place to be as an industry.”

The K-shaped recovery

Typically, a sustained freight recovery requires growing demand. But in today’s uneven, “K-shaped” economy—complicated by shifting tariffs, geopolitical uncertainty, high energy costs and persistent inflation—economists aren’t counting on a broad economic rebound to lift all truckload carriers equally.

Instead, the macroeconomic picture is relatively neutral. Economists aren’t forecasting either a significant tailwind or headwind for trucking, while many of the sectors that traditionally generate freight remain sluggish.

Manufacturing output is forecast to be flat to down in 2027, as is home construction. And while data center construction continues to boom, it generates relatively little TL freight. Overall, the traditional drivers of freight demand remain “lackluster—at best,” according to ATA’s Costello.

“I don’t think the recovery is over,” says Costello. “But I would be so much happier if the parts of the economy that drive freight were doing better.”

That’s where the K-shaped nature of the recovery becomes particularly evident. In truckload, how well a carrier is performing increasingly depends on the sectors and customers it serves.

Flatbed demand remains extremely healthy, trucking executives say, while dry van dedicated freight has begun to pick up. Some shippers may read those signals and move to lock in capacity with their TL partners—even if that means accepting somewhat higher rates than they paid in 2026.

Truckload, after all, is a highly diverse business. Carriers connected to the boom in data center construction have enjoyed a strong year, while executives describe other pockets of freight as simply “not bad.” Overall TL demand, however, remains flat to down, with the midyear increase in fuel prices adding further pressure.

Tariffs are another factor shaping the freight environment. The effective U.S. tariff rate is at its highest level in a century, and the effects are beginning to show up in freight volumes. Mexico volumes, for example, declined for the first time since 2003 outside of a recession.

For now, that leaves truckload carriers operating in a market where tightening capacity is improving pricing conditions, but freight demand remains uneven across industries and regions.

“We have always felt the truckload market tends to be a leading indicator,” adds Averitt’s Williams. “LTL often follows the truckload market’s upturns and downturns. So, we’re seeing the LTL market show strong, positive growth.

$604 million Texas verdict stuns trucking sector, renews calls for reform

A Dallas County jury awarded plaintiffs $604 million in what the trucking industry commonly calls a “nuclear verdict” against defendants including C.H. Robinson in a carrier accident case this summer.

The decision marks one of the first major verdicts involving a freight broker since the Montgomery case at the Supreme Court exposed brokers to potential liability in highway accident cases.

The carrier involved in the accident held a “Satisfactory” safety rating, suggesting that C.H. Robinson was working with a carrier that met the Federal Motor Carrier Safety Administration’s (FMCSA) safety standards.

FMCSA defines a “Satisfactory” carrier as having “adequate safety management controls to meet the safety fitness standard.”

That raises a difficult question for freight brokers: If an FMCSA “Satisfactory” rating is not sufficient when selecting a carrier, what additional standard should brokers use when determining which carriers are permitted on their platforms?

“I do believe change is needed in the area of lawsuit abuse and the impact escalating litigation costs are having on the transportation industry,” says Peter Latta, chairman and CEO of A. Duie Pyle, the nation’s 16^th-largest LTL carrier.

The current litigation environment has become “a major challenge for the industry that ultimately impacts everyone through higher insurance costs and increased supply chain costs,” Latta says.

One solution, according to Latta, would be to eliminate plaintiff attorney contingency fees—often one-third of the settlement amount—and require the losing party to pay the legal fees of the prevailing party.

“This would encourage pursuit of only truly meritorious claims, eliminate legal shakedowns and rid our courtrooms of contrived claims,” adds Latta.

The past twelve months have been a period of constant change in the world of imports and exports. From shifting tariff regimes and increased supply chain scrutiny to evolving export controls, trade compliance professionals have had plenty to keep them on their toes.

Here are some of the year’s most significant developments, along with a few practical steps companies can take now to strengthen compliance programs in preparation for 2027.

No. 1: The Tariff Train

In 2026, most importers begrudgingly received tickets to extend their ride on the U.S. Tariff Train—a train with sections that no one wants to sit in. Whether it’s a ticket to Section 122, Section 232, or Section 301, the rides have been pricey, and the routes have been marked by more than a few switches, delays, and rough patches.

The Tariff Train underwent significant remodeling throughout the year. In late February, it closed seating in its most highly occupied section after the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not grant the President authority to impose the tariffs that had kept the trade industry scurrying for nearly a year.

It then opened seating in Section 122 to address what was deemed to be a problem with international payments. Seating in Section 122 closed only 150 days later when additional seating in Section 301 became available in response to 60 economies’ alleged failure to impose and effectively enforce prohibitions on imports of goods produced with forced labor.

Then, in early April, the Section 232 car added more seats following a major restructuring of the steel/aluminum/copper regime, with new semiconductor duties and additional Section 232 actions involving pharmaceuticals and polysilicon.

It’s no secret that additional investigations are currently underway at the Office of the U.S. Trade Representative and the U.S. Department of Commerce that may lead to additional or expanded tariffs in the future. We can be assured that even as the Tariff Train is moving, new tracks continue to be laid down, with some leading to destinations yet unknown.

With all the Train’s Sections currently open for business, and more expected to follow, one of the most valuable compliance exercises a company can undertake is also one of the least glamorous: review the data coming back from the customs broker. Remember: your broker is an important compliance partner, but the importer remains responsible for reasonable care.

Companies should be spot-checking commercial invoices against entry data reported to Customs to validate HTS classifications, entered values and country of origin, while also scrutinizing the Chapter 99 provisions reported at entry.

This is particularly important in an environment where tariff calculations can involve multiple layers. A classification error or incorrectly reported tariff provision can affect not only ordinary duties, but also the additional duties that may stack on top of them.

And if you know your products do not meet the qualifications for a specific provision—for example, they do not have any copper, iron or steel content—provide written guidance in advance to your broker so they are not left to determine the applicability of duty provisions.

No. 2: Traceability in the supply chain

On June 3, the President signed Executive Order (E.O.) 14411, titled “Strengthening Customs Enforcement.” The E.O. called for customs reform to “remedy systemic inefficiencies, loopholes, insufficient enforcement mechanisms, and outdated processes.”

In response to the E.O., on Sept. 1, CBP published an Advance Notice of Proposed Rulemaking (ANPRM) titled “Heightened Import Disclosures for Supply Chain Visibility.” The ANPRM provides insight into four primary areas CBP is actively considering:

                  Foreign export documents: Should importers be required to submit foreign export documents for all goods imported into the U.S.? Whose responsibility should it be to collect or maintain those documents? What categories of exports, if imported, might pose a national security risk to the U.S.?

                  Identification of the parties involved in the manufacturing, production, movement and export of goods: Is it possible to redefine or replace the Manufacturer’s Identification Code (MID), which is inconsistent and not always indicative of the true manufacturer? What other identifiers could be considered?

                  Innovative technical solutions for supply chain tracing: What technologies are importers currently using for supply chain visibility? Could these systems be integrated with CBP systems to transmit data and provide greater transparency?

                  Potential economic impacts of the above changes: What are the potential costs, time expenditures or savings that could result from the ANPRM proposals?

Although we don’t know what next steps CBP will take after reviewing submitted comments, importers should start giving equally active thought to how they can make small changes to their compliance programs in preparation for any bigger changes to come. Consider the following:

                  Know your supply chain: Map the parties, production locations, materials and processes involved in producing imported goods.

                  Identify your highest-risk supply chains and products: To keep it simple, start with products involving complex manufacturing, multiple countries, related parties, substantial assists, royalties or license fees, transfer pricing, or frequent supplier changes.

                  Strengthen your import documentation beyond the commercial invoice: Consider whether you have readily accessible purchase orders, bills of materials, supplier declarations, manufacturing records, freight documentation, payment records and other information that supports your entry data.

                  Close supplier-data gaps: Determine what additional information your suppliers can provide about manufacturing, materials or processing that could affect the customs treatment of the goods. Establish a process for obtaining updated information when suppliers or production processes change.

                  Test your readiness: Select representative entries and conduct a “show me” exercise: Could you substantiate the information declared to CBP and explain how each key customs determination was reached? Any gaps identified now can be addressed before they become an issue during a CBP inquiry.

No. 3: The evolving export controls terrain

In 2026, some of the more dramatic changes in export controls didn’t necessarily affect the broader exporting community.

But the rule changes did have a common theme: Increased complexity requires greater diligence when vetting shipments, and both the rules—and the systems designed to comply with them—must be constantly monitored. For example:

            In January, the Bureau of Industry and Security (BIS) shifted its previous presumption-of-denial position to a case-by-case review for certain advanced semiconductor chips, but with conditions requiring protections for the U.S. semiconductor supply, additional compliance procedures for Chinese purchasers, and independent U.S. testing of the products’ performance and security.

            In May, BIS clarified that certain advanced-computing items still require a license when destined for an entity headquartered in Macau or a Country Group D:5 destination—or whose ultimate parent is headquartered there—even if the immediate customer is located elsewhere. This added another layer of screening for companies operating in this space.

            In June, BIS removed the United Arab Emirates from the EAR’s D:3 and D:4 Country Groups and added it to Country Group A:5. These changes removed former Chemical & Biological and Missile Technology reasons for control and opened up new license exceptions that previously could not be used for exports to the UAE.

Finally, we would be remiss not to mention that the BIS Affiliates Rule is due to be reimplemented at the end of 2026 following a one-year suspension. The BIS Affiliates Rule expanded export-control screening beyond the names actually appearing on restricted-party lists.

Under the rule, a foreign entity that is at least 50% owned—directly or indirectly, individually or in aggregate—by one or more entities on the Entity List or Military End-User (MEU) List can itself become subject to the applicable restrictions, even if the affiliate is not separately named on the list.

The takeaway from these new—and new-again—rules is simple: Don’t allow an ERP/export-control determination to become a permanent “yes/no” answer when shipping. Strong, continuously updated compliance processes are essential.

BIS enforcement actions increasingly demonstrate that export compliance problems can originate in operational processes, not just in the compliance team’s screening and licensing decisions. Consider the following steps to strengthen controls:

            Implement processes to ensure that rules are continually monitored and that automated screening and export-control tables are updated promptly when BIS changes Country Groups, Entity List entries, or License Exception eligibility.

            Build escalation points for changes in customers, end users, end uses, or routing that could require a new export-control review.

            Establish notification processes so supply chain and logistics teams are alerted to changes in sourcing, manufacturing locations, or foreign production that could alter the export-control analysis at the last minute and delay the movement of goods.

Be nimble

In 2027, companies need to be nimble enough to pivot at the speed of unforeseen executive orders, tariff modifications, and regulatory changes.

The Tariff Train will keep rolling to new destinations, supply chain mapping will continue to evolve, and the export-control terrain will keep shifting. The companies best positioned for 2027 will be those that build compliance processes flexible enough to move with them.

Brian Streu is a senior project engineer, Supply Chain Strategy for St. Onge Company. He has proven expertise leading and designing solutions across all aspects of supply chain and has more than 20 years of experience in supply chain/indirect procurement and 10 years in supply chain design with knowledge in network optimization, inventory optimization, simulation, and data management.

In today’s volatile supply chain environment, companies face the ongoing challenge of balancing three competing priorities: maintaining high service levels, minimizing inventory investment, and controlling operating costs.

Yet many continue to rely on a “one-size-fits-all” approach, applying the same policies across diverse product portfolios. The result is often excess inventory of low-value items, insufficient availability of critical SKUs, and unnecessary operational complexity.

Product and supply chain segmentation offer a powerful alternative. By strategically breaking down a portfolio into meaningful segments, organizations can unlock insights, simplify decision-making, and tailor policies that align with the true economic and operational drivers of the business.

Moving beyond one-size-fits-all

At its core, segmentation is the process of grouping products based on shared characteristics such as demand patterns, profitability, variability, and customer requirements.

Traditional approaches treat all SKUs similarly using the same service targets, replenishment rules, and planning cadence. However, products inherently behave differently. High-volume, stable SKUs require very different strategies than low-volume, unpredictable ones.

Segmentation allows organizations to move away from uniformity and instead design differentiated supply chain strategies. This shift is critical because applying identical policies across all items often leads to inefficiencies, higher costs, and missed service expectations.

Turning data into actionable insight

One of the primary benefits of segmentation is the clarity it provides. By categorizing products into distinct segments, businesses gain visibility into:

            --Where value is concentrated

            --Which products drive risk or variability

            --How demand patterns differ across the portfolio

            --Where working capital is tied up

For example, frameworks like ABC-XYZ segmentation classify items by both value and demand variability, offering a multi-dimensional view of performance. ABC dimension highlights financial importance (e.g., high-value “A” items vs. low-value “C” items)

XYZ dimension captures demand predictability (e.g., stable vs. volatile demand)

This dual lens enables organizations to prioritize attention and resources where they matter most, rather than trying to optimize each SKU individually, a task that is often impractical for large portfolios.

Driving policy differentiation across segments

Segmentation becomes truly valuable when it informs decision-making. Once products are grouped into segments, organizations can design differentiated policies across several key levers:

1. Service Levels: Not all products require the same level of availability. High-value or strategically important items can justify higher service targets, while less critical SKUs can operate with lower service levels.

2. Inventory Investment: Segmentation enables smarter allocation of working capital:

            --Increase safety stock for high-value, unpredictable items

            --Reduce inventory for stable or low-impact SKUs

            --Eliminate or rationalize slow-moving or non-performing items

This targeted approach helps reduce excess inventory while protecting critical service performance.

3. Replenishment and Planning Policies: Different segments call for different operational strategies:

            --Continuous replenishment for high-volume, stable SKUs

            --Periodic review for mid-tier items

            --Make-to-order or minimal stocking strategies for low-value or erratic products

Rather than managing each SKU independently, segmentation allows companies to apply standardized policies at the segment level, dramatically simplifying execution.

Simplifying complexity across the organization

Ironically, while segmentation introduces more categories, it actually reduces operational complexity. In large portfolios with thousands of SKUs, managing each item individually is both inefficient and unsustainable. Segmentation reduces this burden by grouping similar items and applying common rules across each segment.

This simplification has several practical benefits:

            --Standardized planning rules instead of SKU-level customization

            --Streamlined decision-making for inventory, sourcing, and service

            --Reduced firefighting by proactively aligning policies to product behavior

            --Improved cross-functional alignment across planning, procurement, and operations

Additionally, segmentation helps identify unnecessary complexity within the product portfolio itself. For example, low-value, low-volume, and highly erratic SKUs often surface as candidates for rationalization or discontinuation—creating opportunities to simplify the network and reduce cost.

Aligning supply chain strategy to business priorities

Another key advantage of segmentation is its ability to directly align supply chain execution with broader business strategy.

Different segments can be managed with different objectives:

            Growth segments → prioritize availability and responsiveness

            Cost-efficiency segments → optimize for low-cost operations

            Strategic segments → invest in resilience and supplier reliability

By aligning supply chain policies to segment-specific goals, organizations ensure that resources are deployed in support of strategic priorities rather than distributed evenly across the portfolio.

This also enables more educated trade-offs. Instead of trying to simultaneously maximize service and minimize costs across all products, companies can now make deliberate trade-offs at the segment level, achieving better overall performance.

Enabling agility and responsiveness

In dynamic markets, demand patterns and customer expectations are constantly evolving. Segmentation enhances agility by enabling organizations to respond differently across segments. For example:

            --Fast-changing or trend-driven products can be managed with shorter planning cycles

            --Stable products can rely on automated, low-touch processes

            --Volatile items can trigger exception-based management

This targeted responsiveness improves both efficiency and service performance, allowing organizations to adapt quickly without overcomplicating operations.

Conclusion: A foundational capability for modern supply chains

Segmentation is no longer a “nice-to-have," it is a foundational capability for managing modern, complex product portfolios. By dividing the business into meaningful segments, organizations unlock a powerful framework to:

            --Prioritize what matters most

            --Allocate inventory and capital more effectively

            --Tailor service levels and operational policies

            --Reduce unnecessary complexity

            --Align supply chain execution with strategic goals

Ultimately, segmentation transforms the supply chain from a reactive, one-size-fits-all system into a proactive, insight-driven engine of value creation. Organizations that fully embrace segmentation not only improve cost and service performance, but they also gain a sustainable competitive advantage through smarter, more disciplined decision-making.

Innovations like GPS, telematics and real-time transportation platforms sped up the process, and Amazon was raising the bar by making fast, trackable deliveries an everyday expectation. Around the same time, transportation platforms began generating little dots on the map that let shippers watch their freight make its way from Point A to Point B.

Fast-forward to today and we’ve reached a point where “knowing” where your freight is just isn’t enough anymore. Shippers also expect their systems to flag problems earlier, prioritize problem solving and handle previously manual tasks like carrier follow-ups and delivery schedule adjustments.

Toss artificial intelligence (AI), more precise analytics and automation into the mix, and you get a recipe for a more active freight management approach that goes well beyond basic visibility.

“Visibility in and of itself is just a means to an end, because you need visibility to start taking actions,” says Nathan Lease, senior director, logistics technology research and advisory at Gartner. “But just knowing that the truck is going to be late doesn’t do anything. The real question is: Can you act on that information?”

So, instead of tracking “where’s my truck?” companies now want to know “where’s my stuff?” “They want product SKU-level details of what’s on that container, what’s on that trailer and what the upstream and downstream implications of that visibility data are,” Lease explains. “Then, they’re using that information to make decisions about production planning, customer impacts and other operations.”

And that’s just one example of how freight management is changing. Technology, automation and AI now support everything from procurement and carrier management to routing and planning, while autonomous trucks are getting closer to reality. Here are six trends experts say are pushing freight management into its next phase.

1. AI is going to start asking the questions

Most companies using AI for freight management are still asking it questions about their operations and waiting for answers. Angi Acocella, Ph.D., research scientist at the MIT Center for Transportation & Logistics, interviewed about 20 transportation practitioners for a recent white paper on digital technologies in transportation. She found that most companies using AI today are still using it mostly to monitor operations and get answers to specific questions.

Next, the technology will start telling transportation managers what they should be asking in the first place. “I think that’s where a lot of companies are hoping to find value in AI: How can it help me ask questions I didn’t even know to ask in the first place?” Acocella says. “Can an AI agent or tool tell me what I should be looking at? That's the real question many want to know the answer to.”

Going forward, Acocella expects people to stay involved in the consequential decisions while letting AI do more of the identifying of potential issues and raising questions managers may not have thought to ask. As AI handles more of that, transportation managers will still make the final calls. “For the things where big money or relationships are on the line,” she adds, “that ‘human-in-the-loop’ piece of it will continue to be the norm.”

2. Autonomous trucks hit the road

Autonomous trucks have spent years in testing and pilot programs. Lease expects 2027 to be the year they gain a more visible presence on U.S. highways. Several technology developers are preparing to expand their fleets, he says, with much of the early activity concentrated across the southern half of the country.

Lease points to companies like Waabi, Aurora, Kodiak, PlusAI and Gatik as ones to watch as deployment expands, but says their presence probably won’t have a significant, immediate effect on overall freight capacity. “There could potentially be a few hundred autonomous trucks that operate in the southern half of the U.S. by the end of 2027, which could be interesting,” he says.

That would represent a small share of the nation’s truck fleet, but it would put more driverless equipment into regular freight operations than shippers are accustomed to seeing today. For transportation managers, Lease says the bigger shift may come later, as deployment expands beyond a few routes and autonomous capacity becomes another option to consider when planning freight networks.

3. AI reduces the network noise

Transportation managers oversee hundreds or thousands of shipments, not all of which need human intervention. Brandon Hamilton, systems project manager at St. Onge Co., says AI is getting much better at sorting through all of that freight and directing managers toward the shipments that need attention first.

“Most of the time just 5% to 10% of the shipments actually need your attention,” Hamilton says. “AI can sort through that data, identify the ones that may experience issues and allow the people on the front lines to concentrate on those issues instead of all the other noise in the network.”

That changes the transportation planner’s or manager’s daily workload. Rather than spending time reviewing shipments that are moving as planned, they can concentrate on late loads, carrier problems or other exceptions that require action.

Hamilton says this will become increasingly important as freight volumes grow and companies try to handle more business without adding the same amount of staff. “We’re really talking about time and the ability to scale here,” he adds, “and how AI will let companies take on more freight without having to add the same level of resources.”

4. Automation will manage the messier lanes

Predictive analytics already work well on high-volume, consistent freight lanes. Acocella says the next opportunity lies in the lower-volume, irregular lanes that are harder to manage and require more manual attention. Those lanes tend to generate more exceptions, fluctuate more from week to week and require more one-off decisions around pricing and capacity.

That’s where Acocella expects autonomous procurement and other predictive tools to play a bigger role. “The other 80% of lanes are these irregular, low-volume lanes,” she says. “It’s 20% of the volume and the spend, so there’s significant spend happening there. That’s where tools like autonomous procurement come in and help answer questions like: How much time should I actually spend on pricing out these lanes? Should we go more to the spot market?”

The technology may also help transportation managers dig deeper into irregular lanes, decide which ones belong in a procurement event or on the spot market and narrow down the options before someone has to step in.

As autonomous procurement capabilities advance, Acocella expects more of this exception-heavy freight to require less hands-on attention. That could free transportation managers to spend less time manually pricing and sourcing freight that falls outside the core network.

5. Procurement learns to jump the gun

Transportation procurement teams have pretty much always relied heavily on reports that tell managers what went wrong after the fact. But as most companies have learned the hard way, reacting sooner can save a lot of time and money.

Lease says advanced analytics and workflow automation will help companies respond sooner to carrier performance problems. Companies like Transporeon and Leaf Logistics are both building more advanced analytics and workflow automation into transportation procurement, he adds.

Tender acceptance is one area that’s ripe for improvement. If a carrier’s acceptance rate drops below a set threshold, the system can trigger a procurement event for the affected lanes instead of waiting for someone to catch the problem in a weekly report.

The payoffs will come in the form of speed and efficiency. With these advanced systems in their corner, companies can respond to weak carrier performance or rising spot-market costs as the problem develops, instead of discovering it days or weeks later.

“Rather than waiting for the report a week later to figure out what to do,” says Lease, “the system will automatically kick off a procurement event and put an RFP out for the lanes where carriers aren’t performing.”

6. Disruption dodging gets a little easier

Weather events, civil unrest and other disruptions can force transportation teams to reroute freight or rethink where inventory should go. Hamilton says predictive analytics is getting better at helping managers make those calls earlier, before a disruption creates bigger problems across the network.

Hamilton says predictive technology made some of its biggest gains five or six years ago and is now improving in smaller increments as it matures. Those improvements still give transportation managers more information to use when disruptions threaten shipments.

A hurricane is a good example. AI could evaluate the developing storm alongside a company’s transportation and inventory data, then recommend sending freight to a different warehouse or distribution point. “This may be where AI is giving you advice like, ‘take it to this warehouse in Louisiana’ or ‘move it to this warehouse in Georgia’ to avoid the weather disruption,” says Hamilton.

He sees those predictions getting more accurate and, in turn, helping freight management teams make better decisions. This will give companies more time to reroute freight, adjust inventory plans and make decisions before problems spread across the network.

Remember the search for visibility? There was a time when simply knowing where your freight was felt like a major technological breakthrough.

Today, visibility is table stakes. We’ve gotten bolder in our implementations, smarter. Now, logistics managers expect their systems to do something with all of that information: flag problems, adjust schedules and help them focus on the freight that actually needs their attention.

And that’s where things get interesting. As McCrea reports, artificial intelligence (AI), advanced analytics and automation are pushing freight management beyond basic visibility and into a world where systems don’t just tell us what’s happening, they help us decide what to do next.

“It’s true and it’s being put to work,” says McCrea. “AI is helping managers cut through the ‘noise’ of hundreds or thousands of shipments, while autonomous procurement is beginning to tackle irregular, lower-volume lanes. We’re seeing more intelligent systems that can identify deteriorating carrier performance and initiate action before someone finds the problem in a weekly report. Now that’s getting smarter.”

And, yes, our sources contend that autonomous trucks are getting closer to becoming a regular presence on U.S. highways. However, we’ll cool our jets for now and keep an eye on this evolving—and still polarizing—segment.

Indeed, McCrea’s reporting offers a fascinating look at how much more control logistics managers are gaining over their freight operations. Of course, then there’s the truckload market itself, which tends to inspire far less enthusiasm.

As our stalwart trucking correspondent John D. Schulz reports in our annual “State of Truckload," no amount of AI or advanced analytics can tame the forces currently reshaping truckload.

“Thousands of carriers have exited the market, driver availability is tightening and capacity is shrinking enough to firm rates,” says Schulz, “even though overall freight demand remains uneven. In fact, we find ourselves navigating what ATA chief economist Bob Costello calls a rare ‘supply-driven recovery.’”

Rather than booming freight volumes pulling the market forward as we’ve seen in previous recoveries, capacity has been whittled away to the point where the balance is beginning to shift back toward carriers.

“Add a K-shaped economy, tariffs, geopolitical uncertainty, fuel costs and uneven demand across industries and regions, and it becomes pretty clear that the freight market remains one complicated maze,” Schulz adds.

And maybe that’s the real takeaway from this year’s Annual Trucking Issue. The technologies now coming into focus are giving logistics and freight transportation managers better tools to anticipate change, identify problems earlier and react faster when conditions shift.

Here toward the end of 2026, it’s become painfully clear that we can’t control how the pathways of the maze are laid out. But we’re getting much better at navigating them—even as the maze continues to shift in front of our eyes.

This partnership will go into effect on January 1, 2027.

Prior to this announcement, Schneider had a longstanding eastern U.S. domestic intermodal partnership with Jacksonville-based Class I railroad carrier CSX, which stretched back to 2008. This development comes at a time, when the prospects of the proposed $85 billion merger between Class I railroad carrier Union Pacific and NS remain in what could be viewed as a holding pattern or ongoing process.

This partnership comes amid what may end up being the strongest year for intermodal volumes on record. Through the first 42 weeks of 2026, total U.S. rail intermodal volume is up 2.7% annually, at 11,991,461 units, based on data from the Association of American railroads, paced largely by high diesel prices related to the ongoing Iran conflict and various federal government initiatives that have collectively led to declining truckload capacity.

Schneider and NS touted various benefits of this partnership, including how Schneider’s Intermodal Service is supported by company-owned tractors, around 23,900 chassis and 26,800 containers, more than 60 intermodal rail hubs throughout North America, and also company dray drivers completing more than 90% of its domestic dray moves. As for NS, the company observed that third quarter intermodal volumes increased 3% annually, boosted by steady consumer demand, favorable truck-market dynamics, and network improvements.  

On the company’s third quarter earnings call this week, Jim Filter, Schneider President and CEO, said that Norfolk Southern's broader Eastern network expands Schneider's reach and creates additional opportunities to grow with existing customers, pursue new freight and convert truckload shipments to Intermodal.

“By leveraging Schneider's 100% company-owned containers and chassis, which are complemented by our company-operated dray fleet, we expect this agreement to strengthen service, enhance network reach and support our long-term growth strategy,” said Filter. “A potential combination of Norfolk Southern and Union Pacific could provide additional upside through new single-line services and improved connectivity, but those benefits are not assumed in our current expectations. Still, the growth we have seen in Mexico following the combination that created the CPKC only reinforces our view of the long-term opportunities that an effective single-line rail network can provide.

A combination of Norfolk Southern and Union Pacific stands to see similar benefits to speed and reliability on a broader scale while also introducing new Intermodal lanes. We see compelling value from positioning Schneider to be the only fully asset-based provider on the first single-line transcontinental railroad in the United States.”

And Ed Elkins, EVP and Chief Commercial Officer, at NS, said in a statement that customers are taking a broader view of intermodal than ever before, and NS is investing ahead of that demand,” said Ed Elkins, EVP and Chief Commercial Officer at Norfolk Southern.

“By combining Norfolk Southern’s network reach, as well as our terminal investments and capacity, with Schneider’s proven logistics expertise, owned equipment and customer relationships, we are creating new opportunities to move freight across North America and make rail a stronger part of the domestic supply chain,” said Elkins.

Schneider’s support for the Union Pacific-Norfolk Southern merger does not come as a surprise, with UP already sitting as its primary western intermodal partner, observed Dan Moore, analyst, at Baird, in a research note.

To that end, Moore observed that Schneider now “sits on both sides” of the pending transcontinental merger and provide the combined railroad with another scaled, asset-based intermodal partner.

While a major driver for this partnership focuses on the UP-NS merger coming to fruition, Tony Hatch, principal of New York-based ABH Consulting, said the possibility of that not happening also needs to be considered.

“They're [Schneider and NS] making the assumption that it's going to happen, and if you make the assumption it's going to happen—and that's I'm saying a bad one—then this partnership was sort of inevitable,” said Hatch. “You can't really cross pollinate the two, Western carriers and go from one to the other like that. If you're UP, you have to go with what UP does. Some people may have waited a year rather than assuming the merger happening is inevitable. I don’t know how complicated it is to switch over, so maybe the thinking, or feeling, is if they are going to start implementing in the fourth quarter of next year, that Schneider and NS felt they needed to do this now. That may be possible.”

While this announcement is focused on the eastern U.S. intermodal network, Schneider has partnered with UP on its western U.S. intermodal operations since January 2023. Prior to that, it had a primary intermodal partnership with BNSF, which concluded at the end of 2022.

This development follows a September NS announcement, in which it said it is investing ahead of growth across its 22-state intermodal network through various projects, including: a new service between Cincinnati and Atlanta; double-stack clearance improvements connecting the Midwest and New England through the East Edge route; and terminal expansions in Ohio, Michigan, North Carolina and Illinois. And it added that at facilities across Atlanta, Louisville, Harrisburg, Croxton, Chesapeake, Charlotte, Chicago and St. Louis, the company is making improvements to pavement, lighting, storage areas, maintenance facilities, truck access routes and security systems to strengthen reliability, driver turn times “and the everyday terminal experience customers depend on.”

On Oct. 28, 2026, President Trump signed a proclamation under Section 232 of the Trade Expansion Act of 1962, directing the U.S. Department of Commerce and the Office of the U.S. Trade Representative to negotiate agreements with foreign trading partners concerning imports of robotics, industrial machinery, and their parts and components.

The October 2026 proclamation comes just over a year since the Trump administration opened tariff discussions related to robotics and industrial machinery.

Commerce Department continues investigations

The action follows a Commerce Department investigation into how imports of these technologies affect U.S. national security. However, the proclamation does not impose immediate tariffs or other import restrictions. Instead, it establishes negotiations as the administration's initial course of action, while leaving open the possibility of additional trade measures.

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AAPA said that Hendrick’s appointment is the first time in more than 40 years that an AAPA Chairman has been elected from the North Atlantic region, with Hendrick serving a two-year term. Hendrick previously was the AAPA’s Vice Chairman of the Boards and also served as North Atlantic Region representative.

Hendrick has been with the Port of Albany-Rensselaer in New York since 2004 and was selected by the Board of Commissioners to serve as the Chief Executive Officer in 2008, according to the port. During Hendrick’s tenure, the Port has experienced historic increases in ships, tonnage and longshore labor hours worked—as well as investments in infrastructure and Port district growth. Hendrick has overseen nearly $500M in public and private investment in the Port district—the largest capital investment and infrastructure upgrades since the Port was established in 1932. Additionally, he has overseen the reconstruction of all the Port wharves, added 30% covered storage to the Maritime Terminal, and increased the footprint of the Port District by 30% with additional plans for continued investment and expansion. Hendrick was named to City & State NY’s 2024 Transportation Power 100 list.

LM Group News Editor Jeff Berman recently spoke with Hendrick about his new role at the AAPA, as well as other port- and maritime-related topics in the Q&A below.

Logistics Management (LM): Congratulations on being named chairman of the American Association of Port Authorities (AAPA). What does that role entail, and what are your primary responsibilities?

Richard Hendrick: As chairman, I lead the board and help keep its members committed to the work we're doing. We have a fantastic board in place right now.

During the past three [AAPA] CEO searches, myself, our former chairmen, Chett Chiasson, Gary Nelson, and I have led the search committees to find replacements. Unfortunately, we've had four CEOs in approximately the last 10 years.

When I was elected chairman, I said that my primary goal was to keep our current CEO, Sang Yi, in place. We don't want to keep going through the CEO search process. We've landed an unbelievable candidate, and in just over four months, he's already taken AAPA in directions that I haven't seen during my 22 years of involvement with the association.

It's a dynamic organization, but I believe we're now headed in the right direction. Having board members who are fully committed to both their individual ports and AAPA makes a significant difference. Although there may be different priorities among members, the board is committed to the success of AAPA and its staff.

LM: What are some of the key priorities the new CEO will be spearheading?

Hendrick: One of our biggest priorities is government relations. Our team is constantly on Capitol Hill advocating for the Water Resources Development Act (WRDA). We need that legislation to pass.

The bill passed the House as a joint resolution, and we were working hard to get it through the Senate before the end of the year. Otherwise, it would have to go to a new Congress next year. Its passage is important because we need to maintain dredging operations throughout the country.

It's encouraging to see projects underway with the Army Corps of Engineers, including work on the lower Hudson River. Without the legislation, however, we could have to wait until the next year for additional appropriations—and that is a constant work in progress.

Another priority is the Port Infrastructure Development Program (PIDP). As an association, we've been successful over the past couple of years in securing substantial funding for the program. We want to maintain that support and continue ensuring that ports across the country have access to the resources they need.

LM: What are the major benefits of the Port Infrastructure Development Program for AAPA members and ports of different sizes?

Hendrick: One thing that stands out is the $538 million allocated to the program by the House Appropriations Committee. There were requests totaling several billion dollars, so many projects were ultimately rejected.

I'm sure the strongest applications rose to the top during the review process, but smaller ports, such as the Port of Albany, face particular challenges. We really can't survive without government support because we don't have the capital available to fund major projects independently.

Larger ports, such as the Ports of Los Angeles and Long Beach, have different financial capabilities. If they don't receive a grant, they can often continue with their planned projects because they have sufficient revenue to support them.

Smaller ports don't necessarily have that flexibility. That's why these grant programs are so important to us.

LM: Do smaller ports face similar challenges when applying for port security grants?

Hendrick: Absolutely. When the port security grant program first began, I served on review committees. At one point, the New York region alone received $100 million. Today, the entire nationwide program is approximately $93 million.

When you're receiving $500 million in requests but can distribute only $93 million, there will inevitably be winners and losers.

We recently submitted what I thought was a very qualified application to upgrade some equipment that is now more than 20 years old, but we didn't receive any funding. That makes you wonder what else you need to do to qualify.

Years ago, ports were divided into Class A and Class B categories, and Albany was classified as a Class B port. That gave us a somewhat better standing. Over time, however, the funding pool became more competitive, and smaller ports had to compete directly with much larger facilities.

Still, you have to remain committed to these programs. At the Port of Albany, we've submitted applications for the AAPA Lighthouse Awards and faced rejection after rejection. At the most recent conference, however, we were selected for two awards. You can't give up after one unsuccessful application. You have to keep trying.

LM: What are the AAPA Lighthouse Awards?

Hendrick: The Lighthouse Awards recognize projects that ports undertake in areas such as public relations, sustainability, and community engagement. Ports submit examples of their work for consideration.

One of the Port of Albany's winning projects involved a partnership with the Cherry Hill Mansion on South Pearl Street. Together, we developed a board game that is taken to fifth-grade classrooms throughout Albany and the surrounding region. The game teaches children how cargo moves around the world. They simulate transporting cargo from Europe across the ocean to America, and part of the game involves figuring out celestial navigation to move the pieces.

The hope is to introduce children to the maritime industry at a young age and encourage them to consider future careers in the sector. These are excellent, well-paying, and rewarding jobs. Winning the award meant a great deal to the people at Cherry Hill, too.

LM: AAPA recently expressed support for the bipartisan permitting reform bill, alongside organizations such as the Association of American Railroads. How could this legislation benefit ports of all sizes?

Hendrick: The most important thing is that the bill has bipartisan support. Regardless of which party is in power the following year, the legislation has support from both sides, which should help it continue moving forward into the next fiscal year.

That gives ports with projects in development an opportunity to benefit from the reforms.

The supply chain disruptions of 2020 really woke everyone up to the importance of ports. Since then, we've seen increased attention from Congress, along with other initiatives, including the American Shipbuilding Act. We need to take advantage of these opportunities and support legislation that benefits the maritime industry.

The fact that the permitting reform bill received such strong bipartisan support is encouraging. The Water Resources Development Act also received substantial support in Congress, with more than 400 votes in favor, if I recall correctly. That's a testament to the work of our government relations team. They're effective at working with both parties, and our board and I continually encourage them to keep doing that.

Regardless of which party is in power, AAPA needs to be positioned to advocate effectively for its members. Whether a project benefits Albany or another port, if it helps the port industry, we're behind it.

LM: What is the current state of the Harbor Maintenance Trust Fund, and how effectively is it supporting ports?

Hendrick: Eight or nine years ago, perhaps even longer, the AAPA board met and reached a consensus that we needed to support the Harbor Maintenance Trust Fund.

The fund collects billions of dollars through a tax imposed on cargo arriving by ship, based on the value of the containers. That money is then distributed, but there isn't a guaranteed process ensuring that all the money collected is spent on harbor maintenance. Congress makes decisions about how much funding is allocated each year. We reached an agreement to support setting aside 10% of the fund for what are called emerging ports. Albany is considered an emerging port, even though we've been here for more than 90 years, because we're an inland port.

There was also a set-aside for Great Lakes ports, which I believe was 15%, while larger ports and energy-transfer facilities had their own funding opportunities.

However, the money still has to go through the annual appropriations process. The set-asides don't automatically guarantee that the funding will be released.

LM: How significant are dredging costs for a port like Albany, and how would the trust fund help?

Hendrick: Dredging is extremely expensive, and the trust fund can be invaluable in helping ports maintain their channels and berths.

Recently, we had to dredge on both the Albany and Rensselaer sides of the port. On the Rensselaer side, we dredged an area approximately 1,200 feet long, 50 feet wide, and two-and-a- half feet deep. That project cost $2.4 million.

On the Albany side, we had a major project coming in that required us to dredge a berth so the ship could come directly to the port rather than wait in New York Harbor. The contractor completed the work in a single day, at a cost of approximately $800,000. It was expensive, but the ship was able to come in, so the money was well spent.

That's why the Harbor Maintenance Trust Fund is so important. If the fund has $9 billion and another billion dollars is added, but only a quarter of a billion dollars is spent on projects, we're not making the most of the available resources. Ideally, we would be collecting and distributing funding at a level that allows ports to address their maintenance needs effectively. Unfortunately, achieving that remains a challenge because of competing government priorities.

LM: Beyond financing and capital investment, what are some of the biggest operational challenges facing ports today?

Hendrick: I think most people in the industry would agree that permitting timelines are among the biggest challenges.

It's not just a maritime issue. Even getting a building permit for a new structure can take a long time. For port projects, we may have to begin planning two years in advance to navigate planning boards and secure the necessary approvals before we can break ground.

Another major challenge is construction cost inflation. We might develop a project with a $120 million budget, apply for a grant, and successfully receive an award. But by the time we're ready to proceed, the project could have increased in cost by 10%.

Now the grant isn't sufficient to cover the project, and we have to find additional funding. These challenges affect ports throughout the country, not just Albany.

LM: How do environmental regulations and seasonal restrictions affect port operations and infrastructure projects?

Hendrick: Ports must protect the environment, and that's something we're proud to support. The Port of Albany became the first port in New York State to join Green Marine.

However, environmental restrictions can significantly affect when work can be performed. One example is the North Atlantic right whale, which is a major concern in places such as Maine. We have to understand what needs to be protected while also recognizing that seasonal restrictions can limit construction and dredging windows.

On the Hudson River, the dredging window runs from October 1 through December 31, provided ice doesn't interfere. If the river freezes early, the available window becomes even shorter. That can push a project into the following year. These restrictions also make it difficult to secure contractors for projects that may involve lengthy periods when no work can be performed. Contractors have to plan around those limited windows, and that affects both scheduling and costs.

LM: Has the Hudson River dredging window always been limited to October through December?

Hendrick: During my time here, yes, although there was a period when we had a spring window as well.

The National Marine Fisheries Service and the New York State Department of Environmental Conservation have continued to evaluate fish migration, habitats, and potential environmental damage using available technology. As a result, the windows for dredging have become more limited. Some larger ports can use pneumatic dredging, which essentially involves vacuuming material from the bottom. In our area, however, dredging has to be done using a clamshell bucket.

The bucket scoops up the material, and the water has to drain from it before it breaks the surface. That makes the process time-consuming and expensive. Although we technically have a 12-week window, the method we use makes it difficult to complete a lot of work in that time.

I also have to give credit to the regional Department of Environmental Conservation personnel we work with. If a project encounters an issue and needs a few additional days, they may be willing to grant a short extension when circumstances warrant it. That can prevent us from having to bring a dredging contractor back nine months later, which would be very expensive.

LM: From an AAPA perspective, how do ports coordinate operations among shipping companies, terminal operators, and government agencies?

Hendrick: The most important thing is to include everyone involved and maintain close communication. We work closely with the U.S. Coast Guard, and our relationship is on a first-name basis. We know the people we need to contact, and when a ship is coming into the port, we coordinate with them.

We're a port of entry, so ships can travel through New York Harbor directly to Albany. Occasionally, the Coast Guard may identify names on a crew list that need to be vetted before a ship comes upriver. By maintaining a good working relationship, we can address those issues as efficiently as possible. We also work closely with U.S. Customs.

Another organization people might not realize we work with is the Seamen's Church Institute and other maritime ministries. Seafarers can spend weeks or months at sea, and when they arrive in port, we try to coordinate with local maritime ministries to help them get off the ship and access the community.

Many crew members enjoy visiting places such as Walmart, so these organizations provide a valuable service. Seafarers' ministries are recognized in port security plans across the country because of the important role they play.

Labor coordination is another essential part of the process. We have to consider the schedules of our longshore workers, including whether they're working eight-hour shifts or around the clock.

Depending on the cargo, we may receive salt or grain shipments that require local longshoremen to work two 12-hour shifts in a day. Once a ship has finished unloading or loading, we need to ensure workers get an appropriate break before moving on to the next vessel. That requires coordination with shipping agents to determine whether a ship should wait another day before entering the berth. Ultimately, it's like a little ballet. Everyone has to work together, and the key is keeping everyone in close contact.

Rail carloads, at 234,826, rose 3.6% annually, topping the weeks ending October 17 and October 10, at 232,120, and 232,004, respectively.

AAR said that eight of the 10 carload commodity groups it tracks saw annual gains, including: metallic ores and metals, up 2,272 carloads, to 21,811; motor vehicles and parts, up 2,234 carloads, to 16,788; and petroleum and petroleum products, up 1,565 carloads, to 11,700. Commodity groups seeing declines were farm products excl. grain, and food, down 680 carloads, to 17,655; and grain, down 322 carloads, to 22,710.

Intermodal containers and trailers, at 303,677, posted an 11.3% annual increase, trailing the week ending October 17, at 308,015, and topping the week ending October 10, at 302,252.

Through the first 42 weeks of 2026, U.S. rail carloads, at 9,609,543, are up 2.7% annually, and intermodal units, at 11,991,641, are up 4.7%, for the same period.

Total September volume, at 1,644,865 units, increased 6.1% annually, topping August’s 4.1% annual gain, with May, June, and July, seeing annual gains of 4.4%, 11.6%, and 5.3%, respectively.

Trailers, at 41,496, headed up 11.1% annually, and domestic containers, at 806,244, posted an 8.1% annual gain. All domestic equipment, which is comprised of trailers and domestic containers, at 848,190, rose 8.3% annually. ISO, or international, containers, at 796,675, rose 3.8%.

Through the first nine months of 2026, IANA reported that total volume, at 14,368,434, increased 3.4% annually. Domestic containers, at 6,972,784, were up 8.2% annually, and trailers, at 358,192, saw a 4.5% annual gain. All domestic equipment, at 7,330,976, was up 8.0%. ISO containers were the lone sector to see a decline, at 7,037,458, for a 0.9% annual decrease.

Intermodal has been strong throughout most of 2026, aided by high energy prices related to the respective conflicts in Iran and Ukraine, as well as various federal government measures and initiatives, largely focused on driver CDL requirements in various forms, which have, in turn reduced driver capacity.

Andrew Sibold, Director of Economics & Freight Policy, at IANA, told LM that in the beginning of 2026 intermodal was still a little bit sluggish, as the trucking-related capacity issues had yet to fully materialize, prior to the April-May period, when things started to shift.

“That's when you had a lot of the enforcement issues going on with trucking that really limited capacity,” said Sibold. “At the same time, you had quick impact in rising diesel prices of the Iran conflict. In our estimation, most of the [modal] switching has been due to capacity and level of service. Certainly, the diesel prices help intermodal to compete on those shorter lanes, but, especially lately, we've seen a big rebound in the West Coast, and that's a story of high imports coming back in, and then also a lot of still capacity staying in intermodal.”

From an industry fundamentals perspective, Sibold said he expects them to remain intact, for a few different reasons.

That includes things like: diesel prices remaining high; intermodal holding onto freight converted from truckload conversion, in turn, creating additional intermodal capacity.

“Eventually, prices are going to adjust and the market's going to reach an equilibrium, but I still think there's a lot of growth for intermodal, just because you still have the consumer holding up remarkably resiliently, and then you also have the AI capex build out, which is going to continue probably for the next couple years,” said Sibold. “And I honestly think a lot of inflation, in addition to fuel, is driven by that AI capacity being built out, kind of crowding out some private investment in terms of other building projects that would normally get done.”

From a freight perspective, Sibold explained that the data remains positive, but, for consumers, it is to a lesser impact, due to housing prices continuing to rise and housing starts lagging behind data centers. What’s more, he said that is not likely to change anytime soon, with the AI buildout expected to last longer than what was initially anticipated.

Looking ahead to how intermodal volumes could end up in October, Sibold said there isa possibility October could resemble September’s strong performance, and be followed by another jump in December, paced by restocking efforts.

“There is also that steady demand element that's going on in terms of the AI capex,” he said. “I honestly don't see much of a trough coming. There might be a slight one, but I don't really think that we're going to experience anything like a normal seasonal trough, where you kind of enter the doldrums at the end of the year and wait for things to pick back up.”

Quarterly revenue, at $22.9 billion, posted a 12% annual gain, and operating income, at $1.07 billion, increased 10%, for the same period. Adjusted earnings per share, at $3.74, beat Wall Street estimates, at $3.36.

“As our strong operating results and adjusted free cash flow demonstrate, FedEx is winning across high-value market segments while we optimize our network, driving an increase to our full-year outlook,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “As we advance our transformation, we remain committed to disciplined operational execution to reduce our cost-to-serve while focusing on profitable growth. We have the right strategy in place to continue to be the world’s premier B2B parcel and air freight provider, leverage our digital insights to unlock new markets, and use disciplined capital allocation to create additional stockholder value.”

Revenue for the company’s U.S. domestic segment, at $14.710 billion, increased 10% annually, with FedEx attributing the growth to higher package yields, increased package volume, improved service mix, and continued cost savings from its transformation initiatives, adding that these factors were partially offset by increased purchased transportation rates, as well as higher salaries and benefits expenses.

U.S. Ground paced the U.S. Domestic segment, with revenue, at $9.545 billion up 9% annually, with U.S. priority and U.S. deferred, at $3.142 billion, and $1.406 billion, respectively, for 11% and 8% annual gains. Total U.S. domestic average daily package volume, at 14.370 million, increased 2% annually, and average U.S. domestic composite revenue per package, at $15.32, headed up 7% annually.

Express International segment revenue, at $7.465 billion, posted a 17% annual improvement, lifted mainly by increased base yields, higher international export volume, and increased freight weight, said FedEx. Which, it added, were partially offset by higher wage rates, increased purchased transportation rates, and also the financial impact of global trade policy changes.

The company also highlighted that it completed the spin-off of FedEx Freight, its less-than-truckload subsidiary, on June 1, and retained a 19.9% ownership interest. And on October 1, it completed the sale of its FedEx Supply Chain subsidiary to CMA-CGM for around $1.4 billion.

On the company’s earnings call, CEO Subramaniam said that FedEx grew revenue across key B2B verticals and premium B2C, which supported double-digit growth in consolidated adjusted operating income.

“From Network 2.0 to the optimization of our European network, to our global airfreight strategy, we continue to transform FedEx, driving greater density, flexibility and efficiency. Building on our data and technology advantage, we announced new collaborations to provide value-added services for existing and new customers,” he said. “Consistent with our strategy, B2B service drove the majority of our quarterly revenue growth, reflecting strong execution by our commercial and operations teams. Our expanding capabilities across key verticals are enabling us to address more of our customers' logistics needs, unlocking airfreight demand from traditionally parcel-centric customers.

For example, we drove a 15-fold increase in aircraft engine moves and won new airfreight business with an AI data center customer after a more than 40-year, largely parcel-centric relationship. Differentiation is increasingly centered on deep customer relationships and tailored service experiences, positioning us to capture more freight volume as we address customers' needs beyond parcel. Our network transformation initiatives remain on track.”

Further addressing the progress FedEx has made in its Network 2.0 transformation, which kicked off in June 2024 and is focused on consolidating its operating strategy into a single organization, he said the company now has nearly 65% of eligible volume flowing through about 630 Network 2.0 optimized stations, while having closed more than 260 stations. He also noted that this network optimization is leading to tighter capacity utilization across its surface network, with the company expecting Network 2.0 progress to translate to nearly $1 billion of Network 2.0 and associated One FedEx savings by the end of this calendar year and a cumulative $2 billion by the end of 2027.

Brie Carere, Executive Vice President and Chief Customer Officer, at FedEx, said on the call that FedEx is deepening partnerships with customers who value speed, precision and the capabilities the company offers, allowing it to profitably grow Q3 revenue by $2.4 billion year-over-year in what she called a very dynamic market.

“We expect current volume and yield trends to remain directionally similar to Q3 with some moderation in year-over-year U.S. Domestic volume growth given tough comps,” said Carere. “This outlook implies a 10% revenue growth in Q4, with U.S. Domestic revenue up high single digits, including 3 points from fuel price-driven surcharge revenue and international up high teens, including 7 points from fuel price-driven surcharge revenue. We will remain very disciplined on pricing. We expect a sustained mid-single-digit decline in ground economy and double-digit decline in international domestic volume in Q4 as we continue our efforts to improve our service mix. With a significant majority of our Network 2.0 conversion work complete heading into peak, I know that the team at FedEx is ready to deliver superior service for our customers and continued strong financial results for our investors.” 

Addressing pricing, Carere said that calendar year 2026 has an improved pricing environment over calendar year 2025 that is competitive but rational. And from a yield perspective in the United States, she noted that FedEx is very pleased with the base yield growth, which was about half of its year-over-year yield growth in the domestic mix.

“Of that half, the vast majority of it was actually base yield. We did benefit a little bit from some self-help in the mix. And what do I mean by that?” she said. “We have consciously focused on premium e-commerce. So, when you look at the home delivery and ground economy volume mix, it is really important to understand that the ground economy volume was down 4%, and that was intentional as we really lean into the premium. We feel really good about the domestic pricing environment.”

Looking at Peak Season, Carere observed that its top 30 customers drive around 35% peak factors, and are forecasting around 2% average daily volume growth over that period, from Black Friday through Christmas. What’s more, there is one extra shipping day in November, which Carere said bodes well for both retailers and peak demand. Also serving as a positive for peak is strong SMB and small business growth, which she said is a bright spot, as it grew faster than its large customer segment in the third quarter—with a major driver for that being execution.

“As we head into peak despite the high fuel surcharge, the U.S. consumer seems resilient, both large and small customers seem to be able to pass on the fuel to date,” she said.

The September increase followed a series of pauses and rate cuts by the FOMC.

When the FOMC raised the federal funds rate in July 2023, the rate was at 5.25%-to-5.50%. It was subsequently followed by: a 0.50% cut, to 4.75%-to-5.00% in September 2024; a 0.25% cut to 4.50%-to-4.75% in November 2024; a 0.25% cut to 4.25%-to-4.50% in December 2024; a 0.25% cut to 4.00%-to-4.25% in September 2025; a 0.25% cut to 3.75%-to-4.00% in October 2025; and a 0.25% to 3.50%-to-3.75% in December 2025.

The FOMC approved the increase by a 10-2 vote.

And it said in a statement that it decided to maintain the current rate in support of its dual mandate, with the FOMC continuing its policy of maintaining ample reserve in the banking system.

“Economic activity is expanding at a strong pace,” it said. “While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”

In a press briefing yesterday, Federal Reserve Chairman Kevin Warsh noted that economic growth has strengthened, as the GDP increase in the first half of this year was revised up from an earlier estimate of 1.8 percent up to 2.4 percent, and the third quarter appears to have brought an even more rapid advance [it came in at 3.4% today, according to the Bureau of Economic Analysis], led by healthy consumer spending, and business investment likely rising at about a double-digit pace, while capital expenditures are at a historically high share of GDP.

“Americans, of course, are still dealing with inflation that has been running above the committee's objective for close to six years,” he said. “It's our responsibility to get inflation down. That's the reason the FOMC's discussion over the last couple of days focused mainly on the price stability side of our remit. Since our policy action in September, we have started to see some changes in financial and credit conditions. They have tightened for some businesses and households, much as we would expect. Market participants are becoming somewhat more discerning in their capital allocations, and while overall financial conditions are tighter, I'm unwilling and unable to call them tight. But broadly, these developments go in the direction of achieving a longer, more durable period of economic growth and price stability.”

The driver for this pause was no more complicated than ‘right before midterms,’ with the Fed not making a move unless it was absolutely necessary, said Keith Prather, Managing Director, at Armada Corporate Intelligence.

“I heard [Treasury Secretary Scott] Bessent mention that the Treasury rates were ‘doing the tightening job for the Fed,’ and maybe that's the long and short of it for this meeting. The Fed knows that they can't affect a supply-side energy shock with interest rate policy, and that allows them to err a bit by not hiking, but if they hiked too quickly, they could make the situation worse (stagflation).” 

Chris McCarney, Principal, Supply Chain and Operations at KPMG US, noted that elevated interest rates increase the cost of capital across the supply chain, making working capital management more critical than ever.

“Companies will focus on optimizing inventory, strengthening cash flow, and prioritizing investments that deliver both resilience and measurable financial returns,” he said. “Procurement organizations that can unlock value beyond cost savings will play a central role in helping businesses navigate a higher-rate environment."

As previously reported, a recently-conducted Logistics Management reader survey of more than 100 freight transportation, logistics, and supply chain stakeholders found that 63% of respondents felt a rate cut would help, with 37% saying it would not.

Reasons cited for the former included: access to cheaper capital helping the sector and various businesses; reducing interest payments and improving cash flow; spurring housing sector growth; and improving consumer demand, among others. And reasons for the latter included: labor issues not subject to interest rates and deflation, among others.

Marc Schaffer, p  principal economist, at Breakthrough, explained that given current market conditions, the Fed’s decision to hold rates steady reflects an acknowledgment that energy markets and geopolitical developments are a core driver of inflation, and those pressures are unlikely to respond to higher interest rates in the near term, with Fed Chairman Warsh specifically calling out a desire for more information in setting the best policy stance on the path to stabilizing inflation.

"Whether or not the Fed moves rates by a quarter point, shipper cost pressures are likely to persist in the near term," he told LM. "Retail diesel is hovering above $6 a gallon, and linehaul rates remain elevated as the freight cycle turns. The Fed highlighted strong economic activity, pointing to productivity, capital investment and resilient spending. That lines up with some of what we’re seeing in the freight data, where industrial demand is driving pockets of volume while consumer-oriented freight is softer. Overall, volume in the Breakthrough Freight Ecosystem is holding relatively flat, up 0.8% year over year in the most recent early October data. Higher interest rates raise equipment financing costs for carriers and inventory carrying costs for shippers, so the pause is a positive from that perspective. However, the two dissenting votes in favor of a hike suggest current or higher rates are likely to remain through the end of the year, adding to cost headwinds in transportation markets."

The company said that these new agents are focused on ocean shipping, air freight, and customs brokerage—and are a continued part of its expansion of its Lean AI capabilities on the freight forwarding side.

Key benefits of these new agents cited by the company include:

• Price-quoting for ocean and air cargo: AI has determined and delivered over 80,000 price quotes for over 3,600 customers. Quotes that used to take a day for an air shipment and two to three days for an ocean shipment now take two to three minutes;
• Ocean booking: AI has begun to manage the thousands of booking requests C.H. Robinson receives every week; and
• Customs: AI helps with the dozens of documents and highly detailed processes required for an international shipment to clear U.S. Customs – work that has only gotten more labor-intensive with new trade agreements, layers of new tariffs, and stricter compliance rules. 

“As we’ve brought our AI playbook to global forwarding, the benefits keep compounding,” said Mike Short, President of Global Forwarding. “Customers have information they need sooner. Data is more consistent. Processes are more predictable. When plans change or disruptions occur, customers can more quickly evaluate a new routing, mode of shipping, schedule or price. Not to mention speed-to-market is a real competitive advantage. The faster we get you a quote and handle your booking, the faster you get the ideal carrier and the ideal sailing or flight. For a vessel on the water 15 to 35 days, you don’t want to wait weeks for the next one. For an air shipment, life-saving medicines, perishable produce and critical automotive parts absolutely must arrive on time. Our Lean AI makes your supply chain a smarter, faster, better one.” 

This rollout serves as the most recent example of inroads the company is making on the AI front. On the company’s third quarter earnings call earlier today, Arun Rajan, Chief Strategy and Innovation Officer, at C.H. Robinson, explained that the company’s approach of pairing AI with its proven Lean operating model continues to differentiate it, with a key part of that differentiation being its builder culture and more than 450 in-house engineers and data scientists.

“They enable us to design fit-for-purpose technology and embed our agents directly into our proprietary systems and workflows,” said Rajan. “They understand logistics, our business, and how work gets done at Robinson, enabling us to build for real-world complexity rather than rely on generic solutions. That same expertise also enables us to engineer workflows for efficiency, optimizing token usage, and selecting the right large language model for each task based on effectiveness and cost. We don’t need the newest or most expensive model for every use case, and we are not dependent on any single provider.”

In June, the company introduced its Lean AI Engineer offering, which it said is the first to operate a shipper’s global supply chain while also continuously assessing and improving overall performance.

This technology is being used to serve its 4PL Managed Solutions customers, while working in tandem with CHR’s Lean AI Planner, which it defines as a premium service experience powered by a growing digital workforce of AI agents, adding that it is designed to deliver continuous execution quality across the shipment lifecycle, and was released in September. This pairing works together to form a single connected system that, “uniquely enhances a supply chain as it runs,” according to CHR.

And on the trucking side, in January, C.H. Robinson stated that it is now addressing missed LTL (less-than-truckload) pickups, coupled with advanced reasoning, with the aid of new AI agents.

The company explained that this effort has resulted in notable efficiency gains, including automating 95% of checks on missed LTL pickups, that has, in turn, resulted in saving more than 350 hours of manual work per day, in addition to shippers’ freight being able to move up to one day faster. And it added that unnecessary return trips to pick up missed freight have subsequently been cut down by 42%, benefitting both shippers and carriers.    

Other previous AI-related announcements from C.H. Robinson include:

• the October 2025 rollout of its Agentic Supply Chain, which it defines as an intelligent ecosystem that cautiously thinks, learns, adapts, and acts; and 
• the September 2025 introduction of its Always-on Logistics Planner, a premium service experience powered by a growing digital workforce of AI agents, adding that it is designed to deliver continuous execution quality across the shipment lifecycle.

Gartner found that 47% of the supply chains surveyed had cut staff primarily due to AI. Separately, 66% of leaders reported a decline in entry-level headcount, more than double the share reporting reductions at other levels.

The findings come from organizations that already use AI in their workflows to some degree. They do not represent a survey of the entire supply chain industry.

“AI is thinning the entry-level supply chain workforce faster than most chief supply chain officers (CSCOs) are redesigning the talent pipeline, creating a future capability gap that will actually weaken their organizations’ AI performance,” said Tess Frenzel, Director Analyst in Gartner’s Supply Chain practice.

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The company said that this new service provides Canadian shippers with what it called seamless, direct access throughout the country via its Smart Network, which covers more than 40 U.S.-based metropolitan areas. In addition to this new service, Roadrunner rolled out a new 5.9% GRI (general rate increase) that is applied to its RDFS 501 and RDFS 1000 base rates, which will take effect on November 2.

Roadrunner President and COO, Tomasz Jamroz provided LM with an overview of the new service in the Q&A below.

LM: What drove the need, and how long was it in the works?

Jamroz: We launched inbound service to Canada in late 2024 and have been working internally to streamline the process and ensure it provides a seamless experience for our customers.

Because Roadrunner does not have bonded terminals, we developed technology to address the added complexities of cross-border freight. Although inbound service is less complex than outbound service, we started there first to ensure we are fully prepared before launching outbound service. When introducing a new product, such as outbound service from Canada, Roadrunner does not want customers to serve as test users. We want to be fully confident that we are ready. Outbound service from Canada is an appealing market, and we have been working with multiple partners to develop our strategy. We have established a dedicated team to focus on growing that market. We expect it will take time to reach maturity and establish Roadrunner in Canada to match the value our U.S. customers associate with Roadrunner today as a valued partner and a direct, long-haul quality carrier.

LM: How did Roadrunner serve these lanes before?

Jamroz: Historically, in 2019 and before Roadrunner 2.0, we served outbound Canada. However, at that time, we lacked appropriate custodial controls and technology, and our organization was different from the one our customers know and value today as Roadrunner 2.0. We established inbound Canada in 2024 and took the time to do it properly, build the appropriate foundation, and prepare our execution strategy. We view opening Canada as a completely new Roadrunner product, as we embrace our next 5-year strategy, 3.0. Canada outbound is one of the building blocks of our next 5-year phase to establish Roadrunner as the LTL of the future.

LM: What are the main benefits for shippers?

Jamroz: Roadrunner's value proposition is distinctive for shippers seeking direct, fast, long-haul freight transportation. We have demonstrated that demand exists in the U.S. market. Canada is one of the largest exporters to the United States, and we aim to provide our Canadian customers with an option to reach their customers more quickly and with greater flexibility when shipping LTL freight south of the border. Our approach—direct metro-to-metro service, zero rail, and fast transit—offers significant value to customers who prioritize their freight and seek to minimize handoffs from origin to destination. We recognize that an extensive rail network connects the United States and Canada, and that many shipments move via intermodal service. We aim to offer shippers an alternative, especially to those who value this type of service: a 100% truck-based metro-to-metro direct alternative.

LM: What are the main competitive advantages for Roadrunner?

Jamroz: Many businesses operate significantly across national borders, including those in the aerospace, automotive, and pharmaceutical sectors. Our goal is to support growth among

existing customers who have expressed interest in expanding and have asked Roadrunner for additional options, while also introducing new customers. We anticipate that, over the next decade, onshore and nearshore production will shift significantly from offshore production. We want to ensure that Roadrunner is positioned to meet our customers’ needs wherever they are greatest. As we continually assess strategic expansion opportunities, both organic and inorganic, we remain committed to our strategy and philosophy of providing services in metropolitan areas with at least one U.S. professional sports team (NFL, NHL, MLB, or NBA). In keeping with our commitments, we have decided to add Toronto, Montreal, Edmonton, and Calgary to our network as outbound options. If you are a shipper that needs to move your freight fast and direct, 100% on truck, Roadrunner can help you now, even if you are in Canada.

The report, entitled “Retraced: Global and Regional Logistics Costs, Third-Party Logistics Market Trends and Outlook, and Top 3PL Rankings,” stated that 2025 global 3PL gross revenue, at $1.3006 billion, posted a 5.3% annual increase, with 2025 global logistics costs coming in at $12.597 billion, for a 5.4% gain over 2024. To that end, the report explained that 3PL accounted for 10.04% of total logistics spending, for a slight 0.01% increase over 2019’s 10.03% coming short of the 2022 high of 12.93%.

The firm explained that this data serves as an indication that a large portion of the gains in 3PL penetration, between 2020 and 2022 was due to what it called “extraordinary inflation in freight rates rather than a lasting structural outsourcing.”

As for how 2026 may end up, Armstrong said that it is forecasting global 3PL revenue to increase 10.1%, coming in at an estimated $1.431.6 billion, followed by a 6.9% annual gain to $1.529.7 billion in 2027, with penetration at 10.34% and 10.57%, respectively.

Looking at the various 3PL segments it covers, Armstrong laid out the following revenue figures:

• Transportation Management (TM), 2025 Gross Revenue, at $620.9 billion, up 4.3% annually, with 2027 estimated gross revenue, at $758.7 billion, and an estimated 2026-2027 CAGR up 9.3% (this segment is the combination of Domestic Transportation Management and Dedicated Contract Carriage);
• International Transportation Management (ITM), 2025 Gross Revenue, at $329.0 billion, up 7.3% annually, with 2027 estimated gross revenue, at $374.2 billion, and an estimated 2026-2027 CAGR up 4.2%; and
• Value-Added Warehousing & Distribution (VAWD) 2025 Gross Revenue, at $332.5 billion, up 4.7% annually, with 2027 estimated gross revenue, at $377.9 billion, and an estimated 2026-2027 CAGR up 4.8%

“When we look at the 3PL side, there are things like tariffs and trade complexity, which happened and were big factors last year and into this year,” said Evan Armstrong, president of Armstrong & Associates. “That led to pretty good growth for ITM. And because of the disturbances from the Iran conflict and rising diesel prices, we are expecting to see TM grow the fastest. That speaks to the combination of diesel prices going up and also the tight capacity on the transportation management piece.”

With global logistics spending now more in line with pre-pandemic 2019 levels, the report’s findings point to a resetting, of sorts, for the sector, or a retracing, as the report’s title indicates.

The gains seen over the 2020-to-2022 period, said Armstrong, speak to the pandemic-driven increase in rates, which stabilized for a while, and subsequently came back down, with the penetration rate for total logistics costs at or around 2019 levels.

“We have reset the baseline and are now expecting pretty good growth, for this year and next year, which is going to increase the penetration rate overall,” he said.

Looking at the VAWD segment, Armstrong said he considers it the steadiest segment within the global 3PL market, pegging it to rise 8.4% in 2026, with VAWD buoyed by strong inventory levels, while high interest rates essentially serving as a cap on new warehouse development.

“These are the same properties that compete with data centers and are competing at higher interest rates to build, so fewer warehouses are being built, coupled with a cap on capacity, which is going to keep a lot of the existing providers full when it comes to storage,” explained Armstrong.

On an anecdotal basis, he noted that based on warehouse pricing work done by Armstrong & Associates, there is more of an emphasis on 3PLs pricing properly, because of tight capacity, albeit it is not as tight as it was over 2021 and 2022. That speaks to shippers and 3PLs wanting to make sure they are pricing properly, and he added that there are currently not many vacant warehouses, especially in major metropolitan areas, where there is a lot of e-commerce fulfillment activity, according to Armstrong, with locales like the Northeast, Chicago, and the Inland Empire serving as examples of areas where space is tight.

In the TM space, in light of the Supreme Court’s Montgomery ruling in May, which was followed by a recent $604 ruling against C.H. Robinson, coupled with various federal government efforts addressing things like English language proficiency, non-domiciled CDLs and so-called “CDL mills,” Armstrong said things are getting tight on the brokerage side.

“A lot of shippers are still leaning on freight brokers to give them an arm’s length relationship between them and the carrier,” he said. “The freight brokerage piece is going to do OK, but you have to be smart about how you are managing carriers, what carrier you are working with, and how you are vetting carriers. That requires a good technology partner, like Highway or Truckstop RIMS [among others] before tendering loads.

As the segment with the lowest estimated growth rate, ITM is concurrently impacted by things like global trade and tariffs, the Red Sea situation, the Iran conflict, the de minimis phaseout, and geopolitical events in general.

Armstrong described the lower growth estimates as more of a diversion than a decline.

“It is really going back to where we were,” he said. “Last year was tumultuous with tariffs and other things. It feels like we lived through five years of chaos in the last year. We are expecting more normal growth going forward. If there is a change in the mid-terms, and [Democrats] try to curtail some of the tariff authority, that could result in increased stability. Which could be reflected in more normal ITM segment growth, just because there is not the confusion and chaos and the whole compliance on the customs brokerage side. There could also be warmer relations between the U.S. and Canada, too, depending on what happens.”

For the week of October 26, the national average, at $6.352, saw a 7.6-cent increase, following a 9.7-cent gain, to $6.276, for the week of October 19. Which was preceded by a $0.02-cent decrease, to $6.179, for the week of October 12, 18.3-cent decline to $6.199, for the week of October 5, and a 14.4-cent decrease to $6.382, for the week of September 28. Prior to that, the national average saw a 24.4-cent sequential gain to $6.529, for the week of September 21, which topped the $6.285 reading, for the week of September 14, and was also above the $5.967 reading, for the week of September 7.

What’s more the national average has now eclipsed the $5 per gallon mark for 15 consecutive weeks, going back to the week of July 20, when it was at $5.134, with the national average having increase $1.218 over that period.

On an annual basis, the national average price per gallon is up $2.634, topping the previous two weeks, with annual gains at $2.656 and $2.514, respectively.

A recent New York Times article explained that a major driver for the gains is the Iran conflict “continuing to restrict the supply of energy worldwide, further squeezing businesses that rely on diesel to run their factories and equipment.”

When the U.S. national average came in at $5.820 per gallon on Thursday, September 10, it topped the $5.819 record set on June 17, 2022, following Russia’s invasion of Ukraine, according to GasBuddy, with the company saying that 2026 is on track to be the most expensive year for diesel in U.S. history.

Renewed fighting between the United States and Iran, along with Ukrainian attacks on Russian refineries, has disrupted global fuel supplies and pushed prices higher.

At the CSCMP EDGE conference in Nashville earlier this month, Dr. Zac Rogers, Associate Professor of Operations and Supply Chain Management at Colorado State University, described current diesel prices as a big and negative external shock.

“We really are operating in sort of an unprecedented environment, in terms of diesel fuel,” said Rogers. “I have one of my classes calculate what the difference is between what has been spent on diesel this year versus last year, and the difference is $54.4 billion in the last six months.”

Dean Croke, principal industry analyst, at DAT, said his firm is expecting fuel surcharges and retail diesel prices to remain high throughout next year, potentially leading to a point where it becomes too extreme—and the diesel prices further negatively impact small carriers.

“Every time diesel drops and then rises, it always goes up from a higher base, which has happened every time over the last four months,” said Croke. “I think the market has finally figured out that this is not about oil anymore. This is about infrastructure, and the Iranians have played a long strategic long game here and have been very strategic in targeting refinery capacity, which has been the real constraint.”

The average price per barrel of WTI crude is currently at $100.14 on the New York Mercantile Exchange, down from $102.99 a week ago at this time.

Total quarterly revenue, at $22.9 billion, was up 6.7% annually, and earnings per share at $1.69, beat Wall Street estimates of $1.63. Total operating profit, at $1.744 billion, was off 3.3% annually. 

Segment results for Q3 2026:

• U.S. Domestic Package revenue, at $14.865 billion, was up 4.5% annually, paced by a 15.0% increase in revenue per piece, to $14.29, for its second strong quarter of growth;
• International Package revenue, at $5.007 billion, rose 7.1% annually, paced by a 15.0% increase in revenue per piece, to $24.71; and  
• Supply Chain Solutions revenue, at $2.981 billion, was up 18.2% annually, which UPS said was mostly due to growth in forwarding and logistics operations, including healthcare, high-tech, manufacturing, and automotive

“I want to thank all UPSers for their unwavering commitment to our customers and for delivering another quarter of strong performance,” said Carol Tomé, UPS chief executive officer. “Our third-quarter results demonstrate the continued strengthening of our business fundamentals, driven by premium growth and greater network efficiency. As momentum builds, we are entering the holiday shipping season from a position of strength, with the most automated and efficient network in our history. Given the strength we see in the business, we are raising our full-year financial guidance.”

To that end, UPS is raising fourth quarter and full-year 2026 guidance to be roughly $92.6 billion, with capital expenditures around $3.0 billion.

On the company’s earnings call earlier today, Tomé said that the third quarter results exceeded expectations.  

Addressing the U.S. domestic segment, Tomé said that UPS is now past the inflection point on several key elements of its strategy, based on clear evidence in its volume, operating profit, and operating margin performance.  On the International side, she explained that UPS returned to year-over-year operating profit growth for the first time since the 2025 U.S. trade policy changes (in the form of elevated tariffs), with the momentum UPS saw in the second quarter across the China-to-U.S. and Asia-to-Asia trade lanes continuing in the third quarter, supported by investments UPS has made across the region. In addition, she noted that U.S. inbound volume rebounded in September, further strengthening its third quarter performance.

“Taken together, these results show that our strategy is working,” she said. “We're driving more premium growth, improving revenue quality and mix, and creating greater operating leverage through a more efficient network. All of this is strengthening the underlying performance of our business.”

This earnings release follows a recently-released new global operating model for the company, which took effect on September 1. As previously reported by LM, the company said that on the heels of completing its Amazon volume glide-down and network reconfiguration in June, it has “shifted its focus to accelerating profitable growth.” UPS explained that this will take place by evolving from an international company to what it called a truly global enterprise through its new operating model that will better leverage the power of its worldwide network. This move was not surprising in that UPS has made it clear it is focusing on moving significantly into certain sectors and moving away from low-yield residential, e-commerce delivery, which is essentially what happened with its business relationship with Amazon. 

On the earnings call, Tomé noted that this new model enables UPS to serve customers with greater consistency, agility, and scale. Under this approach, she said UPS is standardizing critical operational processes across geographies while maintaining the flexibility necessary to meet the unique needs of local markets.

Looking at healthcare and SMB, which Tomé described as two important growth areas for the company, UPS third quarter healthcare revenue topped $3 billion for the third consecutive quarter, with annual growth in each segment, and SMB operations, including platforms, accounted for 35.1% of total third quarter volume, or around 2.4% annually. What’s more, she said SMB average daily volume rose 3.7% annually, paced by ongoing momentum in UPS’s Digital Access Program (DAP), with global DAP revenue coming in at $1.4 billion, as its mix continues to shift towards more premium volume, with air and ground commercial services representing almost 30% of total DAP volume.

With the holiday season approaching, Tomé said that U.S. consumers remain resilient and the outlook for holiday demand is strong, citing industry forecasts for holiday online retail sales projecting an average annual increase of around 9%.

“A little over 100 U.S. customers account for approximately 80 percent of our peak surge, and based on their forecasts, we expect average daily volume to increase approximately 25% from the third quarter to the fourth quarter,” she said. “That sequential increase is consistent with last year. However, fourth quarter U.S. average daily volume is expected to be lower year-over-year, reflecting the deliberate actions we took earlier in the year to reduce Amazon volume. As we head into peak, our network is more automated, more efficient, and better positioned than ever to handle the holiday surge. We'll add variable capacity where needed, but the investments we've made in our network enable us to operate with fewer vehicle rentals and aircraft leases, and nearly 70% of all packages will flow through an automated process.

“We are ready for peak, and while on-time service is important every day of the year. It matters even more during peak when our customers are counting on us to deliver for their customers. We've been the industry leader in on-time service during peak for the past eight years, and with our network, our know-how, and the commitment of UPSers, we're ready to make it nine.”

UPS CFO Brian Newman said on the call that UPS’s results in the third quarter demonstrate that its strategy is translating into stronger financial performance.

“By growing premium volume, improving revenue quality, and running a more efficient network, we are strengthening the underlying performance of the business,” said Newman. “In the quarter, revenue growth was strong in all three segments, and we delivered operating profit and margin expansion in our small package businesses.”

Stifel analyst Bruce Chan wrote in a research note that ealrier this year his firm observed that 2026 was an important year for UPS, with the second hald in particular being the culmination of extensive network reconfiguration.

"[A]nd we think so far, so good," noted Chan. "As the company enters the Holiday season, revenue/piece trends look to be intact, and the company enters peak with more automation than ever; it's playoff season for the Parcel Industry and the bench is strong at UPS, especially if demand and seasonality hold up, in our view."

While full details were not made available, UPS said that the daily rates for UPS Ground Air, UPS air, and International services will increase by an average net of 5.9%. The company said that the new rates will take effect on December 21, which represents a full week earlier than in recent years.  

“This helps to support ongoing expansion and capability enhancements as we strive to maintain the high levels you expect from UPS,” the company said. “More detailed rate previews will be available at a later date.”

UPS said that the minimum billable weight for Additional Handling packages will head up from 40 pounds to 50 pounds.

“Unfortunately for shippers, there is no way to tell what the actual impact will be because the average will be 5.9% on base rates, but as we know, that only covers base rates and not surcharges,” said Paul Yaussy, director of parcel intelligence, at Loop. “So, we're all going to have to wait until those rates come out to see the full impact of the GRI. Further, the impact is different for every shipper depending on their specific shipping profile.”

Yaussy observed that in addition to raising the billable weight for Additional Handling by 40 pounds to 50 pounds, and it is also making charges to its list of DAS (delivery area surcharges) zip codes.

“The 10 additional pounds on AHS billable weight is huge, as it could be 9% to 22% more depending on the zone,” explained Yaussy. “This will go unnoticed by a lot of shippers, until it's too late. On the DAS zip codes changing, they have not announced the changes.  One thing to keep an eye on here is the population impacted.  The number of zip codes might actually decrease, or stay flat, but it's extremely likely the population, or number of shipments, will increase.”

Regarding fuel, while not included in the 2027 rate changes, UPS recently announced another fuel surcharge, which is rising another 0.25%-to-0.50%, depending on the peg, or baseline, and set to go into effect on November 2.

Dave Sullivan director of professional services, at ShipScience, said in a blog post that the fuel surcharge update looks like a modest increase, with the bigger change in the footnotes.

Sullivan wrote that at latest available diesel and jet-fuel benchmarks, the new schedules produce surcharges 0.50 percentage points higher than the August tables when fuel prices are held constant. And he said that the larger potential impact emerges as fuel prices fall through the affected bands: the difference can reach 2.00 percentage points for Ground and 2.75 points for Air.

“A 0.50-percentage-point increase adds $5,000 for every $1 million of fuel-applicable charges, before contractual fuel discounts,” stated Sullivan. “At lower benchmark prices, a 2.00-point difference would add $20,000 on the same charge base, while a 2.75-point difference would add $27,500. Exposure includes transportation and applicable accessorial charges. UPS’s published list includes Residential, Delivery Area, Additional Handling, Large Package and listed Demand Surcharges, so the November change also increases fuel assessed on applicable peak-season charges. A contractual percentage discount on the fuel surcharge reduces these increases proportionally.

Shippers should use the November schedules when modeling lower-fuel scenarios and 2027 parcel budgets. For shipments dated November 2 onward, verify the applicable weekly percentage and contractual fuel provisions. UPS states that the percentage in its 90-Day Fuel Surcharge History effective on the shipment date governs, regardless of the EIA price or calculation tables; the tables apply when updated weekly percentages are absent. Invoice checks should therefore follow the shipment date and UPS’s posted weekly rate.”

Small businesses face separate pricing

UPS will raise its published Small Business Rates for Ground, Air, and International services by 4.5% on Dec. 21. A 5% domestic and international fuel surcharge will also apply to those rates.

Customers in that program will face the same increase in the minimum billable weight for additional-handling packages, from 40 pounds to 50 pounds.

The daily-rate increase matches FedEx’s announced average increase of 5.9%, although FedEx’s change takes effect Jan. 4, 2027, two weeks after UPS.

New surge fees are coming

UPS plans an additional per-package surge fee for certain customers sending domestic Ground and Ground Saver shipments from specified origin ZIP codes. The fee will take effect on or after Dec. 21.

The carrier expects to release details in early November, including the affected origin ZIP codes. Its current notice does not specify the fee amount or fully explain which customers will qualify.

Those charges add another variable to shipping budgets. The average rate increase alone will not show how much a customer’s total bill will rise.

“To continue effectively offsetting the burden to U.S. commerce while better serving the public interest, President Trump is further modifying Proclamation 11048 (Imposing Additional Duties To Offset Canadian Discrimination Against the Commerce of the United States With Respect to Motor Vehicles), as amended by removing certain products—such as plywood sheets, some paper products, certain machinery and refrigeration equipment, and certain packing crates and boxes—from the scope of the Section 338 tariffs and replacing those products with certain valves, carpets, waste products, and others,”  stated a White House fact sheet.

It added that the Section 338 tariffs apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement (USMCA), and they apply in addition to tariffs imposed under Section 232 of the Trade Expansion Act of 1962.  The White House noted that these product additions and removals are set to go into effect on October 30.

The White House added that these measures are being taken to address Canada’s continued and additional retaliation and discrimination against U.S. commerce to protect American farmers, manufacturers, and partners—whereas a Wall Street Journal report called it a “bid to help Maine Sen. Susan Collins and other Republicans in the upcoming midterm elections.”

As reported by LM, following a late August measure by the U.S. to implement additional 50% tariffs on $27.6 billion worth of certain Canadian goods “in response to Canada’s discriminatory treatment of American products,” under Section 338 of the Tariff Act of 1930, that went into effect on August 22, Canada followed in kind with retaliatory tariffs on United States imports into the country—in the form of 15%, 25%, and 50% on various products.

Following the announced Canadian tariffs on U.S. imports, the White House on September 8 that it had inked various proclamations pursuant to Section 338 of the Tariff Act of 1930 to ban certain products entering the U.S. from Canada, which subsequently took effect on September 29.

Those import bans included imports of:  

• Motorcycles (including mopeds) and cycles fitted with a reciprocating internal-combustion piston engine of a cylinder capacity over 800 cc;
• Various dairy products, including various forms of whey, molasses, and non-alcoholic beer; and
• Various alcoholic products, including beer (including malt beer), wine, cider, whiskies, vodka, and other products like rum and brandy

A CBS News report issued in September said that the affected trade value of these bans is around $967 million, with alcohol comprising roughly 87% of that tally.

“President Trump is doing this because the Canada tariffs in particular have proven unpopular, especially in border states, and Maine Sen. Susan Collins, who is in a tight re-election race, had been asking for modifications that she thinks will help Maine,” wrote Peter Herrell, Visiting Scholar, Georgetown Law School’s Institute of International Economic Law, in a LinkedIn post. “Trump has already previously modified the Section 338 tariffs. From where I sit, Trump seems to be settling in with 338 and finding that he enjoys what he and the Administration's lawyers read as the flexibility in the statute (e.g., they can make modifications without notice and comment procedures, etc.). I am concerned about the precedent here: If Trump decides post-midterms that he wants to impose more flexible tariffs on various other countries, it certainly looks like he sees 338 as a very flexible tariff tool.”

In November 2025, USTR initially issued a one-year suspension that took effect at 12:01 AM ET on November 10, 2025.

As previously reported by LM, prior to the November 2025 announcement, the USTR said on October 14 that it had outlined actions in regards to announced modifications of certain aspects of the responsive action to modify American shipbuilding from April.

On April 17, 2025, a statement issued by the USTR office highlighted the main components of this effort including:

• changing the basis for calculating service fees on vessel operators of foreign-built vehicle carriers and setting the fee at $46 per net ton, as of October 14, 2025;
• eliminating, retroactive to April 17, 2025, a provision permitting the suspension of liquid natural gas (LNG) export licenses if certain restrictions on the use of foreign-built vessels are not met; and
• imposing tariffs of 100 percent on certain ship-to-shore cranes and cargo handling equipment

The USTR added that it was also proposing other further modifications from its requests for public comment made in Federal Register notices in April and June [2025], which include: adding a carve-out from fees for certain ethane and liquid petroleum gas (LPG) carriers under long-term charter; and imposing additional tariffs of up to 150% on certain cargo handling equipment (e.g., rubber tire gantry cranes) and components of such equipment.

When the one-year extended was issued in November 2025, the American Association of Port Authorities said that it was relieved to see these fees and tariffs suspended for one year.

“This pause will allow the industry to continue delivering the cargo and passengers that power the American economy,” it said. “We urge the Trump Administration to continue negotiations to ensure that these policies are not reimposed in one year.”

Last Friday, October 23, the USTR said its objective with this announcement is to allow for further negotiation with China regarding the acts, policies, and practices at issue with this investigation to further suspend that action for two months, through January 9, 2027.

“The United States is continuing to engage with China with the goal of obtaining the elimination of the acts, policies, and practices at issue in the investigation,” it said.

And it added that when the one-year suspension was announced in November 2025, when the U.S. and China announced a trade and economic deal, that this one-year period would allow the U.S. to negotiate with China pursuant to Section 301 in regards to the issues raised in the investigation and also to continue U.S. domestic efforts and discussions with key allies and partners on revitalizing American shipbuilding.

Should this proposed two-month extension take effect, it said that neither party would accrue liability or be required to pay the fees on maritime transport services covered by the suspended measures under that period.

USTR said that written comments on this proposed extension are due by Friday, October 30, at 5:00 PM ET.

Jacoby, a supply chain consultant who teaches at New York University and the University of Pennsylvania, outlined a range of possible tariff paths moving forward and urged companies to examine how their operations would perform under different outcomes.

His message for executives was that uncertainty still leaves room for action. Companies can evaluate alternative production locations, model disruptions and structure supplier relationships to share risk. The challenge is deciding which changes remain useful if the tariff assumptions change.

“So if you’re managing global operations, there are a lot of potential strategies—that’s the good news—you can do a lot actually,” he said.

Jacoby’s outlook included a gradual reduction in tariffs over an extended period, rather than an immediate return to a low-tariff environment. He presented that as his judgment, but for companies considering substantial capital commitments, the range of possibilities matters as much as his preferred scenario.

Please click here to read the complete article. 

The companies explained that the by leveraging AFS’s access to freight data across various modes, coupled with applying advanced analytics like machine learning algorithms, they have developed models that they said provide a complete picture of the data’s depth and richness. And they also highlighted how along with the large amount of historical data, they are evaluating and selecting current macro- and micro-economic factors, which are built into their historical models, which includes the most recent GRI (general rate increase) announcement from a major parcel carrier. What’s more, TD Cowen and AFS noted that the TD Cowen/AFS Freight Index offers what they called a unique and comprehensive review of both past performance and the forecasted outlook for the immediate future quarter.

“We expect fuel to drive elevated transportation costs for the foreseeable future. Inventories are low and refineries are at capacity, so even if crude oil prices drop in the coming months, diesel and jet fuel supplies must still catch up before prices recede,” says Andy Dyer, CEO, AFS Logistics. “The other key force shaping freight markets is capacity. The holiday rush always places a seasonal premium on parcel capacity, while the continued ascent of truckload rates is the result of steady demand chasing a shrinking pool of trucks.”

The TD Cowen/AFS Freight Index issued the following takeaways across the modes it covers:

Parcel—Parcel shipping costs are expected to reach record highs in Q4 2026, driven by years of carrier pricing increases, elevated fuel surcharges, new delivery fees, and seasonal holiday demand.

• Fuel surcharges remain significantly inflated: Although diesel prices have risen, 72% of the 22.25-percentage-point increase in fuel surcharges since Q1 2021 is attributed to carrier adjustments to surcharge tables rather than fuel costs alone. Even if diesel prices returned to $2.91 per gallon, the surcharge would remain at 23.75%—about three times its 2021 level.
• FedEx is increasing delivery area surcharges: Effective January 4, 2027, 2,533 ZIP codes will be reclassified from extended to remote delivery areas. The fee will rise to $17.75 per package, roughly doubling residential charges and more than tripling commercial charges.
• Holiday shipping adds further cost pressure: Peak-season package volumes increase competition for transportation capacity, while seasonal demand surcharges push shipping invoices higher.
• Ground and express rates are hitting records: The ground parcel rate index is projected to reach 43.3% above its January 2018 baseline in Q4 2026, up 5.8% year over year. The express parcel index is projected to reach a record high for the fifth consecutive quarter, rising 13.8% year over year.

The report explained that parcel shipping costs continue to rise due to both seasonal demand and long-term carrier pricing strategies. Businesses should anticipate higher shipping expenses and plan for additional surcharge increases into 2027.

LTL: LTL freight costs are projected to reach record highs in Q4 2026, driven by rising diesel prices, elevated fuel surcharges, and midyear general rate increases (GRIs).

• Fuel surcharges track diesel prices: Unlike parcel shipping, LTL fuel surcharges closely follow actual diesel price movements, rising sharply as diesel reached a record $6.53 per gallon in September 2026.
• Rate increases offset lower shipment weights: Although declining shipment weights put downward pressure on cost per shipment in Q3, higher base rates and fuel surcharges pushed costs upward.
• Record-high costs are expected to continue: The LTL rate-per-pound index is projected to reach 82.5% above its January 2018 baseline in Q4 2026, marking the third consecutive quarterly record.
• Year-over-year costs are rising significantly: The index is expected to increase 8.8% year over year, surpassing the 80% threshold for the first time on record.

LTL freight costs continue to climb as carriers maintain disciplined pricing and fuel costs remain elevated, with Q4 2026 expected to set another record high, noted the report.

Truckload: Truckload shipping rates are recovering after nearly three years of excess capacity, driven primarily by shrinking carrier capacity rather than strong freight demand. Rates are expected to continue rising through Q4 2026.

• Truckload rates are climbing: The rate-per-mile index rose from 7.6% above its January 2018 baseline in Q4 2025 to 19.7% in Q3 2026.
• Freight demand remains weak: Despite 2.2% GDP growth in Q2 2026, much of the growth came from services and investment rather than goods requiring transportation.
• Carriers face financial pressure: High diesel costs are straining profitability, with 16 trucking companies filing for bankruptcy within a 30-day period.
• Capacity constraints are intensifying: Regulatory enforcement is removing drivers from the road and closing training locations, limiting the industry's ability to replace lost capacity. This could lead to tighter capacity utilization and further rate increases.
• More increases are expected: The truckload rate index is projected to reach 23.4% above its January 2018 baseline in Q4 2026, up 14.7% year over year—the highest level since Q1 2022.

Truckload rates are rising mainly because available capacity is shrinking, not because freight demand is booming, it said. And it added that continued driver shortages, regulatory pressures, and high fuel costs could push rates higher even while demand remains soft.

The economy, which topped the list for three consecutive years, fell to sixth. Driver shortages and retention returned to the top 10, and artificial intelligence moved up as respondents weighed its uses against risks to jobs, security and cargo theft.

ATRI gathered responses from more than 3,000 trucking industry participants, who selected and ranked their three biggest concerns. 

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The SCI is a key logistics metric showing freight market health for shippers, combining factors like rates, capacity, and fuel; positive scores mean good conditions (more carrier supply), while negative scores signal tight capacity and tougher times for shippers, with readings near zero indicating neutrality, often fluctuating due to economic shifts and events like fuel price changes or new regulations. Recent readings have seen volatility, with shifts towards more challenging conditions as capacity tightens or improves, reflecting an evolving market where shippers need to monitor trends closely for rate changes and potential bottlenecks, according to FTR.

For August, the most recent month for which data is available, the SCI reading came in at -15.4, nearly doubling July’s 8.1% annual decrease and much steeper June’s -5.4 reading.

FTR explained that August’s reading largely reflects a renewed surge in fuel costs, adding that freight rates also represented a “larger negative for shippers in August but only marginally so. And it added that with diesel prices setting new record-highs in September, further deterioration likely occurred during the month and will be reflected in the SCI when data is finalized.

“We obviously knew that the SCI would take a big hit due to diesel prices jumping more than 50 cents a gallon on average in August after declining in June and July,” said Avery Vise, FTR’s vice president of trucking. “Freight rates and tight capacity remain major challenges for shippers, but at least the pain in those areas is not worsening at the rate it was earlier in the year. With fuel costs surging to a record high in September, the market continues to be highly unfavorable for shippers, and any prospects for near-term relief seem speculative. We expect further stabilization in rates and utilization, but both factors look at least mildly negative for shippers over the forecast horizon.”

Rail carloads, at 232,120, posted a 3.5% annual increase, topping the week ending October 10, at 232,004, the week ending October 3, at 230,711, and trailing the week ending September 26, at 235,787.

AAR noted that nine of the 10 carload commodity groups it tracks saw annual gains: metallic ores and metals, up 2,946 carloads, to 23,306; grain, up 1,470 carloads, to 22,486; and farm products excl. grain, and food, up 1,103 carloads, to 18,776. The lone commodity group to see an annual decline was nonmetallic minerals, down 1,089 carloads, to 32,428.

Intermodal containers and trailers, at 308,015, increased 12.6% annually, topping the week’s ending October 10, October 3, and September 26, at 302,252, 299,001, and 306,610, respectively.

Through the first 41 weeks of 2026, AAR reported that U.S. rail carloads, at 9,374,717, rose 2.7% annually, and intermodal units, at 11,687,964, headed up 4.6% annually.

Gene Seroka, executive director of the Port of Los Angeles, described that pressure during a keynote panel at the recent ASCM CHAINge conference in Long Beach, California. Companies are being asked to pivot repeatedly, he said, while their planning horizon becomes increasingly narrow.

“Just give us the rules. We’ll get on the ground and we’ll make things happen,” he said.

Seroka joined former U.S. Ambassador to China Nicholas Burns, Darnel Group CEO Salvador Miñarro and Tosca Derrick, a licensed customs broker and a leader in Baker Tilly’s global trade management practice. Moderator Nick Vyas guided a discussion that connected geopolitics with the practical work of moving goods, managing costs and choosing production locations.

The panel offered differing perspectives on trade policy, but a common operating challenge emerged: Companies need to understand the whole network behind a product, including the capabilities and relationships that may remain unchanged when its immediate source changes.

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Everson has more than 15 years of experience driving growth and building strong customer relationships in the transportation and logistics technology industry. He leads the company’s sales and marketing efforts with a focus on delivering measurable value and long-term partnerships that help customers succeed. He leads the commercial and customer engagement strategy that connects shippers with technology designed to simplify logistics complexity and deliver measurable value.

Logistics Management (LM): Let's start with Canada and the cross-border freight market. Given the significant volume of freight moving between the U.S. and Canada every day, how do you view the potential impact of shifting sourcing patterns on rail freight moving in both directions across the border? Could this be a permanent game changer?

Everson: I look at it this way: tariffs aren't necessarily changing the overall volume of freight, although there are some volume trends worth discussing. What they're really changing is the map. Where are shipments being sourced from, where are they going, and which lanes are they traveling?

There are downstream effects to consider, including new lanes that shippers need to understand and new benchmarks they need to establish. What we're seeing is that changes in where and how companies source their products are opening up new lanes for some of our shippers.

LM: Turning to volumes, it's been a strong year for intermodal for a variety of reasons, including reduced capacity on the truckload side. How do you view the current state of cross-border rail volumes, and where might they be headed?

Everson: One interesting statistic is that, during the first 30 weeks of 2026, Canadian railroads were up approximately 1% cumulatively, while Mexican railroads were up 11.5%. I think that's a very telling story.

You also have to look at the data at a micro level by examining the commodities actually being shipped. One of the advantages of our systems and customer relationships is that we have deep visibility into raw commodities, and each industry operates differently.

For example, statistics I reviewed recently showed metallic ores and metals up approximately 2,000 carloads, and chemicals up about 1,900 carloads. Meanwhile, motor vehicles and parts manufacturing were down roughly 1,800 carloads. Those figures tell you that commodities are moving in opposite directions within the same network. Overall, rail volumes were up approximately 2.7%, but that figure includes coal. Many industries remain down, while commodities such as metallic ores and coal are helping lift the overall network growth rate above the 2% range.

LM: Shifting cross-border volumes can leave railcars and capacity out of position as shippers change suppliers or facilities. Can you explain how that affects rail operations?

Everson: When your sourcing changes, you start using different lanes. Your inbound sourcing today might look very different from what it did three or four years ago.

That introduces new variables. Your railcars might sit longer at certain carrier terminals because transit windows and pickup schedules have changed. You might experience additional storage time or incur demurrage charges. We see customers making changes to their rail carriers, and that can be beneficial in some cases. But what you don't want to do is make a major change at the last minute without planning.

You need to understand where congestion might occur and what happens if shipments are delayed by an additional two, three, or four days. Those delays have downstream effects. If transit times increase, your cycle times get longer, which means you may need more railcars to move the same volume of freight. For a supply chain executive, that's a significant financial issue. Adding railcars to compensate for longer cycle times can be expensive.

LM: Rail often gets criticized for service problems, sometimes without much consideration for the broader operational challenges. How much of that comes down to shifts in volume and demand rather than the railroads themselves?

Everson: As a supply chain leader, I can decide to switch rail carriers in a week. But if everyone makes the same decision, it might take a railroad a quarter or even two quarters to catch up.

So, when congestion develops, it's not necessarily because the railroads are incapable of handling the freight. It's also because many shippers may be making similar changes at the same time. Summer is generally the best time of year for railroads to catch up on congestion, and we're not in a particularly bad cycle right now. But when winter arrives, weather and storms in the Southeast can create additional constraints and backlogs that slow carriers down. Shippers need to be mindful of those risks. I don't think enough planning goes into rail transportation in some cases.

LM: What should shippers monitor in terms of transit times, dwell, and transportation costs as cross-border freight patterns become less predictable?

Everson: Dwell is a major consideration, but shippers also need systems that provide real-time visibility across a broad dataset. Dynamic estimated times of arrival (ETAs) are more important than ever. You need to know where a particular railcar is and when it's likely to reach its destination.

If you're opening a new lane, you may not have enough historical data to know what normal transit time looks like. That's where data aggregators can help establish benchmarks. They can help you understand whether 11 days is normal, whether 13 days indicates a delay, or whether nine days is achievable. Rail also offers opportunities for detailed tracking. If you're monitoring a railcar closely, you can see when it passes a particular tracking point and estimate when it should reach the next one. If it doesn't arrive as expected, you need indicators that alert you to a potential problem.

Out-of-route movements are especially important. If a railcar is traveling in the wrong direction, identifying the issue on day one instead of day three can make a significant difference. Otherwise, you might have to turn the shipment around after it has already traveled hundreds of miles in the wrong direction. Monitoring dwell and out-of-route movements creates opportunities to improve efficiency and avoid unnecessary charges.

LM: Let's turn to trade policy and tariffs. With uncertainty surrounding U.S.-Canada relations, Mexico's position in North American trade, and the future of USMCA, how do you see these developments affecting the North American freight rail and intermodal network?

Everson: I can't really speak to whether the tariffs are good or bad. What I can say is that there is clearly uncertainty in supply chains right now.

If that uncertainty isn't managed properly, it becomes a significant risk factor that companies need to consider. Part of the situation may be intentional, with an effort to encourage U.S. companies to examine their sourcing options and bring more activity back into the United States. But the U.S. doesn't produce every commodity it needs, so the situation is complicated.

It's difficult to comment on the broader trade policy implications, but there's no question that uncertainty is affecting supply chain planning.

LM: The potential for ongoing uncertainty around USMCA raises questions about long-term predictability. Could that change how companies plan their sourcing and transportation networks?

Everson: The key issue is managing uncertainty and understanding the available options. Companies need to evaluate where their commodities come from, which facilities they use, and what alternatives might be available if their current arrangements become less attractive.

Those decisions can have a significant impact on transportation costs and operational performance.

LM: Assuming the Union Pacific-Norfolk Southern merger is approved and creates a single-line network, how might that affect shippers from both a domestic and a broader North American perspective?

Everson: Shippers need to pay close attention to what's happening because the merger could change their transportation options.  For example, shippers may currently be able to negotiate rates using Rule 11 arrangements across two rail carriers. In some circumstances, a merger could eliminate that option for certain movements. Through-lane alternatives that are typically more expensive could become unavailable under the same arrangements.

On the other hand, there could be benefits. Better customer service or improved transit times might justify the change, although it would take time for a combined network to realize those potential improvements.

Generally speaking, having more railroads rather than fewer gives shippers more options. Ultimately, it comes back to operational planning. Companies need to understand their options, know where their plants and sourcing locations are, and evaluate alternative routes and transportation arrangements. Depending on how well they plan, the resulting impact on procurement and transportation expenses could be substantial.

LM: IntelliTrans has visibility into a significant portion of North American rail freight. What is your data telling you about the resurgence in intermodal? Is the freight recession really over, or are there still mixed signals in the broader economy?

Everson: Intermodal is an option for virtually any company shipping freight by truck, but there are advantages and disadvantages.

One major benefit is that intermodal takes pressure off the truckload market by freeing up trucking capacity. That's something the market needs right now.

We've seen this cycle before. In 2001 and 2002, intermodal was very strong. Then shippers realized they could get comparable pricing on full truckload and shifted back to trucks. It's a pendulum that swings back and forth.

Right now, capacity is tight. The driver shortage is real, and commercial driver's license requirements are becoming more demanding. Instead of paying high rates for full truckload, shippers are asking whether intermodal might be a better option.

There was a recent Wall Street Journal article discussing an increase of around 5% in intermodal, and we're continuing to see that growth.

However, the broader rail network is not slowing down. As I mentioned earlier, overall rail volumes are up roughly 1% to 2%, depending on the measure. When intermodal traffic is added to that network, it can increase transit times.

Some shippers switching to intermodal will experience delays in getting their products to their destinations. Depending on their industry, customers, and delivery requirements, that may be acceptable. For others, it won't be.

I think intermodal will continue to grow in the foreseeable future, but this is my personal opinion rather than necessarily the position of everyone at IntelliTrans: I expect a relatively quick shift back toward full truckload once more drivers become available.

If shippers continue to experience longer transit times, they may reconsider their decisions. The additional intermodal traffic can also affect bulk rail customers. Even if those customers aren't particularly sensitive to transit time, longer cycle times mean they may need more fleet cars or additional non-fleet shipments.

Ultimately, adding intermodal traffic to the rail network can increase costs for shippers.

LM: Looking ahead a couple of quarters, what are you and IntelliTrans paying the closest attention to as we move through the remainder of this year and into next year?

Everson: The merger is always on our minds because it affects a number of our customers.

AI is another major focus. We're looking at how we can use the data we have to help customers streamline the operational planning we've discussed throughout this conversation.

Rail transportation involves many moving parts: equipment leases, maintenance schedules, cycle times, and various car events, including CP, AP, and release events. Understanding the timing between those events—and how it compares with previous periods—can help companies make better decisions about fleet sizing. We can use that information to determine how effectively a company is managing its fleet and what adjustments might be necessary.

If a shipper needs to source a commodity from another location, there may be alternative options. Even if the sourcing location stays the same, there could be another route worth considering. For example, are we seeing more traffic routed around Chicago when congestion develops? Are alternative routes becoming more attractive? What would those routes mean for mileage, cost, transit time, and fleet utilization? Bringing all that data together can produce valuable insights, provided companies know how to use it effectively.

LM: Many senior supply chain executives come from trucking backgrounds and may be less familiar with rail's operational complexities. How significant is that knowledge gap?

Everson: I speak with senior vice presidents of supply chain and chief operating officers quite often, and many have strong backgrounds in truckload transportation. Very few have similarly extensive experience in rail.

That means a lot of companies shipping by rail may be operating without a complete understanding of the data available to them. It's a concern because these factors are becoming more important than ever. Companies need to understand what's happening across their rail networks if they want to manage their supply chains effectively in the future.

LM: How do you see AI affecting rail operations, network fluidity, and the ability to keep freight moving efficiently?

Everson: Prescriptive insights are the big opportunity. AI agents can act as the worker bees that help generate those insights. Many people tell us they don't know what they don't know. That's true in supply chain management in many ways. If we can identify opportunities or risks that customers haven't even realized they should be looking for, we can create significant value. For example, we might identify an alternative routing option involving different rail carriers. Instead of using one established route, a shipper might be able to move freight through another combination of carriers. But the analysis needs to go beyond simply identifying a different route. We need to understand the mileage, estimated cost, potential changes in transit time, and the resulting impact on fleet cycle times.

Once you can master the data and give AI agents specific tasks to understand the long-term implications, you can start generating recommendations that help customers rethink their existing strategies. That's what we're working on at IntelliTrans, and it's incredibly exciting. I also think AI can help senior executives who don't have extensive rail experience develop a much better understanding of the mode. It can make rail's complexities easier to navigate and help them make more informed decisions.

LM: Could AI help close the knowledge gap in rail transportation while also improving operational decision-making?

Everson: Absolutely. The potential is significant. The key is getting involved, mastering the data, and using it to generate actionable insights.

September imports, at 2.63 million TEU (Twenty-Foot Equivalent Units), increasing 9.1% annually, following a 2.3% annual gain in August, with total third quarter imports up 2.5% annually, following a 5.6% first quarter increase. Through the first nine months of 2026, total imports are up 1.5% annually.

The firm explained that the gains partially came from the ongoing AI investment boom, paced by rising imports of electrical components, power equipment, and telecommunications equipment, with growth from consumer goods continuing to be the top driver, especially when compared to the third quarter 2025, which was replete with tariff-related uncertainty.

“Things were very much driven by the consumer side in September, as last year everything was up in the air due to tariffs, with front-loading in July and August, to a certain extent. And then the tariffs hit, leading to the drop in September 2025 (down 2.0%). In a way, you are not comparing ‘normal with normal.’ But actually, when you look at the seasonal consumer goods, things look like how you would expect for them for this time of year. Dare I say it, but we are actually back to normal.”

That normalcy cited by Rogers speaks to import patterns over the course of the year, coupled with that, in recent months, there have not been any new tariffs or incremental changes in global shipping conditions. This normalized seasonality, he added, suggests that importers of seasonal goods are not overly concerned about further tariffs related to Section 301 (manufacturing capacity) that he said “could come at any time.”

The firm cited the following metrics for September U.S.-bound import activity, for September and the third quarter:

• Raw materials increased 3.9% annually in Q3, after a 14.9% Q1 decline, following a normalization of metals tariffs, while adjustments still disrupt month-to-month flows;
• Capital goods fell 5.4% annually, after decreasing 13.9% in the second quarter, paced by gains in electrical components, and power generation and distribution equipment;
• IT products were up 17.6% annually in September and 4.0% in Q3;
• Consumer goods saw discretionary goods imports rise 20.4% in September and staples were up 6.5%, due to the result of a drag from tariffs

Regarding consumer goods, S&P Global Market Intelligence noted that September’s gains were helped with a return to the aforementioned normalized seasonal shipping patterns ahead of the peak U.S. holiday sales season. To that end, it explained that imports of consumer goods and electronics were up 8.0% in September over August, and topped the 10-year average of 6.2% growth, for the same period.

Geographically, the firm reported that imports from the Middle East were off 26.0% in the second quarter, reflecting the impact of an earlier pause in hostilities that has since ended. And shipments from China were up 17.0% in September, up for the first time since June, and above a 5.1% gain for the ASEAN region.

Rogers told LM that U.S.-bound containerized freight shipments are seeing gains that were not previously seen, from the ongoing AI data center buildouts, whereas it was “left behind in the early stages,” as a good amount of that cargo was moving via air freight.

“But now that there's more demand and more volume, we are seeing more of it moving by ocean as well, and you know that that's why we've this kind of turnaround now, with imports of electrical equipment, and power generating equipment, you know we're now seeing growth in those areas where we weren't before,” said Rogers. “How long will that last? It is certainly good for the next three years, when we look at the data center build out, but the thing that kicks that stool away is people not wanting data centers in their back yards so that could mark an early end to that. Looking ahead to 2027, that could continue to be a tailwind and could continue to help, as will normalization of conditions, presuming the White House does not come out with a wide range of new tariffs, which is, of course, a possibility.”

Looking ahead, the firm observed that, for the fourth quarter, U.S. containerized freight imports are pegged to rise 6.5% annually and slow down to a second quarter 2027 decline, with 2027 expected to be up 1.5% annually.

The joint study, The People Paradox in Supply Chain AI Integration, found that 91% of organizations plan to use AI to help human workers, while just 7% expect it to directly replace them.

Researchers collected 144 survey responses and used 107 for detailed analysis. Respondents included managers, directors, executives, and staff, with about 62% based in North America.

Please click here to read the complete article.

ATA reported that trucking tonnage increased 0.8% in September, following a 0.5% August decline, which came on the heels of a 1% July dip, in its advanced seasonally-adjusted For-Hire Truck Tonnage Index.

ATA said that its August advanced Seasonally-Adjusted (SA) For-Hire Truck Tonnage Index reading, at 114 (2015=100), topped August’s 113.1, and was flat annually, faring better than a 1.3% decrease in August. On a year-to-date basis through September, SA tonnage is up 0.9%, paced by robust year-over-year increases from February through April, it said.

The ATA’s not seasonally adjusted (SA) For-Hire Truck Tonnage Index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, came in at 114.8 in September, 1.4% trailing August’s 116.4. 

“Truck tonnage ended the quarter on a better note, but weakness in July and August pushed the third quarter reading into negative territory both sequentially and from a year earlier,” said ATA Chief Economist Bob Costello. “We are seeing soft tonnage levels, but capacity is still contracting, which is leading to a better market for motor carriers.”
 

This free publication is issued monthly by the AAR and provides insights from AAR economists regarding what rail traffic is saying about the current state of the economy, as well as where things may be headed. It also features a Freight Rail Index (FRI), which AAR said “tracks movement across the most economically sensitive rail traffic commodities,” including U.S. carload commodities (excluding coal and grain) and intermodal containers and trailers.

AAR Chief Economist Rand Ghayad told LM that that the RIO essentially provides a summary of the key findings from the roughly 45 reports AAR produces for various industry stakeholders, with some of those reports geared toward those in the freight rail industry, as well as policymakers and academics, with data and information coming from what he called a wide range of sources.

“Rail volume or rail traffic data in general is usually seen as a very important and solid indicator of what's happening in the economy,” he said. “So, if you want to know how the economy is going to be moving over the next couple of months, one way is actually to look at what's happening in the rail industry. The whole idea of RIO is to summarize the findings from everything we're putting out there and connect the dots with what's happening in the economy. If the industry is doing well, it means the economy is on the right track. If the industry is not doing well, it means there are some concerns about how the economy is proceeding. It's meant to be very easy to digest. It's not meant to be very technical. It's not meant to be only for rail folks. It's meant to be for everybody who's interested in knowing about the economy, and mostly about how rail drives the economy.”

Key takeaways from the September RIO were:

• U.S. railroads averaged 295,504 weekly intermodal containers and trailers, up 6.7% annually, coming up short compared to August’s 296,741, the highest tally on record, which marked its highest weekly average since June 2026;
• U.S. rail carloads averaged 231,732 per week in September, trailing August’s record-high of 235,109, which was its highest tally since October 2019, posting its ninth straight month of annual gains;
• U.S. intermodal volume through September, at 11,077,697 units are up 4.2% annually; and
• U.S. rail carloads, at 8,910,593, are up 2.7%, for the same period

The report observed that despite real challenges that could evolve into full-fledged crises, including inflation, high energy prices, rising interest rates, and global conflicts, the overall economy is performing much better than expected.

“Rail traffic continues to perform well too,” said the report. “August, September, and the third quarter set new intermodal records, and total carloads have grown year-over-year for nine straight months. Excluding coal, carloads are growing twice as fast as the overall economy. Importantly, carload growth is occurring across the industrial spectrum, not just in a handful of isolated sectors. The manufacturing expansion that took off at the start of the year appears increasingly durable. When coupled with resilient consumer demand, this bodes well for continued healthy rail volumes.”

As for intermodal, the report noted that September’s strong output helped make the third quarter the highest-volume quarter on record for U.S. intermodal, paced by record-high diesel prices, an exodus of truck drivers related to market and regulatory factors, and generally strong railroad service levels making intermodal an increasingly attractive option for shippers.  

For the week of October 19, the national average, at $6.276 per gallon, rose 9.7 cents, following a $0.02-cent decrease, to $6.179, for the week of October 12, 18.3-cent decline to $6.199, for the week of October 5, and a 14.4-cent decrease to $6.382, for the week of September 28. Which was preceded by a 24.4-cent sequential gain to $6.529, for the week of September 21, which topped the $6.285 reading, for the week of September 14, and was also above the $5.967 reading, for the week of September 7.

What’s more the national average has now eclipsed the $5 per gallon mark for 14 consecutive weeks, going back to the week of July 20, when it was at $5.134, with the national average having increase $1.045 over that period.

On an annual basis, the national average price per gallon is up $2.656, topping the week of October 12, at $2.514.

A recent New York Times article explained that a major driver for the gains is the Iran conflict “continuing to restrict the supply of energy worldwide, further squeezing businesses that rely on diesel to run their factories and equipment.”

When the U.S. national average came in at $5.820 per gallon on Thursday, September 10, it topped the $5.819 record set on June 17, 2022, following Russia’s invasion of Ukraine, according to GasBuddy, with the company saying that 2026 is on track to be the most expensive year for diesel in U.S. history.

Renewed fighting between the United States and Iran, along with Ukrainian attacks on Russian refineries, has disrupted global fuel supplies and pushed prices higher.

At the CSCMP EDGE conference in Nashville earlier this month, Dr. Zac Rogers, Associate Professor of Operations and Supply Chain Management at Colorado State University, described current diesel prices as a big and negative external shock.

“We really are operating in sort of an unprecedented environment, in terms of diesel fuel,” said Rogers. “I have one of my classes calculate what the difference is between what has been spent on diesel this year versus last year, and the difference is $54.4 billion in the last six months.”

Dean Croke, principal industry analyst, at DAT, said his firm is expecting fuel surcharges and retail diesel prices to remain high throughout next year, potentially leading to a point where it becomes too extreme—and the diesel prices further negatively impact small carriers.

“Every time diesel drops and then rises, it always goes up from a higher base, which has happened every time over the last four months,” said Croke. “I think the market has finally figured out that this is not about oil anymore. This is about infrastructure, and the Iranians have played a long strategic long game here and have been very strategic in targeting refinery capacity, which has been the real constraint.”

The average price per barrel of WTI crude is currently at $102.99, up from $95.32 a week ago.

In its forecast, NRF called for holiday retail sale to rise 4.2% annually, to $1.013 trillion, topping its 2025 forecast made a year ago, pointing to a 3.1% annual gain, to $972 billion.

The NRF forecast is based on an economic model which uses key economic indicators, like consumer spending, disposable consumer income, employment, wages, inflation, and previous monthly sales releases. It added that this calculation excludes automobile dealers, gasoline stations, and restaurants, in order to focus on core retail.

On an NRF-hosted media call, Matt Shay, NRF President and CEO, said that NRF continues to be very impressed with the resilience that consumers have demonstrated as they continue to spend and power our economy, with the expectation that this strength will carry into our November-December holiday period, despite various economic headwinds.

“Households continue to navigate persistent inflation and uneven confidence about the economy, but throughout the year, consumers have repeatedly shown that that holidays and spending on loved ones are priorities,” said Shay. “And that's actually been true for many years, particularly the end-of-year holiday season, and we're confident that pattern is going to continue through the 2026 winter holidays. This [forecast] reflects and points to another very strong holiday season supported by…the unsung heroes of the economy, the resilient consumers who continue to spend and drive economic activity.

From a personnel perspective, NRF said that it expects retailers to hire between 325,000-to-375,000 seasonal workers over the holiday season, which aligns with 2025’s 356,000 seasonal workers. NRF cited how retailers are taking a measured approach to seasonal hiring, given the concerns over things like inflation and high gas prices, among others.

This forecast comes on the heels of 12 consecutive months of retail sales growth, observed NRF Economist and Executive Director of Research Mark Mathews.

Addressing inflation, Mathews said that there is “no doubt” it is contributing to nominal sales growth, with core goods inflation, as measured by the PCE price index, expected to average 2.5% in 2026, compared to 1.6% in 2025.

“Higher diesel prices are increasing shipping costs, and surging memory prices are putting upward pressure on important gifting categories, particularly electronics,” he said. “Through the first eight months of the year, excess tax refunds have actually offset higher gas prices, but that effect has gone off. And as we head into the holiday period, if gas prices remain higher, we do expect that this will have a larger impact on households at the lower end of the spectrum. Despite inflationary pressure, we expect goods prices to run lower than headline inflation, as retailers respond to a price-conscious consumer. Our expectation is that of our holiday forecast of 4.2% growth, nearly half of this will result from real consumer spending growth.”

At a time when largely diesel-driven freight costs continue to drive up the price of moving freight, especially for over-the-road trucking, Mathews acknowledged that how retailers manage that situation, whether it be by implementing surcharges on customers, or by other measures, is a challenging subject.

To that end, he said that, historically, retailers have done their very best to make sure they deliver products at competitive prices. Which is especially true now going into the holiday season, at a time when consumers are very value-conscious right now and worried about affordability.

“I think it's really, really hard for any retailer to just to go out there and to have higher prices than anybody else,” said Mathews. “So, as we saw with tariffs, this is a space that survives on providing lower prices for consumers.”

While the 2026 holiday retail sales forecast is positive overall, which is encouraging, it also does not gloss over, or sugarcoat, the fact that there are a lot of warning signs out there. That does not dismiss the thesis that people will be spending for the holidays; they will be, no question. But, at the same time, that spending is coming with caution and a watchful eye.

The verdict is related to Lipe v. Lupus Superior, in which the carrier at issue was reportedly above the intervention threshold in two Safety Measurement System (SMS) BASIC categories criteria that would potentially place it among what the Federal Motor Carrier Safety Administration (FMCSA) deems to be “high-risk” motor carriers that are prioritized for investigation, stated the Transportation Intermediaries Association (TIA). And Baird analyst Daniel Moore wrote that this lawsuit arose from a fatal March 2021 truck accident in Mississippi, which alleged that C.H. Robinson negligently selected an unsafe motor carrier.

This follows a mid-May ruling by the United States Supreme Court, in Montgomery v. Caribe Transport II, LLC, which, in a unanimous ruling stated that the Federal Aviation Administration Authorization (FAAAA) does not preempt state-law negligent hiring claims against freight brokers when those claims fall within the Act’s safety exception.

In a statement provided to LM, Dorothy Capers, Chief Legal Officer at C.H. Robinson, said that the company strongly disagrees with the judgment in Lipe v. Lupus Superior and what it called the misinformation presented at trial, with the company remaining confident in its appeal.

“Nothing about our rejection of the judgment diminishes the profound loss suffered by the families in this case,” said Capers. “But C.H. Robinson did not cause or contribute to the accident, and accountability must be grounded in the facts and the law. The carrier had safely delivered nearly 270 loads for our customers and held a Satisfactory FMCSA safety rating both when we selected it and after a federal review of this accident. The carrier is an independent company, and the driver worked for them. C.H. Robinson does not employ drivers.  

Safety is core to how we operate and always has been. We go beyond federal requirements and apply multiple layers of safety and risk criteria that we continuously re-evaluate and strengthen. The extreme nature of this judgment underscores why a clear national standard for what constitutes a safe carrier is needed now. America's freight network should not be governed by safety standards determined after the fact, state by state and courtroom by courtroom. This legal landscape will continue to push small trucking companies out of the market, increase supply chain costs and drive up prices for everyday Americans. We urge Congress and federal regulators to create a national standard that enhances highway safety, creates consistent accountability and supports the uninterrupted flow of goods across the United States.”

Going back to the Supreme Court’s decision in mid-May, for Montgomery v. Caribe Transport II, LLC, there has been a large amount of attention by industry stakeholders placed on higher expectations for carrier vetting, with freight brokers expected to demonstrate reasonable care when selecting motor carriers. Another key takeaway has been that relying solely on FMCSA safety data is no longer considered sufficient and that brokers should use multiple sources of information.  

In a July statement, Chris Burroughs TIA President & CEO said that shippers, brokers, and the public rely on the Federal Motor Carrier Safety Administration (FMCSA) to ensure motor carrier compliance and safety.

“While the agency operates under significant resource constraints, it has made meaningful efforts to address complex safety challenges,” said Burroughs. “However, this incident dramatically highlights the urgent need for greater transparency and modernization in the system and a longstanding and well-documented issue in the motor carrier safety rating process. The carrier involved in this $600+ million verdict, Lupus Superior, has maintained a ‘Satisfactory’ safety rating since 2014—which was reaffirmed by the FMCSA in 2021 and most recently this past April. This suggested adequate safety management controls were in place, yet in this case, the jury was given access to data regarding this particular carrier’s prior incident and safety record that is not available to the public, including brokers.

Burroughs added that the safety of America’s roads is TIA’s utmost priority, while observing that the industry requires a clear, consistent framework for evaluating motor carrier safety, supported by the agency responsible for oversight.

“To that end, TIA has formally petitioned FMCSA to establish a clear motor carrier selection standard and to make the so-called ‘high-risk’ carrier list publicly available,” he said. “In addition, raising the standards for entry into the industry—for both motor carriers and brokers—must be addressed without delay. Meaningful reform is necessary to improve safety outcomes and restore confidence in the system.”

In a research note, Baird analyst Daniel Moore observed that the court’s judgement leaves the damages and the jury's fault allocation unchanged (driver 45%, Lupus Superior 32%, and CHRW 23%).

“The court found CH answerable for 68% of responsibility, 23% direct and 45% vicarious, above the 50% threshold for joint and several liabilities under Texas law,” wrote Moore. “That finding rests on the borrowed-employee finding and, independently, the mission/control finding. We continue to believe the borrowed-employee finding was unlikely to survive judicial scrutiny and that the award is likely to be materially reduced on appeal. It is, however, consistent with the risk we flagged that a newer civil judge is generally more deferential to the jury and less willing to rein in a nuclear figure.”

The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month, with the actual index number normalized each month to accommodate any new data sources without distortion, with a baseline of 100 equal to the number of loads moved in January 2015. It measures dry van, refrigerated (reefer), and flatbed trucks moved by truckload carriers.

The September Van TVI, at 252, fell 1% compared to August and was down 1% annually, said DAT. The Reefer TVI, at 178, was down 5% compared to August and down 10% annually. And the Flatbed TVI, at 298, rose 2% compared to August and was off 7% annually.

Spot rates saw September gains, with: the national average broker-to-carrier spot rate for dry van, at $3.01 per mile, up $0.12 sequentially and $0.96 annually; reefer, at $3.62 per mile, up $0.24 sequentially and up $1.18 annually; and flatbed, at $3.61 per mile, up $0.07 sequentially and up $1.11 annually. Reefer set a new record, besting the previous high of $3.60, which was set in January 2022.

DAT’s data highlighted the following takeaways for truckload volumes, and rates, for September:

• Reefer spot linehaul rose $0.09 sequentially, to $2.70 per mile, van dipped $0.02, to $2.17, and flatbed was off $0.10, to $2.60 (linehaul rates exclude an amount equal to an average fuel surcharge);
• Contract rates paid by shippers to brokers saw gains, with dry van, at $3.24 per mile, up $0.13 sequentially and $0.82 annually, reefer, at $3.58 per mile, up $0.16 over August and up $0.82 annually, and flatbed, at $4.04 per mile, up $0.12 over August and up $0.99 annually;
• Monthly average reefer and flatbed rates hit new record highs, with (excluding fuel) contract linehaul down $0.01, from August, to $2.40 per mile, reefer up $0.01 to $2.66 per mile, and flatbed down $0.05, to $3.03 per mile; and
• Fuel surcharges set new records for all three segments, with dry van, at $0.84 per mile, up $0.14 over August, reefer, at $0.92, up $0.15 over August, and flatbed, at $1.01 per mile, up $0.17 over August (the previous high was June 2022’s $0.75 for van, $0.82 for reefer, and $0.90 for flatbed)

Addressing fuel, DAT observed that a truck traveling 500 miles per day at 6 miles per gallon, averages around $524 a day, based on the average price of diesel per day, at $6.291 per gallon, compared to $310 per day in February, when the national diesel average was $3.722 per gallon, adding $214 per day or $1,070 over a five-day week.

In an interview with LM, DAT Principal Industry Analyst Dean Croke explained that it is clear that diesel is going to remain in short supply well into 2027, with both fuel surcharges and retail prices expected to remain high throughout the year, calling it an inevitable fact.

“I don’t know at one point we get to where this becomes too extreme and the diesel prices just start to crush the small carrier,” said Croke. “That is sort of my worst-case scenario. I think we are already seeing some carriers do that now. If you add in the impact of Montgomery, in terms of shrinking the available pool of carriers that can check all the boxes for a broker coupled and all the drivers exiting caused by regulations and diesel, coupled with record-high imports, with much of that sitting upstream in warehouses, it shows retailers have run down their inventories and have not replenished. I look at my crystal ball and it says there is absolute chaos when people start wanting to move freight quickly in a spot market with reduced capacity. All I see is rates going up for those that can survive.”

To that end, Croke said that this current situation is a headwind for not entering the trucking sector, even though rates are at record-high levels, in some cases up 40% annually. There is a path for carriers to get through it, he said, citing how some West Coast to East Coast produce loads are up by a factor of two, in some cases.

For the carriers that can come out of this, Croke noted that those can collect a meaningful amount of the fuel surcharge, they can earn more now than prior to the beginning of the Iran conflict, due to the fuel surcharge.

As rates have held steady for the past six months against fairly flat demand levels, Croke said that speaks to capacity exiting faster than loads were moving, with demand not showing any material signs of a true rebound, with the exception of freight moving related to AI data center buildouts.

“If I was a transactional shipper, I'd be horrified right now at my prospects of moving anything within budget, and I'm not sure they see it yet, because most of them are working on contract, and that's repricing up,” said Croke. “Our new contract rates are still repricing up fairly aggressively, and that'll continue into next year, I suspect. But I think any of the small shippers that are transactional, they’re in for a rude shock this quarter, particularly on the temp-control side.”

Total September retail sales, at $745.0, which are adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, eked out a 0.8% sequential increase and headed up 6.3% annually, reported Census, with September representing the 12^th consecutive month of retail sales gains.

It added that total retail sales from July through August posted a 5.5% gain compared to the same period a year ago. On a year-to-date basis, total retail sales, excluding gasoline stations, posted a 4.2% annual gain.

Non-store retail sales, which includes e-commerce, rose 8.0% annually on a year-to-date basis, and general merchandise sales rose 3.6%, for the same period.

Commerce’s data was in line with the new edition of the CNBC/NRF Retail Monitor, powered by Affinity Solutions, which was recently released. Data for this report is based on actual anonymized credit and debit card purchase data from Affinity Solutions and does not need to be revised on a monthly or annual basis.

The CNBC/NRF Retail Monitor found that total September retail sales, excluding automobiles and gasoline stations, came in at $560.8 billion, for a seasonally-adjusted 0.28% sequential increase and a 4.05% annual gain, topping respective 0.22% and 3.47% August gains.

And its calculation of core retail sales, which excluded restaurants, auto dealers, and gas stations, at $453.1 billion, was up 0.27% sequentially and 3.73% annually, besting August’s gains, at 0.17% and 3.47%, respectively.

“Retail sales rose again last month as consumers continued to spend following a solid back-to-school shopping season,” NRF President and CEO Matthew Shay said. “Households remain budget conscious, concentrating on everyday essentials even as higher gasoline prices continue to absorb a larger share of family budgets. Retailers continued to prioritize affordability, leaning on promotions and value pricing to keep everyday products within reach.”

The CNBC/NRF Retail Monitor observed that electronics and appliances sales, rose 8.41% annually, for the largest annual gain in September, with sales posting gains in all categories, save for furniture and home furnishings, which were off 2.7% annually.

Looking at individual retail sales segments, the CNBC/NRF Retail Monitor reported the following:

• Health and personal care stores were up 0.51% month over month seasonally adjusted and up 4.46% year over year unadjusted;
• General merchandise stores were up 0.08% month over month seasonally adjusted and up 2.47% year over year unadjusted;
• Clothing and accessories stores were up 0.48% month over month seasonally adjusted and up 2.21% year over year unadjusted;
• Grocery and beverage stores were up 0.09% month over month seasonally adjusted and up 1.90% year over year unadjusted;
• Furniture and home furnishings stores were down flat month over month seasonally adjusted and down 2.7% year over year unadjusted;
• Building and garden supply stores were up 0.07% month over month seasonally adjusted and up 2.66% year over year unadjusted; and
• Sporting goods, hobby, music and book stores were down 0.12% month over month seasonally adjusted and up 0.20% year over year unadjusted

NRF Vice President of Supply Chain and Customs Policy Jonathan Gold told LM in a previous interview that with retail sales showing relatively steady growth, it runs counter to softer consumer sentiment.

“Consumers continue to spend on retail goods,” he said. “Obviously, the tax refunds in March exceeded last year's refunds by over $20 billion spurring spending across discretionary and essential goods despite rising gas prices. Inflation remains elevated as tariffs and gas prices weigh on the cost of goods. Despite headwinds, consumers still are still out there spending.”

In comments provided to LM, Natalie Kotlyar, National Leader of BDO’s Retail & Consumer Products practice, explained that September's growth shows consumers are still spending, should not be read as broad strength.

“With inflation running above 3% and gas prices high, part of this gain is simply higher prices, and many shoppers are leaning on savings and promotions to stretch their budgets,” she noted. “Retailers should capture early holiday demand, but they shouldn't plan the season based on the headline number. Strong sales alongside paychecks that aren't keeping pace with prices can't last forever, so protecting margins and keeping inventory flexible will matter more than ever heading into November and December.”

Total September volume, at 997,177 TEU (Twenty-Foot Equivalent Units), increased 25.0% annually, topping the previous high set in October 2024, at 987,191 TEU, for the highest monthly tally in the port’s 115-years of operations.

POLB September imports, at 509,390 TEU, rose 31.3% annually, with exports, at 91,747 TEU, up 7.8% annually. Empty containers, at 396,040 TEU, posting a 22.1% annual gain. On a year-to-date basis, POLB said that total volume, at 7,675,255 TEU, rose 3.9% compared to the same period a year ago.

“Shippers continue to lean on the Port of Long Beach as a reliable partner in their business strategies, leading to our historic month for cargo,” Hacegaba said. “Every milestone brings us closer to achieving our long-term goal of doubling cargo volumes to 20 million TEUs annually by 2050 as we build the Port of the Future.”

Earlier this month, the neighboring Port of Los Angeles reported that total September volume, at 1,042,652 TEU (Twenty-Foot Equivalent Units), marked an 18.07% annual increase, representing the highest-volume month in the port’s 118 years of operation, topping the previous monthly record—of 1,019,837 TEU—set in July 2025 by more than 20,000 units, or roughly two more ships’ worth of cargo.  POLA also stated that total third quarter volume, at roughly 3 million TEU, marked the highest-volume quarter on record, for POLA, with the June through September period, at almost 4 million TEU, standing as the best four-month period on record at the port.

On a POLA-hosted media call, Gene Seroka, POLA Executive Director, explained that were various drivers for September’s volumes, as well as the months leading up to it.

“A few things came together all at once,” said Seroka. “Tariffs are lower than the levels we saw earlier this year and last, giving importers more certainty on costs and allowing them to replenish inventories at a quicker rate. The American economy continues to move forward, and consumers are still buying. Additionally, with continued challenges along the Suez and Panama Canal routes, more cargo is being allocated at origin for shipment here to Los Angeles, the fastest and most reliable route from Asia to markets across the United States.”