As reported by LM, in January, the STB issued what it called a unanimous and significant deregulatory and pro-competitive action, in a Notice of Proposed Rulemaking (NPRM).

That action, it explained, is in the form of a repeal of 49 CFR part 1144 that governs reciprocal switching, which the STB said governs the prescription of reciprocal switching through routes and through rates. STB officials explained that this NPRM would, “remove regulatory barriers that limit options for American businesses critical to our economy, including both shippers, such as manufacturers, utilities, and agricultural companies, and railroads seeking to innovate and compete,” adding that, “[i]n removing these regulations, the Board would employ reasoned case-by-case approaches.”

The STB added that while Congress granted it authority over competitive access more than 40 years ago under the Staggers Rail Act, the existing regulations—adopted in 1985—have effectively constrained that authority and have never been used to grant relief.

“The STB’s regulatory rollback supports President Trump’s push to bring manufacturing back home, strengthen our energy and agriculture sectors, and keep American made goods moving,” said Chris Jahn, ACC President and CEO. “America needs more rail competition, not more monopoly power. While the proposed UP–NS rail merger raises serious monopolistic concerns, the STB’s pro-competitive proposal moves the country in the right direction. ACC is ready to work with the Board to build a freight rail system that delivers for the U.S. economy.” 

In its filing with the STB, ACC noted the following:

• current rules are obsolete and no longer reflect today’s rail market;
• freight rail consolidation—from 31 major carriers to just six—has created significant monopoly-like conditions for many rail dependent industries; 
• removing these barriers will restore the STB’s ability to grant competitive access on a case-by-case basis using the authority that Congress granted the agency; and 
• the change is necessary to support U.S. manufacturing, agriculture, energy production, and supply chain resilience

Last July, a decision made by the United States Court of Appeals for the Second Circuit vacated the adoption of final reciprocal switching rules adopted by the STB in April 2024.

Reciprocal switching has long been a prevalent topic in industry circles. As previously reported by LM, STB’s previously proposed reciprocal switching legislation offered up in 2016 would allow a rail shipper to gain access to another railroad if the shipper makes certain showings. As has been defined by the STB, reciprocal switching is a situation in which a railroad that has physical access to a specific shipper facility switches rail traffic to the facility for another railroad that does not have physical access. And the second railroad compensates that railroad that has physical access in the form of a per car switching charge, with the shipper facility gaining access to an additional railroad.

When the final reciprocal switching rule was adopted, STB officials said that under this final rule, railroad shipper customers within a terminal area that have access to only one Class I rail carrier may petition the STB to order a reciprocal switching agreement when the customer’s rail service falls below specified levels. It added that Board-prescribed reciprocal switching agreements will allow shippers or receivers to gain access to an additional line haul carrier, while still allowing the incumbent carrier to compete for the customer’s traffic. It also stated that reciprocal switching orders by the Board will be for a minimum of three years and a maximum of five years, also noting that it considers the reciprocal switching rule to be a significant step in incentivizing Class I railroads to achieve and maintain higher service levels on an ongoing basis by permitting a competing line haul carrier to offer better service to win the customer’s business.

This rule was challenged in court by Class I railroad carriers, CSX and Union Pacific, and Canadian National subsidiaries Grand Trunk Corporation and Illinois Central Railroad Company on various grounds, including: exceeding the STB’s authority under the Staggers Rail Act of 1980, governing reciprocal switching; and overstepping the STB’s ancillary powers, calling them arbitrary and capricious.

“As presented to us, the rail carriers do not challenge the application of the Final Rule in any particular instance,” the judges said in the decision. “Indeed, as far as we are aware, the Board has not yet prescribed a reciprocal switching agreement under the procedures adopted in the Rule. The carriers instead seem to challenge the Final Rule more on its face, inviting us to conclude that the Board’s promulgation of the Rule itself exceeds the authority Congress conferred in the Staggers Rail Act to order reciprocal switching.”

And they added that this dispute stems from Class I railroad service-related “widespread concerns,” especially coming out of the pandemic, which led to an April 2022 STB hearing. Which then led to the STB requiring Class I railroad carriers to submit service recovery plans explaining the specific actions each carrier planned to take to improve its service, as well as the STB issuing a Notice of Proposed Rulemaking for comments on a new set of regulations focused on improving service by increasing competition.  

Last week, the U.S. Court of International Trade lifted a pause on the case, allowing the challenge to proceed.

The lawsuit was filed by Axle of Dearborn, an auto parts retailer that operates as Detroit Axle. The company argues that the executive branch lacks authority to suspend the long-standing de minimis exemption, which previously allowed imports valued at under $800 to enter the United States duty-free.

Detroit Axle says the change has significantly affected its business. The company relies on overseas manufacturers for many of the auto parts it sells and previously used the exemption to ship those products to U.S. customers at a lower cost. Without the exemption, the company says its imports are now subject to tariffs as high as 52.5%.

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None of those have gone away, but while the news cycle continues to churn out dramatic headlines, the underlying risk environment for carriers, brokers and their shipper partners, remains as fluid as ever. For freight leaders, the challenge is that the traditional signals around rates, capacity, and enforcement that once guided the market are becoming harder to interpret amid overlapping risks.

“I would say you don’t hear as much about it now,” said Kendra Phillips, VP of global transportation management at Ryder, told Supply Chain Management Review about cargo theft at the Manifest conference earlier this year. “The noise has quieted down, but it’s obviously still a very big concern in the industry.”

It’s just that there are so many risks today that no single issue is able to stay in the headlines for too long.

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In late February, Sen. Jim Banks (R- Ind.) introduced a bill to require anyone with a CDL to be recertified by a state within six months after the law is enacted.

The legislation would bar CDLs to individuals who are “not citizens or lawful permanent residents of the United States or holders of certain work visas.”

Banks was acting after President Donald Trump’s State of the Union address urged Congress to create the “Dalilah’s Law.” It’s named after Dalilah Copeland, a five-year-old girl who was involved in a 2024 tractor-trailer crash with a driver who was allegedly in the country illegally.

Banks’ proposal would require states to recertify individuals or otherwise lose federal funding for highways and bridges. The CDL licenses could be revoked if the current bill proceeds as is. Recertification would be needed to preserve federal funding.

“Many, if not most, illegal aliens do not speak English and cannot read even the most basic road signs to direction, speed, danger or location,” Trump said during his speech on Feb. 24.

The elimination of foreign-born drivers would substantially worsen the driver shortage. Although the trucking industry has had sub-par earnings the last three years, there are green shoots within the industry that would suggest a recovery is near.

The U.S. truck driver shortage is estimated between 80,000 to over 100,000 drivers. That’s driven by high turnover in the truckload sector, an aging workforce and increased freight demand. The American Trucking Associations (ATA) suggests the industry may need to hire 1.2 million new drivers over the next decade to keep pace. This legislation would exacerbate that shortage.

Jason Seidl, trucking analyst for T.D. Cowen, said recently in a note to investors, “Capacity has already seen sustained pressure prior to this incremental proposed legislation.” He added a recovery in industrial markets could result in a “significant shift towards a carrier's market” in the truckload market.

Foreign-born drivers have been instrumental in addressing labor gaps, accounting for nearly one in six U.S. truck drivers. However, recent policy changes — including the State Department’s pause on visa issuance for foreign-born commercial drivers and an executive order mandating changes to the government’s guidance on English language proficiency for truck drivers — threaten to worsen the shortage.

The U.S. trucking industry has long benefited from immigrant labor. Between 2000 and 2021, the number of foreign-born truckers more than doubled, rising from 316,000 to over 720,000 drivers. Today, about 18% of U.S. truck drivers are foreign-born.

But following an April 2025 crackdown on English proficiency standards, approximately 12,500 drivers were restricted from operating heavy trucks after failing an English test, according to the Federal Motor Carrier Safety Administration (FMCSA).

The Owner Operator Independent Driver Association (OOIDA) has led efforts to enforce existing English language proficiency requirements for those already driving. It has worked closely with the Commercial Vehicle Safety Alliance (CVSA) and the Trump administration to restore a lack of English language proficiency to an out-of-service violation. 

Banks’ bill goes even further. It would revoke “all trucking licenses currently issued to illegal aliens and aliens with temporary status, whether or not such persons have work authorization.”

In his State of the Union address, Trump claimed many “illegal aliens” lack English proficiency to understand road signs for safety. In his second term, Trump and his administration have repeatedly highlighted U.S. trucking crashes involving foreign drivers and have urged changes in the CDL process.

OOIDA expressed support for efforts that ensure only well-trained and qualified drivers take the wheel of a tractor-trailer.

“The president highlighted the tragic consequences of a preventable truck crash caused by an unqualified truck driver,” OOIDA President Todd Spencer said in a statement.

“For professional truckers, safety is not political. It is our daily responsibility,” Spencer added.

Among other safety concerns highlighted by the Trump administration would be one that would elevate English language proficiency violations an out-of-service (OOS) violation.

FMCSA recently issued a final rule to increase the documentation that states require when issuing and renewing non-domiciled CDLs. It is effective in mid-March.

With oil and gasoline prices seeing significant increases since the recently-launched joint strikes by the United States and Israel less than two weeks ago, in an initiative geared towards halting Iran’s development of nuclear weapons, the national diesel average, for the week of May 9, came in at $4.859 per gallon, marking a $1.277 annual gain and an $0.855 gain compared to the same week in 2024.

This represents the highest weekly diesel average since a $4.622 reading, going back to the week of January 30, 2023, and the largest weekly gain since a $0.745 March 7, 2022 weekly gain, after Russia invaded Ukraine.

Rising 8.8 cents, the national average, for the week of March 2, came in at $3.897 per gallon, following a 9.8-cent gain, to $3.809, for the week of February 23—which marked the previously highest weekly gain since a 9.4-cent increase, to $3.50, for the week of January 26, prior to this week. This was preceded by a 2.3-cent gain, to $3.711, for the week of February 16, and 0.007-cetn increase, to $3.688, for the week of February 9.

This gain followed three weeks of sharp gains, including: a 5.7-cent increase, to $3.861, for the week of February 2; a 9.4-cent increase, to $3.50, for the week of January 26, and a 7.1-cent increase, to $3.530 per gallon, for the week of January 19. The latter two weeks of gains represent the highest ones since a 20.4-cent increase, to $3.775 per gallon, for the week of June 23, 2025.

WTI crude is currently trading at $83.38 on the New York Mercantile Exchange, down from a high of $119.98 on March 9.

An Associated Press report cited a Tweet from Patrick De Haan, a petroleum analyst at GasBuddy, stating the following on March 9: “Can’t underscore what a massive jolt this is to the logistics, trucking, (agriculture) sectors.”

The report added that the effective closure of the Strait of Hormuz, the waterway that carries a fifth of the world’s crude oil and liquified natural gas, already has caused problems for the shipping industry, with quickly rising oil and gas prices expected to add to the burden. It also noted that fuel surcharges will also rise—as shipping companies aim to pass along higher costs to their customers, ultimately making goods more expensive.

Armada Corporate Intelligence Managing Director Keith Prather told LM the biggest concern, in the supply chain, at the moment, is the price of diesel.

“From a carrier perspective, like in trucking, historically, when you see prices rise like they did in 2008 and also in 2022, we started seeing a material loss of capacity in the trucking industry,” he said. “For a lot of smaller firms who just don't have the cash flow, they can't flip those invoices, and they are at a point where they literally cannot fill their trucks. I don't know how it's going to end, but, again, from a supply chain perspective, diesel is probably the biggest impact.

On the maritime side, I think, adding another 11-to-12 days of transit around the Cape of Good Hope is going to be kind of the norm for at least the short-term. From an economic perspective, 30 days of disruption seems to be that critical point. If we go up to and beyond 30 days, then we start having a material global impact on the economy. If we see kind of see conditions continue to be volatile inside Iran, and we then see the rest of the Strait of Hormuz and Red Sea and other areas, other Middle Eastern partners starting to free up the flow of goods and the movement of materials, then we probably, we probably see this whole situation calm down, and the economy kind of reverts back to, sort of fundamentally, where it was before the conflict started and off We've got some critical weeks ahead of us. I think everyone's going to really pay attention to.”

Recent disruptions across global shipping lanes are already adding pressure.

Data released by E2open shows the conflict has already begun to affect freight flows.

According to the company’s latest situation report:

• 4 in 9 logistics organizations have experienced air freight disruption
• 1 in 3 have experienced ocean freight disruption
• About 33,700 ocean shipments across roughly 200 vessels have been disrupted due to rerouted voyages and schedule changes
• Around 11,000 air shipments have been disrupted, representing a 4.3% disruption rate

While these disruptions are centered on global trade lanes, they still influence domestic transportation costs because fuel markets respond quickly to geopolitical risk.

Logistics Management (LM): How does the White House’s 10% Section 111 tariff, coupled with ongoing legal uncertainty related to trade and tariffs, impact, or shape, United States supply chains?

Kent Savage: There is a growing focus on the cost of managing that extended supply chain. There are some analogies between this current period to the immediate post-pandemic period. Recall that cost of a shipping container went up from the $2,000 as a proxy in China, to $25,000 in a month or two. For one of our customers, the goods that they were bringing were $17,000, to bring in a container at a time when the raw materials and the cost of shipping was double the cost of the material very quickly, and they did not have any way to plan for that. So, we see the focus coming back to managing the supply chain in a narrower profile and the cost of all the oversight that has to happen—quality issues, working capital tightening up and and now the tariffs on top of that—have been the straw that broke the camel's back. If there is some good news in the Supreme Court ruling, it appears that soon we'll at least have some clarity, because the uncertainty is also a huge factor in this. There's something else that's probably not quite as obvious about how the supply chain affects all this, which is predictability in manufacturing.

LM: How so?

Savage: The way that manufacturers are profitable, Velocity included, is to have rhythm and consistent flow. Things that are spiky or unpredictable—like having a factory locked and loaded to make these things, and now they're not available, or goods hit the port and the cost 30% more than we thought it was going to be— disrupt the rhythm and affect our ability to promise. The manufacturers have to move the promises that are made. Somebody at the other end of that manufacturing process is expecting these goods to be made and delivered on time, as expected, and all of this disrupts it. So, when I look at the current tariff, whether it is 10% or if it's 15%, it's worse than 0%, but it's way better than 135%.  Overall, I look at this as a very positive development, if it gives us clarity, and that's really the key. Does it stay this way, or is there something else? Is there some other path that the administration takes to make it different than what we think it is today?

LM: That lack of clarity is what made 2025 such a tough year, to say the least. Does tariff volatility accelerate, slows or complicate reshoring decisions? How do you view that in general?

Savage: We see it as an opportunity. Reshoring was already in play before the tariffs. This is just exacerbated. But the things that happened in 2025 are very real. I almost liken the decision-making process today as being like going through a PTSD shock, when we thought we had our ducks in a row, we know how to run our business, and the apple cart was upset, and now we put it back together, and now somebody dumps it out again, and I'm tired. I'm speaking in terms of the decision-makers.

And I think we're coming to a point where they're ready to pull the trigger on reshoring to prepare for that. We're just in the final stages of bringing up a new facility, which will double our capacity. It'll come online in August of this year, and the construction is well along. We're doing it in on a site where we have the ability to double it again. We think that that's going to be needed, and we will be the beneficiaries. We've been wrong before, but we think we've got a pretty good beat on this. A lot of the reshoring that may have been paused or not happened as quickly as somebody would have said this time in early 2025, before Liberation Day, it's still going to happen—and clarity on the tariffs is very much a needed factor for that to really accelerate.

LM: How do you view the real cost trade-offs companies assess when comparing domestic production versus offshore production?

Savage: That's evolved, in my opinion. Ten or 20 years ago, there was just a press to go to the lowest-cost country for manufacturing, and now there's really a total cost, landed cost, and the hidden piece was all the effort that the manufacturer had to put in to manage that supply chain to make sure that the quality was what it's supposed to be. The woods are full of stories where the quality is not [sufficient]. What we experienced them when we used to make tools in China was that the greatest deal is [adjusted]—so you spec it to be this, and it comes in and throwing tin cans in the steel or whatever. That takes a lot of time and money to managing all the shipping. Looking at it holistically, those factors all add in. The ability to be agile in the markets we serve—we rarely make a finished product—we're making a component or a sub-assembly or something that goes into another product. We have to have our component done right and ready for the whole manufacturing process to begin. And if there's one piece of that that's not there, that's a cost. So, all this volatility increases the cost if I delay. If I'm supposed to start making a product on March 1, and I have one little thing that's not there, one small sub component, and I have to delay that a week to March 8, that could cost tens or hundreds of thousands of dollars, depending on projects. When you talk about the ancillary costs, I don't even look at them as ancillary. They're really a part of this volatility.

LM: What are ways that manufacturers can counter that impact of the unpredictability on capital investment pricing strategies, and supplier networks?

Savage: One thing they can do is to partner with companies like Velocity. We have made the decision to lean into this onshore manufacturing, and when we work with our clients, we don't just say, ‘Well, how do we do what you did offshore here in the same way?’ We start from the position of what is the end product that you need or the end self-assembly, or whatever it might be that they make. How can we do it better and more efficiently? We're very strong in our Lean processes. All of those things that can create productivity and efficiency in manufacturing, we embrace. We often, because of our design for manufacturing capabilities, can show customers how if you change this or that, we can simplify the manufacturing process, and consolidate two parts into one or three parts into one, and mold it and make it in a different way, and take the labor out of the equation. We also apply automation, but selectively, because, again, we're not making a million of the same things in which you can have it all automated. We do use cobots and robots to the extent that it makes sense for these short runs.

LM: And for the whole concept of lead time disruption, component pricing, and planning for 2026, from the manufacturing perspective and the manufacturers that you work with, what are they telling you? What some of the big takeaways, if you will.

Savage: They're frustrated. I think they're battle weary. They've been fighting this challenge for long time now, even before last year. But, certainly through last year, they've been on the front lines of battle, and what they're telling us is they want it over. And we can help with some of that by giving them contracts that that are favorable, in terms of matching price increases to an index like PPI or CPI.

LM: What are some of the big hot button, manufacturing-based, supply chain issues, as you see them, in 2026?

Savage: When we look back at 2025, I believe it's very different than in looking forward to 2026. If you look forward to 2026, you see some massive impacts. Tariffs are still there, as are some other things. But beyond that, this massive shift towards AI, not about the use of AI but the data center builds and the mega-scalers or hyper-scalers that are sucking up so many resources and bandwidth. There's a clear pressure on chips and electronics memory. And yes, it starts with the high end Nvidia chips and others that are used for AI processing, but it goes all the way down to the lowest-level chips. Prices are moving upward very quickly. We've seen some components that we buy go up 26% since January. So, 2026 lead times are going out further and further. Energy costs are going to be accelerating quickly. There's this demand and there's huge investment going into how are these data centers going to be powered, nuclear and solar and generating onsite. That's affecting everybody who's not in the in the AI business or data center business as well, third in that chain is the cost of cloud computing. Anyone that's using a smart product in some way or fashion is going to see upward pressure on the cost of Amazon Web Services or Azure, partly because of AI, but partly because there's more demand than there is supply. And we're seeing those prices go up, and all of that rolls into the cost of making anything. That's a whole another set of challenges in this PTSD tariff era manufacturers are going to see in 2026.

LM: Let's fast forward to late July, when the Section 122, 10% tariff expires and has to go back to Congress. What happens then if, A: the tariffs stay intact, or B: they go away, in terms of the impact on manufacturing operations?

Savage: If they go away and they don't have the ability to pop back up again, that's, that's a good thing from the manufacturer standpoint. If refunds do happen, it may feel like the impact of tariffs gets unwound, leaving the question of, what does that mean for manufacturing—not in terms of the uncertainty we have already gone through, but the

Not the uncertainty that we've already gone through, but more so the financial pain. And every time we tried to stay on top of that, you can't get straight answers out of anybody. We have containers coming in from offshore, and we see what's that going to be when it lands this. We don't know, but we have contracts to make things at a fixed price.

The ports surveyed in the report include: Los Angeles/Long Beach; Oakland; Tacoma; Seattle; Houston; New York/New Jersey; Hampton Roads; Charleston, and Savannah; Miami; Jacksonville; and Fort Lauderdale, Fla.-based Port Everglades.

Authors of the report explained that cargo import numbers do not correlate directly with retail sales or employment because they count only the number of cargo containers brought into the country, not the value of the merchandise inside them, adding that the amount of merchandise imported provides a rough barometer of retailers’ expectations.

“The Supreme Court has struck down IEEPA tariffs but other tariffs have already been announced and others will be coming, so uncertainty continues for retailers,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “The need for clear and predictable trade policy remains, and long-term planning continues to be difficult for merchants and other businesses. While we agree with holding our trading partners accountable and looking for more domestic manufacturing opportunities, it needs to be understood that tariffs drive up costs for businesses and prices for consumers. They should be used in a strategic manner. In addition to tariffs, we are closely watching the situation in Iran and the potential impact it will have on retail supply chains.”

As previously reported by LM, the United States Supreme Court ruled against the administration’s use of tariffs under the International Emergency Economic Powers Act (IEEPA). In response, President Trump announced a temporary 150-day 10% tariff, using Section 11 of the Trade Act of 1974, with the possibility of raising it to 15%. The administration is also considering launching new trade investigations under Section 301 of the Trade Act of 1974.

Separately Ben Hackett, founder of Hackett Associates, said it is still too early to see any effect on U.S. container imports from the recent actions involving Iran.

For January, the most recent month for which data is available, U.S. imports, for the ports surveyed in the report (minus the Ports of New York/New Jersey and Miami, whom each had not yet reported their data at press time), came in at 2.08 million Twenty-Foot Equivalent Units (TEU, marking a 3.8% gain over December and down 6.4% year over year.

Port Tracker issued projections for February and the subsequent months, including:

• February, at 2.01 million TEU, down 1.3% annually;
• March, at 1.91 million TEU, down 11.2% annually;
• April, at 2.03 million TEU, down 8.1% annually;
• May, at 2.09 million TEU, 7%, which would mark the first annual gain since August 2025);
• June, at 2.1 million TEU, up 6.8% annually; and
• July, at 2.2 million TEU, down 8%

Should these estimates come to fruition, those numbers would bring the first half of 2026 to 12.21 million TEU, down 2.5% from 12.53 million TEU during the same period in 2025. The year-over-year increases in May and June are largely because of the sharp drop-off in imports during those months last year after “Liberation Day” tariffs were announced in April 2025. Imports during 2025 came in at 25.4 million TEU, down 0.3% from 25.5 million TEU in 2024.

“The Supreme Court’s ruling that President Donald Trump can’t use the International Emergency Economic Powers Act to impose tariffs has resulted in confusion for importers and trade partners alike,” wrote Hackett. “And a new across-the-board tariff of 10-15% imposed in lieu of the IEEPA tariffs raises questions about recent trade deals, with some trading partners including China and India benefiting since that rate lowers their effective tariff rate. With the new tariffs also likely to be challenged, there is uncertainty in supply chains as managers are faced with the decision of how best to source goods. What will occur beyond the 150-day limit on the Section 122 tariff is unclear. Legal arguments against the levy will ensure a difficult process, and the situation will not be helped by the politics of the 2026 mid-term elections.”

This free publication is issued monthly by the AAR and provides insights from AAR’s 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 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 towards those in the freight rail industry, as well as policy makers, 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 is 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 to know about the economy, and mostly about how rail drives the economy.”

The February FRI saw a 1.8% gain, from January to February, representing its third sequential increase in the last four months, following a 3.1% increase, from December to January.

February U.S. rail carloads, at 898,947, posting a 6.5% annual gain, paced by strong volumes for grain, coal, and other industrial products. RIO noted that year-to-date carload volumes, through February, at around 1.76 million carloads, for a 5.5% annual increase, are at its highest level, for this period, going back to 2023. And the weekly U.S. carload average, at 224,737, mark its highest level for February. AAR said that 14 of the 20 carload commodity groups it tracks saw annual gains, including: grain, coal, chemicals, and petroleum products.

“Broad-based gains across carload categories suggest industrial activity and goods demand movement are firming,” noted AAR. “That matters because many carload sectors tend to move closely with underlying real-economy activity, making rail volumes a clear-time signal of changing freight demand.”

AAR reported that total U.S. February intermodal volume, at 1,122,758, container and trailer units, increased 1.5% annually, and weekly average volume—at 280,687—marked the highest tally on record for February, as well as the first annual gain in six months.

On a year-to-date basis, total U.S. intermodal volume, at 2.19 million units, fell 1.0% annually, while still marking the second-highest reading for this period.

“The combination of modest year-over-year softness and still-elevated absolute volume suggests underlying goods demand has cooled but not collapsed,” wrote AAR.

Looking ahead, AAR explained that the coming months should provide a clearer test of whether the recent improvement in freight volumes and the scattered signs of macro stabilization can build into something more durable.

“Manufacturing appears to be regaining some footing, service-sector activity remains firm, and consumer spending has not yet broken,” it said. “If those conditions hold, the backdrop for rail shipping should improve further. The labor market remains the key swing factor. For now, however, the balance of recent data suggests the freight economy may be on somewhat firmer ground than seemed likely just a month ago.”

According to FTR, a TCI reading above zero represents an adequate trucking environment, with readings above 10 indicating that volumes, prices and margin are in a good range for carriers.

And it explained that the TCI tracks the changes representing five major conditions in the U.S. truck market. These conditions include: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Individual metrics are combined into a single index indicating the industry’s overall health. A positive score represents good, optimistic conditions. And a negative score represents bad, pessimistic conditions. Readings near zero are consistent with a neutral operating environment, and double-digit readings in either direction suggest significant operating changes are likely.

For January, the most recent month for which data is available, the TCI came in at 9.3, well above readings in previous months, including: December’s 4.85; November’s 2.14; October’s 0.89, and September’s 0.42 readings. January’s reading represented its highest level since February 2022.

The firm cited sharply stronger freight rates, volume, and utilization collectively resulting in what it called robust marketing conditions. And it added that the core outlook has gotten stronger for carriers, with the caveat that fuel costs will offset firmer freight dynamics, at least in the near-time.

“Surging diesel prices in the wake of military operations in the Middle East will temper overall financial conditions for trucking companies in the near term, though even that development arguably will tighten capacity further by forcing out many of the weakest players,” stated Avery Vise, FTR’s vice president of trucking. “However, much stronger freight rates and rising utilization probably will keep most operations afloat, and the longer-term recovery in trucking looks solid. Economic indicators point to an industrial sector recovery, which is key to trucking’s rebound as well. Carriers dependent on consumer spending, though, face more risks as rising gasoline prices add to consumers’ stress from stubborn inflation, a weakening job market, and tighter cash reserves.”

The monthly LMI is a joint project among researchers from Arizona State University, Colorado State University, University of Nevada, Reno, Florida Atlantic University, and Rutgers University, and also receives support by Council of Supply Management Professionals (CSCMP). CSCMP. The LMI is written by Zac Rogers Ph.D., Steven Carnovale Ph.D., Shen Yeniyurt Ph.D., Ron Lembke Ph.D., and Dale Rogers Ph.D.

The report’s authors explained that the LMI score, or reading, is based on eight “unique components” within the logistics sector, including: inventory levels and costs, warehousing capacity, utilization and prices and transportation capacity, utilization, and prices.

The February LMI reading, at 61.5, rose 1.9% over January’s 59.6, marking the fastest rate of expansion going back to February 2025, when it came in a 62.8. It also snapped an 11-month stretch of monthly LMI readings below the all-time average of 61.3.

Key sub-index readings in the February LMI included:

• Inventory Levels fell 0.1%, to 53.8, expanding, at a slower rate;
• Inventory Costs, at 67.8 (any reading over 70.0 is viewed as significantly expansionary), fell 3.5%, expanding at a slower rate;
• Warehousing Utilization 5.9%, to 60.3, expanding, at a faster rate;
• Warehousing Capacity, at 50.0, was flat;
• Warehousing Prices, at 62.6, fell 2.1%, expanding, at a slower rate;
• Transportation Prices headed up 5.2%, to 76.7, expanding, at a faster rate;
• Transportation Capacity was down 6.0%, to 41.0, contracting, at a slower rate; and
• Transportation Utilization, at 61.9, rose 3.8%, expanding, at a faster rate

The report’s authors explained that in February 2025, companies stocked up heavily on inventory (64.8) to get ahead of tariffs, adding that by February 2026, they shifted to a lean inventory strategy (53.8) to avoid tariff-related costs. This change slowed inventory cost growth (from 77.3 in 2025 to 67.8 in 2026. However, it also shifted pressure elsewhere in the supply chain: Warehousing prices grew faster in 2025 (77.0) due to larger inventories, though they still increased in 2026 (62.6); Transportation capacity became tighter in 2026 (41.0 vs. 55.1 in 2025); and Transportation prices rose significantly in 2026 (76.7 vs. 65.5 in 2025) because of higher inventory turnover and more frequent shipping.

“While this represents a dramatic shift in both supply chain strategies and asset utilization, the goals of both strategies have been the same—optimize cashflow,” the report noted. “Tariffs have led to significant uncertainty over the last year. The way supply chains have adapted to this uncertainty is nothing short of impressive. With the recent ruling by the U.S. Supreme Court, it seems likely this uncertainty will continue through 2026. It will be interesting to continue observing the effects of this on logistics activity.”

The lawsuit was filed in the U.S. Court of International Trade and argues that the president doesn't have the authority to impose sweeping global tariffs without congressional approval.

State attorneys general behind the case say the administration is attempting to work around the Supreme Court’s recent decision by using a different legal justification to impose the tariffs.

The dispute centers on a new tariff policy that would add a 10% tax on imported goods, with Trump saying he plans to raise the rate to 15% across the board.

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Rail carloads, at 238,131, rose 6.9% annually, topping the weeks ending February 21 and February 14, at 227,124, and 225,283, respectively.

AAR reported that eight of the 10 carload commodity groups it tracks saw annual gains, including: grain, up 4,210 carloads, to 25,210; coal, up 3,864 carloads, to 63,950; and chemicals, up 2,900 carloads, to 36,642. Commodity groups posting annual declines included forest products, down 427 carloads, to 7,905 and miscellaneous carloads, down 302 carloads, to 8,599.

Intermodal containers and trailers, at 278,598 units, rose 1.6% annually and were below the weeks ending February 21 and February 14, at 280,588, and 285,116, respectively.

Through the first eight weeks of 2025, AAR reported that total U.S. rail carload volume, at 1,762,504, increased 5.3% annually, and intermodal units, at 2,191,101, fell 1.0%, for the same period.  

ODFL reported that revenue per day fell 3.3% annually in February, driven by a 6.8% decrease on LTL tons per day that were partially offset by gains in LTL revenue per hundredweight. And it added that the decline in daily LTL tonnage was due to a 7.0% decrease in LTL shipments per day, which was partially offset by 0.2% increase in LTL weight per shipment.

On a quarter-to-date basis, ODFL said that LTL revenue per hundredweight and LTL revenue per hundredweight, excluding fuel surcharges, rose 3.5% and 4.1%, respectively, on an annual basis.  

“We are encouraged by trends that we have seen develop in our business,” said Marty Freeman, President and Chief Executive Officer of Old Dominion. “While our LTL tons per day declined on a year-over-year basis for the first two months of the quarter, we remain cautiously optimistic about the direction of the domestic economy. In addition, our best-in-class service continues to support our disciplined approach to yield management and the ongoing improvement in our LTL revenue per hundredweight. Due to our consistent execution of our strategic plan, we have the available capacity necessary to effectively manage incremental volume opportunities as the demand environment improves. As a result, we remain confident that we are in a unique position to generate profitable revenue growth and increase shareholder value over the long term.”

ODFL's calendar year 2025 revenue, at $1.3 billion, was down 5.7% annually, with LTL services revenue, at $1.295 billion, down 5.6% annually. 

This release comes at a time when LTL carriers continue to deal with things like low, or reduced, demand, tariff- and trade-driven uncertainty, inflation, the employment outlook, and a slowly recovering manufacturing environment.

An LTL industry stakeholder recently told LM that market trends are getting worse and carriers have freight recession malaise, and chinks in their pricing armor, with carriers trying to protect their turf, and with some carriers desperate for more freight to fill networks.

On a more positive note, the stakeholder added that pricing is still strong but not as strong as it has been in the past.

“Potential positive trends for 2026 include: durable goods inventories are low and need restocking and can serve as an LTL growth catalyst, as well as more domestic industrial capacity coming online—driven by pandemic—can help drive volumes more than import growth, maybe on the truckload side, too,” he noted.

Baird analyst Dan Moore wrote in a research note that following severe winter conditions in January, freight activity was materially disrupted, placing notable pressure on both tonnage trends and shipment volumes.

“Against that backdrop, the improvement observed in February is not particularly surprising, especially in light of the recent recovery in the ISM Manufacturing Index and the ISM New Order Index in January and February, which points to firming in underlying demand conditions,” he wrote.

The move comes as the Postal Service continues to struggle with falling mail volumes and rising costs across its nationwide delivery network. Officials say outside advisers will help evaluate financial options and long-term strategies for stabilizing the organization.

Postmaster General David P. Steiner said the agency’s financial situation remains serious.

“We are out of cash in 12 months if we don’t do anything different,” he said.

The Postal Service has been dealing with financial challenges for years. Traditional first-class mail, once the backbone of the organization’s business model, has steadily declined as more communication moves online. Over the past 15 years, billions of pieces of mail have disappeared from the system.

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That topic got, at least, some pathway to closure this week, with the United States Court of International Trade (CIT) stating in an order, Atmus Filtration Inc. v. United States, before Judge Richard K. Eaton, that importers whose United States-bound goods were charged IEEPA duties are entitled to benefit from the Supreme Court’s February ruling in overturning the legality of the IEEPA tariffs.

“Accordingly, it is hereby ordered that, with respect to any and all unliquidated entries that were entered subject to the IEEPA duties, U.S. Customs and Border Protection is hereby ordered to liquidate those entries without regard to the IEEPA duties,” wrote Judge Eaton. “Any liquidated entries for which that liquidation is not final shall be reliquidated without regard to IEEPA duties.”

In essence, this means that importers should receive refunds of those duties where applicable, according to the court.

While the CIT did not offer up specifics for how refunds will be addressed and handled, CIT Juge Eaton scheduled a closed conference for Friday, March 6, according to various reports, which stated that Judge Eaton has given the federal government’s counsel until them to prepare initial steps on how CBP can refund IEEPA tariffs to importers of record without requiring them to file a complaint with the CIT.

A New York Times report stated that the White House is expected to challenge the CIT order, coupled with indications that it intends to delay or contest repayment of the money, indicating that, “refunds could create a fiscal crisis for the United States.”

An estimate based on calculations made by the Penn Wharton Budget Model found that the total value of tariff refunds could come be $175 billion.

What’s more, soon after the Supreme Court’s ruling last month, Memphis-based global freight transportation and logistics services provider FedEx filed a lawsuit with the CIT for tariff refunds, which was subsequently followed by Costco and other companies.

Jonathan Todd, Partner and Vice-Chair, Transportation & Logistics, at Benesch, a Cleveland-based law firm, told LM that the CIT’s order is welcomed news.

“For importers who are looking to recover IEEPA duties paid, the order was very clear in that, Customs is to remove IEEPA duties and liquidate unliquidated entries or reliquidate liquidated entries with IEEPA duties,” said Todd. “And it's also clear the order applies on a nationwide basis for all importers—that's a very quick and very succinct position out of the CIT. The U.S. government has signaled that it will take every measure to slow or avoid refunds, and so many are expecting an appeal. The devil is in the details, as always, but in terms of every importer in the country who is watching this and looking for developments and positive news, this is certainly positive news in a very quick and succinct format.”

The fairly short period between the Supreme Court’s February ruling and yesterday’s CIT order should be viewed as a positive for stakeholders looking to recover duties, according to Todd. But he cautioned that much remains to be seen, especially as it related to a federal government appeal and what the actual refund process will look like—for which he said there is no clear answer.

And he pointed out that resolution before the CIT of any appeal that may occur is needed, but we also need a process of that is what will happen out of U.S. Customs.

“The big question on my mind and for lots of importers is whether litigation is absolutely required to recover,” said Todd. “And it's clear in this order that the opinion of this judge is that there's a stated interest in the 300,000 importers for goods into the United States, receiving recovery of duties paid under IPA without the necessity of filing a lawsuit. But that still remains to be seen. Filing a lawsuit is still the conservative approach, and some people have exercised that, and some people may continue to exercise that.

That's the big question. What is the process? What is the timing? What do people get back? I'm hearing it from clients that, as this plays out, there will be more scrutiny than was historically the case on the duties that were paid. So, if these duties were unlawful, there are still lawful duties that were paid. Are those appropriate and have importers been playing games with country of origin and dutiable value. The DOJ now has a trade fraud task force that is, you know, joint with HSI and CBP, and they're ready to chase down duty evasion. We're still kind of in the early innings of this game, and there's no clear answer, but yeah, for everyone watching it, this was, I think, welcome news.”

Pete Mento, Director, Global Trade Advisory Services, at Baker Tilly, said in a LinkedIn post that for importers, through the CIT’s order, it has ordered that all unliquidated entries be processed without the IEEPA tariffs.

“In practical terms, that means when Customs liquidates those entries, the IEEPA duty should simply be removed,” explained Mento. “So, for most of those entries, there isn’t really a dramatic “refund program.” The mechanics are much simpler than that. If the duty was only estimated at entry and not yet finalized, CBP will just liquidate the entry without the IEEPA amount. The illegal duty never becomes final, so nothing is owed. If the importer already paid the estimated duty, then when the entry liquidates without the IEEPA portion, ACE should automatically issue a refund of the overpayment through the normal liquidation process. No special claim form, no secret handshake. This is why the court started with unliquidated entries. They’re the easy ones. Liquidation fixes the problem. The real complexity — and where the real money sits — is with entries that already liquidated with IEEPA duties. That’s where protests, court orders, and whatever refund mechanism ultimately emerges will matter. So yes, the court cleared the runway for a lot of entries to be corrected automatically. But the bigger chapter of this story is still ahead.”

FTR reported that February preliminary orders, at 47,200 units, rose 47%, from January to February, and posted a 159% annual gain, marking the highest monthly tally since September 2022. What’s more, the firm said that February marks the third straight month that orders topped the 20% annual growth mark, while adding that February was well above the 10-year February average of 24,991 units. For the 12-month period through February, FTR said that Class 8 orders came in at 258,466 units.

“February’s very solid annual increase in net orders extended the firmer tone that has been building since late last year,” said Dan Moyer, senior analyst, commercial vehicles, at FTR. “While a portion of demand still reflects previously deferred replacement purchases reentering the market, the consistency and breadth of recent order activity suggest momentum is now being driven more meaningfully by improving freight fundamentals. Freight volumes and utilization are trending higher, and FTR’s rate forecasts have strengthened. Also, improved clarity around tariff-adjusted pricing and EPA 2027 NOx regulations is reducing policy-related hesitation and giving fleets greater confidence to advance capital plans. Order patterns increasingly suggest a structured replacement cycle and forward-looking fleet planning rather than short-term catch-up buying, underscoring healthier underlying demand.”

FTR added that the 2026 order season, which was from September 2025-February 2026, was up 4% annually, with the firm calling it “a notable improvement” compared to double-digit declines seen earlier in the cycle. And it explained that the steady narrowing of the annual deficit in recent months, coupled with strengthening freight conditions, suggests that the market is stabilizing and also transitioning into what it called the early stages of a cyclical recovery.

But it also cautioned that various risks, including durability of the freight recovery, still-high financing costs, the potential for tariff or regulatory shifts, and geopolitical risks such as the new conflict in the Middle East, remain intact—while stating that the sustained and increasingly freight-driven strength in orders reinforces the case that underlying demand is firming more decisively as 2026 progresses.

ACT data: ACT reported that preliminary Class 8 orders, at 46,200 units saw a 156% annual increase.   

“With onerous EPA’27 cost increases on the horizon, an aging fleet, and growing confidence that the winter run-up in freight rates will remain sticky, Class 8 order strength continued in February,” said Carter Vieth, Research Analyst at ACT Research. “February’s intake represents the eighth best order month in the 530 months ACT Research has been collecting data,” shared Carter Vieth, Research Analyst at ACT Research. “The higher EPA’27 cost estimates, coupled with an improved carrier profitability outlook, may partly explain February’s high-side surprise, as dealers and large fleets have even greater incentive to find the budget for equipment now rather than later. Arguably, the most important factor to the order turnaround has been the sustained run-up in spot rates that started in late November.”

Supply Chain 24/7: With the U.S. and Iran now in open conflict, how is that uncertainty already showing up in global supply chains?

Sarah Jinhui Wu: Uncertainty first shows up as supply chain variability. Variability is the “enemy” of a lean system. For instance, shipping lead times become less reliable as carriers slow steam, reroute, or even pause sailings; schedules become harder to trust. More buffer is needed to hedge risk, and firms shift from cost optimization to continuity. You may see more expedited moves, higher safety stocks on critical SKUs, and more multi-sourcing, especially for energy- and chemical-dependent inputs.

SC247: We’re seeing oil prices climb and energy markets wobble. How does conflict in the Middle East translate into higher costs for fuel and freight?

Wu: There are two compounding channels that lead to higher costs for fuel and freight. First, conflict around the Gulf threatens supply continuity and shipment schedules, creating an energy price shock that oil and gas markets price in as a reflection of scarcity and risk. The Strait of Hormuz is a major chokepoint—about 20 million barrels/day (roughly 20% of global petroleum liquids consumption) move through it, so even a partial disruption can change price expectations quickly. Second, freight gets pricier due to the logistics cost shock. Typically, carriers apply emergency/conflict surcharges, which quickly feed into shipper invoices. Rerouting adds distance and time, tying up vessels/aircraft longer, reducing effective capacity, and pushing rates up. 

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The February Services PMI, at 56.1(a reading above 50 represents expansion and below 50 indicates contraction), was up 2.3% over January, growing, at a faster rate, for the 20^th consecutive month—turning in its highest reading since July 2022’s 56.5. ISM added that the overall economy grew, at a faster rate, for the 69th consecutive month in February.

The February Services PMI reading is 4.1% above the 52.0 12-month average, with February marking the highest reading for that period and May 2025’s 50.2 marking the lowest.

ISM reported that 14 of the services sectors it tracks saw growth in February, including: Mining; Information; Real Estate, Rental & Leasing; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Wholesale Trade; Finance & Insurance; Utilities; Professional, Scientific & Technical Services; Construction; Management of Companies & Support Services; Public Administration; Health Care & Social Assistance; and Educational Services. Sectors seeing contraction included: Retail Trade; Arts, Entertainment & Recreation; and Transportation & Warehousing.

The report’s subindexes that factor into the PMI largely saw gains, including:

• Business Activity/Production, at 59.9, growing, at a faster rate, for the 20^th consecutive month, for its second-highest since hitting 62.7 in November 2022, trailing only the 60.5 May 2024 reading, with 13 sectors seeing gains;
• New Orders, at 58.6, rose 5.5%, growing, at a faster rate, for the ninth consecutive month (and expanding in 36 of the last 38, months), with 15 sectors reporting increases in new orders;
• Employment, at 51.8, was up 1.5%, growing, at a faster rate, for the third consecutive month, with seven sectors reporting employment growth; and
• Supplier Deliveries, at 53.9 2 (a reading above 50 indicates slower deliveries), off 0.3%, slowing, at a slower rate, for the 15^th consecutive month, with nine sectors reporting slower deliveries

Comments from ISM member panelists included in the report highlighted various trends in the services sector, with tariffs and business conditions again receiving a fair amount of attention.

“Residential homebuilding continues to lag due to affordability and interest rate issues,” said a Construction sector panelist. “While we saw improved sales last month due to further discounts, we struggled to achieve similar results in February. More material cost increases have rolled in for beginning of the second quarter, so margins continue to be reduced.”

And a Transportation & Warehousing sector panelist said that transportation/truck capacity has been extremely tight, causing rates to spike 30 percent to 40 percent.

“Some of this can be attributed to the weather; some can be attributed to the Federal Highway Administration’s push to make sure all drivers are proficient in English and others can be attributed to an increase in commerce,” the panelist said.

In an interview with LM, Steve Miller, Chair of the ISM Services Business Survey Committee, attributed February’s strong performance to continued strength in business activity, new orders, new export orders (up 12.2%, to 57.2), and moderation in prices paid.

The gain 11.3% gain in inventories also stood out, according to Mille, with the timing of the Asian Lunar New Year helping to drive that increase.

“We are also seeing some sustained change in trend in recent months for business activity and other readings, too,” he said. “Over the last six months, eight of the 10 indices in the report are on a positive trend, with the only two not on that trend are inventory sentiment and prices paid. There is still inflation but at least the reading is not in the high 70s or low 80s like it was during higher inflationary periods.”

Addressing the joint United States-Israel attack on Iran, in terms of how it could impact the services sector, Miller explained that the moderation seen for gasoline and oil prices is likely to stop, coupled with Transportation & Warehouses contracting in February.

Transportation includes airlines, and [the Iran conflict] is going to impact both the tourism, as well as restriction in trade routes and it going to affect that sector pretty significantly, both from a cost and from a cost of operations perspective overall,” he said. “For customers using ocean freight, those costs are going to go up. My guess is 30%-to-50% increase, at least short-term, on Container rates. Typically, now is a time where you see very cheap container rates. I think that that's going to be a problem, because they're going to have to hold containers longer, because a lot of the shipping is going to have longer routes, requiring more equipment and making those, those loads less available.”

Miller said he expects the first quarter Services PMI to end up around 55, pointing to likely slower supplier deliveries, lower new orders, while business activity is expected to remain elevated.

“It could end up between 54-to-56,” he said. “Further into the year, it will depend on how long the trade impact continues around the conflict. For the U.S. economy, it really depends on petroleum and what happens there. “It is such a core piece for what you pay to keep your buildings heated or cooled. Also, in terms of IT, information of one of our most significant sectors, and utilities is another, with the cost of operations for utilities expected to go up. Consumer costs could rise, leaving less money to spend on services. If it goes on for a while, we could be in contraction by the end of the second quarter. We just need to see how things play out.”

Supply Chain 24/7: One week after the Supreme Court ruling, what concrete changes are you seeing in sourcing, freight bookings, or trade activity?

Brian Cupp: We are still early. It will likely take many months and further court battles until we see any significant sourcing reversals or structural network changes. Most companies are holding existing supply chain configurations in place while they assess the broader trade policy direction. What we are seeing is a cautious posture. Teams are reviewing inventory positions and carrier commitments rather than making immediate shifts in booking patterns. The market is in observation mode more than execution mode at this stage.

Karl Fillhouer: No changes in activity yet.

John Lash: Not much, yet. So far, the data reveal essentially no change in freight bookings for trade with the US since the ruling (keep in mind that the Supreme Court ruling occurred right after the start of the Chinese New Year, so it will be a while before the data reflects a change in imports from China). Granted, it’s a small sample size when comparing booking volume for the days since the February 20 ruling to the prior period, but the change is statistically insignificant. I expect this will change as orders move through the supply chain, especially for standard items with shorter lead times. Companies have been granted a window of tariff relief, where goods imported from certain countries are now taxed at a lower rate. In the case of Brazil and China, we’re talking about a double-digit drop in duty rates. That’s a sizeable savings. Think of this as a windfall back-to-school sales tax holiday for businesses. The big difference is that we don’t know how long it will last, so act fast and get in your orders before the rules change.

Don Mabry: There’s some immediate margin relief for import-heavy supply chains, and a few are exploring refund opportunities. But it’s not a wholesale shift; most are holding off on major sourcing or freight changes until the policy dust settles, especially with the increased global uncertainty introduced by heightened hostilities in the Middle East.  

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Additionally, this year’s findings on projected spending over the next two to three years is rosier than the responses regarding 2025 and the current year. This year’s survey also shows respondents are after better software and a more automated means of generating and using performance metrics.

To better understand current market conditions, trends and best practices in manufacturing, warehousing and distribution operations, Peerless Research Group (PRG), in conjunction with Modern Materials Handling and sibling publication Logistics Management, recently completed its 2026 Industry Outlook study. The annual survey was further designed to track any changes that may have occurred during the last 12 months and to provide insight into longer-term spending.

After reviewing the study results, Norm Saenz, partner and managing director at consulting firm St. Onge Co., noted that slightly more respondents say they are holding off on investments, but that shift is not drastic, with higher budgets in the respondent pool. Saenz also sees a healthy level of current uptake for categories like autonomous mobile robot (AMR) fleets, other robotics, and increased interest in updating warehouse control system (WCS) software.

“Some spending indicators are down, but those spending are planning higher budgets,” says Saenz. “The study also shows increased plans around software and controls to help lower labor requirements and a bump up in several automation categories, including AMRs for picking operations. There also are hints of e-commerce volumes increasing in these findings, and a trend toward capturing data for key performance indicators and metrics with automation, with artificial intelligence likely to play a role in gaining value from the data.”

Mixed results on spend outlook

When asked about the impact of the present state of the economy, this year 16% said the economy was having little or no impact on materials handling plans, up from 13% in our 2025 survey.

Additionally, 18% said they are proceeding with investments, down slightly from 21% last year. The 2026 survey also found that 24% are holding off on investments, up 1% from last year, while 42% are taking a “wait-and-see” approach, down 1% from last year.

Of those proceeding on investments, 59% say they’re spending on technology information systems like warehouse management systems (WMS), 40% on lift trucks, 41% on automation technologies, 40% on storage, and 38% on conveyors and sortation.

When asked how 2025 spending compared to 2004, 16% said it increased, 60% said it stayed about the same, and 24% saw a decrease. Looking to 2026, this year, 28% of respondents say they expect company spending on solutions to increase (by an average of 27%), while more than half (61%) expect spending to stay the same, and 11% expect company spending to decrease.

The longer-term outlook is more bullish this year. For this survey, when asked how spending on materials handling equipment and systems will change over the next two to three years, 42% said it would increase (versus 35% last year); 46% said spending will remain steady; while 12% expect a decrease, (down by 2% versus last year).

Breaking down spend buckets

According to this year’s survey, 32% of companies will be investing in more materials handling equipment over the next 12 months, while 27% of anticipated spending will be information systems, a broad category that takes in software including WMS, labor management systems (LMS), as well as automated data capture (ADC) technologies.

The information system categories of high interest this year include data capture tech (29%), asset management systems (25%), WMS (21%) and WCS (19%). Interest in WCS grew by 8% versus the previous study; and LMS plans, at 15% this year, are 5% higher than last year.

On the materials handling equipment side, the categories companies are most interested in are racks and shelving (45%); lift truck and accessories (39%); and dock equipment (30%). Plans for dock equipment rose by 12% versus the previous study.

“With the continued increase in automation usage, there is a notable increase in multiple survey responses indicating more focus on warehouse control and execution software,” says Saenz. “This interest may tie into cases of new systems struggling to hit expected rates, causing some to re-evaluate controls software options.”

When asked which new systems or service represent a first deployment or change from the past, 37% named “systems equipment” such as automated storage and retrieval systems (AS/RS), conveyors, or bins/totes, up 3% versus last year. Additionally, 22% expect to tap third-party logistics (3PL) provider services, up from 15% last year.

The robots are here

In a sign of automation use marching along, uptake for industrial robots as well as AMRs and automatic guided vehicles (AGVs) was strong in this year’s survey, not only with current use levels, but those who will consider projects over the next 24 months.

This year, 16% of companies are using AMRs or AGVs, and 27% say they’ll be evaluating these options within the next one to two years. That current use level is up from last year, when 10% said they were using AMRs or AGVs.

On the industrial robot front this year (articulating arm or other types of industrial robots), 21% of companies are using industrial robots (up from 13% last year), with 24% of respondents planning to evaluate them over the next two years.

Looking at applications for robotics, respondents will be deploying them in significant percentages for multiple purposes. For AMRs and AGVs, top applications include storage (42%); pick-and-place tasks involving eaches (31%); bin picking (28%); and order fulfillment in a part-to-picker (27%) workflow, which typically involves an AMR that can retrieve goods in totes from shelving and transport them to a workstation.

“We are experiencing most of our distribution and manufacturing design projects including the evaluation of AMRs and AGVs, and other automation for piece/each, full case, and full pallet movements,” Saenz says. “Companies continue to push for automation to drive down labor requirements, while increasing throughput.”

Average spend shoots up

For respondents overall this year, average anticipated spending trended upward.

Over the next 12 months, companies plan to spend an average of $541,670 on materials handling equipment and information systems solutions, up from less than $402,000 last year. The median anticipated spend, however, stayed fairly level at just under $90,000.

Some companies said they have significant spending plans, with 12% planning to spend $2.5 million or more, and another 5% anticipating spending of $1 million to $2.49 million. While a quarter of respondents will spend under $25,000, a significant slice of the respondent pool is in the middle, with a combined 19% having indicated their companies will spend more than $250,000, but under $1 million.

Budgets trended up as well. The average budget this year came in at $546,739, up from under $368,000 the previous year.

To maintain automated materials handling systems, 59% of companies rely on internal staff, 20% outsource it, and 28% use a blend of internal staff and outsourcing. A 3% gain was reported in those outsourcing compared to last year.

“We’re seeing an increased concern with how to maintain complex automated systems and many relying on outside groups for maintaining these systems,” says Saenz.

Vendors and maintenance suppliers play different roles in helping end-user organizations with uptime and maintenance, with 46% of companies asking providers to perform maintenance, 41% using them for consulting, 30% working with them on equipment upkeep and upgrades, and 28% for analysis.

Warehousing and manufacturing priorities

When asked about industry challenges in this survey, some factors—such as workplace safety, cost containment, enabling growth and labor available—always rate as high priorities and this year was not different.

But there are always some shifts, especially when it comes to how respondents see a challenge changing in importance two years out versus its current level.

When it comes to issues rated very important today, the top concerns this year include safety (76%), company growth (66%), cost containment (60%), capital availability (58%) and labor availability (57%).

While most of the top challenges aren’t expected to change much two years out, some challenges ranking lower today see a sharper rise in importance in two years. For example, achieving/keeping an operational advantage, rated very important by 52% today, rises to 57% in two years.

Other two-year shifts: training rises from 50% today to 59% in two years; cycle time pressure goes from 40% currently to 55%; and ergonomics rises from 33% today to 44%. Disaster contingency planning also grows in importance two years out, reaching 44% from 38%.

Other trends of note

How e-commerce orders are fulfilled is another part of the survey. This year, the most frequently cited common method was to buy online, ship to customer from DC, with a 29% response; this was followed by buy online ship to customer from store, cited by 24%; and in third, the drop-ship scenario of buy online, ship to customer from vendor (22%). When asked for methods two years from now, 38% said e-commerce orders would ship from a DC (up 9%), ship from store declined to 18%, and ship to customer from vendor gained 2%.

The survey also explored key manufacturing trends and practices, as ranked today, and two years out. This year, the top three practices are continuous improvement (60%), lean manufacturing (49%) and labor productivity measurement and management (47%).

In two years, the percentage for continuous improvement falls to 50%; lean manufacturing, down a bit to 45%, while labor productivity management grows to 53% in two years. Lot and serial control practices also were rated as growing in importance, from 40% today to 42% in two years.

When it comes to current and future use of mobile technologies like bar coding, sensors or RFID, this year, a net of nearly half (49%) of respondents have plans for these technologies. More specifically, 64% use bar code labels, 58% use bar code scanners, and 52% use smart phones or tablets. Additionally, 39% use sensors, 36% utilize RFID readers; and 21% employ voice technology.

New and better software and automated data capture should help organizations automate the creation of key performance indicators (KPIs). When we asked about automated metrics generation, many respondents do this already and respondents want to do even more of this in the next couple of years.

For example, 51% tap automation today to monitor inventory levels, and in two years 66% want to do so. Likewise, order fulfillment cost KPIs are automatically generated today by 50%, but 59% want to automate it two years out.

Finally, this year’s survey found an uptick in respondents having plans to identify, analyze and deal with exposure to various categories of supply chain risk. Overall, 49% had supply chain risk plans, up from 40% last year. The top three risk categories this year are logistics risks (74%); supplier risks (58%); and data breaches (37%). 

2026 Respondent Demographics

Peerless Research Group’s (PRG) e-mail survey questionnaire was sent to readers of Modern Materials Handling and Logistics Management in December 2025, yielding 103 qualified respondents.

The respondents were from sites whose primary activity is manufacturing (35%), warehouse/distribution (28%), corporate headquarters (17%), and warehousing supporting manufacturing (13%). Average annual revenue size for respondents’ companies was $305.9 million—down from $345.9 million last year.

Qualified respondents—managers and personnel involved in the purchase decision process for materials handling solutions—hold influence over an average of 130,530 square feet of DC or facility space.

The concept—be it Control Tower, Command Center or Dispatcher in the Sky—has been around for decades. And, we can say that great leaps have been made in bringing the concept closer to the vision of a holistic system that enables the users to determine at anytime, anywhere what is transpiring across the supply chain and take remedial action—rather than fixing things after they’ve broken. 

Not all that long ago, supply chain management was essentially a back-room function—a necessary evil related to selling and delivering product. In many instances, it was—and in some cases still is—a paper-driven process that made real or near-real-time visibility and action difficult or impossible.

The net effects—all bad—increased lead times, amped up inventory and safety stock and frequently annoyed and disappointed customers, not to mention frustrating the supply chain practitioners in the enterprise.

Amazon was the driving force that amped up the use of supply chain as a competitive weapon. Generally speaking, they don’t sell anything (Kindle e-books excluded) that you can’t buy elsewhere. They’ve mastered the art of superior supply chain management that makes them the default vendor of choice in a great number of cases. The convenience factor, “free” shipping and smooth and easy returns have helped make them the 9-billion-pound gorilla.

There’s no mystery here, but prior to the internet there just wasn’t any reliable way to remedy the situation. The internet altered the potential for dramatic change virtually overnight, although the realization of that dramatic change has been painfully slow in coming to fruition.

Control tower evolution

The early efforts, starting in about the mid-1990s, envisioned a system of interconnectivity between and among trading partners that would enable everyone to see what was going on from beginning to end in the supply chain. 

The goal was to not only be able to manage supply chain performance, but to also enable corrective action to be taken as events were unfolding and problems were occurring (think port strike, weather disruptions, terrorist activity, changes in government policies, etc.).

In the early 1990s, i2 Technologies launched Global Logistics Manager (GLM) with the notion of a single platform for managing every element of the supply chain in complex, large-scale global networks.

GLM was a good start and had promise, but suffered from a terminal illness: it was pre-internet, so connectivity was difficult. The necessary connectivity between and among trading partners was complicated by getting everyone to play ball. This left gaps in the data, which created an environment of mistrust in reliability.

The advent of the internet radically changed the game by providing the ability of all players to connect. The challenge was developing a common trading platform. One example was the introduction by GTNexus of what was referred to as the “cloud-based multi-tenant platform,” which I have referred to as “Facebook for Logistics.” It allowed changes and updates to supply chain events to be posted and seen by all simultaneously.

One of the challenges is that no single software platform provides the "silver bullet" solution envisioned as the holy grail, being the comprehensive aggregation of all elements for any given supply chain.  More realistically, it still requires the stitching together of several different components to achieve true end-to-end event management and visibility.          

Many companies, including most large ones, have already implemented some form of transportation management system (TMS) to enable the efficient dispatching of loads to customers. But, most TMS technologies don’t provide for complete “cradle-to-grave” monitoring that allows companies to effectively see what’s going on across the entire supply chain, particularly in complex global networks. 

Of course, much of this depends on how far up and down the supply chain you want to go. For shipments like coal to power plants, it's very simple: out of the mine; onto the train; delivery to utility. For domestic shipments, it may be as simple as a truckload of product from shipper to consignee over a period of 24 hours or 48 hours, or even the same day. It may include order management, warehousing and pick-pack-ship steps as well.

When it comes to international trade, things get much more complex, with steps like multi-country consolidation and the involvement of local draymen, consolidators, customs brokers, NVOCCs, ocean carriers, domestic draymen, de-consolidators, intermodal service providers and so on. Tracking shipments across the globe can be a bit challenging in terms of getting timely and accurate information that is actionable.

During the pandemic we learned that supply chains were less resilient than hoped for, which led to a number of issues in terms of transportation costs, stock levels, replenishment and sales to customers.

Predictive analytics is a significant aid in dealing with issues as they arise. The technology is out there and is advancing, but is not widely spread across supply chains. The rise of AI capabilities will enhance the management of such complex supply chains and provide critical information more readily than ever before.

Complicating the growth, spread and move toward maturity is the sheer volume of data being generated by complex global supply chains. The digital universe is enormous (149 zettabytes—with one zettabyte equal to a trillion gigabytes) and doubling every couple of years, which makes deriving usable intelligence from such mountainous amounts of data quite challenging. AI/Gen-AI is posited to help remedy the situation, but it’s too soon to say just how transformational this will be.

If you consider that an international shipment from Shanghai to New York, for example, may have as many as 12 to 15 trading partners from cradle to grave, and then consider that a single container may have as many as 5,000 pairs of shoes with SKUs by size, color and style, you might have something approximating 1.8 to 2.0 million separate data elements. 

If you take that across the number of trading partners, you end up with 20 million to 30 million discrete elements for that single container. The largest importers have volumes in the range of 800,000 TEUs annually, which would then drive this number to 2.4 times 10 to the 13^th power, which is about 2.4 trillion. This presents challenges in managing information at a granular level without robust computing and analytical power.

Control Towers in the pandemic era

The world was shaken with the onset of the pandemic. No one was adequately prepared for the broad and deep disruption of lives and economies. Supply chains were shown to be quite brittle and unable to efficiently or successfully combat the rapid and extreme disruptions, regardless of how well companies thought they were doing.

There’s a robust set of learnings stemming from all of this—and a chance to design and prepare for the next large-scale event. Dwight Eisenhower, supreme allied commander responsible for the largest amphibious invasion in history on D-Day said: “Plans are worthless, but planning is everything. No battle plan survives contact with the enemy.” 

So, the planning must be done in anticipation of large-scale disruptions, bearing in mind that when launching into action in the face of a dilemma, those plans will most assuredly have to shift the meet the “battlefront conditions.”

The onset of the pandemic exposed just how ill-prepared virtually everyone was to deal with disruptions on this scale. While there is no simple answer, much was learned about how such events impact supply chain execution. Supply chains, in particular, were revealed to be fragile and ill-equipped to manage rapid, severe disruptions, despite companies’ perceived readiness. This unprecedented crisis highlighted significant vulnerabilities and forced a reevaluation of traditional supply chain management approaches.

The impacts of the pandemic on global supply chains have accelerated the evolution of supply chain control towers into a cornerstone of modern logistics and operational strategy. These advanced systems provide real-time visibility, predictive analytics, and enhanced collaboration, enabling organizations to navigate the post-pandemic landscape with greater agility and resilience.

One of the most significant advancements in control towers is the integration of real-time data and predictive analytics. By leveraging artificial intelligence (AI and Gen-AI) and machine learning, control towers can forecast demand, identify potential disruptions, and optimize supply chain operations.

This proactive approach allows companies to anticipate and mitigate risks before they escalate, ensuring continuity and minimizing the impact of unforeseen events. The ability to make informed decisions based on accurate, up-to-date information is crucial in an era where supply chain dynamics are constantly shifting.

Collaboration and connectivity have also become paramount in the post-pandemic era. Modern control towers facilitate seamless communication and data sharing among all stakeholders, including suppliers, manufacturers, and logistics providers. Cloud-based platforms and digital tools ensure that everyone involved in the supply chain has access to the same information, fostering a more coordinated and efficient workflow.

Of course, Blockchain was the purported cure-all for this, but has not dominated the landscape for a variety of reasons—not the least of which lack of mainstream adoption across a broad spectrum.

This enhanced connectivity not only improves operational efficiency but also strengthens relationships and trust among partners.

Resilience and risk management are also key priorities for supply chain control towers today. The pandemic underscored the importance of having robust contingency plans and diversified supply sources. Control towers focus on strategies, such as maintaining buffer stocks, developing alternative sourcing options, and implementing comprehensive risk management frameworks.

These measures help companies build resilience against disruptions, whether they stem from geopolitical tensions, natural disasters, or other unforeseen challenges. By prioritizing resilience, organizations can better withstand shocks and ensure the continuity of their operations.

In addition to operational efficiency and risk management, sustainability and regulatory compliance have gained prominence in the post-pandemic era. Control towers play a vital role in monitoring environmental impact, tracking compliance with regulations, and supporting initiatives aimed at reducing carbon footprints and waste.

As consumers and governments increasingly demand sustainable practices, control towers help companies align their operations with these expectations, enhancing their reputation and ensuring long-term viability.

The post-pandemic era has accelerated the adoption of advanced technologies in supply chain management, making control towers indispensable for modern businesses. By providing real-time visibility, fostering collaboration, enhancing resilience, and promoting sustainability, control towers, properly designed, built and run, can empower organizations to navigate the complexities of the global supply chain with confidence and agility.

As the world continues to recover and adapt, these advanced systems will remain critical in shaping the future of supply chain management.

In our next installment we’ll look at the role of technology going forward, along with the challenges in coping with and managing Big Data. Finally, we’ll posit what we think the future will look like and what the challenges will be in bringing better solutions to fruition.

By Brooks A. Bentz, Contributing Editor; Steve Ostendorf, Technology Fellow, Deloitte Consulting, LLP; Dr. Ronna Jackson, DBA, Manager-Supply Network Operations, Deloitte Consulting, LLP

While the precise size of the dedicated trucking market is difficult to quantify, it clearly includes many of the industry’s largest and most sophisticated carriers. And although some industry observers draw distinctions between “contract” and “dedicated” trucking, for the purposes of this report, both terms refer to essentially the same suite of higher-service, long-term transportation offerings.

The annual State of Logistics report, released last July, did not break out dedicated trucking revenue for 2024, the most recent year with full data. Instead, it estimated combined “private or dedicated” trucking revenue at $541 billion, up from $528 billion the year prior. Private carriage accounts for roughly 80% of that total—about $400 billion—suggesting dedicated trucking represents an estimated $100 billion to $150 billion market.

Werner Enterprises, the nation’s seventh-largest trucking company, with more than $3 billion in annual revenue in 2024, estimates that its dedicated business with dollar-store customers can account for as much as 5% of total revenue in any given year.

At A. Duie Pyle, the nation’s 16th-largest less-than-truckload (LTL) carrier, dedicated contract carriage is among its largest service offerings, representing roughly 18% of company revenue and ranking as its second-largest division. “Dedicated provides a stable foundation of recurring revenue, long-term partnerships, and steady asset utilization—all essential to sustaining profitability through freight market cycles,” says company chairman Peter Latta.

E-commerce has only intensified this demand. Nearly every major retailer now maintains agreements with one or more core carriers to guarantee freight volumes on specific city-to-city or ZIP-code-based routes, often in exchange for more favorable truckload or LTL pricing, executives say.

“It sounds great on paper, but it takes good planning,” says Geoff Muessig, chief marketing officer at Pitt Ohio, the nation’s 14th-largest LTL carrier. “When it works, it’s marvelous.”

Muessig adds that while roundtrip or triangulated routes are typically preferred in dedicated operations, there are cases where trucks return empty. “You can create a win-win where the carrier can serve other customers en route,” he says. “That creates the optimal solution, with fewer empty miles.”

To better understand why shippers are increasingly turning to contract and dedicated models—and how carriers are responding—it’s worth taking a closer look at the evolving dedicated trucking market.

First, a little history

Dedicated carriage traces its roots to the post-deregulation era of the 1980s, when “dedicating” a portion of a carrier’s trucking capacity to its best shippers made clear economic sense. Carriers gained guaranteed use of part of their fleets and improved capacity planning, while shippers received more reliable service—often in exchange for modest rate concessions.

These operations typically run on fixed schedules, with consistent pickup times and delivery locations, giving both carriers and drivers a more structured workweek. A dedicated driver, for example, might haul automotive parts from the same warehouse to the same factory each day.

There are several advantages to this model, starting with driver and equipment availability. Because dedicated routes operate on predictable schedules, drivers become familiar with the nuances of specific facilities, while shippers and consignees get to know the drivers, their habits, and their timing—helping ensure smoother operations with fewer surprises.

That consistency benefits drivers as well. Repeated interaction with the same shippers and receivers often leads to more efficient loading and unloading, fewer hassles, and better working relationships overall.

For carriers, those improvements matter. The trucking industry continues to struggle with annual driver turnover approaching 100%, and driver dissatisfaction—often tied to treatment at customer facilities—remains a key factor. For years, drivers have cited everything from long wait times to being denied basic amenities, such as restroom access, as reasons for leaving the job.

Dedicated routes can also offer improved work-life balance. Owner-operators and company drivers alike note that many dedicated assignments provide more frequent home time, an important consideration for drivers with families.

Compensation is another draw. Dedicated trucking typically offers steadier pay, since freight volumes and miles tend to be more consistent. In an industry that still largely compensates drivers by the mile rather than by the hour, that predictability carries real value.

Still, dedicated work is not without its drawbacks. Some drivers point to the lack of variety, noting that the job can begin to feel repetitive. For those who value the open road and new destinations, a dedicated route may eventually feel routine.

There can also be trade-offs in pay. While earnings are more stable, per-mile rates may be lower than in other driving roles, depending on the carrier and its compensation structure.

Shippers, too, face potential challenges. While most value the consistency and reliability of dedicated arrangements, those relationships often come with higher expectations around timeliness, professionalism, and performance. In some cases, carrier standards within dedicated operations may be stricter than shippers anticipate.

“With a healthy pipeline and renewed shipper interest in capacity assurance and reliability, we’re already seeing green shoots pointing to sustained growth in 2026 for dedicated,” says Frank Granieri, chief commercial officer at A. Duie Pyle. “Demand is strengthening as shippers seek reliable, asset-based capacity and operational control without the cost and complexity of running private fleets.”

Market allure

Some carrier executives describe dedicated contract carriage as a “mutual-value model,” blending trucking’s most reliable service with long-term operational stability.

Customers gain dedicated fleet control and guaranteed service reliability without the capital expense, administrative burden, or liability risks associated with owning assets, managing compliance, or coping with driver turnover. Carriers, in turn, benefit from contractual stability and deeper operational integration, which can drive continuous improvement over time.

“Our dedicated network supports a diversified client base—from grocery and refrigerated transport to steel and flatbed operations, to retail chains relying on unattended overnight delivery into Metro New York,” says Granieri. “That diversity not only spreads risk, but also fuels innovation across modes.”

Over the long term, dedicated carriage plays an essential role in many carriers’ service strategies. It can strengthen customer relationships, sustain a premium-service reputation, and position carriers to deliver more integrated, end-to-end supply chain solutions across their enterprises.

How to choose the right model

For shippers with significant freight volumes moving between fixed origin-and-destination pairs—and concerns about capacity tightening when the industrial economy returns to full stride—dedicated trucking may be an attractive option.

The decision typically hinges on volume, capacity requirements, frequency, service expectations, and economics. For some shippers, especially those seeking cost predictability, dedicated carriage can offer an economical alternative to fluctuating spot or contract markets.

Importantly, dedicated does not have to be an all-or-nothing proposition. Some shippers blend dedicated and common-carrier models to better meet e-commerce and broader supply chain demands, industry experts say.

“There’s opportunity for all parties to prosper,” says Muessig. “Because shippers don’t have access to every backhaul load available, that’s where carriers can benefit. We can mix and match more easily.”

Reduced damage and fewer time constraints at retail destinations are also commonly cited advantages of dedicated services, along with lower claims exposure. “Shippers with multiple palletized orders that are more vulnerable to damage in a typical LTL environment can benefit,” Muessig adds. “Dedicated minimizes the likelihood of damages.”

Some say no

Dedicated carriage, however, is not for everyone. Old Dominion Freight Line (ODFL), the market and profitability leader in the LTL sector, has chosen to stay out of the space.

“We don’t play in that space at all,” says Greg Plemmons, executive vice president and chief operating officer at ODFL, which posted an industry-leading 74.3 operating ratio in the third quarter and holds roughly a 12% market share in the $57 billion LTL market. “We’ve studied that market, and the returns just aren’t that exciting for us. We’re sticking to our knitting elsewhere.”

Still, Plemmons notes that ODFL believes it is well positioned to respond when the freight market turns more favorable for carriers. “It will turn,” he says. “And we need some clarity around certain issues to restore confidence among the shipping public.”

Back in the 1940s the New Haven Railroad produced a promotional film showing an aunt in Boston buying a bicycle and sending it to her nephew in New York. She took it to South Station, gave it to the agent, who then put it in the express car. Upon arrival at Grand Central, an agent picked it up and delivered it to the nephew’s apartment the next morning—no drones required.

While that sort of service was not unusual then, the level of expectations and execution has risen to a much higher level. For example, on the afternoon of Jan. 9, I ordered a Roku streaming device (USB) for $30.41. The delivery was confirmed between 4:00 p.m. and 8:00 a.m. the next morning. When I awoke, there it was. No urgency, just rapid fulfillment. This is becoming more the norm than the exception for a wide array of consumer products.

Expectations have risen to the point where same-day service or next-day service is pressuring vendors and carriers to ratchet up service to a level never seen before. All of this has a distinct impact on transportation.

In addition to the rise in demand for speed, last-mile delivery is continuing to be a major factor, which can be particularly challenging in and around urban areas in terms of congestion and in rural areas in terms of density. Advances in technology and the galloping pace of AI, Gen-AI and the rapid growth in robotics—along with more efficient routing and scheduling—are driving improved services. 

At the same time, a major improvement is being made in “pick-pack-ship” routines in fulfillment centers, which are now being sited much closer to the end users—driving up demand for short-haul trucking and parcel services.

If you look at the makeup of e-commerce shipments today, the shift is clear: far higher volumes of smaller, more frequent orders rather than large, bulk moves. That change is steadily pulling freight away from traditional truckload and toward parcel and LTL networks, while last-mile delivery continues to evolve toward autonomous vehicles, drones, and other nontraditional models as shippers, carriers, and technology providers all look for a competitive edge.

Together, these forces are reshaping not just how goods are delivered, but how freight networks are designed, managed, and priced. The downstream effects are now being felt across every mode of transportation and every link in the logistics chain.

Volume growth reshapes freight networks

Alison Conway, professor of civil engineering at City College of New York, recently said: “This new freight reality is exposing significant gaps in transportation planning and infrastructure design, driven in part by limited data visibility around facilities, vehicles, and labor. At the same time, urban street and curb designs are increasingly misaligned with modern delivery patterns, creating tension between freight efficiency, community impacts like congestion and noise, and access for workers and vulnerable road users.”

Taken together, these pressures point to continued shifts toward LTL and parcel freight. According to global data and business intelligence platform Statista, U.S. package volume totaled 22.4 billion shipments in 2024—roughly 61 million per day—and is expected to climb to 24 billion shipments, or about 65 million per day, in 2025.

At a more granular level, Capital One Research reinforces this trend, finding that the number of packages the average American received between 2017 and 2022 increased 73%, to roughly 66 packages per person annually. Between 2017 and 2024, total package volume increased 78% and is projected to reach 31.1 billion packages by 2028.

At the same time, tariffs are having a measurable impact on trade volumes and freight flows. China–U.S. air cargo volumes, for example, are down 60% since April, according to investment bankers Cassel Salpeter & Co. Given that a large share of consumer goods originate in the Asia-Pacific region, this decline is expected to ripple across supply chain networks. Studies examining the impact of tariffs indicate that approximately 96% of tariff costs are ultimately borne by buyers of goods and services—an effective cost increase of roughly 4.5%.

To gain shipper perspective, I spoke with Bill Hutchinson, a veteran supply chain executive and now an independent adviser. Hutchinson sees capacity across all modes continuing to tighten as the prolonged freight recession and rising underlying costs push weaker players out of the market. Even as fuel costs moderate, labor, insurance, and equipment expenses are moving many carriers in the wrong direction.

Hutchinson also believes most e-commerce shippers are broadening their routing guides to take advantage of the lane-specific strengths of both regional and national carriers. “There are some great solutions in the market to help smaller shippers do this without the high legacy cost of carrier onboarding from years past,” he says.

In addition, micro-fulfillment centers and store-based fulfillment models are giving shippers more flexibility in how they approach local delivery. Hutchinson notes that local sourcing can reduce freight costs and improve customer cycle times, but only when paired with disciplined inventory management practices.

Finally, network modeling and capacity planning are capabilities e-commerce shippers need immediately. Legacy peak-planning cycles are simply too slow to support modern inventory placement decisions. Getting this right, Hutchinson says, will ultimately separate winners from losers from a margin perspective.

Now, let’s take a look at the anticipated impact on the most closely linked modes—truck, parcel, air, and ocean—through the spyglasses of our panel of modal experts.

Parcel

According to parcel industry veteran Brian Sternberg, traditional delivery companies have historically handled the bulk of e-commerce shipments. “USPS for low-value, smaller items, followed by UPS and FedEx,” he says. “At one point, this accounted for roughly 90% of e-commerce deliveries in North America.”

That model shifted dramatically after the pandemic, as B2C and C2C activity surged and consumers began expecting rapid home delivery as the norm. The result has been an explosion in last-mile parcel volumes, with carriers across all modes attempting—often unevenly—to replicate what Sternberg calls the “Amazon experience.”

But parcel services are not created equal, nor are they available uniformly across geographies. Sternberg points to two persistent real-world challenges tied to global sourcing. The first is duty and tax exposure, which many U.S. consumers and even some shippers underestimate based on declared product value. The second is returns, which frequently must move back to the original sender—often across borders—driving up reverse logistics costs that are increasingly borne by customers.

As parcel complexity increases, Sternberg advises shippers to focus on a tighter set of operational fundamentals. These include a clear understanding of product composition and country of origin, accurate tariff classification and HTS code updates, and vendor compliance around shipment size, weight, and mode selection. He also stresses the importance of clearly defined Incoterms and regularly reviewed transportation contracts—managed internally or through trusted third-party expertise.

Inventory discipline is equally critical. Sternberg notes that shippers must pay closer attention to packaging optimization, dimensional weight calculations, and return policies, while also ensuring ERP, WMS, and TMS platforms are fully integrated with carrier networks. In today’s parcel environment, speed alone is no longer the differentiator—visibility, compliance, and cost control increasingly define performance.

Those same service expectations and cost pressures are also reshaping how trucking capacity—particularly in LTL and last-mile segments—is deployed.

Trucking

The most significant impact e-commerce has had on trucking has been concentrated in the LTL and small-package segments, largely due to the rise in smaller, more frequent orders. That shift has placed added pressure on last-mile delivery and reverse logistics operations, where both LTL and parcel carriers are managing higher touch counts and tighter service expectations than ever before.

While capacity constraints in this segment have not been as acute as in other parts of the trucking market, peak-season surges continue to pose challenges—particularly when it comes to securing sufficient labor.

At the same time, the growth of e-commerce has opened the door for new providers to enter the market, even as barriers to entry remain significantly higher than in the dry-van truckload sector. Despite the increase in e-commerce activity, overall LTL volumes have remained sluggish, with most carriers reporting declines late in 2025, ArcBest being a notable exception.

John Larkin, veteran industry analyst and strategic advisor at Clarendon Capital and senior partner at Venture 53, notes that e-commerce demand is more truckload- and last-mile-intensive than many shippers realize. “With housing-related demand depressed by high interest rates and industrial production flat to down for several years, incremental e-commerce demand has not been sufficient to absorb excess capacity across the industry,” he says.

As a result, trucking rates have hovered at—or near—non-compensatory levels for an extended period. Still, e-commerce has raised the service-level bar for carriers, as shippers and consumers alike increasingly expect same-day, next-day, or, at worst, two-day delivery performance.

Looking ahead, Larkin sees a potential inflection point forming. “The administration’s crackdown on non-domiciled CDL holders, non-English-speaking CDL holders, and non-compliant driver-training schools will likely rein in capacity,” he says, “just as lower interest rates begin to support housing demand and tariffs encourage increased investment in domestic manufacturing.”

If reduced capacity coincides with even modest demand growth, the market could begin to turn in 2026—creating conditions in which carriers regain pricing power and earn their cost of capital. “Given this setup,” Larkin adds, “shippers would be wise to lock in rates as early as possible in 2026, before pricing leverage shifts back to carriers.”

Air Cargo 

Is e-commerce driving a meaningful shift from ocean and ground transportation to air in pursuit of speed and reliability? The data suggest a strong case can be made. E-commerce currently accounts for roughly 20% of global air cargo volumes and is projected to grow by more than one-third by 2027.

At the same time, the nature of air cargo itself is changing. As we said earlier, shipments are skewing toward smaller, more frequent, parcel-sized freight, a trend that favors express carriers over traditional freight haulers.

This shift has helped fuel new market entrants, including Amazon and several large Chinese players that are building out their own air cargo capabilities. Amazon, for example, now operates a fleet of more than 100 cargo aircraft and approximately 250 daily flights, with plans to expand its fleet to 200 planes or more.

Growth is particularly pronounced in cross-border e-commerce. According to a recent report published in Air Cargo Week, the global cross-border e-commerce logistics market was valued at $97.85 billion in 2023 and is projected to grow at a compound annual rate of 25.4% between 2024 and 2030—far outpacing domestic e-commerce growth.

While speed remains a core driver, technology is increasingly central to air cargo performance, improving predictability, visibility, and route optimization. But near-term uncertainty remains. “Air cargo will live or die with the Supreme Court’s decision on the Trump tariffs,” says Chuck Clowdis, principal at air cargo consultancy Trans-Logistics. “The entire air cargo rate environment depends on getting back to serious business once the current turmoil moderates.”

From a market-structure perspective, capacity is tightening as consolidation accelerates. According to Joey Smith, director of aviation services at investment bank Cassel Salpeter, rising insurance costs and stricter regulatory requirements are pushing smaller carriers out of the market, leaving larger players with increasing scale advantages.

At the same time, Smith says technology is reshaping how shippers view air freight economics. Air cargo is shifting from a pure cost center to a strategic ROI lever, as shippers increasingly prioritize reliability and speed over price. Failed or delayed deliveries, he notes, often carry hidden costs in the form of customer churn and reshipping expenses.

“An interesting trend is shippers moving away from legacy national carriers toward more flexible, tech-first platforms,” Smith says. “These providers offer real-time visibility, automated quoting, and predictive analytics that help manage disruptions before they occur.”

Looking ahead, Smith expects artificial intelligence to play an expanding role in air cargo operations. “AI already supports routing, pricing, fraud prevention, customer support automation, and delivery-instruction compliance,” he says. “In 2026, its use will broaden into forecasting, real-time network balancing, and dynamic rate cards—optimizing speed, reliability, and cost at the parcel level, while also helping carriers and shippers navigate tariff-related complexity.”

While air cargo is being pulled forward by speed-sensitive demand, ocean shipping is grappling with a very different set of market dynamics.

Ocean

According to Phil Damas, managing director at Drewry and a long-time tracker of ocean carrier trends, carriers are continuing to add capacity even as demand softens. Drewry data show global container capacity increased 13% between January and October 2025, while demand declined 4% over the same period.

Early indicators suggest January 2026 will reflect a similar divergence. Excess capacity has pushed vessel utilization below 80%, firmly shifting the market in favor of shippers and sustaining downward pressure on rates. Spot rates from Shanghai to Los Angeles, for example, fell 44% year over year to roughly $2,900 per 40-foot container as of January 15, according to the Drewry World Container Index.

Service reliability, however, has shown notable improvement—albeit from a low base. Carriers such as Maersk and Hapag-Lloyd have raised on-time arrival performance into the 70% to 90% range, well above the 40% to 50% levels that have long characterized container shipping. For logistics teams still working to rebuild resilience after the pandemic-era disruptions, that improvement has been a welcome development.

“In our discussions with shippers, we see logistics teams placing greater emphasis on service reliability as part of the ocean bid process,” Damas says. “Our advice is to remain agile and plan for potential trade disruptions, even though the market overall is expected to remain soft in 2026.”

Drewry forecasts minimal growth in both imports from Asia and exports to Asia this year—roughly 1% year over year—following several quarters of declining trade volumes driven by tariffs, inventory drawdowns, and cautious consumer spending. The challenge for shippers has shifted accordingly. While 2024 was about managing volume growth, and 2025 was defined by sharp, policy-driven swings in demand, 2026 will require managing slow overall growth punctuated by intermittent peaks and valleys.

Looking ahead, tariff policy remains a major wildcard. A potential Supreme Court ruling against the IEEPA tariffs could trigger refund claims worth millions of dollars for importers, though those refunds would not flow through to consumers. The prevailing view is that new tariffs would likely follow quickly, setting the stage for another short-term surge in imports between policy shifts.

From a logistics perspective, shippers may once again face a narrow window of accelerated inbound volumes, the duration of which remains uncertain. Another key variable to watch is when—and to what extent—major ocean carriers resume regular transits through the Suez Canal, a move that would further influence capacity deployment and service reliability across global trade lanes.

Intermodal

While intermodal does not play as central a role in e-commerce logistics as parcel, trucking, or air cargo, it remains an important option for shippers looking to balance cost, flexibility, and service.

The ability to transload inbound freight from Asia-Pacific origins—moving cargo from ocean containers into domestic equipment—offers shippers the opportunity to lower transportation costs while also breaking down inventory and reallocating it “on the fly” once containers arrive.

“Based on my work, transloading accounts for about 60% of import TEUs moving inland from the U.S. Southwest by rail, compared with roughly 40% moving as intact IPI,” says Larry Gross, president of Gross Transportation Consulting and a long-time observer of intermodal trends. “That said, the transload share is down about five percentage points from where it stood during the post-pandemic surge.”

Gross notes that the share of inland port intermodal (IPI) moves increased as shippers sought flexibility during labor disruptions on the East and Gulf Coasts and security concerns tied to Red Sea shipping. “IPI was easier to reroute during the ILA and Houthi-related disruptions,” he says. “I expect the IPI share to decline gradually from here, but I don’t see any significant direct e-commerce impact on intermodal volumes.”

Taken together, intermodal’s role in e-commerce is best viewed as situational rather than transformative—valuable when flexibility and cost control align, but not a primary driver of network change.

As this analysis shows across every mode, few conclusions are definitive. What is clear, however, is that the pace of change in freight and logistics due to e-commerce growth continues to accelerate, forcing shippers and carriers alike to adapt in real time.

Albrecht described his role as “looking around corners”—tracking long-term technology megatrends and aligning them with business strategy. Today, he sees logistics at a critical inflection point. For years, he said, the industry has relied on computer-aided work, in which software digitized processes, but humans remained the logical engine. Transportation management systems and ERPs streamlined operations, yet still required people to define workflows and make decisions.

That model, Albrecht said, is now being disrupted by advances in general-purpose AI. As an example, he said that history offers clear parallels: the internal combustion engine reshaped cities and travel; and the electric motor transformed factory work. “When foundational technologies change, businesses must adapt,” he said. “AI represents that kind of shift, moving logistics from predefined workflows to agentic systems capable of deciding how work gets done.”

Earlier forms of AI supported this computer-aided model, continued Albrecht, adding that machine learning excelled at pattern recognition, enabling forecasting and dynamic pricing, but it did not alter the underlying workflow. Even the rise of large language models in 2022, while groundbreaking, produced largely reactive tools, as humans still provided the logic and sequencing.

Agentic AI changes that dynamic, according to Albrecht, because these systems can reason, determine next steps, and execute tasks independently—requiring a new kind of leadership.

Visionary leaders focus first on high-impact problems with clear return on investment—what he calls “not hobby AI.” They also recognize the importance of capturing the “why” behind decisions. “Traditional systems log actions, but they don’t record reasoning,” he said.

For AI agents to perform effectively, Albrecht noted that organizations must begin collecting and managing that reasoning data.

This evolution also reshapes organizational structures. As AI agents take over tactical tasks, Albrecht expects companies to move from pyramid-shaped organizations to diamond-shaped ones. In this model, fewer employees focus on execution, while more oversee AI agents, conduct higher-level reviews, and concentrate on strategy and value-added work.

According to Albrecht, C.H. Robinson is already seeing measurable results from this approach. One of the most immediate benefits has been simpler digital integration. Traditional EDI connections are complex, expensive, and difficult for smaller shippers to maintain.

“Agentic AI allows customers to interact through basic tools like e-mail while still receiving a fully digital experience,” said Albrecht. “E-mail-based quoting enables customers to request pricing in natural language, which AI converts into structured data and processes instantly—often helping customers avoid costly last-minute shipping premiums.”

Another major advantage is durability. Previous automation efforts frequently broke when document formats changed or edge cases emerged, requiring constant engineering support.

Agentic AI reasons from first principles, allowing it to interpret unfamiliar documents, extract relevant data, and complete workflows without manual intervention. This capability has increased automation rates from a traditional ceiling of 50% to 60% to more than 90%, enabling faster, around-the-clock processing in just-in-time supply chains.

When it comes to prioritizing AI investments amid competing customer demands and legacy systems, Albrecht emphasizes discipline. “You can’t scale chaos,” he noted, adding that C.H. Robinson first focused on strengthening its digital operating model—particularly the quote-to-cash process that powers the business. By stabilizing, standardizing, and scaling these core workflows, the company created a foundation for sustainable growth. AI investments followed a Lean mindset: stabilize, standardize, then scale.

For logistics organizations navigating similar challenges, Albrecht’s message is clear. Agentic AI is not simply another technology upgrade—it represents a fundamental shift in how work gets done. Companies that recognize and adapt to this new arc early will be best positioned to lead the industry forward.

Over the past decade, Logistics Management has charted how the steady rise of direct-to-consumer commerce has reshaped how freight moves across every mode. What once flowed in predictable, palletized waves through regional DCs now moves in smaller, faster, more fragmented bursts toward consumers who expect delivery measured in hours, not days.

As contributing editor Brooks Bentz notes in this month’s cover story, the result is a freight network under constant pressure to move faster, flex more, and absorb volatility that used to be seasonal—but now feels permanent.

“The most visible change by far is speed,” says Bentz. “Same-day and next-day delivery expectations have pushed shippers and carriers alike to redesign networks around proximity, not just cost.”

Indeed, fulfillment is moving closer to end customers, micro-fulfillment and store-based models are gaining traction, and short-haul trucking, parcel, and last-mile services are absorbing the downstream impact. “At the same time, ‘pick-pack-ship’ is no longer a back-end function—it’s a competitive weapon that directly shapes transportation demand,” adds Bentz.

But speed alone isn’t the whole story. The growth of e-commerce has also fragmented freight. Higher volumes of smaller, more frequent orders are steadily pulling volume away from traditional truckload toward parcel and LTL networks. As Bentz reports this month, that shift raises service expectations for carriers while compressing margins in markets already grappling with excess capacity, labor constraints, and rising operating costs.

“Layer on top of that tariffs, trade policy shifts, and uneven global demand, and what emerges is a freight environment defined less by stable planning cycles and more by continuous network recalibration,” says Bentz. “Legacy peak-planning models, built around predictable seasonal surges, are struggling to keep pace with inventory flows that now change lane by lane, week by week.”

The takeaway from Bentz’s reporting is clear: e-commerce is no longer just a sales channel—it’s the organizing force reshaping freight economics, service models, and network design across parcel, trucking, air, ocean, and intermodal. And the playing field keeps shifting.

Nowhere is that shift more visible than in the quiet rise of dedicated trucking. As John Schulz reports this month, shippers are increasingly turning to dedicated carriage not simply as a cost play, but as a hedge against uncertainty.

“In a freight market defined by volatile demand, uneven capacity, and rising service expectations, dedicated fleets offer something many logistics teams are prioritizing again—control,” says Schulz. “Control over capacity. Control over service levels. And, increasingly, control over customer experience.”

The logic is easy to follow. As e-commerce compresses delivery windows and pushes fulfillment closer to consumers, transportation can no longer be treated as a variable, transactional expense. It becomes an extension of the fulfillment operation itself.

“Dedicated routes, predictable schedules, and tighter carrier integration give shippers a way to stabilize the most fragile link in their networks—last-mile and regional distribution—without taking on the cost and complexity of running private fleets,” says Schulz.

As both Bentz and Schulz point out, the winners in this next phase of e-commerce logistics won’t be those chasing the cheapest rate in the spot market. They’ll be the ones building networks—and partnerships—designed to flex, absorb disruption, and still deliver when volatility hits.

The primary objective within the EO directs the creation of a Maritime Action Plan (MAP), which will provide a strategy with specific actions in order to restore and create sustained resiliency for the American maritime sector. This plan was part of a mandate issued by a White House EO issued in April 2025, entitled “Restoring America’s Maritime Dominance.”

“Up until now, government procurement processes and over-regulation have hindered private industry’s ability to build vessels on time and on budget—this Order reverses that trend,” the EO stated.

Key aspects of the White House’s Maritime Action Plan in a White House fact sheet include:

• instructing the Secretary of Defense to assess options, including the Defense Production Act Title III authorities, to invest in and expand the Maritime Industrial Base, which
• will help better utilize and leverage existing authorities to spur public and private investment in the Maritime Industrial Base;
• directing the United States Trade Representative (USTR) to make recommendations regarding China’s anticompetitive actions within the shipbuilding industry;
• directing the Secretary of Homeland Security to enforce collection of the Harbor Maintenance Fee and other charges on foreign cargo entering the United States to prevent circumvention via Canada or Mexico, putting an end to a longstanding unfair practice, ensuring all cargoes entering the United States are assessed the proper applicable fees and generating additional revenue for investment into the maritime industry;
• the U.S. government will work with its allies and partners to align trade policies to disrupt China’s non-market practices in the international supply chain and logistics sectors;
• establishing a Maritime Security Trust Fund to provide consistent funding for maritime programs in addition to a shipbuilding financial incentives program to boost private investment in U.S. shipbuilding;
• developing Maritime Prosperity Zones to incentivize investment in waterfront communities be modeled on President Trump’s Opportunity Zone concept;
• expanding Mariner training and education through an investment in the U.S. Merchant Marine Academy and a plan for expanding training opportunities;
• to ensure national economic security, the U.S. government will increase the fleet of commercial vessels trading internationally under U.S. flag as well as domestically between its ports;
• the MAP will develop a strategy to ensure security and leadership of arctic waterways to address the growing presence of foreign nations in the region and the need for the United States to reestablish itself in the area;
• the Administration will review ways to improve competition within the private sector for government projects and reduce costs to ensure taxpayer funds are being utilized most efficiently; and
• the Order directs the Secretary of Defense to conduct a review and issue guidance on the funding, retention, support, and mobilization of a robust inactive reserve fleet, to ensure the U.S. adequate assured access to sealift capacity whenever needed for military operations

The White House cited President Trump’s recent State of the Union address, in which he pledged to “resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding.”

“We used to make so many ships,” he said. “We don’t make them anymore very much, but we’re going to make them very fast, very soon. It will have a huge impact.”

The MAP also calls for a universal infrastructure or security fee on all foreign-build commercial vessels calling on U.S. ports, which would be assessed based on the tonnage of imported cargo arriving on a vessel, with $0.01 per kilogram of imported cargo able to bring in around $66 billion over a 10-year period and $0.25 per kilogram bringing in around $1.5 trillion for the same period—with revenues from this fee to be directed into a new Maritime Security Trust Fund to support shipbuilding capacity, fleet expansion, and maritime workforce development.

It also calls for a land port maintenance tax, focused on ensuring land border ports contribute more equitably to U.S. trade infrastructure costs. The fee would be comprised of a 0.125% of the value of merchandise entering the through land ports of entry, Mexico and Canada, with proceeds allocated towards a Land Port Maintenance Fund, for port planning, construction, maintenance and improvements.

John D. McCown, Non-Resident Senior Fellow at the Center for Maritime Strategy, the Navy League’s think tank, told LM that, in his assessment of the MAP, the U.S. has a “pretty amazing” shipbuilding industry in certain niches, which needs to be further leveraged.

“I think we ought to build on that,” he said. “The higher end you go, the more effective we are…and layer that on top of everything going on, whether it is molten sulfur, atomic plants, automation, or AI—things which the U.S. should be leading. I embrace all of that but where it [MAP] got a little confusing to me are the fees. There are certain aspects of this that are kind of a redo of what the USTR had proposed. But this is broader and does not really just affect China. If you are doing this to build the maritime base, you need to be clear in stating that.”

The MAP’s focus on expanding mariner training, including at the U.S. Merchant Marine Academy, was welcomed by McCown, whom called it a critical need.

To that end, he explained that a high priority should be placed on operating vessels that have spots for crew personnel and staff coming out of U.S. Merchant Marine academies.

The Washington, D.C.-based National Industrial Transportation League (NITL) said it supports the White House’s efforts to strengthen the reliability, resiliency, and security of the U.S. supply chain, with the caveat that it reviewing the Order’s provisions and its potential impact on American shippers.

“The goal of strengthening America’s maritime capabilities is one we share,” said Nancy O’Liddy, Executive Director of NITL. “At the same time, policymakers must carefully consider how new vessel fees, port charges, and regulatory changes could affect companies that depend on efficient, globally competitive transportation. Shippers ultimately bear these costs, which can ripple throughout the U.S. economy. We look forward to working with the Administration and Congress to ensure supply chain resilience without unintended cost burdens on businesses and consumers.”

To that end, NITL explained that the EO signals potential new fees on certain foreign-built or foreign-linked vessels calling at U.S. ports, stricter enforcement of the Harbor Maintenance Fee, and possible new charges on land-bridge cargo. These measures could increase ocean freight rates and overall transportation costs, noted NITL

And that organization, which is the nation’s oldest and largest shipper association, representing manufacturers, retailers, agriculture, and other cargo owners, observed that the policy also promotes expanded domestic shipbuilding, greater use of U.S.-flag vessels, and enhanced maritime workforce development.

“While these initiatives may strengthen long-term resilience and national security, required shifts to higher-cost U.S.-built or U.S.-flag vessels could increase transportation expenses in the near term,” said NITL. “NITL will continue engaging with federal agencies, Congress, and industry stakeholders to ensure shipper perspectives are represented as implementation moves forward.”

Rising 8.8 cents, the national average, for the week of March 2, came in at $3.897 per gallon, following a 9.8-cent gain, to $3.809, for the week of February 23—which marked the highest weekly gain since a 9.4-cent increase, to $3.50, for the week of January 26. This was preceded by a 2.3-cent gain, to $3.711, for the week of February 16, and 0.007-cetn increase, to $3.688, for the week of February 9.

This gain followed three weeks of sharp gains, including: a 5.7-cent increase, to $3.861, for the week of February 2; a 9.4-cent increase, to $3.50, for the week of January 26, and a 7.1-cent increase, to $3.530 per gallon, for the week of January 19. The latter two weeks of gains represent the highest ones since a 20.4-cent increase, to $3.775 per gallon, for the week of June 23, 2025.

Prior to the last nine weeks of gains, the national average fell 1.8 cents, to $3.459, for the week of January 12, following a 2.3-cent decline, to $3.477, for the week of January 5, a 4.4-cent decline, to $3.500, for the week of December 29, and a 6.3-cent decline, to $3.544, for the week of December 22.

And before that, the national average saw a 5.8-cent decline, to $3.607, for the week of December 15, a 9.3-cent decline, to $3.758, for the week of December 8 (the steepest decline since the week of December 9, 2024, when it fell 8.2 cents, to $3.458 per gallon), and a 3.7-cent decline, to $3.831, for the week of December 1, for a cumulative 40.9-cent decline over that eight-week span.

On an annual basis, the national average rose 8.8 cents, down from 11.2 cents last week. WTI crude is currently trading at $76.55 on the New York Mercantile Exchange, up from $63.95 last week this time. The gain is largely tied to the joint strikes launched by the United States and Israel on Iran over the weekend, in an initiative geared halting Iran’s development of nuclear weapons.

A Los Angeles Times report observed that oil prices saw sharp gains following the attack on Iran, adding that roughly 15 million barrels of crude oil per day — about 20% of the world’s oil—are shipped through the Strait of Hormuz, making it the world’s most critical oil choke point, according to Rystad Energy. Tankers traveling through the strait, which is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the United Arab Emirates and Iran, the report stated.

The report’s benchmark reading, the PMI, came in at 52.4 (a reading higher than 50 indicates growth), down 0.2% compared to January’s 52.6 reading, which marked a 4.7% gain over December, and represented the first positive PMI reading since a 50.0 reading in February 2025, with the overall economy growing, at a faster rate, for the 16^th consecutive month.

The February PMI was 3.1% above the 12-month average of 49.3, with January’s 52.6 and December’s 47.9 marking the respective high and lows for that period.

ISM reported that 12 manufacturing sectors—Printing & Related Support Activities; Textile Mills; Primary Metals; Nonmetallic Mineral Products; Chemical Products; Machinery; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Plastics & Rubber Products; Miscellaneous Manufacturing; and Computer & Electronic Products—saw growth in February. The five industries seeing contraction were: Apparel, Leather & Allied Products; Furniture & Related Products; Petroleum & Coal Products; Wood Products; and Food, Beverage & Tobacco Products.

ISM cited the following for the report’s key metrics in January:

• New Orders, at 55.8. fell 1.3%, to 55.8, growing, at a slower pace, for the second consecutive month, following January’s 57.1, its highest reading since a February 2022 59.7 reading (prior to January the metric had not seen consistent growth since a 24-month stretch of growth ended in May 2022), with 12 sectors reporting growth in February;
• Production, at 53.5, decreased 2.4% from January’s 55.9 reading, its highest reading since February 2022’s 58.1, growing, at a slower rate, for the fourth consecutive month, with nine sectors reporting growth;
• Employment, at 48.8, rose 0.7%, contracting, at a slower rate, for the 29^th consecutive month, down for 37 of the last 38 months, with seven sectors reporting growth;
• Supplier Deliveries, at 55.1 (a reading over 50 indicates slower deliveries), were up 0.7% compared to January, slowing, at a faster rate, for the third consecutive month, with 11 sectors reporting slower deliveries;
• Inventories, at 48.8, rose 1.2%, contracting, at a slower rate, for the 10^th consecutive month with nine sectors reporting gains;
• Customers’ Inventories, at 38.8, were down 0.1%, coming in too low, at a slower rate, for the 17th consecutive month; and
• Prices, at 70.5, were up 11.5%, increasing, at a faster rate, for the 17^th consecutive month, with 14 sectors reporting higher prices, hitting its highest reading since June 2022’s 78.5 reading

Tariffs and the economy were once again the main themes cited in ISM panelists’ comments.

“Today, American produced commodities like steel and aluminum are the highest priced in the world, by far,” said a Transportation Equipment panelist. “Hence, the Section 232 tariff policy is having the exact opposite effect of their intention on an American manufacturer like us: It is raising prices while lowering demand and profitability.”

A Computer & Electronic Products panelist observed that overall orders and supply footprint are improving.

“As we review customer demand, we are also taking several categories of established materials and supplies out to RFP for review and cost improvements — in particular, printed circuit assemblies, plastics, sheet metal assemblies and motorized assemblies,” the panelist said. “This will help ease the burden of tariff and customer impacts as we broaden our supplier base to a more regional footprint.”

In an interview with LM, Susan Spence, Chair of the ISM's Manufacturing Business Survey Committee, said it was good to see the PMI remain in growth mode, albeit by a slim margin.

“There were two positive comments in the report for each negative one, which is good,” she said. “For Employment, for every person hiring, there was 1.4 that are not, which is its best reading sine last summer. Most indications are good, with the Prices reading being a huge leap. That was anticipated but you need to look at what happened. Was it tariffs or customer orders, which had to happen [for the latter] because inventories go so low? We have two months of New Orders and Imports [up 4.9%, to 54.9] being up, so that could be the tariff impact finally.”

As for the Supreme Court’s recent decision ruling against the legality of President Trump’s implementation of IEEPA tariffs, which was subsequently replaced by 10% global Section 122 tariffs for a 150-day period, Spence noted that where things go from here require a watchful eye.

As an example, she said that current steep steel and aluminum tariffs, at 50%, are hurting manufacturers, coupled with various other commodities, up in price.

“Which industries will continue to get beat up for that? And if this is going to be even more emphasis on Section 232 tariffs that are focused a threat to national security, at one point are the international customers saying it is great to tell the administration it can't do whatever it wants— but it has another way of doing it, and it's just going to be more of the same chaos,” she said. “They going to continue to go find other places to buy our stuff from. Perhaps there is an increase in New Orders because there's just nowhere for these other manufacturers to go for now, but eventually, maybe they will. That's what I worry about. I like to think it pays to be paranoid sometimes and worry about that, and then for our purchasing managers who are facing the same increases, whether it's from a domestic producer or someone they have to import from that's been slapped with a tariff it is a question of how are we going to preserve our margin and keep the input prices?”

As for the United States and Israel launching a joint attack on Iran over the weekend, in terms of its impact on manufacturing, Spence said that it is too soon to say if the effort will be prolonged.

The big question for manufacturing related to this conflict, according to Spence, is the direction of oil prices, as well as other logistics-related impacts in and around the Red Sea and Strat of Hormuz, on top of global trade and tariffs and other economic issues, too.

“Is it going to be like the pandemic, where we got a couple years of just, real uncomfortableness? We don't know yet,” she said. “You need to look at political, economic, societal, technological, legal and environmental risk all the time and make sure it informs your sourcing strategy, because there are some things that you can only go to one place for, and then there's others where if you have only one source for something, or two sources, then you got to be able to wait out a conflict and not run out of stuff. You can carry two months of supplies on the shelf, because over time, you can't have your factories go quiet because you don't have the stuff. People think about that when these types of things happen.”

Looking at the state of manufacturing through the first two months of 2026, Spence said that conditions are strong overall, amid tariffs and the Middle East conflict.

“We are still strong and hopefully things calm down, as it relates to policies and the conflict, but those things come and go and are always going to be there unfortunately,” she said. “How resilient industries are has a lot to do with how much they have thought about what they will do when something bad happens. Overall sentiment from our panelists is good, which has not been the case since last spring.”

Those issues include things such as the likelihood of higher energy prices, restricted shipping lanes in and around the Middle East, as well as the most recent example in what could be viewed as an ongoing series of heightened global logistics challenges, or concerns, among others.

Bruce Chan, Managing Director, at investment firm Stifel, observed in a research note that perhaps the biggest takeaway of this development is that the conflict has caused a shuttering of the Straight of Hormuz “and a prolonging effect of reduced Suez Canal and Red Sea shipping traffic.”

Which, in turn, reduced recent signs that Red Sea shipping traffic, that, going back to late 2023, when an ongoing series of attacks on the Red Sea shipping lane by the Yemeni Houthi pirates in response to the ongoing Israel-Palestine conflict took hold, had started to show signs of a return to more normalized operations. Prior to the late 2023 attacks, the Red Sea/Suez Canal shipping route saw 10%-to-15% of global maritime trade moving through it, according to industry estimates.

In terms of ocean cargo operations, Chan explained that the conflict could curtail global fleet capacity and also keep ocean container rates elevated for longer, adding that in the aftermath of these strikes on Iran by the U.S. and Israel have seen container shipping lines suspend transit through the Strait of Hormuz—representing around 2% of the global ocean container fleet.

“Increased uncertainty from geopolitical conflict presents a broad risk to demand, especially if fuel prices increase substantially enough to affect consumer discretionary expenditures,” wrote Chan.

Daniel Moore, Baird & Co. analyst, noted that the ostensible closing of the Straight of Hormuz is viewed as “especially critical because around 20% of global petroleum liquids consumption and roughly one-third of globally traded seaborne crude oil, which is equivalent to 17 million-to-20 million barrels per day move through it, adding that 90% of Saudi Arabia’s oil exports flow through the Strait of Hormuz.

As for the nations most impacted by this conflict, Moore cited the following: India imports around 85% of its oil needs, approximately 60% of which comes from the Gulf; China sources around 40% of its oil needs via the Strait of Hormuz, which is especially significant given its reliance on Venezuela, which is now effectively controlled by the U.S; and it is reasonable to expect meaningful consequences for Japan, which imports 90% of its oil needs, approximately 60%-70% of which comes from the Gulf region.

“The most immediate consequence of these developments is higher energy prices,” wrote Moore. “However, the impact is unlikely to stop there. Disruption to maritime corridors will likely push container rates incrementally higher in some lanes as transit times lengthen and insurance premiums rise. At the same time, shippers seeking to mitigate delay risk may shift incremental volume to air cargo, increasing demand for lift capacity, which is likely to place upward pressure on airfreight rates across much of the region. We expect the direct economic impact on U.S. and European markets to be more limited.”

Commentary from Peter Sand, chief analyst, for global freight intelligence platform Xeneta, observed that repercussions of this conflict will see what he described as the further weaponization of trade and also shatter hopes of a largescale return of container shipping to the Red Sea this year.

“Carriers had been returning selected east-west ocean container services to transits via Suez Canal in recent months after sailing around Cape of Good Hope since late 2023 due to attacks by Iran-backed Houthi militia in the Red Sea region,” noted Sand. “If Houthi militia resume attacks, as now seems likely, carriers will reverse the decision to return services to the Red Sea and prioritize the safety of crew, ship and cargo. Any plans for a phased return of container shipping to the Red Sea in 2026 will be shelved until the security situation becomes clearer. Carriers are on red alert and we have seen signs of them pre-empting this security deterioration in the Middle East, notably with CMA CGM last month reversing a decision to return its FAL1, FAL3 and MEX to the Red Sea citing ‘the complex and uncertain international context.’”

And with a largescale return of container ships to Red Sea in 2026 now unlikely, Sand said that freight rates on major global trades will continue to soften, but will not fall as hard as previously expected in the second half of the year as more services returned to Suez Canal transits.

Chris Clowes, associate director at SCALA, a global supply chain and consultancy, said that from a supply chain perspective, the biggest risk of the escalation in the Middle East is wider instability that could affect both energy prices and the routes used to move everyday goods.

“Air freight is likely to feel the impact fastest,” said Clowes. “If airlines must avoid certain airspace, capacity falls and flight times increase, pushing up rates quickly, with time-critical goods such as medicines, semiconductors and high-value technology among the most exposed. When it comes to sea freight, which is typically used to transport everything from clothing to consumer electronics, the Suez Canal isn’t formally closed, but if security risks rise, more Asia to Europe services are likely to divert via the Cape of Good Hope. That can add around 10-to -15 days and increase fuel and insurance costs. Longer voyages also tie up ships and containers, which can tighten wider capacity and push up rates beyond the region. Then there is the matter of energy; even partial disruption or perceived risk around the Strait of Hormuz could trigger a rapid rise in oil and liquefied natural gas prices, feeding through into transport, manufacturing and packaging costs in turn.”

Entitled the Securing American Freight, Enforcement, and Reliability in (SAFER) Transport Act, the legislation’s key objectives focus on combatting freight fraud and theft, strengthening motor carrier oversight, modernizing registration systems, and enhancing enforcement of transportation and cabotage laws.

“Americans deserve safe and reliable supply chains and roads,” said Young. “The SAFER Transport Act takes important steps to strengthen our transportation infrastructure, combat crime that is hurting U.S. consumers and businesses, and ensure our roads are safe for all Americans.”

One of the legislation’s key priorities is to establish a freight fraud and theft advisory committee within 60 days, with the committee to be comprised of various industry stakeholders, including: motor carriers (including owner-operators); railroads, ports, and marine terminal operators; brokers and aviation operators; state and local law enforcement; state and local law enforcement; and shippers and insurers. The legislation stated that this committee must provide recommendations within two years, focused on reducing freight fraud and improving coordination between agencies.

Addressing modernizing and securing the registration system, the legislation aims to eliminate MC (motor classification) numbers over a five-year period through the Federal Motor Carrier Safety Administration (FMCSA), with all motor carriers, brokers, and freight forwarders being required to use a USDOT number as their sole identifier.

The legislation’s focus on issuing CDL (Commercial Driver’s Licenses) requires states to verify work authorization for non-citizens or non-permanent residents, align CDL expiration dates with work authorization expirations, and provide required verification to FMCSA. And states would be required to submit monthly reports to DOT in regards to CLPs and CDLs issued, foreign non-domiciled CDLs issued, and endorsements issued.

The legislation received strong endorsements from various industry organizations.

“Over 90% of trucking fleets operate 10 trucks or fewer, and each one embodies the American Dream,” said American Trucking Associations President & CEO Chris Spear. “Motor carriers spend years building their reputations, but ruthless and sophisticated criminals are actively exploiting loopholes in USDOT’s registration process to steal their identities, capitalize on their good names, and commit cargo theft,”  “Small businesses are not equipped to fight large-scale fraud on their own, which is why it is so critical to implement Senator Young’s commonsense reforms that modernize USDOT’s systems to weed out chameleon carriers and enhance oversight and penalties.  We are grateful for his willingness to listen to the voices of hardworking truckers.”

Truck Renting and Leasing Association (TRALA) President and CEO Jake Jacoby said his organization applauds Senator Young for this much needed legislation.

“The trucking industry has been deluged with fraud and theft, costing companies and, in turn, consumers, billions in losses annually,” said Jacoby. “This bill strengthens regulatory oversight and fraud detection, enhances oversight, improves law enforcement coordination, and increases penalties to help curb the abuse impacting our industry.”

The “Curve” was initially released by Coyote Logistics in 2018, with Coyote subsequently acquired by UPS in August 2015, and then sold to RXO in September 2024. The Curve is a proprietary forecasting model that helps shippers and carriers position themselves for success regardless of market conditions. And it measures three concurrent cycles-seasonal demand, annual procurement and more elusive market capacity–to help supply chain professionals identify recurring patterns that can lead to better informed supply chain and logistics decisions.  

The report’s primary observations included:

• spot rates rose 5.2% annually in the fourth quarter, topping the 1.8% annual gain seen in the third quarter;
• while freight volumes remain somewhat muted, continued attrition in carrier capacity, combined with some late peak season volatility and winter storms, is causing disruption; and
• while spot rates have been increasing, carriers still remain under immense cost pressure, and capacity continues to leave the market, creating what RXO called a fragile balance of supply and demand

In an interview with LM, Corey Klujsza, VP of Pricing and Procurement Strategy, at RXO, explained that one of the largest takeaways of the report is that its findings point to a divergence in the marketplace for rate volatility in what is still considered a soft demand environment.

“I think as shippers are going through this and forecasting and budgeting for next year, they most likely—depending on what industry you're in­—there isn't really a picture out there right now that says that demand is ready to take off,” he said. “And this is because demand is the catalyst to a change in rate volatility in the market.”

To that end, Klujsza explained that for it can be difficult for a shipper predicting, or forecasting, that 2026 volumes will be close to flat annually, whereas carrier partners are indicating that things, in fact, are quite different than compared to a year ago. Which leads to the question of how do the shipper and carrier work together to make sure things are moving in the right direction.

That is what Klujsza said is they key driver, especially when comparing this cycle to previous ones, like the pandemic, which saw the demand and shift for goods consumption as easily explainable on an annual basis, in terms of why this rate volatility is starting to look different.

“You can even go back to previous cycles for goods consumption changing, or the dynamics of good, goods consumption changing and kind of pinpoint that to say, ‘OK, I've got a catalyst here on why,’” he said. “And I think right now we're kind of still in the middle innings, and you could start to see some restocking. Inventory levels are a little bit lower, you know, they were for 2025. December was a little bit of different behavior for inventory levels. So, you could start to say, ‘is there some restocking that's driving some behavior and is there a little bit of change in consumer behavior?’ and also manufacturing orders a little bit. But I think that's the one kind of key piece here, where there's this disconnect around forecasted volumes and rate volatility overall, which again, gives us a good idea of what we're saying around some structural changes to the supply side.”  

Addressing the nearly three-fold sequential jump in spot rates, from 1.8% in the third quarter to 5.2% in the fourth quarter, Klujsza said that it helps to look at some of the collective behavior that happened in 2025, in the form of what he described as capacity-constrained events, given things like typical seasonality and demand surges and also supply shocks such as DOT’s Road Check Week.

Some supply, he said, is going to sit on the sidelines, adding that there were signs of outperformance against the last three years during some constrained events.

“The reality is that we just kind of shot back down to the baseline, and the market recovered very quickly,” he said. “For Peak Season demand, there was not some outperformance that was atypical to the last couple of years. Anytime there is an increase in demand, you get in a capacity-constrained event—and the last 30 days between Thanksgiving and the New Year are what I could consider as a capacity-constrained event. We outperformed quite a bit from a rate volatility standpoint…with a slight surge in demand enough to throw things out of balance. We started to see some different behavior in September, with annual rates starting to tick higher and then again saw outperformance in October and November. But December was the real catalyst for when spot rates kind of surged to get to a 5.2% annual gain.”

In its first quarter forecast, the “Curve” explained that volatility may moderate somewhat later in the quarter, amid a shifting market, adding that it is expected to remain in “inflationary territory,” with the first quarter ending up higher than the fourth quarter.

It also pointed to a continued increase in carrier exits driven by the enforcement of new government rules or an increase in freight demand driving the market higher into inflation [higher rates]—as well as some reasons for optimism such as recent industrial production data and also government stimulus actions.

Best New Innovation:

• AutoStore | AutoCase | B13108
• Dexory | DexoryView Storage Health Feature | B7624
• Locus Robotics | Locus Array | B10704, B11104

Best Robotics Innovation:

• Anyware Robotics Inc. | Pixmo: Automate Inbound Without Fixed Infrastructure | C11567
• NuMove Robotics & Vision | RAPTOR | C14198
• Slip Robotics | SlipLift | A2809, B11311, C12965

Best IT Innovation:

• EPG (Ehrhardt Partner Group) | EPG's LYDIA Voice Gamification | B11122
• Lucas Systems, Inc. | Best Pallet Matching from Lucas Systems | C12783
• ProGlove | MAI (Wearable Companion with AI Voice Assistant) | A1831

Best Sustainability Innovation:

• Flux Power | Flux Power Lithium-Ion Energy Solutions | B8108
• TLM INTERNATIONAL, INC. | iLIVING Washdown Solar Fan | B7827
• Westfalia Technologies, Inc. | Satellite® Technology with Triple-Rail System | B9304

The MHI Innovation Award educates and provides valuable insights on the latest manufacturing and supply chain products and services to Modex attendees. MODEX 2026 exhibitors were invited to submit a new product, product line, technology, or service that delivers quantifiable, sustainable results in terms of ROI, cost savings, customer satisfaction, etc.

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Rail carloads, at 227,124, increased 17.6% annually, topping the week ending February 14, at 225,283, and the week ending February 7, at 208,408.

AAR reported that nine of the 10 carload commodity groups it tracks saw annual gains, including: coal, up 10,972 carloads, to 58,828; grain, up 8,121 carloads, to 24,463; and nonmetallic minerals, up 5,365 carloads, to 28,181. The lone commodity group to see a decline was forest products, which was off 137 carloads, to 8,242.

Intermodal containers and trailers, at 280,588, increased 5.8% annually, trailing the week ending February 14, at 285,116, and topping the week ending February 7, at 278,446.

Through the first seven weeks of 2025, AAR reported that total U.S. rail carload volume, at 1,524,373, increased 5.3% annually, and intermodal units, at 1,912,503, fell 0.8%, for the same period.  

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POLA reported that January volume, at 812,000 TEU (Twenty-Foot Equivalent Units) fell 12% annually, following a 14.1% annual decline in December. Imports, at 421,594 TEU, were down 13% annually, and exports, at 104,297 TEU, decreased 8% annually. Empty containers, at 286,110 TEU, fell 12% annually.

“There are several factors at play,” said POLA Executive Director Gene Seroka. “First, we’re comparing January to 2025 elevated numbers when importers were scrambling to get cargo in ahead of tariffs. Second, inventories remain slightly higher, reflecting the earlier cargo surge and a more cautious restocking pace. Finally, U.S. trade policy continues to keep everyone on edge. However, the American consumer has shown remarkable resilience. And purchase orders that go out three months in advance to Asia look stable, a good sign.”

POLB data: The Port of Long Beach reported that January volume, at 847,765 TEU, was down 11% annually, while posting the highest volume of any U.S. port in January, as well as the second highest-volume month in POLB’s 115 years of operation.

January POLB imports, at 409,418 TEU, saw a 13.1% annual decline, and exports, at 99,478 TEU, eked out a 0.8% annual increase. Empty containers, at 338,470 TEU, were off 11.5% annually.

POLB CEO Dr. Noel Hacebaga said on a port-hosted media call that at this time last year, the goods movement industry was deeply concerned about the potential effects of tariffs, adding that no one knew for sure if or when new tariffs would hit.

“There was more than a fair share of doom and gloom scenario planning going around at that time,” he said. “This uncertainty led retailers and shippers to frontload an extraordinary amount of cargo in an effort to bring their shipments ahead of new tariffs. All that front loading at the beginning of the year catapulted us to a record year in 2025, when we moved 9.9 TEU. “Today, warehouse inventories continue to reflect last year's frontloading activity, and consumers are still buying goods, and we are expecting another strong year in 2026 with a projected 9.5 million TEU, which would make it one of our top five busiest years ever.”

The top POLB executive added that he anticipates continued uncertainty following the U.S. Supreme Court’s ruling last week, declaring two-thirds of tariffs imposed last year under the International Emergency Economic Powers Act, or IEEPA, unconstitutional.

“While this decision ruled on the legality of the IEEPA tariffs, it did little to remove the uncertainty we’ve seen—and continue to see—across the global supply chain,” Hacegaba said. “Our customers are seeking clarity on whether tariffs already paid will be refunded, and consumers are seeking relief from higher prices.”

Total January volume, at 1,469,047 units, was off 5.9% annually, following respective 0.1%, 4.1%, and 2.0% declines in December, November, and October, as well as respective 2.4% and 1.6% annual gains seen in September and August. Which were preceded by July’s 4.4% annual gain, which saw higher volumes due to the pulling-forward of goods being imported during the previous pause on the White House’s reciprocal tariffs.

Trailers, at 39,449, fell 7.2% annually, marking an improvement over December’s 14.6% annual decline. Domestic containers, at 702,659, were off 2.5% annually, and all domestic equipment, which is comprised of trailers and domestic containers, at 742,108, decreased 2.8%. ISO, or international containers, at 726,939, were off 8.9% annually.

For calendar year 2025, IANA previously reported that total volume, at 18,941,267 units, marked a 2.3% annual gain. Trailers were down 21.4%, to 464,790, and domestic containers, at 8,742,062, headed up 3.2% annually. All domestic equipment, at 9,206,852, rose 1.6%. ISO containers, at 9,284,415, were up 2.9%.  

In an interview with LM, Andrew Sibold, IANA Director of Economics, explained that 2025’s annual growth was due to consumer spending holding up, amid tariff-driven uncertainty throughout the year, in turn, making the data somewhat lumpy.

“The data pointed to overall positive growth, which, I think, was the larger economic story that is going on right now,” he said. “We actually have a strong economy that is somehow surviving all the hits and punches being thrown at it—and it is continuing to grow.”

Looking at 2025 domestic intermodal volumes, IANA cited various factors driving that, including improved railroad performance (in terms of the timeliness of trains), rising industrial activity, and persistent consumer demand.

When asked about the impact of rising industrial activity on intermodal performance, Sibold explained that is focused on manufacturing investment and housing starts. But he added that a pull-forward of supply around July caused manufacturing activity to largely trend down, while closer to the end of 2025, investment into and production of new homes, a key driver of industrial activity picked up.

“That is why we are feeling bullish, at least for next quarter, maybe two, in regards to industrial activity driving freight stability and maybe growth,” said Sibold.

As for the potential trajectory of 2026 intermodal volumes, Sibold estimated that total volumes could be up around 1.25% annually.

At the outset of the year, he said the biggest wildcard was tariffs, with a fair amount recently being overturned by the United States Supreme Court, but subsequently re-implemented through a different method by the White House.

“I do think freight will continue to grow, just due to the pickup in industrial activity, but that is somewhat fragile and subject to various headwinds and tailwinds, too,” said Sibold.

As for the possibility of intermodal gaining market share from trucking, as trucking is seeing some attrition in capacity related to federal government actions regarding non-domiciled CDL holders, Sibold said that there is an opportunity for some share shift in 2026.

The reason for that, he said, is that trucking continues to face headwinds, with rates still low, as well as the U.S.-Iran situation, which, should things escalate, potentially drive-up fuel prices.

“There are some variables at play, and some of them have a lot of upside potential for intermodal,” he said. “If there is any type of uptick in demand or consumption, I think intermodal is pretty well-positioned to handle whatever volume spikes are coming its way.”  

The tariffs were put in place by the Trump administration under the International Emergency Economic Powers Act. The Supreme Court last week said that law did not give the president the power to impose broad tariffs. As a result, businesses that paid those duties are now trying to get their money back.

FedEx’s filing says the company has “suffered injury” from paying the tariffs and wants a “full refund from Defendants of all IEEPA duties Plaintiffs have paid to the United States.” The suit names the United States, U.S. Customs and Border Protection, and CBP Commissioner Rodney Scott as defendants.

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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.

January’s TVI dry van freight reading, at 219, fell 4% from December and was down 11% annually. The refrigerated (reefer) TVI, at 184, was down 4% for the same period and down 9.8% annually. And the flatbed TVI, at 257, rose 2% over December and was off 5.5% annually.

DAT’s data highlighted the following takeaways for truckload volumes, and rates, for the month of January, including:

• the national average spot van rate was up $0.03 sequentially, to $2.32 per mile and up $0.17 annually;
• the national average spot reefer rate was up $0.12, to $2.81 per mile and up $0.27 annually;
• the national average flatbed rate increased $0.22, to $2.85 per mile and was up $0.41 annually;
• the contract van rate, at $2.48 per mile, was up $0.02 over December and up $0.04 annually;
• the contract reefer rate, at $2.81 per mile, was down $0.02 compared to December and up $0.04 annually; and
• the contract flatbed rate, at $3.04 per mile, was down $0.01 compared to December and up $0.02 annually

DAT explained that strong gains in flatbed freight served as an indicator of continued demand for specialized equipment to move construction and industrial materials, especially in challenging winter conditions. It added that Winter Storm Fern disrupted transportation networks generally, sidelining truckload capacity and reducing supply chain productivity across 24 states, with tighter effective capacity helping to boost spot-market pricing despite lower truckload volumes.

“Not every spike or dip warrants a response,” said Ken Adamo, chief of analytics at DAT, in a statement. “What matters is whether the data signals a temporary disruption or a real shift in market fundamentals. January’s numbers didn’t mark a change in loads moved, but they did show how shipper urgency and carrier pricing discipline can push rates up despite softer volumes.”

In looking at the potential direction of spot rates early into 2026, Adamo told LM in a recent interview that the first quarter represents what he described as probably the most important in the freight market since the pandemic, with rates rapidly compressing back.

Adamo observed that entering 2026 rates were around $0.05 higher than they were for the same period in 2023, with the freight recession truly taking hold in the second quarter of 2023—with rates falling around $0.40 a mile over the first 120 days of 2023.

“If you think about comparative analytics, that is where to really draw attention,” he said.

First quarter activity, he noted, could be viewed as more of a harbinger, with the second quarter more likely to be the true benchmark for spot market activity.

“In January, you still have the exhaust from the holidays,” said Adamo. “February is always slow, no matter what, unless you have some type of apocalyptic polar vortex, and then March is when you start to come out of your burrow like Punxsutawney, Phil and all that stuff.  That's kind of the freight calendar. It's really when you get into April, May and June, that you kind of tell the tale for the whole year, in my opinion. In 2025, year we had a pretty poor April and May. All that momentum that we carried through the holidays last year was optimistic and then tariffs came in, and Q2 was just an absolute disaster and set the tone for the rest of the year.”

Entitled the Railway Safety Act of 2026, the legislation was introduced by Sen. Jon Husted (R-Ohio), Sen. Maria Cantwell (D-Wash.), Sen. Bernie Moreno (R-Ohio), Sen. Eric Schmitt (R-Mo.), Sen. Roger Marshall (R-Kan.), Sen. Amy Klobuchar (D-Minn.), Sen. Tammy Baldwin (D-Wis.) and Sen. John Fetterman (D-Pa.).

This legislation was initially introduced into the Senate in 2023, with a major impetus for it being due to the February 3, 2023 derailment of a Norfolk Southern freight train, transporting hazardous materials, on the Ohio-Pennsylvania border.  

As previously reported, the National Safety Transportation Board (NTSB) said in a February 14, 2023 update that as a result of the derailment, 38 rail cars derailed and a fire ensued which damaged an additional 12 cars, adding that there were 20 total hazardous material cars in the train—11 of which derailed. And on February 23, in its preliminary report, it said that surveillance video from a local residence showed what appeared to be a wheel bearing in the final stage of overheat failure moments before the derailment. It added that the wheel bearing and affected wheelset were collected as evidence to be examined by the NTSB. 

“The Railway Safety Act will make communities across the country safer,” said Sen. Cantwell. “It has been over three years since the Norfolk Southern derailment disaster in East Palestine, Ohio, and it is past time for Congress to act. Our bill requires railroads to deploy technology that could have prevented the East Palestine derailment, holds large railroad companies accountable through stiffer fines and ensures that trains carrying hazardous materials are held to a higher safety standard.”

Key aspects of the Railway Safety Act of 2026 included in a Senate Committee on Commerce, Science, and Transportation fact sheet include:

• Mandating the use of defect detection technology to make railroads stop trains when something is wrong which could have prevented the East Palestine derailment. The bill requires hotbox detectors to be deployed an average of every 15 miles, compared to every 25 miles currently;
• Expanding the list of hazardous materials that are subject to higher safety standards, like vinyl chloride carried by the East Palestine train, and require speed restrictions, better braking and route risk analysis;
• Improving emergency response by notifying states about the hazardous materials being transported by rail through their communities and strengthening railroad emergency response plans;
• Preventing improper railcar inspections and mandating a new requirement that ensures railcars are properly maintained. It’s been shown that Norfolk Southern recommends only 30-seconds for railcar safety inspections;
• Increasing civil penalties for rail safety law violations from $100,000 to $10 million to ensure safety laws are taken seriously;
• Requiring two crewmembers to operate a train to prevent a situation where only one person is on the train in an emergency;
• Ensuring firefighters are made whole after responding to major derailments. The DOT can reimburse first responders for overtime, equipment costs, and health care assessments; and
• Expanding the existing Hazardous Materials Emergency Preparedness grants to allow fire departments to purchase the personal protective gear that keeps them safe

In a previous interview, Association of American Railroads CEO Ian Jefferies told LM that policymakers certainly recognize the need for continuous improvement but also recognize that rail is by far the safest way to move goods across land.

“We are proud of our safety record, but we are not satisfied and have more work to do,” he said. “That’s a never-ending process.”

What’s more he said that the AAR and the railroad industry have a long history of supporting smart safety measures with demonstrable safety benefits and also have a long history of not waiting for the regulator or waiting for Congress to take safety steps when needed.  In 2011 and 2012, he said AAR was petitioning for stronger tank car standards at the DOT two years before they were formally issued by the DOT.

AAR Senior Vice President of Communications Ted Greener told LM that freight railroads continue to advance safety through sustained investment in the core network, deployment of proven and emerging technologies, and rigorous operating standards. 

"Because of this, railroads are in the midst of their safest era ever and remain the safest way to move goods over land," said Greener. "As Congress considers any rail safety legislation, policymakers should reject backwards-looking, one-size-fits-all mandates that undermine competition and raise prices for consumers, and instead ensure each provision is objectively grounded in data to reduce risk. The priority should be policies that encourage innovation and measurable safety outcomes without disrupting the supply chain or diverting resources from proven, safety-critical investments.”

Mark Wallace, National President, Brotherhood of Locomotive Engineers & Trainmen said his organization supports the Railway Safety Act of 2023, but also called for accountability from Class I railroad carriers.

“Our nation doesn’t need another rail disaster like what we all saw in East Palestine,” said Wallace. “Inaction by the rail industry since that derailment and fire three years ago demonstrates that we can’t trust that the major railroads will raise safety standards without action by Congress. The Class I railroads continue to move in the wrong direction by running longer trains, holding fewer and shorter inspections, and having an over-reliance on automation. This has increased safety risks for railroaders and the 80 million Americans who live near a Class I railroad track. Two-person train crews, stronger and more frequent inspections, tougher penalties, and improved hazardous materials notification are essential to protecting railroad workers and the public. These reforms will only happen if Congress passes the Railway Safety Act of 2026.”

This year’s practitioner-led event will take place at the W Nashville hotel in Nashville, Tennessee, Oct. 21–23, 2026.

Building on the strong momentum of the 2025 conference, NextGen 2026 will once again bring together senior supply chain, operations, procurement, and logistics leaders for three days of candid, experience-driven dialogue around the technologies, skills, and strategic decisions reshaping the profession.

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