The letter was written by: Eleanor Keukura Roi, Chairman, Asian Shipowners Association; David Loosely, Secretary General and CEO, BIMCO; Bud Darr, President and CEO, Cruise Lines International Association; Sotiris Raptis, Secretary General, European Shipowners; Thomas A. Kazakos, Secretary General, International Chamber of Shipping; Kostas Gkonis, Director/Secretary General, INTERARGO; Tim Wilkins, Managing Director, INTERANKO; and Joe Kramek, President and CEO, World Shipping Council.

“The ability of merchant ships to navigate international waterways safely, predictably and without any unnecessary impediment is fundamental to resilient supply chains, economic stability, and energy security,” the letter said. “Introducing compulsory charges for transit or service fees that are a toll in all but name through the Strait of Hormuz would represent a significant departure from established international practice. Beyond the immediate financial implications for global trade, it would establish a precedent that could undermine the internationally recognized legal framework governing straits used for international navigation and transit passage. Once such a precedent is established, it becomes increasingly difficult to resist similar measures elsewhere, creating uncertainty for international shipping and global commerce.

Any additional costs on maritime transport inevitably flow through international supply chains. These consequences extend beyond shipping costs, contributing to higher energy prices, higher inflation, and higher economic uncertainty.”

A Reuters report noted that the proposed deal would allow Iran to intervene with any inbound traffic through the Strait of Hormuz with outbound traffic following a route between Iran and Oman, with exit clearance granted through Oman after notifying Iran. And a Wall Street Journal report observed that a key part of the deal addresses separate shipping lanes, with ships entering the Persian Gulf moving through a lane adjacent to or within Iranian-controlled waters, with vessels exiting the Persian Gulf using a route closer to Oman-based waters. Which it said would provide Iran with increased oversight of outbound traffic and Oman overseeing a majority of the outbound route.

As for the proposed fees, the Reuters report said Iran would charge “between 5% and 7% of the price of cargoes from ships using the strait,” citing a senior Iranian official,” with “Oman is discussing fees of around 3%, while Washington wants no fees at all.”

When the conflict began in late February, with joint strikes launched by the United States and Israel on Iran, in an initiative geared halting Iran’s development of nuclear weapons, various logistics- and supply chain-related issues were raised, including the likelihood of higher energy prices, which came to fruition, but are now seeing declines, as well as restricted shipping lanes in and around the Middle East, which was seen with the closure of the Strait of Hormuz, which, prior to the start of the conflict, handled about 20% of the world’s petroleum supply (roughly 20 to 21 million barrels per day) and about 20% of global liquefied natural gas (LNG).

The impact of the conflict, in terms of U.S.-bound imports departing from Strait of Hormuz-affected ports has been significant, with data from Descartes showing that total U.S.-bound imports fell from 1.5M metric tons in May 2025 to 100,591 metric tons in May 20926, for a 93.2% annual decline.

From small package specialists to large, 80,000-pound full truckload operations, trucking executives say they are well-positioned to gain when the U.S. economy recovers from the Iran war and other economic detriments.

Of course, the announcement from Washington that Gross Domestic Product (GDP) grew by an anemic 1.5% annual rate in the second quarter put a damper on overall enthusiasm, even as individual carriers were posting impressive gains.

On the small package front, UPS is expecting record revenue this year of about $92 billion after shedding what executives described as sub-par freight when it cut back sharply on Amazon deliveries.

“Our second-quarter results marked an expected and significant shift in our performance,” CEO Carol Tomé said. UPS had planned to finish removing more than half of its Amazon freight from its network by mid-year. Specifically, UPS said it has eliminated approximately 2 million pieces per-day of lower-quality Amazon volume from its network.

In place of the low-margin e-commerce packages that Tomé described as “dilutive” to profits, UPS is focusing on fewer parcels that yield higher margins in a less-is-more strategy.

Amazon Shipping, the e-commerce giant’s delivery service, is growing market share by offering lower shipping rates than UPS and FedEx. However, Tomé said she is “not aware of any volume that we’ve lost to that competitor,” referring to Amazon on an analysts’ call.

Amazon’s strengths are delivering lightweight, short-distance shipments in urban areas, Tomé said.

“Where we have strengths is every other place,” Tome said.   

Less-than-truckload (LTL) market leader Old Dominion Freight Line (ODFL) posted a 10.4% increase in revenue, a 30% rise in operating income and earnings per diluted share that match a company record set in third quarter 2022.

It all resulted in a stunning operating ratio of 70.1 for ODFL.

ODFL Chief Financial Officer Adam Satterfield said the freight recovery is still developing. "I think we are still in the early innings," he said on an earnings call. 

Satterfield said ODFL is benefiting from some freight shifting from competitors facing capacity issues. Freeman also said the company has the capacity to grow without running into bottlenecks.

“We’re not having any capacity issues, whether it be with equipment or drivers or real estate,” he said.

ABF Freight System, the seventh-largest LTL carrier and largest unit of ArcBest Corp., also beat analysts’ expectations as it “is outperforming seasonality,” according to Jason Seidl, trucking analyst for TD Cowen, in a note to investors.

Third-quarter freight is driven by “favorable weight/shipment trends” at ABF. But company officials tamped down commentary as they called U.S. industrial demand “subdued” in an analysts’ call.

J.B. Hunt’s second quarter truckload revenue was up 35% to $240 million in the period. But Hunt posted an operating loss of $1.3 million compared to operating income of $3.4 million for the second quarter ended June 30 .

That operating performance declined from the prior year period primarily due to higher purchased transportation expense, which resulted in a 12% decline in gross profit.

Hunt’s intermodal services accounted for nearly half its overall revenue of $1.44 billion in the quarter. Dedicated contract services accounted for another $847 million revenue, the company said.

Hunt executives said it knows shippers need to reduce costs. But at the same time they are demanding on-time service through their increasingly complex supply chains.

Landstar, the nation’s seventh-largest TL carrier with $2.3 billion revenue last year, also posted solid second quarter results as its management said it is benefitting from the strongest trucking market in four years.

Analyst Seidl said Landstar’s “core business trends are robust” as Landstar is benefiting from what Seidl called “early cycle inflection tailwinds.”

Landstar’s third quarter was off to a strong start with both volume and yield trends outperforming seasonality with some help from the 4th of July holiday. Its count of owner-operators ticked up sequentially and Landstar executives expected enthusiasm in the base to continue given a strong operating environment.

TFI International, the Canadian-based owner of the former U.S.-based Contract Freighter Inc. in truckload and the former Overnite unit in LTL, also surprised analysts with a strong second quarter.

TFII reported Q2 well above consensus estimates as TL strength was driven by yield growth and margin expansion, according to analyst Jason Seidl of TD Cowen.

Not only that, but third-quarter guidance is trending above previous estimates though margins should stay stable sequentially for both TL and LTL. TFII looks to “recover pricing in the near-term,” reflecting strength in both trucking markets.

FTR reported that preliminary July Class 8 orders, at 22,000 units, fell 31% sequentially, while posting a 75% annual gain, snapping a four-month stretch of orders topping 120% annual growth. On a year-to-date basis through July, orders are up 120% annually, said the firm. And it added that orders for the current season, from September 2025 through July 2026, are up 39% annually, and over the past 12 months through July, orders came in at 344,823 units.

FTR pointed to various drivers for the annual gains in July: replacement demand, firmer freight rates, improving utilization, and a moderate pre-buy to avoid new emissions charges continuing to support the market. It also noted that most calendar year 2026 truck production is already committed, with manufacturers have yet to open up 2027 order boards, leaving build spots constrained.

“With calendar 2026 production essentially sold out, attention shifts to decisions on model year 2027 engine technology, pricing, and build timing,” said Dan Moyer, senior analyst, commercial vehicles, at FTR. “Almost all model year 2027 engines are expected to carry manufacturer upcharges tied to compliance with the Environmental Protection Agency’s 2027 NOx regulation. However, EPA’s proposed revisions to the 2027 NOx rule, published on July 14, introduce considerable flexibility for truck and engine manufacturers to address fleet demand. For example, under EPA’s planned changes, manufacturers could continue building current-technology engines beyond 2026 indefinitely, subject to the payment of nonconformance penalties (NCPs), which presumably will be passed along to truck buyers. Several engine manufacturers have already announced plans to use NCPs to offer both current and new platforms well into 2027, and others are considering doing so.

Overall, July’s preliminary order volume suggests that Class 8 demand remains healthy as activity normalizes from unusually strong winter and spring levels. The next phase of the cycle will depend more on production-related factors than on overall demand, including whether EPA’s proposed flexibility delivers a smoother transition and a longer, shallower post-pre-buy decline in the market.”

ACT data: ACT reported that July preliminary Class 8 orders, at 22,100 units, saw a 68% annual gain and a 30% sequential decline.

“Class 8 preliminary orders in July totaled 22,100 units, up 68% y/y on easy comps and improved trucking fundamentals, but down 30% m/m on a seasonally adjusted basis,” said Carter Vieth, Research Analyst at ACT Research. “The sizable m/m decline doesn’t reflect a sudden drop in demand for new equipment but indicates a lack of 2026 build slots available as orders run up against full Class 8 backlogs, something we flagged as a possibility earlier this year. Lack of EPA clarity, at least until the end of August, may also be impacting orders, as OEMs and customers both await finality regarding regulations/penalties/pricing before 2027 order boards open.”

This report, which was initially launched in the third quarter of 2017, is comprised of data on freight shipping volumes and spending on both a national and regional basis. The report’s data is based on the actual transaction payment date and the highest-volume domestic freight modes of truckload and less-than-truckload, and is seasonally and calendar adjusted. Its historical data goes back to 2010, with a base point of 100, and its index point for each subsequent quarter marks that quarter’s volume in relation to the preceding quarter. U.S. Bank Freight Payment's business processes more than $43 billion in annual freight payments for some of the world’s largest corporations and government agencies.

The report’s second quarter shipment index value, at 75.1, was off 1.1% compared to the first quarter, and was down 2.8% annually, following the first quarter’s 0.6% annual gain, for its first annual gain in four years.

“Shipments remain soft because the broader freight economy remains soft,” the report stated. “Federal Reserve factory output data for the first two months of the quarter suggested slightly more manufacturing freight, but the gain was narrow. Total factory output averaged 1.1% above first-quarter levels. Excluding aerospace, miscellaneous transportation equipment, and computer and electronic products, growth was 0.7%. Year to date, total production was up 1.1% from 2025, but was flat when those stronger categories were excluded. Carriers not serving those sectors likely saw limited manufacturing freight growth.”

On a regional basis, shipments saw a 0.5% sequential increase and a 5.5% annual gain in the Western U.S.; a 3.7% sequential decline and a 2.8% annual gain in the Midwest; a 0.0% sequential reading and a 2.0% annual decrease in the Northeast; a 0.6% sequential decrease and a 20.2% annual decrease in the Southwest; and a 0.9% sequential increase and a 6.5% annual decline in the Southeast. The report explained that these readings reflect uneven freight demand across the country.

As for spending, the second quarter spend index value, at 75.1, fell 1.1% compared to the first quarter and was up 28.1% annually, while remaining 17% below the second quarter 2022 peak, with much of the gains paced by fuel, at $0.75 per mile, based on data from DAT, topping the first quarter by $0.24 and up almost 80% annually.

“Higher fuel surcharges added to shipper costs during the quarter, but fuel was not the only factor,” according to the report. “In many markets, limited capacity appears to have been the larger factor. One favorable development for shippers was the late-quarter decline in diesel prices. After peaking above $5.64 per gallon in April, the national average diesel price ended the quarter nearly a dollar lower at $4.67 per gallon.”

Spend data largely showed gains across the board, with the West, up 12% sequentially and 35.9% annually; the Southwest, up 11.2% sequentially and 39.9% annually; the Midwest, down 0.8% sequentially and up 22.9% annually; the Northeast, up 5.0% sequentially and up 26.5% annually; and the Southeast, up 10.0% sequentially and up 23.7% annually.

“The Southwest continued to stand out this quarter,” said Bobby Holland, director of freight business analytics at U.S. Bank. “The gap between declining shipments and rising spending was more pronounced there than anywhere else in the country. It's a signal that capacity conditions can have a significant impact on freight costs even when underlying demand isn't growing.”

That sentiment was echoed by Bob Costello, American Trucking Associations Chief Economist and the report’s lead author, whom wrote in the report that capacity tightened during the second quarter as the national spending index significantly outperformed the shipments index.

“The market continued trends seen in Q1 with capacity tightening, which appears to reflect two forces,” said Costello. “First, after three-plus years of freight recession, small, mid-sized and large fleets continued to exit amid weak rates, rising costs and softer volumes. That gradual reduction did not fully align supply with low demand, but it narrowed the gap. Second, industry participants have pointed to federal safety and compliance initiatives that gained momentum over the past year, including English language provisions (ELP), non-domiciled CDL (Commercial Driver’s License) revocations and increased oversight of driver training schools. These actions may have helped bring supply closer to demand and, in some markets, pushed available capacity lower.”

Costello added that diesel prices also increased shipper outlays, with tighter capacity appearing to have been the larger contributor, explaining that tighter capacity appears to have been the larger contributor.

To that end, he said that carriers seeing more freight may be benefitting from fewer fleets pursuing available loads, and not due to a broad-based demand recovery.

The July Services PMI reading, at 54.1 (a reading above 50 represents expansion and below 50 indicates contraction), was up 0.1% compared to June, growing, at a faster rate for the 25^th consecutive month, with the overall economy growing, at a faster rate, for the 74th consecutive month.

The July reading is 0.7% above the 12-month average of 53.4, with February’s 56.1 and September 2025’s 50.3 marking the respective high and low readings over that span.

ISM reported that 13 of the services sectors it tracks grew in July: Retail Trade; Transportation & Warehousing; Wholesale Trade; Management of Companies & Support Services; Information; Construction; Accommodation & Food Services; Public Administration; Utilities; Educational Services; Mining; Professional, Scientific & Technical Services; and Finance & Insurance. The four sectors reporting contraction in July were: Agriculture, Forestry, Fishing & Hunting; Other Services; Health Care & Social Assistance; and Real Estate, Rental & Leasing.

The report’s subindexes that factor into the PMI were mixed:

• Business Activity/Production, at 59.1, up 3.7%, growing, at a faster rate, for the 25th consecutive month, with 13 sectors seeing gains;
• New Orders, at 57.2, increased 2.1%, growing, at a slower rate, for the 14^th consecutive month and expanding in 41 of the last 43 months, with 13 sectors reporting increases in new orders;
• Employment, at 47.4, fell 3.8% after a 3.3% June gain, contracting for the fourth time in the last five months, with seven sectors reporting employment gains; and
• Supplier Deliveries, at 52.8 (a reading above 50 indicates contraction), were down 1.6%, slowing, at a slower rate, for the 20th consecutive month

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

“Conditions are largely unchanged from last month,” said a Transportation & Warehousing panelist. “The exception is pricing, which continues to rise, driven mainly by fuel and labor costs. Demand remains stable.

A Wholesale Trade panelist said that business is more robust than expected, considering some of the economic headwinds still plaguing the industry.

“Lumber supply is tighter, and freight rates and availability are challenges,” said the panelist. “Many of our builders are pushing back hard on price increases. However, the outlook is favorable for the remainder of 2026.”

In an interview with LM, Steve Miller, Chair of the ISM Services Business Survey Committee, said that, in looking at Services PMI readings over the last few months, the underlying theme is that that are in similar territory and are solid, adding that the last stretch of similar Service PMI readings came in 2002, when the economy was coming out of the pandemic.

“The numbers are really good,” he said. For Employment, if you look at it in context with Backlog of Orders [down 4.0% to 50.9, growing for six straight months], I can see some relationship there. If you are able to keep up with backlog and the order volume with the people you have, then you don’t hire. It was about an eight-point shift from when you look at the overall numbers, from those in expansion versus those that are in contraction—which is not a huge shift but it is a significant shift. Will we see that with New Orders volume being as high as it is now? It has been more than four months of an increasing 12-month average for New Orders.”

July’s New Orders reading, at 57.2, marked the fourth-highest in the last 26 months, which Miller said leads to the question of if that is going to build up order backlog or if there are things going on in terms of productivity, in terms of things like AI development.”

As for headwinds within the services sector, Miller pointed to pricing for petroleum related products [May Prices in the report were up 2.6% to 70.3, increasing for the 110^th consecutive month].

“We are seeing that more broadly in the commentary, as well as on a repeat basis, for commodities up in price,” said Miller. “And we are still $20 a barrel above where we were in January…it is a higher cost of doing business.”

For the over-the-road market, rates and pricing have seen strong gains for a few months now. In more normal times, when the market was in more of what could be called a traditional cadence, the reasoning behind the strong pricing and rate gains would likely have been attributed to improving volumes and a truly resilient economy—in other words, improving demand. But as we have seen, that is not necessarily the case, at least not uniformly anyhow.

A primary reason for the improvements, of course, has been the myriad actions taken by the federal government focused on Commercial Driving Licenses (CDL), related to tightening requirements and English Language Proficiency, among others, which has lowered the amount of over-the-road capacity and subsequently improved the outlook for motor carriers, in what is largely being viewed as a supply-driven event.

That shift from a shippers’ market to a carriers’ market was a long time coming, no question. So, again, does that mean everything is back to normal and that the industry’s problems are solved? The short answer, despite the optimism, largely remains, no, not yet, anyhow.

But should demand meaningfully return, what happens then? That is a question for which, at least at the moment, there does not appear to be a clearcut answer.

One industry observer explained that remains to be seen, as it is contingent on how much, or, to what extent, that happens.

“Things are still largely dormant,” the observer noted. “Maybe the answer is just that things get a little better, but I don’t think it is going to be robust like some people think it is. I don’t see as catalyst for that. It could be that it is more of a demand-light cycle and a capacity cycle.”

And he added that is not to imply that there is no demand period, as the ongoing AI data center buildouts continue to contribute to volume and tonnage levels, with the caveat that it is not going to be recurring for a materially long period. What’s more, while consumers continue to spend, it is not at an incredibly high level, with many forced to tighten their belts, due to things like inflation and high gas prices. Adding to that, high mortgage rates are continuing to slow home sales, which does not help fill trucks and boost volumes.

Paul Tonsager, CEO, at IMS Advisory, observed that the CDL actions, as well as rising insurance, and immigration-focused efforts, among others, are collectively driving people out of the market.

What’s more, there is no silver bullet out there that can definitively point to how the market may look down the road, which Tonsager described as very concerning.

Matt Muenster, Chief Economist, at Breakthrough, was on the same page as Tonsager, explaining that supply challenges are kind of the experience of the market right now.

“When I think about what's driving price uniquely, maybe with the exception of flatbed, we don't have a lot of demand, or at least consistent demand across industries, to really be moving the needle,” he said. “Instead, it's really the supply side tightness, the availability of drivers, and a changing regulatory environment that's removed some drivers from the market.”

A bright spot amid the uncertainty is coming into focus on the manufacturing side, as evidenced by strong year-to-date readings from the Institute for Supply Management (ISM), with the manufacturing PMI, its core metric topping the 50-mark, its benchmark for growth each month, after a lengthy stretch of contraction.

“This is extremely important for trucking, because except for short-haul freight that typically moves in dump trucks, manufacturing can really be viewed as the driver in trucking, more so than consumer spending or housing,” said Avery Vise, Vice President of trucking, at FTR.

Vise makes a great point, but that should not be interpreted as things are back to normal, not yet. There are some positive signs out there but more work needs to be done, as the industry navigates its many challenges on a true road to recovery.

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 July LMI reading, at 68.9 (a reading above 50 indicates growth is occurring), expanded at a slower rate, and fell 2.2% from June’s 71.1, which marked the first time the LMI topped the 70-mark since March 2022’s 76.2 reading. The report’s authors observed that while this is a moderate rate of expansion relative to the last few months, July’s 68.9 is higher than any readings made at any point from 2023-2025.

Most of the LMI’s key metrics were mixed:

• Inventory Levels, at 55.0, decreased 5.5%, expanding, at a faster rate, with the report noting that it was largely driven by downstream retailers going from robustly expanding inventory levels in June, at 66.0, to contraction, at 46.3, in July;
• Inventory Costs, at 77.0, increased 1.1% from June’s 75.9, expanding, at a slower rate, demonstrating the ongoing increases in the relative costs of inventories due to tariffs and war;
• Warehousing Capacity, at 46.3, fell 1.2%, contracting, at a faster rate;
• Warehousing Utilization, at 66.1, was down 3.3%, expanding, at a slower rate;
• Warehousing Prices, at 75.5, rose 1.7%, expanding, at a faster rate, due to the lack of storage space, as well as its fastest rate of expansion since January 2025, in advance of the “anticipated tariff regime of incoming second Trump administration;
• Transportation Capacity, at 28.4, was off 2.4%, contracting, at a faster rate, matching April as the second-fastest level of contraction for this metric in LMI history, next to September 2020’s 23.8 reading;
• Transportation Utilization, at 65.0, decreased 9.7%, expanding, at a slower rate;
• Transportation Prices, at 86.9, were down 5.5%, expanding, at a slower rate, its lowest level since the start of the Iran conflict; and
• Aggregate Logistics Costs, at 239.5, fell 2.6%, expanding, at a slower rate

“The slowdown in expansion stems slower growth in Inventory Levels, which had seen a spike last year as respondents pulled inventory forward ahead of anticipated tariff increases in July,” wrote Dr. Dale Rogers in the report. “The difference is particularly pronounced for Downstream retailers, who went from robust Inventory Level expansion at 66.0 last month to contraction at 46.3. This dramatic shift may signify that the inventories that were pulled forward ahead of the holiday season are currently sitting Upstream at the wholesale level. Despite the slowdown in Inventory Levels, Inventory Costs continue to expand (+1.1) to 77.0—outstripping levels by 22.0 points and demonstrating the ongoing increases in the relative costs of inventories due to tariffs and war.

We are seeing the effects of the war, but also the tariffs have begun to bite.  While we do not like tariffs much on the LMI team, the worst ones to put on would be those where they are constructed where you cannot make a deal to reduce them—the new tariffs are about forced labor and supposedly you cannot negotiate them down—and also uncertain tariffs where U.S. supply chain managers don’t know if they are permanent or not. It is an unnecessarily confusing time. This is not a political statement. It is just really confusing and hard to know how to respond.”

The report noted that despite the overall slowdown in expansion in July, the LMI reading still represents significant growth.

For the week of August 3, the national average price per gallon headed up 3.5 cents to $5.348, which was preceded by a 17.9-cent increase to $5.313, for the week of July 27. Prior to that, for the week of July 20, the national average price per gallon increased 33.8-cents, coming in at $5.134, marking the third-highest weekly increase on record (and matching the week of June 9, 2008), since EIA first began collecting this data.

This was preceded by a $1.058 increase to $4.796, for the week of July 13, which marked first weekly increase since a $0.001-cent decrease, to $5.639, for the week of May 11. With the brief Memorandum of Understanding between the United States and Iran not sticking, it was widely viewed, prior to this week, that these escalations would lead to the average price per gallon of diesel topping the $5.00 mark, which came to fruition.

The national average price per gallon, for the week of July 6, fell 9 cents, coming in at $4.578 per gallon, following a 16.4-cent decrease, to $4.668, for the week of June 29, following a 22.7-cent decline, to $4.832, for the week of June 22, which snapped a 14-week stretch of the national average topping the $5.00 per gallon mark, going back to the week of March 16, when the national average was at $5.071 per gallon.

Prior to that, the national average, for the week of June 15, dropped 15.1 cents, to $5.059, following a 14.0-cent decline, to $5.210, for the week of June 8, a 17.3-cent decline, to $5.350, for the week of June 1, which marked steepest weekly decline since the week of April 20, when the national average fell 20.5 cents, from $5.608 to $5.403, for the largest weekly decline in more than three years, according to EIA data.

Prior to the week of May 4, the highest average price in any week since came during the week of May 9, 2022, when it was at $5.623 per gallon. Prices continue to remain elevated, due to the launched joint strikes by the United States and Israel, in an initiative geared towards halting Iran’s development of nuclear weapons.

On an annual basis, the national average price per gallon is up $1.548. The average price of WTI crude is at $76.81.   

Findings for the report, entitled “Recalibrating: Big and Bulky Last-Mile Delivery in the United States-2026,” were based on two separate studies and also public information, with surveys sent to NHDA members and other U.S. last-mile delivery 3PLs, with 2025 last-mile delivery revenues of 3PLs coming in between $1.5 million-to-$1.2 billion, accounting for 33% of the estimated $10.63 billion U.S. Third-Party Logistics Big and Bulky Last-Mile Delivery Market.

In the report, Armstrong & Associates estimated that from 2017 to 2025, the market grew at a compound annual growth rate (CAGR) of 10.6%, and called for a 5.1% CAGR from 2025 through 2027, coming in at an estimated $11.42 billion in 2026 and $12.34 billion in 2027.

Evan Armstrong, president, Armstrong & Associates, told LM that the estimated reduction in growth, from 2025 through 2027, is related to various consumer-facing topics, such as tariffs, the Iran conflict, and oil and gas prices.

“A lot of things that will impact consumers are impacting the consumer already,” he said. “The on-and-off nature of tariffs are an example of that. In terms of the operators, we have seen some deterioration in gross margins, although they are actually pretty good [28.9% in 2022, 28.1% in 2023, 27.9% in 2024, and 27.5% in 2025].”

As for the key drivers of estimated future growth, the report explained it is being led by major retailers and e-commerce platforms, including Amazon, Wayfair, Home Depot, and Lowe’s, “all of which have made large-format products central to their online offerings.” And it added that with customer expectations shifting to what it described as faster, more transparent, and seamless delivery experiences, big and bulky 3PLs are subsequently being pushed to white glove operations without prioritizing quality or cost control.

Armstrong made it clear that while major retailers continue to be the market pacesetters, that there is plenty of demand for 3PL’s services, too, using RXO and Ryder as examples.

“There are two completely different business models, but there has been plenty of demand, and they have been growing very well—at above market rates,” he said.

As for regional and smaller players in the market, Armstrong said a lot of them are getting acquired, which he said is a clear trend, with demand still there, albeit having softened.

A bigger issue, he observed, is that available labor is somewhat scarce, as it has become more difficult to find independent contractors, both on the driver side and the provider side, which is forcing more freight brokerage usage as well.

“There are now also vetting and compliance issues on the freight brokerage side,” he said. “If you are running a lot of routes, for last-mile delivery, with small carriers, it can be a compliance challenge, especially as you have to vet carriers with five-to-seven trucks.”  

The report cited the impact of tariffs on big and bulky last-mile delivery, noting that tariff policy stabilized following the February Supreme Court decision, which ruled against the legality of the White House’s implementation of IEEPA tariffs. While that was considered a positive development, the report pointed to consumer softness as a “dominant near-term headwind,” as evidenced by a 30-year low in housing turnover and declining furniture store sales. Which is a concern, as Armstrong said big and bulky demand is closely tied to housing turnover and also large-ticket discretionary spending.

“What happened with tariffs was an overall headwind,” said Armstrong. “You started having more ocean and air consolidations, so a lot of it happened at the point of origin versus the point of delivery. Once a delivery arrives, it just gets deconsolidated and shows up as last-mile deliveries out of a warehouse. In terms of products delivered, the growth areas where we have seen the most weakness if mattresses, but overall appliances and furniture still make up around two-thirds of [big and bulky] last-mile deliveries. As we look forward, the electronics and high-tech sectors have the highest potential.”

The report’s benchmark reading, the PMI, came in at 55.6 (a reading above 50 indicates growth), topping June by 2.3% and marking the highest monthly tally going back to May 2022’s 55.9. ISM added that the overall economy grew, at a faster rate, for the 21st consecutive month.

The July PMI reading was 4.3% above the 12-month average of 51.3, with July marking the highest and December’s 47.9 marking the lowest for that period.

ISM reported that 15 manufacturing sectors expanded in July: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Primary Metals; Nonmetallic Mineral Products; Transportation Equipment; Miscellaneous Manufacturing; Textile Mills; Machinery; Computer & Electronic Products; Food, Beverage & Tobacco Products; Wood Products; Plastics & Rubber Products; Furniture & Related Products; and Fabricated Metal Products. The lone contracting sector was Chemical Products.

ISM cited the following key metrics for July:

• New Orders: 56.7, up 0.7%, growing, at a faster pace for the seventh consecutive month, with 12 sectors reporting growth;
• Production: 58.5, up 6.6%, growing, at a faster rate, for the ninth consecutive month, marking its highest reading since November 2021’s 60.5, with 12 sectors reporting growth;
• Employment: 52.8, up 3.1%, growing after 32 months of contraction, and hitting its highest level since August 2022’s 54.2, with six sectors reporting growth;
• Supplier Deliveries: 58.9 (readings above 50 indicate slower deliveries), up 1.5% compared to June, slowing for the eighth consecutive month, with 13 sectors reporting slower deliveries;
• Inventories: 51.2, down 0.2%, growing, at a slower rate for the second consecutive month, with eighth sectors reporting higher inventories;
• Customers’ Inventories: 40.7, down 1.6%, remaining too low at a faster rate for the 22nd consecutive month, with two sectors reporting higher inventories; and
• Prices: 71.1, down 1.9% off of June’s 73.0, increasing, at a slower rate, for the 22nd consecutive month, with 14 sectors reporting higher prices

Economic conditions, tariffs, and the ongoing Iran conflict were among the main themes cited in panelists’ comments.

“Continued tariffs on products utilized in our product lines are being monitored by the business, which is working to mitigate or limit tariff risk,” said a Transportation Equipment panelist. “Geopolitical risk, especially in the Middle East, pertaining to commodity and energy markets remains a concern. There has been some increased cost and transit time for rerouted shipments due to conflicts in the Red Sea, Strait of Hormuz and Suez Canal.”

An Electrical Equipment, Appliances & Components panelist said that the pricing volatility and lead-time extensions in this market are arguably worse than the pandemic area.

“During COVID-19, we saw a surge of price hikes and inventory buy-ups, which caused constraints that eventually leveled out,” the panelist said. “We are seeing nothing but consistent upward trends for both pricing and lead times that show no signs of slowing down. Specifically, 5-percent to 25-percent price increases for printed circuit board assembly components and 15-percent to 45-percent increases for bare boards are negatively impacting customer demand outlook into next year. This isn’t sustainable.”

In an interview with LM, Susan Spence, Chair of ISM’s Manufacturing Business Survey Committee, said that the report’s findings were notable on various fronts.

“Certainly, employment has finally gotten to where we were hoping it would,” said Spence. “Manufacturing CEOs have deal with a lot, like changing tariff levels and what may happen next and not making any sudden [decisions] because new orders were not flowing. So, now, after seven months of new order gains, nine months of production gains, and seven months of backlog of orders gains [up 5.5% to 55.0 in July], it has led to more hiring. And the sentiment for hiring versus managing downward has been turning ever so slightly in the right direction for a few months.”

Addressing pricing, which was at 84.6 as recently as April, Spence noted that the volatility has seen declines over the last couple of months, amid the stop-and-start nature of the Iran conflict, which she likened to tariffs, in that it has created uncertainty.

As for the ongoing impact of tariffs on manufacturing, she said their key impact was related to order flows stopping, coupled with companies not hiring.

“When you’re looking at a 50% swing in your raw materials costs because of tariffs from the country your unlucky enough to be importing from, that will stop things,” said Spence. “The war remains an issue, but, at least, it has been relatively short-term—and maybe those suppliers or these companies are passing prices through, or maybe not. But the things that were driving contraction, in my opinion, over the last year, have been largely settled. It feels like the conditions that were stopping growth have settled down.”

To that end, Spence cited recent improvements in consumer confidence and declines in unemployment claims, which, she said, serves as signs for companies seeing gains in new business opportunities. But, at the same time, she said that risks remain, too.

“The Iran war definitely continues to be a risk for getting things through the Strait of Hormuz, with lead times starting to be a factor, as does pricing volatility,” said Spence. “Some of that is due to competition for things like semiconductors and data center buildouts, but by and large, not only are the numbers finally turning to the right direction consistently, so is the sentiment. If you look at the PMI and the sectors that are in contraction that are not growing, it is only chemical products, out of the top six sectors, and that is 20% of manufacturing GDP, whereas in November 85% of manufacturing GDP was in contraction.

As for the remainder of 2026 on the manufacturing front, Spence first took a look back to November, when the PMI was at 48.0, and has subsequently increased to nearly 56.0, which she described as a huge difference, with that growth occurring during the Iran war and ongoing tariff-related challenges.

“Despite things that were harmful, there was some underlying strong economic growth,” she said. “If we did not have the ‘Mag 7’ and the AI data center buildout, would the sector be slumping? Maybe, it would. But, for now, jobs are expanding in manufacturing, and even if consumer confidence is down, consumers are still buying so that is good. It is just that it is not equally good for everybody.”

Financial terms for the transaction were not disclosed.

RMG was established in 2018 by Greg Oberting, who has served as founder and CEO, remains invested in the company, and will continue to oversee its operations. RMG is an intermodal logistics services provider, operating a network of privately operated intermodal terminals providing services to inland containerized export shippers. 

The company partners with freight railroads and ocean carriers through its inland terminals, delivering what it describes as “an integrated containerized export solution for U.S. shippers,” while also providing cost-effective transportation and greater access to global markets for producers and processors that are not in close proximity to marine ports and intermodal options. It added that through the facilitation of efficient end-to-end transportation, from producer to port, RMG serves as critical agricultural supply chain infrastructure.

What’s more, RMG noted that its large-scale terminals consolidate producers’ export freight onto full-length 100-plus railcar unit trains with on-dock service into U.S.-based West Coast ports. Going back to its founding in 2018, RMG said it has shipped more than 1,200 unit trains, which serve as the equivalent of roughly 200 million truck miles. Helping to put those figures into perspective, RMG noted that intermodal rail transloading serves more than 20 million containers on an annual basis; more than 40% of U.S. long-distance freight moves via rail; and the $1.5 trillion U.S. agriculture sector has a large portion of its production located far from marine export terminals and major inland intermodal hubs.

“This transaction represents an important milestone in the evolution of Rail Modal Group and is a testament to the hard work and dedication of the entire RMG team,” said RMG’s Oberting. “InfraRed demonstrated a strong understanding of our business, our industry, and the essential role that RMG plays in the North American supply chain. Its experience scaling infrastructure platforms, together with its long-term investment approach, makes InfraRed an ideal partner for RMG. I am excited to continue leading RMG as CEO and expand the services we provide to our customers, transportation partners, and the communities that we serve.”

Filip Guz, Partner and Head of Americas Investments at InfraRed Capital Partners, said that RMG is an established, asset-backed platform providing essential infrastructure to customers across the agricultural and logistics supply chains.

“The company has developed a differentiated network, strong customer relationships, and a compelling pipeline of growth opportunities,” said Guz. “We have been impressed by Greg and the RMG management team and by what they have built to date. We look forward to supporting the company with capital, infrastructure expertise, and operational resources as it expands its network and realizes its long-term potential.”

Looking ahead, RMG said that its focus is on continued investment in growth, with a focus on expanding capacity and resilience at its existing terminals, as well as broadening service capabilities and developing additional locations.

In a previous interview with LM, RMG’s Oberting explained that the impetus for establishing the company stemmed from a strategy he developed through his nearly three decades of experience in the commodity trading sector for agricultural commodities, which entailed developing a logistics-focused solution for rural locations that were dislocated from freight transportation services, particularly intermodal.

“What we ended up doing was taking a grain elevator facility where large amounts of soybeans are stored in eastern Nebraska, and we took that facility and repurposed it into an intermodal terminal,” he said. “The best way to describe it is like an inland port. What we do is take intermodal containers that are in abundance in places like Chicago and Dallas, for shipments of commodities back to Asia. The reason there is an abundance is that the U.S. imports twice as much as it exports in containers. That led us to develop a solution that is beneficial to the container shipping companies and the railroads, and also helps the U.S. supply chain, where we are filling empty freight capacity.”

That led to RMG working in partnership with BNSF Railway and some steamship lines to develop a strategy to reposition those containers that were empty in locations like Chicago and move them into inland depot locations RMG was developing, handle those containers in those RMG-developed depots, and have them loaded at locations anywhere from five to 20 miles away with exportable products, explained Oberting. At which point, he said, those containers are then brought back to an RMG export terminal and put on trains to be delivered to West Coast port terminals, loaded onto vessels, and then moved for export.

The Hagerstown project will bring the technology to a busier site and could provide a model for wider use across the FedEx network.

FedEx and Dexterity did not say how many robots will be installed or provide a timeline for a bigger rollout.

FedEx loads tens of thousands of trailers each day. Trailer loading is one of the most physically demanding jobs in parcel shipping, requiring strength, endurance, and the ability to make quick decisions as packages arrive.

It has also been difficult to automate because packages vary in size, shape, and weight, and conditions inside each trailer can change throughout the loading process.

Dexterity’s Mech robot has two arms and is compact enough to work inside a trailer. It is powered by the company’s Foresight system, which uses sight, depth sensing, and touch to make loading decisions in real time.

Please click here to read the complete article. 

Median inventory across Deposco’s network ended the second quarter at 89.3 days on hand, down 5.9 days from a year earlier and close to its lowest level in 18 months. Inventory had peaked at 111.5 days in early 2025.

Brands made most of the cuts during the latest quarter, trimming inventory by 10.6 days to finish June at 89.2 days on hand. Inventory held by 3PLs remained nearly flat at 85.9 days, leaving the two groups just 3.3 days apart.

Please click here to read the complete article.

The updates include a new online pickup dashboard, a faster shipping process on UPS.com, and a redesigned mobile app connected to more than 5,500 UPS Store locations across the United States.

“We know small business owners are masters at juggling priorities, but a complicated shipping process shouldn’t be one of them,” said Matt Guffey, UPS Chief Commercial and Strategy Officer. “UPS gives customers one less thing to worry about with tools designed to save time, reduce complexity and help businesses stay focused on serving customers and growing.”

Pickups in one place

The new dashboard allows businesses to schedule, manage, and track pickups from one place. It also provides real-time status updates and notifications as pickups move through the process.

UPS has expanded the controls available through its Smart Pickup service. Businesses can now request or cancel pickups based on whether they have packages ready to ship.

Smart Pickups only take place on days when shipments are ready. According to UPS, that can save a business up to 50% compared with the cost of scheduling a daily pickup.

The added flexibility is aimed at smaller companies whose shipping volume may change from one day to the next.

Faster labels and mobile tools

UPS has also redesigned the shipping process on UPS.com. A new single-screen format places shipment details and service choices together, allowing customers to compare options and create labels more quickly.

Businesses can import order information from shopping carts and major online marketplaces. They can also create templates for frequently used shipping labels, reducing the need to enter the same information for each order.

The redesigned UPS mobile app allows customers to create labels, arrange pickups, track packages, and manage shipping from a phone or other mobile device. Users can scan a tracking number instead of entering it manually.

The app also connects with more than 5,500 The UPS Store locations. Customers can create labels digitally and have them printed at a store. Those labels include RFID technology that provides tracking from the time a package enters the UPS network.

“Whether a business ships a few packages a week or hundreds a day, UPS is committed to creating the best customer experience in the industry,” Guffey said.

Total June volume, at 1,639,677 units, posted an 11.6% annual gain, far outpacing a 4.4% annual May gain.

Trailers, at 41,294, headed up 19.4% annually, and domestic containers, at 799,069, posted a 15.6% annual gain. All domestic equipment, which is comprised of trailers and domestic containers, at 840,363, rose 15.8% annually. ISO, or international, containers, at 799,314, headed up 7.5%.

Through the first six months of 2026, IANA reported that total volume, at 9,365,178, increased 2.5% annually. Domestic containers, at 4,540,122, were up 7.4% annually, and trailers, at 233,272, saw a 2.8% annual gain. All domestic equipment, at 4,773,394, was up 7.2%. ISO containers were the lone sector to see a decline, at 4,591,784, for a 1.9% annual decrease.

Earlier this month, IANA’s North America Intermodal Volume Index (IVI) pointed to solid market conditions.

The North America IVI made its debut in May, with IANA describing it as a measure of industry activity that provides a “most likely” estimate of current market conditions, with IANA adding that the IVI

The July IVI estimate, at 106.8, came in below June’s 107.7 reading, while marking its second-highest 2026 reading. In explaining the IVI’s methodology, IANA said that the IVI “gauges what is happening right now—before the official monthly figures are published.” And it added that it translates a high-frequency freight activity onto the same scale as the published index, giving shippers, carriers and analysts an early snapshot of current-month demand.

On a recent IANA-hosted, IANA Director of Economics Andrew Sibold said that the impact of the Iran conflict has been significant for domestic intermodal

With fuel prices having seen significant gains over the course of the Iran conflict, Sibold said that intermodal has seen some gains, with industry stakeholders’ modal shifts from long-haul trucking to intermodal.

Addressing the slight year-to-date volume gains, he explained that a year ago at this time, there was still a fair amount of tariff-driven pull-forward activity, which impacted annual comparisons.

“With a high domestic share, that is kind of a structural thing, where there is a lot of international weakness, due to some imports being swapped out for some of the domestic freight,” said Sibold.

To that end, he explained that what is happening now represents a break in kind of how intermodal has historically worked, given the overall rise in domestic and domestic ostensibly overtaking international as the big structural shift.

“Probably the most straightforward answer to it is the effect of the price shock and also the drop in imports coming from tariffs that could also be debated,” he said. “It's not quite certain whether the diesel price is actually driving the switch, so this could be largely tariff-driven.”

C.H. Robinson said in the filing that the advisory verdict remains subject to post-trial proceedings before the court enters a final verdict and expects to appeal if the jury’s verdict is entered as final.

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

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

“We extend our deepest sympathies to everyone affected by this tragic accident,” said Dorothy Capers, Chief Legal Officer at C.H. Robinson. “Every loss of life on our nation's highways is one too many. We strongly disagree with the verdict in Lipe v. Lupus Superior, LLC, et al. and will immediately appeal. C.H. Robinson should not be held liable and did not act negligently. The carrier had safely delivered nearly 270 loads for our customers and held a Satisfactory FMCSA rating when we selected it. That rating remained Satisfactory following a federal review of this accident. The carrier is an independent motor carrier, and the driver worked for them. C.H. Robinson does not employ drivers.

Safety is core to how we operate and always has been. We go beyond federal requirements and apply multiple layers of safety and risk criteria that we continuously re-evaluate and strengthen. The shipments we arrange overwhelmingly move without incident, with one serious accident claim filed for every 500 million miles driven on our customers' loads. The extreme nature of this verdict means it is even more imperative that Congress and the Federal Government act with urgency to establish clear and proper accountabilities across the transportation industry that enhance highway safety and support the uninterrupted flow of goods across the United States.” 

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

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

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

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

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

In a research note, Baird’s Moore wrote that to his firm’s knowledge, this is the first significant negligent-selection verdict involving a freight broker following the Supreme Court's decision on Montgomery v. Caribe Transport II.

“While the headline figure is significant, the advisory verdict is not a final judgment,” he wrote. “And, as is customary, we would expect any ultimate award to be subject to post-trial proceedings and appeal, where it is often meaningfully reduced.”

This action follows two rounds of USTR-held public hearings, which included more than 2,100 public comments and engagement with U.S. trading partners, said USTR.

“President Trump recognizes that decades of moral suasion have not eradicated forced labor from global supply chains.  The United States has had a forced labor import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same,” said USTR Ambassador Jamieson Greer.  “Today’s action will begin to correct what is both a human rights abuse and distortive trade practice to improve the welfare of workers everywhere.  I am encouraged by the trading partners who have moved quickly to adopt forced labor import prohibitions, and look forward to ensuring their effective enforcement.”

The timing of this announcement does not come as a surprise, as the expiration date for the 10% Section 122 tariffs, which went into effect in February, after the United States Supreme Court ruled against the legality of the White House’s implementation of global reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA) by a 6-3 margin, was 12:01 AM ET on July 24. At the time, the White House said the objective of these tariffs was to address what it described as serious international payment imbalances and a growing U.S. balance-of-payments deficit.

The Office of the USTR said that the new tariffs will be in the form of a 10% or 12.5% tariff on 60 trading partners, subject to certain product exemptions, adding that these apply to 99.4% of U.S. imports. It explained that those trading partners that have made commitments to adopt, and effectively enforce, forced labor prohibitions will have a 10% tariff, whereas those trading partners that have failed to do so will have a 12.5% tariff.

What’s more, goods not covered by these new tariffs are: informational materials, donations, and accompanied baggage, all articles and parts of articles subject to section 232 tariffs; and certain products that rely on raw materials that could become unavailable domestically because of tariffs, product that could cause economy-wide disruptions if subject to the proposed additional tariffs, products that cannot be produced of sourced in sufficient quantities from the U.S. or alternative suppliers; and products that if exempted would encourage countries to adopt and enforce bans on imports made with forced labor.

Feedback on this development from industry observers was direct, as it related to key shipper takeaways and what may be next on the trade and tariff front.

Paul Bingham, Director, Transportation Consulting, S&P Global Market Intelligence, told LM that the timing of these new tariffs aligns with the temporary 10% Section 122 US import tariffs President Trump imposed back in February and results in the effective level of U.S. import tariffs remaining largely unchanged, depending on the country and commodity, as these Section 301 tariffs replace the expiring Section 122 tariffs.

“A difference is that these new Section 301 tariffs are not temporary, and were able to be anticipated by supply chain managers, as they are being imposed four months after they were announced,” said Bingham. “Whether these tariffs withstand potential court challenges remains to be seen but the court proceedings will take time and, like with the IEEPA tariffs last year, the importers are faced with the tariffs having to be paid at least in the interim. The details (on the commodity-specific and country specific imports that will be affected) have to take into consideration the other existing tariffs and exemptions that collectively form the effective import tariff companies are faced with. There are no shocks in what we have seen based on what the Trump administration has stated about what they were intended to do with these over the last four months. And the timing is exactly as expected as the Section 122 tariffs expired without being extended by Congress.”

Bingham’s colleague, Chris Rogers, Head of Supply Chain Research for S&P Global Market Intelligence, observed that the timing of the USTR’s announcement was absolutely as expected.

“Remember that the Section 301 rates only apply to around 44% of U.S. imports (the rest are exempt or Section 232) and that the higher rate of 12.5% (remember everyone pays Section 122 at 10%) only applies to around 60% of U.S. imports eligible for the rate,” he noted. “As a result, the overall impact on the average U.S. tariff rate is only about 0.7%. The impact of the new rates is minimal in terms of the overall economy, but at least brings some short-term planning certainty. More important is the other, manufacturing capacity review which could greatly increase rates from their current levels for imports from China and the ASEAN. We’d also still be watching the USMCA negotiations as being more important for the U.S. economy at large.”

Looking ahead, Rogers noted that the yet-to-be-announced results of the Section 301 (excess manufacturing) review which is where Trump can increase tariff rates on some countries back to their original IEEPA rate is considered more important, in terms of the tariff percentage impact, explaining it could add between 2.5% (e.g. EU, Japan and others that got a 15% deal) and 20%-plus for those (e.g. China) that didn’t.

Like Rogers, Keith Prather, Managing Director and Co-founder, at Armada Corporate Intelligence, said that while yesterday’s USTR announcement was expected, and “telegraphed several weeks ago, the Section 301 review on excess manufacturing capacity could be viewed as even more important.

“That one will likely add to these, and will hit 16 more trading partners (many of the big ones),” he said. “What we don't know about it is: 1-what percentage rate it will impose and 2-will both 301s stack?  That will determine whether they get close to the IEEPA averages of 15-to-18% or exceed them (and both will definitely exceed the 10% under the expiring 122 tariffs). There is a lot to unpack. I'm, frankly, just watching that second 301 (the percentage and how it stacks). That will tell us much and really shape the supply chain for 2027 and beyond.” 

The impact of these new tariffs is muted, in a way, because the IEEPA reciprocal tariffs normalized around a 10% baseline, as were the section 122 tariffs, and now the new section 301s, between 10%-to-12.5%, noted Jonathan Todd, Partner and Vice-Chair, Transportation & Logistics, at Benesch, a Cleveland-based law firm.

“The monetary impact is not going to be a shock to many importers,” said Todd. “In a way, it can be viewed as status quo, which gets to the overall theme that is kind of the consensus among the trade community that this is step three in what was attempted with IEEPA. Another thing people need to keep in mind right now is that the dust may not have settled on the section 122s, in the sense that we still have active litigation over those—it is not impossible that those will end up in a refund posture. There are still threats of litigation over IEEPA and there be threats of litigation over section 122s between buyers and sellers and consumers.

Another major piece related to tariffs and trade policy, according to Todd, is that the Department of Justice, Customs and Border Protection, and the Department of Homeland Security, at large, have been building up their enforcement capacity, with recent developments around forced labor, which is the basis of the current section 301 tariffs.

“There will be more enforcement and there will be more scrutiny, and everyone needs to prepare as best as possible to defend whatever positions they have taken as they have navigated these waters,” said Todd. “That is a measured change. It used to be that U.S. Customs was an agency that would work with the trade and steer in the direction of compliance. But it's becoming an era of increased DOJ criminal enforcement and threats of criminal enforcement that will be kind of a new variable in the in the compliance issue.”

The increased peak surcharges and fees include the following:

• Demand Additional Handling Surcharge, for U.S. Package Services and FedEx International Ground Shipments, of $5.95 per package, from September 28-November 22, $11.85 per package from November 23-December 27, and $8.80 per package from December 28-January 17;
• Demand-Oversize Charge, for U.S. Package Services and FedEx International Ground Shipments, of $95.75 per package, from September 28-November 2, $117.25 per package from November 23-December 27, and $95.75 per package from December 28-January 17;
• Peak Ground Unauthorized Package Charge, for U.S. Ground Services, International Ground Service, of $350.00 per package, from October 4, 2021 to January 16, 2022;
• Demand Ground Unauthorized Package Charge, for FedEx Ground, FedEx Home Delivery, and FedEx International Ground Shipments of $535 per package, from September 28- November 22, $595 per package, from November 23-December 27, and $535 per package, from December 28-January 17;
• Demand Ground Unauthorized Package Charges, for FedEx First Overnight, FedEx Priority Overnight; FedEx Standard Overnight (excluding FedEx One Rate packages), of $1.30 per package, from October 26-November 22, $2.55 per package, from November 23-December 27, and $1.30 per package, from December 28-January 17;
• Demand Ground Unauthorized Package Charges, for FedEx 2Day A.M., FedEx 2Day, and FedEx Express Saver (excluding FedEx One Rate packages, of $1.20 per package, from October 26-November 22, $2.35 per package, from November 23-December 27, and $1.20 per package, from December 28-January 17;
• Demand Surcharge, for FedEx Ground Residential and FedEx Home Delivery Residential Shipments, of $0.50 per package, from October 26-November 22, $0.80 per package, from November 23-December 27, and $0.50 per package, from December 28-January 17; and
• Demand Surcharge, for FedEx Ground Economy Package Services, of $2.55 per package, from October 26-November 22, $4.05 per package, from November 23-December 27, and $2.55 per package, from December 28-January 17

“During times of elevated volumes, high demand for capacity, and increased operating costs across our network, FedEx will implement Demand surcharges,” said FedEx. “Demand surcharges are determined for each market based on regular assessments of shipment volume and network capacity.  FedEx reserves the right to reassess and/or reinstate the Demand Surcharge at its sole discretion.”

FedEx said that the Demand Residential Delivery Charges apply to only enterprise shippers that are shipping more than 20,000 U.S. domestic residential and FedEx Ground Economy packages during a calculation week. Each week, the company said it calculates customers’ residential and FedEx Ground Economy shipment volume, with the resulting surcharge applied two weeks later. It added that the surcharge is added on top of the standard Residential Delivery Charge, with any negotiated discounts or caps on the standard Residential Delivery Charge not applying to this additional fee. And the surcharge amount is based on what it calls the peaking factor, which it calculates as packages shipped during the calculation week divided by average weekly packages shipped from June 1-28 2026 multiplied by 100—with a higher peaking factor resulting in a higher per-package surcharge, with rates varying by U.S. package service.

On FedEx’s fiscal fourth quarter earnings call in June, Brie Carere, FedEx EVP and Chief Customer Officer, said that a significant majority of the company’s incremental profit from yield was due to base price increases, demonstrating its disciplined approach to revenue quality.

“Within our U.S. domestic services, we grew yield 10%, driven by fuel surcharges, higher base rates, and favorable service mix,” said Carere.

Luke Larson, Enterprise Account Executive, at Loop, wrote in a LinkedIn post that the Additional Handling, Oversize, and Ground Unauthorized Package charges all see their steepest increases during the Thanksgiving-to-Christmas window, before stepping back down in late December.

“Enterprise shippers moving high residential volume should pay close attention to the dynamic Residential Delivery Charge, which adjusts weekly based on a peaking-factor formula tied to volume relative to a June 2026 baseline,” wrote Larson. “For shippers planning Q4 logistics and fulfillment budgets, now is the time to model these costs into holiday shipping strategy and evaluate whether carrier diversification or rate negotiations make sense.”
 

That was made clear in a session at the recent SMC3 Connections in Palm Beach, Fla., which included Daniel Hoff, VP, Government Affairs, Transportation Intermediaries Association (TIA), Matt Minton, VP, Carrier Experience, C.H. Robinson, and Jim Mullen, President Truckload Carriers Association (TCA).

The session examined how the Supreme Court’s decision has emphasized the need for robust carrier vetting processes, in addition to other things: the usage of multiple data points and documented vetting processes; technology integration and direct carrier relationships; potential shifts towards larger data-rich carriers; the need for regulatory changes, better data collection, potential insurance market shifts; the necessity of clear standards and public-private partnerships to enhance safety and compliance.

The impetus for the ruling stems from 2017 trucking crash, in which petitioner Shawn Montgomery sustained severe and permanent injuries after his tractor trailer was struck by a truck driven by respondent Yosniel Varela-Mojena, whom was driving a load of plastic pots through Illinois for respondent Caribe Transport II, LLC, with the shipment coordinated by C.H. Robinson. Montgomery sued several parties, including transportation broker C.H. Robinson. He claimed the broker was negligent in hiring the trucking companies because it knew or should have known, based on a carrier's poor safety record, that they posed a significant accident risk.

Lower courts dismissed the claim, holding that it was preempted by the Federal Aviation Administration Authorization Act (FAAAA), which limits state laws affecting trucking prices, routes, or services. They also found that the FAAAA’s safety exception did not apply.

The Supreme Court reversed those decisions, ruling that negligent-hiring claims against freight brokers fall within the FAAAA’s safety exception, which preserves state authority over motor vehicle safety. Because such claims require brokers to use reasonable care when selecting carriers, they directly relate to the safety of trucks operating on public roads.

From the perspective of C.H. Robinson’s Minton, he explained that even though CHR was the “loser” in this court case, some positive developments have come out of it.

“What it has actually caused us to do is just revisit our process,” said Minton. “We've been working in this space for years— safety has always been a priority. When you look at the data and you look at our record of accidents, we're very safe. We have really robust processes already. We were hoping for more of a national standard, singular standard, but we were ready for either scenario. So, based upon operating model planning, we reacted quickly to the decision, and we made some slight tweaks to our vetting processes, and we feel like we're in really good shape. I think the one thing that is very clear now is FMCSA data alone is a singular point, and in order to have what is a reasonable case when you're selecting carriers, you need to go above and beyond. We feel like we always have, and we're bringing other people with us now. There are still a lot of unknowns, so we'll see how things evolve over the next couple months.”

TIA’s Hoff explained that when industry stakeholders discuss the Montgomery ruling—and what it means for the industry—it is about what he called basic steps: reviewing your processes; making sure those processes are documented; and ensure that the process itself is followed, and then that documentation exists.

“Then look at the technology that you're implementing and ensure that that technology matches those processes,” he said. “Are there other technology components that make sense to add on again? Do all of this with your general counsel. And then finally, build relationships with your carriers. Ensure that you have a direct relationship with your carrier and that there's somebody at that company that you can talk to and that there's somebody that you can engage with on a person-to-person basis. Rebuilding those connections directly to your carrier is an important way to validate some of the metrics that you're looking at, but also ensure that there's communication between the brokerage and carrier.

Hoff added that it's also really important to note that the FAAAA preemption is not a valid defense for negligent carrier selection, as that was already the case in 30-plus states.

“So, if you were a broker that was moving freight through those states, you would already take that into account a lot of cases, and so again, for us, this is really about reviewing where you are, review what you have in place, and ensure that those processes and the carrier vetting criteria that you have match kind of the risk profile that you're have, and ensure that all the documentation is in place,” he said. “I wouldn't characterize this as a reinvention of the industry. This is really more of making sure your processes are in place, recharacterize what you're doing, and just make sure that you continue to do all of the really great things that the industry has been doing for decades.”

For the TCA, which has some carriers with in-house brokerages as part of its membership base, Mullen noted that, safety is at the forefront of the court’s decision, with TCA firmly believing it will promote safer highways, due to the carrier vetting process.

“We do believe that to be true,” he said. “And then, secondarily—as it relates to our members' capacity, and what does that mean to the capacity side, as it relates to our customers, our members and their customers—we believe that this will change the dynamics as it relates to the size of the carriers and those carriers that have sufficient robust staff. There's going to be some collateral effects as they relate to which carriers have enough data, but brokers are going to feel comfortable hiring.”

The platform, called Overroute, was introduced Tuesday after about a year of development alongside J.B. Hunt. Rather than asking employees to learn a new system, Overroute works inside the transportation software carriers already use. It reads live freight data, flags exceptions, and helps coordinate customer communications and other routine work.

According to J.B. Hunt, the technology is already operating at scale across one of North America's largest freight networks.

“We operate one of the most complex freight networks in North America, and that gives us a unique opportunity to take emerging technology and apply it at real scale,” said Nick Hobbs, chief operating officer of J.B. Hunt. “Overroute is an example of a broader strategy where we're using AI as a force multiplier within our expansive network to reduce friction and improve how freight gets executed every day.”

Please click here to read the complete article. 

Rail carloads, at 226,883, fell 1.2% annually, topping the weeks ending July 11 and July 4, at 223,040, and 212,691, respectively.

AAR reported that six of the 10 carload commodity groups it tracks saw annual gains: metallic ores and metals, up 1,958 carloads, to 23,183; nonmetallic minerals, up 683 carloads, to 33,068; and grain, up 639 carloads, to 22,179. Commodity groups posting annual declines were: coal, down 5,894 carloads, to 56,261; motor vehicles and parts, down 928 carloads, to 12,581; and petroleum and petroleum products, down 224 carloads, to 10,924.

Intermodal containers and trailers, at 297,017, increased 7.2% annually, topping the weeks ending July 11 and July 4, at 280,485, and 269,340, respectively.

Through the first 28 weeks of 2026, AAR reported that U.S. rail carloads, at 6,334,225, were up 2.9% annually, and intermodal units, at 7,831,914, are up 3.8% annually, for the same period.

That is in the form of a joint announcement made yesterday by UP and Montreal-based CN, with the companies inking a binding Memorandum of Understanding (MoU) that they said will establish a framework for CN to secure competitive access in connection with the proposed merger. And they also noted that this MoU preserves customer options and also resolves terminal railroad ownership issues—while expanding CNs Midwest presence and reaffirming gateway protections for all customers and railroads.

When the merger was first announced in July 2025, the rail carriers said it would create the nation’s first transcontinental railroad—connecting more than 50,000 route miles across 43 states, from the East Coast to the West Coast, and linking approximately 100 ports.

As per the terms of the MoU, UP and CN cited its main objectives, with the deal needing to be approved by the Surface Transportation Board (STB) and made official:

• CN gains access to shipper facilities where Class I railroad options would be reduced from 2-to-1 or 3-to-2, where commercially and operationally feasible;
• CN acquires Norfolk Southern's ownership interests in the Kansas City Terminal Railway Company (KCT) and the Terminal Railroad Association of St. Louis (TRRA);
• CN gains new access in the Midwest through overhead rights between Tuscola, Illinois, and East St. Louis, Illinois, and rights to serve customers between St. Louis, Missouri, and Kansas City, Missouri. For the first time, CN will have a footprint in the heart of Kansas City, with usage of Union Pacific’s Neff Yard; and
• CN will not oppose the Union Pacific-Norfolk Southern merger. Both parties will collaborate through the STB process to ensure that this agreement takes effect

UP and CN leadership explained their respective rationales for moving forward with the MoU.

“From day one, we’ve said our merger with Norfolk Southern will preserve and enhance competitive options and create a stronger railroad industry that delivers better service for customers,” said Union Pacific CEO Jim Vena. “This settlement agreement reinforces those commitments by giving expanded access and operating rights to a tough competitor.”

And CN President and CEO Tracy Robinson noted that as the rail industry considers significant structural change, it is essential that customers continue to benefit from meaningful competition and choice.

“This framework would preserve competitive access to key markets, including Kansas City, while positioning CN to continue providing reliable and efficient options for customers across North America,” she said.

Brooks Bentz, supply chain consultant and LM contributing editor, observed that this appears to be a reasonably good arrangement for CN.

“If it gets them what they want, in exchange for supporting the deal, then who is to say no,” he said. “Of course, then, the question remains as to who else will dive in with similar requests and how much will it dilute what UP is trying to achieve.”  

This development signals a shift in positioning, regarding the proposed merger, by CN.

Following the April 30 submission of an amended merger application by UP for the proposed merger, CN filed comments in May with the STB, arguing that the application “still fails to meet the Board’s requirements and thus remains incomplete.”

CN said in its May filing to the STB that the amended application is still lacking required information that regulators and stakeholders need in order to fully assess what it called the competitive and operational impacts of the proposed merger. To that end, it added that the amended application addresses only one of the three “independent deficiencies” identified by the STB in January—providing the complete merger agreement—when the initial application was rejected, while failing to address the other two deficiencies regarding meaningful competitive enhancements, which CN said does not meet the STB’s requirement for Class I mergers to enhance competition and meet the public interest standard.

CN also observed that the Committed Gateway Pricing Program in the amended application, which it called the sole alleged enhancement to competition, is temporary and limited and applies to less than 1% of United States rail traffic. It added that the program excludes major traffic categories, including finished vehicles, intermodal shipments, unit trains, and customers served by CN, CPKC, and several short line railroads.

“In January, the Board gave Applicants a clear roadmap: fix three specific deficiencies and take the opportunity to improve your application,” said Olivier Chouc, Executive Vice-President and Chief Legal Officer, CN. “Instead of doing the work, Applicants addressed only one of three—and ignored the Board’s invitation to meaningfully improve their application altogether. Rather than provide the required competition analyses, they recycled the same flawed approach the Board already rejected. Rather than submit the required TRRA application, they deleted their prior filing and offered a vague promise in its place. And rather than propose real competitive enhancements, they doubled down on a pricing program that will harm more shippers than it helps, as shown by their own expert’s study. This is not a serious effort to comply with the Board’s requirements—it is a disregard for the process and for the stakeholders who depend on it.”

The current status of the proposed merger remains pending before the STB and has yet to be approved, while it has advanced beyond the initial filing stage and is now in the regulatory review process, according to the STB.

On May 28, in a unanimous decision, the STB accepted the revised major merger application filed by UP and NS for consideration, in addition to a related application.

The STB said that this decision holds the merger process in abeyance, or temporary suspension, which includes an environmental review of the transaction and ordered the railroads to submit supplemental information by no later than July 27.

Highlights of the amended merger application cited by UP and NS include:

• A transcontinental railroad will create a stronger alternative to long-haul trucking, removing an estimated 2.1 million truckloads off the road annually. Giving shippers an attractive new option will make the entire supply chain more competitive, putting downward pressure on truck and rail prices;
• Manifest and bulk customers will save on inventory and equipment costs with the combined railroad’s faster, more reliable service;
• Shifting freight from higher-cost trucks to lower-cost rail is projected to save shippers an estimated $3.5 billion annually, helping lower costs across the supply chain;
• The merger will enhance competition by providing customers with access to seamless coast-to-coast rail service for the first time. For the limited group who will not directly benefit from a more competitive single-line option, Committed Gateway Pricing will allow more customers to share in the merger’s benefits; and
• The combined network is projected to drive growth that will require approximately 1,200 net new union jobs by the merger’s third year. This growth is in addition to an unprecedented jobs-for-life guarantee – every union employee with a job at the time of the merger will continue to have one.

They also noted that the application’s analysis is the first in rail merger history to use 100% actual traffic data provided by all six North American Class I railroads, making it what they called the most thorough assessment of market and operational impacts ever. 

“Today, the Board finds that Applicants have provided sufficient information to satisfy the completeness requirements for a major merger application,” stated the STB. “Given the fairly narrow procedural question of completeness, issues raised by commenters do not warrant rejecting the revised application.

However, the Board finds that there are several aspects of the revised application that are unclear or underdeveloped and require supplementation at this stage of the proceeding so that the Board may have the information necessary to thoroughly evaluate—and the public has an adequate opportunity to comment on—whether the transaction is in the public interest.  As a result, today’s decision holds the proceedings, including the environmental review, in abeyance, pending Applicants’ submission and the Board’s review of the supplemental information.  Abeyance of the procedural schedule does not affect discovery.  In a future decision, the Board will establish an appropriate procedural schedule for the remainder of the proceeding.”

Paul Tonsager, founder of IMS Advisory, told LM that securing support for the merger will depend on UP and NS demonstrating that it is the right move.

He said the issue is not only about combining resources to create shareholder value, but also about increasing competition and delivering customer benefits.

“The STB, which will ultimately decide on this, takes the process very seriously,” he said. “The three-month period between the initial rejection and now coincides with upcoming midterm elections, and depending on the outcome, the conversation could shift. I previously estimated a 60–40 chance of the merger being approved, but now I see it as closer to 50–50. Part of that has to do with the application itself. Speed is not everything here—delays can invite negative press and additional scrutiny. In that sense, they may be slightly behind the eight ball after having to resubmit.”

BNSF weighs in: Zak Andersen, Chief of Staff and VP of Communications, at BNSF, said that yesterday’s announcement does nothing to change the fact that this merger doesn’t enhance competition and would leave thousands of rail customers with fewer competitive options and a single railroad controlling roughly 50% of the market.

"More importantly, UP’s agreement with CN undermines one of the core arguments for the merger," he said. "For a year, UP has claimed that partnerships cannot deliver the benefits it says this transaction would create. Yet the CN agreement closely resembles partnerships that BNSF and other Class I railroads  have successfully operated for decades.UP is required to demonstrate that the benefits it claims can only be achieved through a merger. Its own agreement with CN shows the opposite. The benefits UP highlights can be pursued today without a merger, and significant portions of the arrangement are not even contingent on merger approval.”

A focus on connectivity: In a separate announcement, UP and CN said they signed a separate binding MoU focused on augmenting service. Under the terms of the MoU, UP will receive expanded operating rights over CN's Elgin, Joliet & Eastern Railway (EJ&E) corridor through Chicago and grant CN rights over UP's network running between Memphis and Eagle Pass Texas, supporting freight movements between Canada and Mexico. 

Earnings wrap: In its second quarter earrnings announced earlier today, UP reported that net income, at $2.0 billion, rose 6% annually, and operating revenue, at $6.9 billion, was up 12% annually, paced by higher fuel surcharge, volume grwoth, core pricing gains, and greater "other" revenue partially offset by business mix.

June imports, at 2.53 million TEU (Twenty-Foot Equivalent Units), posted a 9.0% annual gain, despite the majority of sectors tracked by the firm seeing import declines or slowing growth, while trailing May’s 13.6% annual growth rate. Total second quarter imports rose 5.5% annually, and on a year-to-date basis through June, the firm reported that total imports, at 14.56 million TEU, eked out a 0.9% annual gain.   

S&P Global Market Intelligence pointed to a 37.9% annual June gain in consumer discretionary goods, following a 44.1% annual May gain, as the primary growth driver for the month, with those shipments up against weaker annual comparisons, due to weaker 2025 post-tariff shipments, as well as pre-tariff front-loading in advance of Section 301 tariffs that are expected to be implemented in the third quarter.

For other sectors, it reported the following:

• Technology imports fell 4.9%, with AI accelerators crowding out conventional electronics;
• Materials imports grew 1.3%, with slower growth due to chemical sector disruptions related to the Middle East conflict, following a 2.4% May gain;
• Capital goods imports dropped 7.8% annually, steeper than May’s 3.8% decline, down for the 14^th consecutive month, due to slowing growth in industrial products and a decline in building products; and
• Technology product imports dropped 4.9% annually, following a 0.7% May gain, with Consumer Electronics products off 13.2% annually

In an interview with LM, Chris Rogers, Head of Supply Chain Research, at S&P Global Market Intelligence, explained that June, in a sense, represents how both the second quarter and also the first half of 2026 went, in terms of import levels and activity. And he added that that amid the tariff-driven turbulence going back to the April 2025 “Liberation Day,” shippers now have a “playbook for uncertainty,” for how to approach and handle shifting situations, based on learning from past experiences.

“Tariffs have been and are happening, and shippers know to pull-forward where it makes sense to do so,” he said. “You want to try and identify where there's risks that we need to control versus risks that we want to control. Every risk mitigation has a cost, and I think people have learned over the past two years that you need to do something, but you shouldn't do too much. And that is why we are seeing pull-forward activity but perhaps not to the same extent as last year. We are also now, to a certain extent, talking about kind of July and August shipment levels in June—so not only do you have a lower-than-normal June, you are also effectively talking about July arriving a month early. While the annual growth percentage is pretty big, the numbers are understandable in that regard.”

What’s more, he explained that the high amount of pull-forward activity, in addition to general tariff dealings, and volatility caused by the Middle East conflict, collectively serve as the trade thesis of the second quarter.

To that end, Rogers said that the second quarter, over all, turned out much better than expected, with April relatively weak, May very strong, and June not as strong as May.

And with the White House’s temporary 10% Section 122 tariffs set to expire at the end of this week, S&P Global Market Intelligence noted that they may increase from 10% to 12.5% and potentially subsequently to more than 20%, with decisions expected soon on the White House’s Section 301 review related to manufacturing capacity. Which it added would “put a cap on tariff front-loading imports from more heavily tariff-affected countries.

“The bigger question is not if it is a 10% or 12.5% tariff, it is that potential for higher tariffs,” he said. “The lesson [from Brazil and Canada] is that the White House still has the appetite for much higher tariffs. And within that, it is willing to provide exemptions where they are needed, like food, for example. There is also a willingness to be highly differentiated by country. We had expected the White House’s Section 301 investigation on excess manufacturing to be announced already…and is more difficult to assess, because you need to have a detailed economic model of every country in the world.

That is clearly a much more difficult process to manage, in terms of setting those tariffs, but make no mistake, the Section 301 investigation on excess manufacturing capacity will be the main vehicle for both differentiating tariff rates and moving them to higher levels, particularly for the countries that the U.S. has a big trade deficit with, particularly China. One of the reasons it may be sitting back on this is because President Trump is scheduled to meet with President Xi on September 24.”  

In its “U.S. Industrial Market Statistics 2026 Q2,” Colliers noted that the second quarter vacancy rate fell seven basis points sequentially to 7.3% in the second quarter, while posting an annual gain of four basis points, which it said serves as an indication of vacancy stabilizing. What’s more, it said that vacancy has either declined or stabilized over the last year in 63% of the 79 markets tracked by Colliers.

Colliers Director of National Industrial Research Craig Hurvitz told LM that vacancy is stabilizing because the supply-demand imbalance that drove rates higher over the past several years has narrowed.

“New deliveries have declined substantially from their peak, while leasing and net absorption have improved,” said Hurvitz. “Demand exceeded new supply in Q2, allowing more markets to work through recently delivered space. Vacancy remains elevated in some overbuilt markets, but a smaller development pipeline, fewer large tenant move-outs, and strengthening demand suggest the national rate has reached its cyclical peak.”

As for why demand is exceeding new supply was evident in the report’s data, with Colliers stating that there was 53 million square-feet (SF) of new supply in the second quarter, down 22 million SF annually—also representing the lowest level for any quarter since 2016, said the firm—with deliveries having returned to what it called more historical levels after hitting a peak of more than 100 million SF over a nine-quarter period from 2022-2024.

And it added that there was 59 million SF of net absorption in the quarter, up 31 million SF annually.  With occupier demand outpacing new supply in the quarter, Colliers explained that serves as another sign that the market is regaining equilibrium.

“The shift [in demand outpacing supply] primarily reflects two converging trends: a sharp slowdown in completions and a recovery in occupier activity,” said Hurvitz. “Recent demand has been largely driven by third-party logistics providers (3PLs), retailers, food and beverage companies, manufacturing-related users, and supply-chain diversification, while rapid data-center development is generating additional requirements from equipment manufacturers and suppliers in select markets. Demand is likely to continue exceeding new supply over the next several quarters, although the margin will vary considerably by market. Economic and trade-policy uncertainty could delay some decisions, but the limited near-term delivery pipeline should allow even moderate demand growth to tighten market conditions.”

Looking at the U.S. construction pipeline, Colliers said it headed up 7% to 312 million SF in the second quarter, hitting its highest level since the third quarter 2024. Which is being paced by a slowdown in project deliveries and a pickup in construction starts, especially for built-to-suit and speculative facilities 200,000 SF or larger.

Going forward, Hurvitz said that the pipeline should expand gradually but not return to the scale of the previous development cycle.

“Construction has begun to increase from its late-2025 low of 290 million SF as developers respond to improving fundamentals and diminishing availability of modern space in balanced or tightening markets,” he said. “However, high financing and construction costs, tighter lending, and greater scrutiny of speculative projects will keep growth in check. New development will be more selective, with a larger emphasis on build-to-suit projects, infill locations, and markets where recent demand supports additional supply.”

When asked how much of a concern the slowdown in project deliveries is, as it relates to future growth, Hurvitz said that in the near term, the slowdown is good news because it is helping the market absorb the excess supply delivered during the last cycle.

“The longer-term concern is that development takes considerable time to restart,” he said. “If tenant demand continues to improve while starts remain limited, some markets could move from elevated vacancy to a shortage of modern, well-located space relatively quickly. Eventually, this could place renewed upward pressure on rents in tight markets where demand outpaces construction.”

Second quarter warehouse/distribution asking rents, at $10.14 per SF, were “relatively” flat, said Colliers, falling 1.6% annually, with the firm saying that this tally reflected corrections in some coastal markets that experienced “outsized rent growth” during the pandemic-era expansion period. And it added that with vacancy leveling off, coupled with construction activity well below peak levels, that rents will remain relatively stable over the balance of the year.

Many freight transportation and logistics executives and analysts consider the Cass Freight Index to be the most accurate barometer of freight volumes and market conditions, with many analysts noting that the Cass Freight Index sometimes leads the American Trucking Associations (ATA) tonnage index at turning points, which lends to the value of the Cass Freight Index.

What’s more, the Cass Transportation Index accurately measure changes in North American freight activity and costs based on $37 billion in paid freight expenses for the Cass customer base of hundreds of large shippers. 

The June shipments reading, at 1.009, fell 4.1% annually, steeper than May’s 1.2% annual decline, and were off 3.1% sequentially, snapping a four-month stretch of sequential gains. On a month-to-month seasonally-adjusted (SA) basis, shipments were down 2.9%, and on a two-year stacked-change basis, June shipments were down 6.4%.

“To some extent, volumes are still down because capacity is declining, and the glimmers of strong demand visible with double-digit growth in the relatively small domestic intermodal sector are not moving the needle in this more trucking-based index,” observed Tim Denoyer, the report’s author and ACT Research vice president and senior analyst. “Higher fuel prices were also a drag on goods demand. The normal seasonal trend would put the shipments component of the Cass Freight Index down about 3% [annually] in June.”

June expenditures, at 3.640, posted an 11.2% annual gain, on the heels of a 7.5% May increase, and rose 14.1% on a two-year stacked change basis, while posting a 2.2% sequential gain. On a month-to-month SA basis, June expenditures rose 1.2%.

“The acceleration was mainly due to rates, while volumes stepped back,” said DeNoyer. “In SA terms, the index has risen [sequentially] for eight straight months, and rose 1.2% [sequentially] in June, after a 4.9% [sequential] increase in May. The expenditures component of the Cass Freight Index, after a record 38% surge in 2021 and another 23% increase in 2022, fell 19% in 2023 and 11% in 2024. In 2025, the index declined by 0.5%.”

ATA reported that its June Seasonally Adjusted (SA) For-Hire Truck Tonnage Index reading, at 113.1 (2015=100), saw a 0.7% annual decrease (downwardly revised from an originally-reported 0.6% annual decrease), following a 2.5% annual increase in April. Through the first five months of 2026, the index posted a 1.4% annual increase, paced by first quarter gains, whereas it was flat annually in 2025.

The ATA’s not seasonally adjusted (SA) For-Hire Truck Tonnage Index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, came in at 116.5, topping May’s 113.4 reading by 2.7%. ATA said that these indices “are dominated by contract freight, as opposed to traditional spot market freight.”

“While tonnage was little changed during June, there was a definite weakening in volumes during the second quarter as the index contracted a total of 4.1% during April and May,” said ATA Chief Economist Bob Costello. “After five straight year-over-year gains, tonnage has now contracted from year-earlier levels for the last two months. While the U.S. economy remains on solid footing overall, the freight economy isn’t as strong. With that said, the decrease in capacity over the last year probably has fleets feeling a little better than volumes would suggest”

For the week of July 20, the national average price per gallon increased 33.8-cents, coming in at $5.134, marking the third-highest weekly increase on record (and matching the week of June 9, 2008), since EIA first began collecting this data.

This was preceded by a $1.058 increase to $4.796, for the week of July 13, which marked first weekly increase since a $0.001-cent decrease, to $5.639, for the week of May 11. With the brief Memorandum of Understanding between the United States and Iran not sticking, it was widely viewed, prior to this week, that these escalations would lead to the average price per gallon of diesel topping the $5.00 mark, which came to fruition.

The national average price per gallon, for the week of July 6, fell 9 cents, coming in at $4.578 per gallon, following a 16.4-cent decrease, to $4.668, for the week of June 29, following a 22.7-cent decline, to $4.832, for the week of June 22, which snapped a 14-week stretch of the national average topping the $5.00 per gallon mark, going back to the week of March 16, when the national average was at $5.071 per gallon.

Prior to that, the national average, for the week of June 15, dropped 15.1 cents, to $5.059, following a 14.0-cent decline, to $5.210, for the week of June 8, a 17.3-cent decline, to $5.350, for the week of June 1, which marked steepest weekly decline since the week of April 20, when the national average fell 20.5 cents, from $5.608 to $5.403, for the largest weekly decline in more than three years, according to EIA data.

Prior to the week of May 4, the highest average price in any week since came during the week of May 9, 2022, when it was at $5.623 per gallon. Prices continue to remain elevated, due to the launched joint strikes by the United States and Israel, in an initiative geared towards halting Iran’s development of nuclear weapons.

On an annual basis, the national average price per gallon is up $1.322, ahead of the $1.058 reading a week ago at this time.  The average price per barrel of WTI Crude is at $85.25, topping $80 a week ago and $70.37 two weeks ago.

“While the ongoing U.S.-Iran situation continues to weigh on markets, the story is increasingly less about crude oil and more about global refining capacity—the Strait of Hormuz remains closed while continued Ukrainian attacks on Russian refineries further squeeze an already strained supply picture,” noted Patrick De Haan, analyst at Gas Buddy, in a social media post. “With WTI crude approaching $85 per barrel in Sunday night trading, price-cycling markets are likely to see another jolt higher in the coming days, and motorists should brace for a rougher stretch ahead.”

Another threat that could compound rising energy prices was noted in a New York Times report, with the Houthi pirates said on Monday they would impose a blockade on Saudi ships, which could open a new front in the Middle East while also raise pressure on volatile global energy markets.

In explaining its rationale for moving forward with these tariffs, the White House explained that these tariffs are being implemented as a response to what it views as discriminatory trade practices by Canada that affect U.S. exports, specifically for automobiles, alcoholic beverages, and dairy.

“President Trump is taking action to hold Canada accountable for its continued discrimination against and unreasonable and unequal treatment of U.S. commerce that has burdened and disadvantaged hardworking Americans,” the White House said. “Section 338 empowers the President to impose tariffs when a country disadvantages U.S. exporters relative to the exports of another country to offset the disadvantage or burden on U.S. commerce. Canada imposes certain tariffs and quotas on cars imported to Canada from the U.S., but not on imports from other countries.  Canada also administers these quotas in a way that compels U.S. auto companies to invest in production in Canada instead of the United States.

Other key aspects of these tariff actions cited by the White House were:

• each Section 338 proclamation imposes a 50% tariff on a different set of Canadian imports, covering products ranging from wine to hockey sticks to cement, including commercial refrigeration equipment, cement and other building materials, and certain dairy products and ingredients;
• these Section 338 tariffs apply to all covered goods regardless of whether a good originates under the U.S.-Mexico-Canada Agreement (USMCA);
• these Section 338 tariffs will not apply to energy, potash, products subject to tariffs under Section 232, and certain other goods, such as fish or critical minerals; and
• the tariffs will take effect 30 days after signing and are designed to offset the burden and disadvantage on U.S. commerce from Canada’s discrimination

What’s more, the White House pointed to various declines in U.S. exports to Canada as a driver for the new tariffs.

As examples, it observed that exports of U.S. motor vehicles fell 22%, or $5.6 billion, from April 2025 through March 2026 compared to the same period over 2024 to 2024, while exports of motor vehicles from other countries into Canada have gone up, offsetting the previous demand that came from the U.S. And for alcoholic beverages, it said that with the exception of two Canadian provinces and territories, all others have ceased the purchase, distribution, or retailing of U.S. alcoholic beverages and have not imposed similar restrictions on other countries. For the period from March 2025 to February 2026, the White House said that From April 2025 through March 2026, Canadian imports of U.S. motor vehicles decreased by approximately 22%, or $5.6 billion, compared to the same period in 2024-2025. Exports of motor vehicles from other countries to Canada have increased to meet the demand previously filled by U.S. exports.  

All but two Canadian provinces and territories have halted the purchase, distribution, or retailing of U.S. alcoholic beverages, and have not imposed similar restrictions on other countries. From March 2025 through February 2026, Canadian imports of U.S. alcoholic beverages decreased by about 81%, or $582 million, compared to the same period in 2024-2025.

Chris Rogers, Head of Supply Chain Research, at S&P Global Market Intelligence, observed in a research note that the implementation of the tariffs is far from certain given they are not being applied for 30 days, or until Aug. 19.

“There may be a negotiating tactic ahead of United States-Mexico-Canada Agreement (USMCA) negotiations, which are focused in part on automotive rules of origin, potentially driving only a small response from Canada,” wrote Rogers. “The tariffs are also untested in law and have not been applied since the statute was first introduced in 1930.”

And he added that Canada has not retaliated against these measures, noting that its Prime Minister Mark Carney has referred to the tariffs a “direct violation” of the USMCA, but did not announce countermeasures, likely with the intention of further negotiation with the U.S. during likely upcoming USMCA talks, which are currently stalled.

“If the tariffs proceed, Canadian retaliation is likely, with higher tariffs likely placed on goods primarily produced in Republican-run states,” he said.

With the 10% Section 122 tariffs, which took effect in February after the Supreme Court ruled against the legality of the White House’s implementation of tariffs under the International Emergency Economic Powers Act (IEEPA) set to expire this week on Friday, July 24, this is far from the only development of note on the global trade front.

Earlier this month, the U.S. said that in a joint review of the USMCA (United States Mexico Canada Agreement), that it did not agree to renew the USMCA in its current form. With the U.S. electing to not renew the USMCA in its current form, the agreement will remain intact until 2036, and it will not enter a period of annual reviews that start in 2027, noted a Reuters report. The report added that during those annual reviews, the U.S., Canada, and Mexico are able to negotiate amendments, agree to extend the agreement, replace it with a new arrangement, or one nation could separately choose to withdraw under USMCA’s withdrawal provisions.

The U.S. also recently said 25% tariffs will apply to most imports from Brazil under Section 301 of the Trade Act of 1974, will take effect on July 22. But there are exceptions for: Informational materials, donations, and travelers accompanied baggage; products already subject to Section 232 tariffs; certain essential products, such as those that lack sufficient U.S. supply, could disrupt the economy if taxed, cannot be sourced elsewhere, or where tariffs would not effectively address the policy concerns, according to the White House.

It added that other specific imports—including beef, orange juice, aircraft and aircraft parts, and energy products—are not covered in order to maintain the effectiveness of the Section 301 action and encourage Brazil to address the underlying issues.

A Financial Times report published today that the U.S. is gearing up to impose new tariffs on various counties, with China, the European Union, Japan, Canada, and Mexico among them. This is related to a United States Trade Representative’s Section 301 investigation under the Trade Act of 1974 regarding the importation of goods produced with forced labor. The report said that countries with partial bans may see 10% tariffs, and others could see 12.5% tariffs.  

In an 8-K filing with the Securities and Exchange Commission, the company outlined the following initiatives, which are set to take effect on August 1:

● Workforce Reduction: Upon completion of the Plan, the Company expects to have reduced its workforce by approximately 2% of total positions across multiple functions and geographies. The reductions include employee separations, the elimination of certain open positions, and the non-replacement of certain positions vacated through retirements and other attrition;

 ● Brand Consolidation: Effective August 1, 2026, MoLo Solutions, Panther Premium Logistics and ArcBest Technologies will operate under the ArcBest brand, reflecting ArcBest’s position as an integrated logistics provider. In connection with this transition, the Company will retire the MoLo brand for truckload brokerage and the Panther brand for ground expedite services. The Company will continue to operate its asset-based, less-than-truckload operations under the ABF Freight® brand and its moving services operations under the U-Pack brand;

● Facility Consolidations: The Company intends to close ten ABF Freight service centers in smaller markets and consolidate their operations into other facilities within the affected regions. The locations subject to closure represent approximately 1% of the total doors in the ABF Freight service center network. Following the planned closures, the Company's total door count is expected to remain approximately 8% above 2021 levels. The consolidations constitute a change of operations under the National Master Freight Agreement (the “NMFA”) with the International Brotherhood of Teamsters and are subject to approval by the joint union-management Change of Operations Committee pursuant to the terms of the NMFA; and

● Discontinuation of Product Offering: The Company will discontinue the Vaux Freight Movement System and focus its Vaux® operations on the Vaux Smart Autonomy product line.

“Our customers are managing complex, constantly evolving supply chains, and they want partners who make that work easier,” said Seth Runser, ArcBest president and CEO. “Bringing MoLo and Panther capabilities together under one ArcBest brand better unifies us as one team for a more coordinated experience across our solutions.

We’re making it simpler and faster for them to access the solutions they need, while delivering the reliable service they expect. At the same time, streamlining our organization and operating footprint improves efficiency, strengthens profitability and positions us to grow without compromising the service our customers rely on. ArcBest will continue bringing together experienced teams, creative solutions and purpose-built technology, including the recent launch of ArcBest View, to help solve challenges and build stronger supply chains ArcBest has been a trusted logistics provider for over 100 years. These actions strengthen the foundation we've built and prepare us to deliver for our customers over the next hundred.”

Morgan Stanley analyst Ravi Shanker wrote in a research note that as part of the restructuring, the company will also reduce its workforce by 2%, eliminate select open positions, and consolidate around 1% of its service center network.

“Mgmt. expects the changes to generate $40 million in annualized cost savings, or a $1.33 benefit on EPS (or 13% of our estimate of normalized EPS of $10-11), while creating a more streamlined customer experience and improving operational efficiency,” wrote Shanker. “This restructuring follows the recent launch of ArcBest View and closely aligns with its broader strategy of integrating its logistics offerings under a single platform and brand.”

The milestone includes civil and criminal recoveries, penalties, forfeitures, and publicly charged losses since the task force was launched with the Department of Homeland Security in August 2025. At the same time, the DOJ announced a new Global Trade & Commerce Enforcement Section within its National Fraud Division, signaling that customs enforcement will remain a major priority.

“For too long, fraud actors have viewed customs violations as a mere surcharge or cost of doing business,” said Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division. “By utilizing the department's full weight, we are making it clear that trade fraud is a serious economic crime.”

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A major driver of that is the high level of front-loading, or pulling forward of cargo in order to avoid what are widely assumed to be higher tariff levels, following the July 24 expiration date of the White House’s temporary 10% Section 122 tariffs, which took effect in February, soon after the United States Supreme Court ruled against the legality of the White House’s usage of tariffs under the International Economic Emergency Act (IEEPA).

In the months leading up to the expiration of the Section 122 tariffs, the level of early shipping, in the form of front-loading and pulling forward, has been apparent. That was made clear in June data issued by the Port of Los Angeles (POLA), which observed that total July POLA volume—at 1,002,734 TEU (Twenty-Foot Equivalent Units)—increased 12% annually, for the busiest June on record for the port, and also marking the third time monthly volumes have topped the 1 million TEU mark. Port officials attributed the strong month to strong import demand, with retailers and manufacturers pulling forward cargo, due to what it called “evolving trade policy,” as well as higher fuel costs and ongoing global supply chain uncertainty.

“Importers aren't simply moving more cargo now; they're moving it differently,” said POLA Executive Director Gene Seroka. “Many companies have stepped away from traditional seasonal shipping patterns, advancing cargo whenever they see an opening rather than waiting for perfect conditions. In other words, retailers are making strategic decisions about when and how much to ship, balancing back-to-school and holiday demand against tariffs, rising fuel costs, and global uncertainty.”

To that end, the results of a recently-conducted Logistics Management reader survey of 100 freight transportation, logistics, and supply chain stakeholders highlighted various aspects of the 2026 peak season, related to how things are currently progressing as well as things to monitor over the coming months.

The survey’s findings pointed to respondents planning for a more active Peak Season in 2026, with 52% of respondents stating it will be more active (nearly doubling last year’s 27% reading), 19% said it would be less active (well below last year’s 42% reading), and 30% said it will be about the same (in line with last year’s 31%).

Reasons cited by respondents pointing towards a more active 2026 compared to 2025 included: customer delivery commitments; tight over-the-road capacity; rates and pricing; the traditional holiday rush; and geopolitical issues.

For those in the other camp, calling for a less active Peak Season, tariffs led the way, as well as lower sales partially due to high tariffs, in addition to fuel costs, and lower sales and revenues.

As for the impact of Peak Season on day-to-day operations, the survey’s results showed that 44% of respondents view it as very significant, with 56% saying it is somewhat significant.

And in a straight “yes” or “no” question, 78% of respondents said Peak Season impacts their day-to-day operations, down from 91% last year, while the remaining 22%, up from 9% last year, said it does not impact their day-to-day operations.

Reasons for the former included: labor shortages; delivery delays with additional volume into the same footprint; increased logistics coordination; capacity constraints; and increased freight and fuel costs.

With an earlier Peak Season this year, the Global Port Tracker report, which is published by the National Retail Federation (NRF) and maritime consultancy Hackett Associates, is calling for second-half volumes to trend down.

“This year’s early peak season is expected to continue through July as retailers and other importers prepare for potentially higher tariffs beginning in August and other trade uncertainties,” said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold. “The busy back-to-school selling season has already started, and the winter holidays won’t be far behind, so retailers have been working to get products into the U.S. and ready to go before new tariffs can potentially drive prices higher. Despite ongoing economic headwinds, consumers are continuing to spend, but affordability is a key factor affecting their spending habits.”

Chris Rogers, Head of Supply Chain Intelligence, at S&P Global Markets, said that while there is an earlier Peak Season this year, shippers now have a “playbook for uncertainty,” for how to approach and handle shifting situations, based on learning from past experiences.

“Tariffs have been and are happening, and shippers know to pull-forward where it makes sense to do so,” he said. “You want to try and identify where there's risks that we need to control versus risks that we want to control. Every risk mitigation has a cost, and I think people have learned over the past two years that you need to do something, but you shouldn't do too much. And that is why we are seeing pull-forward activity but perhaps not to the same extent as last year.”

Rail carloads, at 223,040, saw a slight 0.4% annual decrease, topping the week ending July 4, which was likely impacted by the timing of the July 4 holiday, at 212,691, and trailed the week ending June 27, at 232,408.

AAR reported that eight of the 10 carload commodity groups it tracks saw annual gains, including: metallic ores and metals, up 1,627 carloads, to 21,857; nonmetallic minerals, up 1,263 carloads, to 32,823; and farm products excl. grain, and food, up 835 carloads, to 18,093. Commodity groups posting annual declines were: coal, down 4,713 carloads, to 53,527; and grain, down 1,197 carloads, to 21,446.

Intermodal containers and trailers, at 280,485 units, rose 3.0% annually, topping the week ending July 4, at 269,340 units, and trailing the week ending June 27, at 293,060 units.

Through the first 27 weeks of 2026, AAR reported that U.S. rail carloads, at 6,117,342, were up 3.1% annually, and intermodal units, at 7,534,897, are up 3.6% annually, for the same period.

The conference will feature keynote presentations from leaders at Wayfair, Tractor Supply Company, and Eli Lilly and Company, alongside executives from many of the world’s most influential organizations. Additional speakers represent Apple and Amazon—both Fortune 100 companies—as well as Fortune 500 organizations including Target and Penske Logistics. Attendees will also hear from innovators such as Stanford Medicine, DP World, Fanatics, Evonik, and Dr. Reddy’s Laboratories, providing practical insights across retail, healthcare, manufacturing, logistics, and technology.

Scheduled for October 21-23, 2026, at the W Nashville hotel in downtown Nashville, Tennessee, the conference features keynote presentations, executive fireside chats, panel discussions and  30 small-group breakout sessions covering artificial intelligence, digital transformation, talent development, healthcare, retail, logistics, climate resilience and supply chain execution.

View the complete agenda here: https://www.nextgensupplychainconference.com/agenda/

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

For May, the most recent month for which data is available, the SCI reading, at -15.4, improved slightly over April’s -17.4 and March’s -18.9, with the firm saying it is among the six “least favorable” readings going back to 2000. The firm explained that even though market conditions in May were less severe compared to March and April, it did not represent any type of material improvement, with conditions remaining extremely challenging, due, in large part, to high freight rates.

“As we have indicated for several months, there is little in the way of good news for shippers,” Avery Vise, FTR’s vice president of trucking. “The SCI estimate for June is preliminary, but the one relative positive seemed to have been falling fuel costs. However, that factor very recently has stopped improving and could be reversing. The lone near-neutral contributor to the SCI recently has been—and is expected to be—lack of freight volume pressure on the transportation system, but that experience varies by type of equipment needed. While we expect market conditions to become less daunting for shippers in the months ahead, we expect the SCI to be consistently negative throughout the two-year forecast horizon. Even worse, most risks to that forecast probably are to the downside for shippers.”

POLA reported that total June volume—at 1,002,734 TEU (Twenty-Foot Equivalent Units)—increased 12% annually, for the busiest June on record for the port, and also marking the third time monthly volumes have topped the 1 million TEU mark, something only POLA has done more than once. Port officials attributed the strong month to strong import demand, with retailers and manufacturers pulling forward cargo, due to what it called “evolving trade policy,” as well as higher fuel costs and ongoing global supply chain uncertainty.

June POLA imports, at 530,538 TEU, rose 13% annually, for POLA’s third-highest import month in its 118-year history, and exports, at 128,365 TEU, flat annually. Empty containers, at 345,811 TEU, rose 17% annually.

Through the first six months of 2026, POLA reported that total volume, at 5,122,603 TEU, is up 3% annually and up 4% compared to the port’s five-year average.

On a POLA-hosted media call, POLA Executive Director Gene Seroka said that June imports were 18% above the port’s five-year average

“Importers aren't simply moving more cargo now; they're moving it differently,” he said. “Many companies have stepped away from traditional seasonal shipping patterns, advancing cargo whenever they see an opening rather than waiting for perfect conditions. In other words, retailers are making strategic decisions about when and how much to ship, balancing back-to-school and holiday demand against tariffs, rising fuel costs, and global uncertainty.”

As for exports, he explained they continue to face headwinds, especially for American agricultural and business interests.

He called the year-to-date volume tally a strong performance by any measure, but especially meaningful given all the uncertainty businesses have navigated for some time now.

“June also marked the close of our fiscal year here in Los Angeles,” he said. “We finish with 10.4 million TEU, making it among our best fiscal years in port history,” he said. “That's another milestone that reflects the consistency of this port and the people who keep it running every day. The women and men of the ILWU, our terminal operators, truckers, rail partners, and all our stakeholders-they made this possible. Their professionalism, collaboration, and commitment to excellence are the foundation of all these remarkable accomplishments.”

Looking at the second half of 2026, Seroka said that it is important to note that the market remains in what he described as a dynamic cargo environment, with some cargo being pulled forward as businesses respond to uncertainty.

“However, at some point, those shipping patterns will normalize and volume will moderate,” he said. “It's worth keeping in mind also that we're comparing against an exceptionally strong second half of 2025. Last July, we exceeded 1 million TEUs as well, and August approached 960,000 units. Those are challenging comparisons for any port. That said, the data we're seeing today suggests that the month of July should be another solid one, with cargo volume remaining above 900,000 container units. Beyond that, the picture gets a little harder to read because businesses are adapting in real time, and conditions keep changing.”

Those conditions include things like shifts in tariffs and trade policy, the Iran conflict, freight rates, consumer spending, and inventory replenishing, he noted.

POLB data: June Port of Long Beach volume, at 779,331 TEU, saw a 10.6% annual gain, for the port’s third-highest June reading.

Imports rose 11% annually to 387,025 TEU, and exports, at 86,446 TEU, moved up 1.3%, with empties, at 305,860 TEU, climbing 14.1%

On a year-to-date basis through June, total POLB volume, at 4,829,578 TEU, are up 1.7% annually, ahead of the 2025 pace, which was the port’s highest-volume year in its history.

POLB CEO Dr. Noel Hacebaga said on a media call that June’s results demonstrate the continued confidence that cargo owners and supply chain partners have in POLA and the resilience of the supply chain, and the continued demand for goods moving through its gateway.

“We're keeping a close eye on several factors that could influence cargo volumes in the months ahead, including global economic conditions, consumer demand, trade policies, and geopolitical developments,” he said. “The end of the ceasefire affecting the Strait of Hormuz underscores how quickly geopolitical events can impact the global supply chain. U.S. oil reserves remain low, and when inventories are tight, the market has less cushion to absorb a disruption, that can put upward pressure on oil prices, increase fuel and transportation costs, and create ripple effects throughout the global supply chain.

Businesses across the shipping and logistics industry continue planning for a range of scenarios as they work to build more resilient and diversified supply chains. Trade policy also remains a key variable. Earlier this month, the U.S. announced that it will not renew the U.S.-Mexico-Canada Trade Agreement in its current form. This trade pact is valued at $2 trillion in annual trade, with U.S. exports to both countries exceeding $670 billion. We're monitoring negotiations as they continue through the summer or potentially longer. One option we might see is the U.S. agreeing to separate trade agreements-one with Mexico and another with Canada. Stay tuned.”

Company officials said that the $100 million investment into this 617,000 square-foot facility will expand Maersk’s Northeast U.S. logistics footprint and add roughly 1,000 jobs. What’s more, they added that this facility “will support a major e-commerce customer” (whom it declined to identify) and also help the company to deliver faster and more reliable fulfillment services to Northeast-based consumers.

“The Hopedale facility will serve a single large-scale e-commerce customer and is expected to process up to 330,000 units per day at peak capacity,” said Dave Hune, Head of Maersk Contract Logistics North America. “Equipped with advanced conveyor and sortation technology, the operation will support high-volume fulfillment and delivery across the Northeast region while helping ensure speed, reliability and scalability during periods of peak demand.”

Maersk said that this new facility helps to support the company’s focus on building integrated logistics services offerings bringing together transportation, warehousing, fulfillment, and distribution into what it called a seamless customer experience.

A Maersk spokesperson told LM that a major driver for opening up this new facility is that companies today are increasingly looking for logistics partners that can help them position inventory closer to customers and respond to demand with greater speed and flexibility.

“Our investment in Hopedale reflects continued customer demand for modern fulfillment capabilities,” said the spokesperson. Designed to support high-volume fulfillment operations, the site expands Maersk's ability to help customers meet growing consumer expectations for faster, more reliable delivery.”

The firm noted that the national vacancy rate came in at 6.9%, with leasing activity climbing to its highest level in around four years. Other key data points cited by the firm were:

• Net absorption, at 62.1 million square-feet (SF), represented the second time in the last three quarters that quarterly demand topped 60 million SF, with occupiers having absorbed 113.6 million SF of industrial space, for its best first-half performance since 2023;
• Net absorption over the last four quarters, at 236 million SF is up 17% compared to the post-pandemic three-year average;
• Developers completed 62 million SF of new space in the second quarter, with first-half deliveries at 119 million SF, a nearly 20% annual decrease;
• Warehouses completed since 2020 accounted for 137 million SF of first half 2026 net absorption, with facilities larger than 500,000 SF accounting for almost half, as demand continues to be focused on modern industrial properties, with occupiers addressing higher clear heights, greater operational efficiency, and increased power capacity to support automation; and
• New leasing volume, at 193.4 million SF, marked the highest quarterly tally since mid-2022, with year-to-date leasing activity up 16% annually, paced by continued demand for large-format distribution facilities

Jason Price, head of logistics and industrial research, Americas, at Cushman & Wakefield, told LM that second quarter vacancy decreased due to shrinking sublet space, with some tenants pulling space off the market for use and some leasing up sublease space. 

“Demand outpaced speculative new supply as well in Q2,” he said. “And there is just less space coming online (or vacant) than in previous years—as many markets are starting to stabilize amid less supply delivering.”

As for whether net absorption levels can remain at their current pace, given how strong it has been in recent quarters, Price explained that quarterly absorption is projected to rise modestly in the second half of 2026. 

“Even though it’s already up 83% annually (on a year-to-date basis), we are still below levels seen from 2015-to-2019,” he said. “So, while the numbers are much healthier, there is still room for acceleration—although we will not reach the record levels seen from 2021 to 2022.”

With first half deliveries off almost 20% annually, Price noted that in order for deliveries to rise, the pipeline needs to grow, with the pipeline back above 300 million SF for the first time in more than two years.

“While it should climb further, development will remain more disciplined and developers are reacting to strong demand in key markets,” he said. “While the delivery totals will likely start to increase next year, we won’t come anywhere near the levels of new supply which we had from 2021 through mid-2024.”

When asked how much of a driver automation is for industrial real estate growth, relative to other sectors and tenants, Price said that for corporate industrial tenants, automation has become very important in order to drive operational efficiencies.

“Companies are investing a lot of capex into automation and AI systems, and we are seeing that on the leasing front as the flight to quality trend has accelerated,” he said. “New warehouses which have higher power capacity (in order to support automation) are in high-demand (especially larger big-box buildings).”

Total June retail sales, at $768.6 billion were up 0.2%, from May to June, and rose 6.7% annually, Commerce reported. And it added that, from April through June, total sales increased 6.4% compared to the same period a year ago. June marks the ninth consecutive month of retail sales gains.

Non-store retail sales, which includes e-commerce, rose 1.9% sequentially and 14.2% annually, and general merchandise sales rose 0.1% sequentially and 3.5% annually.

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

The CNBC/NRF Retail Monitor found that total June retail sales, excluding automobiles and gasoline stations, saw a 0.33% seasonally-adjusted, sequential gain, while heading up 9.41% annually on an unadjusted basis, compared to 0.42% sequential and 6.98% annual gains in May.

For core retail sales, which the Retail Monitor describes as retail sales, excluding restaurants in addition to auto dealers and gas stations, rose 0.36% sequentially and 10.08% annually, compared to a 0.39% sequential and 6.98% annual May increases.

The report attributed the large annual gains to the comparison of slow retail sales activity in June 2025, adding that on a seasonally-adjusted basis, total June sales were up 4.26% annually and core sales were up 4.23% for the same period. And on an unadjusted basis, total retail sales were up 6.81% annually through the first six months of 2026, with core retail sales up 4.23%.

“The summer shopping season got off to a strong start in June,” NRF President and CEO Matthew Shay said. “Consumers took advantage of summer sales events, and many got an early jump on back-to-school shopping. The willingness to spend on retail goods has been supported by the retail industry’s laser focus on affordability as well as a durable labor market. Year-over-year gains look particularly strong compared with a weak June 2025.”

Looking at individual retail sales segments, the CNBC/NRF Retail Monitor observed that Jun e sales rose in nearly every category it tracks:

• Sporting goods, hobby, music and book stores were up 0.45% month over month seasonally adjusted and up 18.53% year over year unadjusted;
• Electronics and appliance stores were down 0.01% month over month seasonally adjusted but up 14.16% year over year unadjusted;
• Clothing and accessories stores were up 0.63% month over month seasonally adjusted and up 13.65% year over year unadjusted;
• Digital products (such as electronic books and games) were up 1.25% month over month seasonally adjusted and up 13.56% year over year unadjusted;
• Health and personal care stores were up 0.5% month over month seasonally adjusted and up 12.87% year over year unadjusted;
• General merchandise stores were up 0.29% month over month seasonally adjusted and up 9.9% year over year unadjusted;
• Grocery and beverage stores were up 0.25% month over month seasonally adjusted and up 5.26% year over year unadjusted;
• Furniture and home furnishings stores were down 0.16% month over month seasonally adjusted but up 4.92% year over year unadjusted; and
• Building and garden supply stores were up 0.06% month over month seasonally adjusted and up 4.04% year over year unadjusted

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

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

Chip West, Director of Category Strategy, National Sales, at RR Donnelley, observed that the deteriorating impact of tax refunds, economic uncertainties, and subsiding gas prices (slowing spend at stations) were big factors of the softer result, adding that June was softer in part because the impact of tax refunds has dwindled; most people have already spent what they are willing to spend from those refunds.

“Geopolitical tensions briefly eased in June, offering a welcome reprieve to drivers after a sharp spring spike,” said West. “Gas prices were significantly lower in June compared to May, though they remained much higher than they were a year prior. Lower prices at the pump may have given consumers a little extra breathing room to spend at restaurants, aiding that sector's uptick.

With the conflict in the Middle East recently resuming, however, that June reprieve may be short-lived. Consumers may not be following the day-to-day changes of the Middle East conflict, and they are increasingly immune to the back-and-forth news cycle. However, they are absolutely following how the conflict impacts their wallets, gas prices and ability to spend. As we look past June and head into July, summer celebrations and an early start to the 4th of July helped fuel consumer spending. Looking ahead, the Back-to-School season will continue to expand deeper into July.”

The quarterly index found that truckload rates reached their highest level in nearly four years during the second quarter, while LTL pricing climbed to another record high. Parcel costs also remained near historic highs despite growing competition from regional carriers and Amazon.

The report points to rising diesel and jet fuel prices as the biggest driver behind higher transportation costs. It also says tighter truck capacity and continued pricing discipline among carriers are keeping rates elevated even as freight demand remains uneven.

The index is based on transportation data from more than $11 billion in annual freight spend and provides quarterly projections across truckload, LTL,  and parcel markets.

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LM: What do you view as the key aspects of the freight economy in terms of what the data is saying?

Matt Muenster: I think for the freight economy, something that stands out to me, whether we're talking about the cost of transportation and service itself, or the energy that moves it, is just supply challenges are kind of the experience of the market right now. So, when I think about what's driving price uniquely, maybe with the exception of flatbed, we don't have a lot of demand, or at least consistent demand across industries, to really be moving the needle. Instead, it's really the supply side tightness, the availability of drivers, and a changing regulatory environment that's removed some drivers from the market, and in many circumstances, perhaps rightfully so, if they're not operating in a safe manner or under appropriate like U.S. guidelines.

And in the energy market, it's also kind of a return to supply constraints. Although even in this recent downward movement for crude oil prices, it was interesting because we never got close to returning to pre-crisis vessel levels in the Strait of Hormuz. There had been some return, but certainly not anything that resembled kind of pre-crisis and obviously now we have an escalation again. Energy is challenging for everyone, there's no getting around it. It's a necessity when it comes to the other experiences of the market.

The upturn in the rate environment's been really beneficial for carriers and the trucking and rail providers who have faced some of these higher costs coming from labor and equipment. And it's been challenging collectively all around for shippers, manufacturers, food and beverage companies, and other sectors that need to move products to market. There's a lot of upward costs, and the amount of change on a year-over-year basis that they've seen occur to both their freight rates and the energy to move their freight has been substantial and definitely outside of the scope of most forecasts.

LM: You noted that with the exception of flatbed that there really has not been a lot of activity on the demand front. Is that because of the ongoing AI data center build out build out initiatives?

Muenster: Definitely and we see that having a significant impact in some corridors, in particular, I think in Texas and Virginia, which continue to get called out as difficult places to find capacity and where flatbed rates have increased. But it's definitely having an impact on the market, and those rates have basically gone mercurial because of the amount of demand out there [related to AI buildouts]. And dry van carriers are trying to figure out how they can more consistently be receiving some of that freight, too, in assessing what their place in this whole data center buildup is. It's not going to go anywhere. It's not going away by the time 2027 hits, so there'll be plenty of this again next year, too.

LM: Where does the rest of the demand come from, and what does this mean for the market at a time where the economy is mixed and freight levels have just simply leveled off? Looking at the back half of this year and beyond, how do things kind of materialize from that demand-driving perspective?

Muenster: For the back half of this year, I'm not expecting to see a lot of change. From a Breakthrough ecosystem perspective, it's really an industry-by-industry experience. We've had paper and packaging and retail volumes pop this summer. They're doing better than the average, which is essentially flat. That's pretty much the average. For some durable goods, steel, for example, those goods that are supporting the data center build out, they have had heavy traffic. However, other industries, even within durable goods, like home appliances or anything related to durable goods that are that are more frequently moving in a hotter housing market—they're not moving because the housing starts and existing home sales have been slow, and there's not really anything that would make us consider that fundamentally changes this year and even into 2027, especially when you know the Fed is going to change its perspective. We've had inflationary pressure from energy and tariff related items, as well as some long-term seemingly structural price cost increases, like around such things as insurance to consumers, that that doesn't seem to be going away, and so now the Fed's changing its own language, and perhaps the next move isn't a rate cut; it could be an increase.

LM: Let’s shift over to imports and the 2026 Peak Season. By many indications, and due largely to the Section 122 tariffs expiring soon, it looks like the peak has come earlier this year. How do you see things at the moment?

Muenster: Even going back to May, there was commentary that peak season was going to be earlier from folks like the National Retail Federation [NRF’s Global Port Tracker Report with Hackett Associates]. The report’s estimate for July was around 2.5 million containers, which is very robust. When we think about the timing of it, yes, I think it moved up because of the tariffs and the potential changes on July 24. There is also the USMCA (United States Mexico Canada Agreement) moving off of a previous cadence to now annual reviews, which is interesting. Fundamentally, the amount of freight heading north from Mexico in the U.S. has grown tremendously over the last couple of decades. I don't think anything structurally immediately changes, based on what recently happened.

I still think that there's going to be tremendous growth there. That there's still a lot of appetite to bring freight closer to the U.S. Mexico does offer a less expensive labor market. Geopolitically, it's a lot more stable than experiences in in Asia or the Middle East or elsewhere so I don't really see that structurally changing. I think a lot of carriers, like IMCs and Class I railroads, are making a lot of investments to grow their volumes that are coming from Mexico, and so I think there's just a lot of business appetite to keep that continuing. When we think about like the impact Peak Season typically has on intermodal volumes and international containers, something that has stood out is that we've seen a lot of intermodal volume growth across our client base happen in the eastern United States. It's the shorter length of haul that we've had a lot of growth. Of course, in the near term, energy prices have made it a lot more competitive with truckload and offered greater savings for moving that freight to intermodal. Typically, it's not how shippers were planning for the year. There wasn't an energy shock on their radar.

Intermodal volume movement tends to be more of a longer-term commitment, so it would have gone there anyway. But now with the freight market turning and those savings—even if the energy market subsides, which at some point it will—could be intact for a while. But as some point, you cannot count on diesel savings forever, but with the current rate environment, intermodal will be slower to respond [relative to truckload], and there will be good savings there to be had from intermodal.

LM: What do you think about the current status of the proposed Union Pacific-Norfolk Southern merger? If it is eventually approved by the STB, how much will things change, with a single-line transcontinental railroad?

Muenster: One place where we might be a little critical regarding this deal is if it will take as much freight off the road as they're indicating? It is kind of a believe it when we see it type of thing. They need to have infrastructure that skirts around some of the metros that have been the headache for interchanges west to east to accomplish that. So, I think it takes a longer time than what's being suggested for that freight to ship.

Shippers have a good appetite to move more intermodally. They're pretty dependent on it to reduce emissions. We've seen even though the policy environments change, there are plenty of shippers who are very committed to reducing the emissions within their supply chain. Maybe it's quieter based on the policy environment, however, if they had the goal and were committed to it pre-current administration, then they've stuck with it and just respect the fact that policy will continue to change and evolve—but their corporate goals are their corporate goals, and they're doing it not just to reduce emissions, but in many circumstances, they see that a way to mitigate costs, too, by becoming more efficient.

LM: With mortgage rates still fairly high and housing starts still weak, what are your thoughts on the housing market, as it relates to freight and goods movement?

Muenster: It still feels stagnant. I think it's kind of status quo in that that respect. We look across shippers that are impacted by those volumes. It's segments like appliance manufacturers being affected, for example. Their volumes are still very low, and I just would expect them to continue experiencing those headwinds because, the expectation is [Federal Reserve interest] rates may actually increase. We know that housing prices had climbed considerably in recent years, so any increased interest rate on higher costs still makes it really difficult for those entry level buyers that typically can swing the market into one that's slow, into one that's creating some tailwinds for freight.

LM: How does that square up with the optimism coming from ISM manufacturing data, which has been positive year-to-date?

Muenster: I think some of it's coming from the green other parts or in other manufacturing sectors. It is the support of all things data centers and tech. It's not the only place that we've had growth, though. We are seeing the freight market play into this. Truck orders and trailer orders are up. Daimler is intending to bring head count back up, which is a pretty quick change, given that these [Class 8 truck] manufacturers cut head count just last year, because orders were so slow. I realize that that's part of the cycle those firms face. It can be quick turns. They're bringing back headcounts and to accommodate the fact that they're going to need more build slots for vehicles and trailers now. I think when it comes to manufacturing, we're seeing some of that pick up with industrial production.

LM: Going back to tariffs for a moment, it stands to reason that when these new tariffs come through, they could be higher than current levels. Even if that is the case, does it help industry stakeholders from a planning perspective, because they know this is what it's going to be, and it's not going to change. Or is it that too naive of a way of thinking, given everything that we've gone through since the beginning of last year?

Muenster: I think understanding the administration's aims around setting them at a certain level creates more certainty, or at least creates a point at which businesses can be planning around. Even if the tariffs come and go, and we've kind of had this fairly sloppy experience of having tariffs and tariffs being reimbursed, it's just been a lot to manage in terms of the amount of the amount of legal counsel that has probably been involved and it's probably been a lot more businesses to manage. But I think, generally speaking, there's an expectation that those tariffs are going to be set at a certain level. It seems to be kind of hovering between 10% and 15%, with the idea that it leans closer to 15%

LM: Looking at labor and the employment outlook, how do you see things?

Muenster: I think the labor outlook is brightening, and we're starting to see a couple of indicators of that. We have started to see long-distance trucking employment pick up. We had begun to see the number of carriers with operating authority begin to pick up. We have started to see some of those indicators, and obviously, rates have now been supported long enough that it's encouraging firms to thinking about adding headcount and those next drivers. I'm definitely hearing the radio ads for it, and so that that's been anecdotally that's been something that's changed in the last few months is the number of ads I'm picking up from larger regional and just large national carriers has definitely picked up. That is helpful in that there there's going to be labor demand from the transportation logistics industry. It is imbalanced. We're seeing you maybe the implications of AI and maybe the implications of a longer-term downturn in the freight market also hit logistics technology firms more congruently. So, there have been there have been cuts across the industry and just general stress. For venture-backed firms and technology startups in the in the U.S., they just are facing fiercer competition, and AI is going to continue to have a role in that. When it comes to things like ELPs and non-domiciled trucking, something that surprised me is the weekly levels of English language proficiency violations and out of service designations have basically held up going back to last July. Almost a year in, we see roughly I want to say it's 1,200- to-1,500 violations every month, and 400 or so weekly driver exits.