CBP said that this ANPRM stands in support of an executive order issued by the White House in June, entitled “Strengthening Customs Enforcement,” which addresses what it called long overdue U.S. customs reform.

The EO explained that customs enforcement is viewed as essential to U.S. national security, foreign policy, and economy, adding that effective customs enforcement prevents the importation of unlawful and dangerous goods, ensures importers of record (IORs) are correctly identified and accountable for duties owed; and guarantees compliance with numerous federal laws, including laws that govern forced labor, rules of origin, origin marking, intellectual property, revenue collection, and product safety.

In the ANPRM, CBP is focused on:

• foreign export documentation, with importers possibly having to provide or retain documents that their foreign suppliers submitted to foreign customs authorities, for things like export declarations, commercial invoices, packing lists, certificates of origin, export licenses and permits, and bills of lading and air waybills—and use these documents to compare foreign export information with U.S. entry information and identify discrepancies, fraud, undervaluation, or other violations;
• more detailed identification of supply chain participants, noting that the existing Manufacturer/Shipper Identification (MID) system does not provide enough reliable information, and CBP is considering replacing or supplementing the MID with full legal company names and addresses, manufacturer, producer, shippers, exporter, seller, and possibly distributor information; and
• technology and supply chain traceability, with CBP potentially wanting importers to use technology to provide better visibility into where goods are made and how they move through the supply chain, with a focus on AI, supply chain tracing platforms, technology for verifying raw material origins, tamper-proof credentials; digital entry identifiers, and integration with CBP’s Automated Commercial Environment (ACE)

Pete Mento, Managing Director and Practice Leader for Global Trade Management at Baker Tilly provided LM with a detailed overview on this ANPRM and what it means for shippers in the Q&A below.

LM: What are the biggest shipper takeaways from this ANPRM, in terms of its pros and cons?

Mento: The biggest takeaway is that this is much bigger than a customs-entry change. CBP is effectively asking whether importers should be able to identify who made the goods, who exported them, who moved them, what was reported to the foreign government, what technology platforms touched the transaction and, potentially, what happened much farther upstream in the production process.

That is not simply a new data requirement. That is a supply-chain governance requirement.

The good news is that CBP is right about the underlying problem. The Manufacturer Identification Code (MIC) was designed in 1986. It has had a good run, but so did the fax machine. It is not always unique, it does not always identify the party CBP is actually interested in and it may not be available early enough to be useful for targeting. Better business identifiers, better information about the actual participants in the transaction and better reconciliation of foreign export data could make it considerably harder to hide dual invoicing, illegal transshipment, origin manipulation and other forms of evasion.

That is good for legitimate shippers. Companies that spend real money building compliant supply chains should not have to compete against companies whose trade strategy is essentially, “Maybe Customs won’t notice.” If better information allows CBP to focus on the genuinely risky cargo, compliant importers should benefit through fewer unnecessary examinations, fewer repetitive requests and faster, more predictable clearance.

The downside is that the importer may be given responsibility for information it did not create, does not own and, in many cases, cannot easily obtain. A foreign export declaration may have been prepared by a factory, trading company, consolidator, exporter or logistics provider. It may be in another language. It may use a valuation or classification concept that does not line up neatly with the U.S. entry. And the importer may not have a direct contractual relationship with the party that filed it. CBP’s own questions recognize all of these complications.

Reasonable care is a legitimate standard. But reasonable care cannot magically produce a foreign government document that a supplier refuses—or is legally unable—to provide.

From a supply-chain perspective, that is where this gets very real. If these data elements have to be available earlier, then compliance has to move earlier. Supplier onboarding changes. Purchase contracts change. Broker procedures change. ERP and transportation systems change. Someone has to translate the documents, reconcile the discrepancies, validate the identifiers and decide whether the cargo can move when the information does not match.

A documentation issue that once might have been addressed after entry could become a release issue before the goods ever leave the foreign port. That means more lead time, more exception management and potentially more inventory. It also creates a very real risk that importers will favor larger, technologically sophisticated suppliers over smaller factories and trading companies simply because the larger company can produce the required data. That may improve transparency, but it could also reduce sourcing flexibility and increase concentration risk. CBP is specifically asking about earlier filing, small-business costs, scalability and possible disruption to critical goods, which tells you the agency understands that this is not a minor operational change.

My view is that greater visibility can be a very good thing—but it has to be a trade. If industry gives CBP better information earlier, CBP should give compliant industry better decisions earlier. That means meaningful pre-arrival certainty, fewer redundant requests, better targeting and real CTPAT benefits.

Otherwise, we have not modernized trade. We have simply built a much more expensive paperwork machine.

LM: Is this overdue, in your opinion? If so, why do you think it took a while to get to this point?

Mento: Yes, the modernization is overdue. We are trying to regulate a 2026 supply chain using an identification methodology created in 1986. Today, a product may pass through multiple factories, subcontractors, trading companies, consolidators, digital marketplaces and logistics platforms before it reaches the United States. CBP may see the final commercial snapshot, but not necessarily the movie that produced it.

The idea that Customs needs better upstream visibility is common sense. But I would draw an important distinction: modernization is overdue. A requirement to collect every available document is not necessarily modernization.

It took this long because collecting more data is easy. Determining who owns the data, who can validate it, who should transmit it and who gets punished when it is wrong is extremely difficult.

The legal responsibility for the entry generally rests with the importer. The facts, however, may sit with a supplier on the other side of the world. That supplier may not use the same systems, speak the same language, follow the same recordkeeping rules or understand why the U.S. importer needs the information. Visibility does not automatically mean control.

There is also no single global supply-chain data system. Information is spread across manufacturers, exporters, ERP platforms, carriers, freight forwarders, brokers, foreign customs authorities, marketplaces and third-party technology providers. Getting information from all of those systems is one challenge. Establishing that the information is authentic, complete and has not been altered is another. CBP’s questions about data integrity, interoperability, cybersecurity and tamper-proof credentials go directly to that problem.

There is a historical reason this has been difficult as well. For roughly three decades, customs modernization has been built around informed compliance, shared responsibility and reducing the amount of paper that has to be presented at the border. The government retained the right to examine the records later, but the goal was not to stop every shipment while everyone assembled a documentary biography of the product.

We should be careful not to modernize customs by recreating the old paper chase in digital form.

What has changed is both the risk environment and the government’s technological capability. Forced-labor enforcement, tariff evasion, illegal transshipment, national-security concerns and origin manipulation have made upstream information much more valuable. At the same time, AI and modern analytics allow CBP to connect entry, manifest, entity and supply-chain information in ways that were not practical before.

So yes, this is overdue. But the answer should not be “collect everything.”

The answer should be to identify the limited number of data points that materially improve risk decisions; determine which party can reasonably provide and certify them; protect commercially sensitive information; test the process before making it universal; and provide meaningful facilitation to companies that get it right.

The last thing the supply chain needs is for 64 good questions to become 640 new reasons to hold a container.

Rail carloads, at 240,021, posted a 2.2% annual gain, topping the week ending August 22, at 235,885, and the week ending August 15, at 233,261.

AAR reported that seven of the 10 carload commodity groups it tracks saw annual gains: metallic ores and metals, up 2,449 carloads, to 24,801; grain, up 1,644 carloads, to 21,359; and nonmetallic minerals, up 1,219 carloads, to 33,812. Commodity groups posting annual declines were: chemicals, down 1,322 carloads, to 33,640; motor vehicles and parts, down 1,049 carloads, to 16,443; and miscellaneous carloads, down 597 carloads, to 8,954.

Intermodal containers and trailers, at 303,191 units, saw a 5.7% annual increase, topping the weeks ending August 22 and August 15, at 296,577, and 291,838, respectively.

Through the first 34 weeks of 2026, AAR reported that U.S. rail carloads, at 7,751,931, are up 2.7% annually, and intermodal units, at 9,605,177, are up 3.9%, for the same period.

ODFL reported that revenue per day was up 12.5% annually, due to an increase in LTL revenue per hundredweight, which was partially offset by a 0.9% decrease in LTL tons per day. It explained that change in LTL tons per day was due to a 2.4% decrease in LTL shipments per day that was partially offset by a 1.7% increase in LTL weight per shipment.

And on a quarter-to-date period, ODFL reported that LTL revenue per hundredweight and LTL revenue per hundredweight, excluding fuel surcharges, increased 11.3% and 4.8%, respectively, on an annual basis.

“Old Dominion produced solid revenue growth for July and August, with underlying demand trends remaining relatively consistent as the quarter has progressed,” said Marty Freeman, President and Chief Executive Officer of Old Dominion. “In addition, the strength and consistency of our industry-leading service continue to support the ongoing improvement in our LTL revenue per hundredweight. Our value proposition remains best-in-class, and we have all the necessary elements of capacity in place to support volume growth as the business environment evolves. As a result, we remain confident that through the continued execution of our long-term strategic plan, we are well positioned to win profitable market share and increase shareholder value over the long term.”

ODFL second quarter revenue, at $1.55 billion, rose 10.4% annually, with LTL services revenue, at $1.538 billion, accounting for the bulk of that, posting a 10.3% annual gain.  

Baird analyst Daniel Moore wrote in a research note that ODFL’s August metrics came in better than expected, “confirming that continued improvement in the LTL freight market has been led by an industrial recovery.”

Moore added that his firm agrees with the view that LTL volume demand should improve into 2027 as the AI infrastructure build-out moves past early planning and development and into increased completions.

“We see today's update as further evidence in support of that argument,” he wrote. “It also remains clear to us that ODFL remains highly disciplined on yield and focused on earning incremental margin, a differentiated strategy relative to more growth-focused peers that have emphasized volume.”

Industrial activity, a key driver for LTL tonnage and demand, has seen strong growth on a year-to-date basis, as evidenced by the Institute for Supply Management’s Manufacturing Report on Business, which has highlighted what could be viewed as a rebound, serving as a solid growth indicator.

Conversely, retail sales and consumer activity are also key LTL growth drivers, with the outlook more mixed, due to low consumer confidence readings and ongoing concerns related to high fuel prices, due to the ongoing Iran conflict. What’s more, LTL carriers continue to deal with things tariff- and trade-driven uncertainty, inflation, and the employment outlook.

The August Services PMI reading, at 55.4 (a reading above 50 represents expansion and below 50 indicates contraction), increased 1.3% compared to July, growing, at a faster rate, for the 26^th consecutive month, with the overall economy growing, at a faster rate, for the 75th consecutive month.

The August reading is 1.7% above the 12-month average of 53.7, 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 August Mining; Real Estate, Rental & Leasing; Accommodation & Food Services; Wholesale Trade; Arts, Entertainment & Recreation; Educational Services; Retail Trade; Information; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Public Administration. And it said five sectors reported contraction: Agriculture, Forestry, Fishing & Hunting; Construction; Management of Companies & Support Services; Finance & Insurance; and Health Care & Social Assistance.

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

• Business Activity/Production, at 61.7, up 2.6%, growing, at a faster rate, for the 26th consecutive month, with 13 sectors seeing gains;
• New Orders, at 60.9, increased 3.7%, growing, at a slower rate, for the 15^th consecutive month and expanding in 42 of the last 44 months, with 14 sectors reporting increases in new orders;
• Employment, at 47.8, rose 0.5%, contracting, at a slower rate, for the second straight month, and for the fifth time in the last six months, with seven sectors reporting employment gains; and
• Supplier Deliveries, at 51.8 (a reading above 50 indicates contraction), were down 1.5%, slowing, at a slower rate, for the 21st 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.

“General business conditions are positive,” said an Accommodation & Food Services panelist. “The challenges lie in managing through the dynamic nature of the administration’s policies—tariffs and Middle East conflict—that have caused numerous input cost headwinds for suppliers and us.”

A Wholesale Trade panelist observed that electrical distribution industry volume demand and opportunities remain very strong, while adding that commodities-based products of materials like copper, aluminum and polyvinyl chloride continue to have price increases and adjustments on a weekly basis. “Geopolitical issues like tariffs continue to impact pricing as well,” said the panelist. “Supplier capacities are still strained due high market demands.”

In an interview with LM, Steve Miller, Chair of the ISM Services Business Survey Committee, said that with business activity, new orders, and backlog of orders (up 4.7% to 55.6) being strong, coupled with employment continuing to be suppressed continues to be what he called as pretty standard story, especially when pricing continues to squeeze margins—which results in delayed hiring.

“That is not employment reductions but delayed backfills, and that is what we are seeing in the [panelists’] commentary,” he said. “It is all very natural, but it also seems like that with backlog of orders at its second-highest reading in years, that is when you think that glass ceiling has to break. With the strength in new orders, business activity, and backlog of orders increasing, the source of lower employment readings is delayed backfilling of positions. Companies need to backfill, which kind of pushes to Q4 being strong for hiring.”

Addressing ongoing pricing gains, coupled with rising oil and gas prices, Miller said oil-related products and transportation pricing will continue to be elevated into the first quarter of next year, removing previous optimism that those higher prices would retreat.

Looking out over the balance of 2026, Miller described the current state of the services sector as very solid.

One reason he cited for that is that companies are holding onto inventory, with inventory sentiment not at a very high level.

“Average inventory sentiment is at 54.1, and the 12-month average is 54.5,” he said. “We don’t see people saying ‘we have too much inventory, slow down,’ which would lead to some supply chain impacts, in terms of other service areas, particularly transportation and warehousing, and wholesale trade.”

“Border security is national security. Knowing what is coming into this country is vital to our national security,” said CBP Commissioner Rodney S. Scott, in a statement. “By strengthening visibility into the supply chains behind goods entering the United States, CBP can better identify high-risk shipments, stop illicit trade, and ensure that American businesses are not undercut by those who evade our customs laws.”

CBP said that this ANPRM stands in support of an executive order issued by the White House in June, entitled “Strengthening Customs Enforcement,” which addresses what it called long overdue U.S. customs reform.

The EO explained that customs enforcement is viewed as essential to U.S. national security, foreign policy, and economy, adding that effective customs enforcement prevents the importation of unlawful and dangerous goods, ensures importers of record (IORs) are correctly identified and accountable for duties owed; and guarantees compliance with numerous federal laws, including laws that govern forced labor, rules of origin, origin marking, intellectual property, revenue collection, and product safety.

To that end, CBP observed that the EO’s key takeaways include directing the Department of Homeland Security to strengthen enforcement of U.S. customs laws, increase transparency in international supply chains, and help prevent bad actors from exploiting outdated processes and enforcement gaps.

In the ANPRM, CBP is focused on:

• foreign export documentation, with importers possibly having to provide or retain documents that their foreign suppliers submitted to foreign customs authorities, for things like export declarations, commercial invoices, packing lists, certificates of origin, export licenses and permits, and bills of lading and air waybills—and use these documents to compare foreign export information with U.S. entry information and identify discrepancies, fraud, undervaluation, or other violations;
• more detailed identification of supply chain participants, noting that the existing Manufacturer/Shipper Identification (MID) system does not provide enough reliable information, and CBP is considering replacing or supplementing the MID with full legal company names and addresses, manufacturer, producer, shippers, exporter, seller, and possibly distributor information; and
• technology and supply chain traceability, with CBP potentially wanting importers to use technology to provide better visibility into where goods are made and how they move through the supply chain, with a focus on AI, supply chain tracing platforms, technology for verifying raw material origins, tamper-proof credentials; digital entry identifiers, and integration with CBP’s Automated Commercial Environment (ACE)

CBP is accepting public comments on this ANPRM through December 1, with comments sent through the Federal Rulemaking Portal—at regulations.gov under docket number USCBP-2026-1058. It said that these comments will help it to assess considerations of these proposals as the agency works to improve enforcement, detect illicit trade and illegal transshipment, support legitimate commerce, and reduce unnecessary burdens, especially for small businesses.

And it added that it is asking for trade community input on potential ways to strengthen supply chain visibility for imported goods in the form of: possible requirements to identify key parties in the importation process, improve business identifiers, collect or retain foreign export documentation, and use innovative supply chain tracing technologies.  

This ANPRM collectively would establish a foundation for a more data-intensive import system, with U.S.-based importers potentially needing to provide the exact information on who made, sold, shippers, and exported their goods and the goods’ original origins, with foreign documents and also digital supply chain data.

In a LinkedIn post, Pete Mento, Director of Global Trade Management Services, at Baker Tilly, said that with this ANPRM CBP appears to be moving from analyzing entries to analyzing entire supply-chain networks, calling it a profound change.

“Procurement becomes customs compliance,” wrote Mento. “Supplier onboarding becomes customs compliance. Master data becomes customs compliance. And brokers get pulled much further upstream. There is another part I’m less comfortable with. CBP discusses private-sector technologies and identifiers, including Altana ID. Private technology absolutely has a role here. But private companies should not become de facto architects or gatekeepers of federal customs compliance. If importing eventually requires access to proprietary databases, algorithms or identifiers, we aren't simply modernizing customs; we’ve privatized part of the compliance infrastructure.

The other enormous issue is liability. Requiring an importer to obtain a foreign export declaration is one thing. Holding that importer responsible for the accuracy of something prepared by somebody else, in another country, for another government is quite another. The Mod Act made importers responsible for knowing their entries. CBP is now asking whether importers should be responsible for knowing their entire supply chains. I’m not opposed to better visibility. But the rules need to be transparent, technologically neutral and contestable. Otherwise, an importer is going to discover its cargo was stopped by an algorithm it can’t see, using data it can’t verify, operated by a company it never hired. That’s not modernization, but more like a due-process problem with an API.”

Jackson Wood, VP of Trade Regulations at Descartes said that this ANPRM begins the process of putting Executive Order 14411 into practice, and it confirms the shift trade professionals have been tracking all year.

"Customs compliance is moving from ‘entry accuracy’ towards greater ‘accountability’: who is doing the importing, who controls the organization, and what evidence stands behind the claim," said Wood. "The four areas CBP has opened for comment, covering the parties to an importation, business identifiers, foreign export documentation and supply chain tracing, are going to pose significant data gathering and accuracy challenges. Origin fraud and transshipment risks are driving this action, and proving product origin now takes strong provenance and routing intelligence. CBP is right to ask about burden on smaller importers, because visibility at this depth is affordable only when it is automated. Companies should use the comment period, which closes December 1, to help shape requirements that are enforceable and workable."

Alison Layfield, Vice President of Product Development at ePost Global, observed tha the U.S., like the EU and other countries, is tightening its borders by strengthening customs compliance requirements for imports.

"Given the various types of imports, meeting these requirements may be more challenging for certain ecommerce entries," said Layfield. "Many questions remain about how the proposed regulations would be implemented and enforced. It will be important for the businesses and other parties potentially affected to share their perspectives now while CBP is actively seeking industry input."

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 August LMI reading, at 66.6 (a reading above 50 indicates growth is occurring), expanded, at a slower rate, and was off 2.2% from July’s 68.9 and 4.4% below the recent four-year peak of 71.1, in June—which marked the first time the LMI topped the 70-mark since March 2022’s 76.2 reading. The report attributed the sequential LMI reading to declining Inventory Levels, which was also the case in its previous edition.    

Most of the LMI’s key metrics were mixed:

• Inventory Levels, at 52.8, decreased 2.2%, expanding, at a slower rate, with the report noting that the reading is “close to no movement”;
• Inventory Costs, at 78.6, increased 1.6%, expanding, at a slower rate, marking the second-fastest rate of expansion in 12 months, with the report noting that Inventory Cost expansion is now outstripping the growth rate in Inventory Levels by 25.8%, nearly double to average delta of 13.1% between the two metrics;
• Warehousing Capacity, at 53.5, up 7.2%, expanding, after contracting in July, for its fastest rate of expansion on a year-to-date basis;
• Warehousing Utilization, at 59.6, decreasing 6.5%, expanding, at a slower rate;
• Warehousing Prices, at 75.0, fell 0.5%, expanding, at a slower rate, seeing gains despite additional capacity coming online;
• Transportation Capacity, at 40.0, fell 28.4%, contracting, at a slower rate;
• Transportation Utilization, at 70.6, rose 5.6%, expanding, at a slower rate;
• Transportation Prices, at 90.0, increased 3.1% expanding, at a slower rate, despite additional capacity coming online; and
• Aggregate Logistics Costs, at 243.6, were up 4.1%, expanding, at a slower rate

“Despite this being the lowest level for the overall index since April, it is still much higher than the LMI readings from both one (+7.3) and two (+10.2) years ago,” the report observed. “The index has clearly been impacted by the conflict with Iran as the average of 69.0 in the five months since the war far outstrips the more modest average reading of 58.5 from the previous five months.”

Addressing Aggregate Logistics Costs, Dr. Zac Rogers noted in a LinkedIn post that Aggregate Logistics Costs from March to August in 2026 average 241.9, which he called another statistically significant step up. The reason for that, he explained, is that, generally, aggregate costs exceeding 240.0 have led to increased levels of supply-driven inflation.

“The San Francisco Federal Reserve’s breakout of the sources of inflation points to increased supply-driven inflation (outstripping inflation from demand) in July,” wrote Rogers. “Essentially, we're seeing that disruptions in the form of tariffs and oil shocks are contributing directly to supply inflation. The challenge with supply inflation is that there's not much the Federal Reserve can do about it. Interest rates are more targeted at demand, which seems to be less or a problem right now (consumer retail spending actually dipped a bit in July). One half of the Fed's mandate is to curtail inflation. However, I'm a bit concerned that the only tool they have is a hammer, and this problem isn't really a nail.”

Flexport officials said that bringing international fulfillment services to these locales extends the company’s end-to-end logistics network into markets where its customers already sell. What’s more, it added that “Canada and the United Kingdom rank among the most attractive markets in the world to sell into, and many brands serve them from a warehouse in another country.” 

“Our customers built demand in Canada and the UK long before they had a good way to serve it," said Ryan Petersen, Founder and CEO of Flexport, in a statement. "Flexport customers using freight through fulfillment in the U.S. have seen tangible efficiencies and cost savings with end-to-end logistics. We’re happy to offer that to more customers in new markets.”

In Canada, Flexport’s Mississauga facility, near Toronto Pearson Airport, serves Canada’s largest population center and is Health Canada certified for medical products, supplements, and consumer goods. Inbound operations began in July 2026, with customer shipments starting in September.

And in the United Kingdom, Flexport operates from two partner-run facilities in Manchester, both using AutoStore automated storage and retrieval systems (ASRS). The robotic system efficiently retrieves inventory and can store the same volume of goods in about 25% of the floor space of a traditional warehouse.

In an interview with LM, Petersen explained that there were various factors that led to Flexport opening up these new fulfillment service centers, with demand from its existing customers at the top of the list.

“Brands using Flexport for freight and customs into Canada and the UK were already selling heavily into those markets, but had to route fulfillment through a warehouse in another country—adding time and cost to what could be a domestic delivery,” said Petersen. “Canada and the UK are two of the largest international markets for our customers, so extending fulfillment there was a natural next step in building out the end-to-end network.” 

When asked about the main benefits these new international fulfillment centers provide for Flexport’s shipper customers, Petersen cited three key ones:

• In-market fulfillment. Brands can now store inventory in Canada and the UK and fulfill domestically, instead of shipping cross-border for every order—which typically means faster delivery and fewer customs touchpoints per shipment;
• One continuous relationship. Customers keep the same platform, account team, and freight/customs relationship they already use—no new vendor to manage; and
• Direct customs clearance and in-country returns. Flexport clears customs directly in both markets, and orders and returns stay entirely within the country rather than crossing back over a border

Prior to this announcement, Flexport only served customers in Canada and the UK through freight and customs services only, moving goods into Canada and the UK, but without a fulfillment layer on the other end.

“Customers handled the ‘last mile’ themselves often by warehousing in a different country than where they were actually selling, which added the extra cross-border step to domestic orders,” he said. “Now that gap is closed and customers can hold inventory in-market and fulfill locally, on the same platform and account relationship they already trust for freight.” 

In terms of the main competitive advantages these new international fulfillment centers provide, from a Flexport perspective, Petersen pointed to network expansion into markets customers already need, with Canada and the UK rounding out Flexport’s fulfillment footprint outside the U.S., with continental Europe next in 2027—building toward a fulfillment network that mirrors the international freight lanes Flexport already runs. 

Another advantage cited by Petersen was facility-level differentiation.

As an example, he noted that the Mississauga facility carries Health Canada certifications for medical products, supplements, and consumer goods, and the Manchester facilities run on AutoStore automated storage and retrieval systems where robots pull inventory to a human picker vs. pickers walking the aisles themselves.

“That setup fits roughly the same inventory volume into about a quarter of the floor space of a traditional warehouse—meaning more capacity and throughput per square foot, which translates into speed and cost savings passed onto customers,” he said.

The report’s benchmark reading, the PMI, came in at 54.6 (a reading above 50 indicates growth), trailing July’s 55.6, which marked the highest monthly tally going back to May 2022’s 55.9, by 1.0% and. ISM added that the overall economy grew, at a faster rate, for the 22nd consecutive month.

The August PMI reading was 2.8% above the 12-month average of 51.8, with July’s 55.6 marking the highest and December’s 47.9 marking the lowest over that period.

ISM reported that 15 manufacturing sectors expanded in August: Primary Metals; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Textile Mills; Furniture & Related Products; Nonmetallic Mineral Products; Paper Products; Transportation Equipment; Fabricated Metal Products; Petroleum & Coal Products; Printing & Related Support Activities; Computer & Electronic Products; Plastics & Rubber Products; Machinery; and Food, Beverage & Tobacco Products. The two industries seeing contraction are Wood Products and Chemical Products.

ISM cited the following key metrics for August:

• New Orders: 53.7, down 3.0%, growing, at a slower pace for the eighth consecutive month, with 11 sectors reporting growth;
• Production: 58.3, down 0.2%, following July’s 58.5, which marked its highest reading since November 2021’s 60.5, with 12 sectors reporting growth;
• Employment: 51.2, down 1.6% from August’s 52.8 (its highest level since August 2022’s 54.2), growing, at a slower rate, for the second consecutive month, following 32 months of contraction, with seven sectors reporting growth
• Supplier Deliveries: 59.3 (readings above 50 indicate slower deliveries), up 0.4% compared to July, slowing, at a faster rate, for the eighth consecutive month, with 14 sectors reporting slower deliveries;
• Inventories: 50.6, down 0.6%, growing, at a slower rate for the third consecutive month, with seven sectors reporting higher inventories;
• Customers’ Inventories: 42.8, up 2.1%, remaining too low at a faster rate for the 23rd consecutive month, with two sectors reporting higher inventories; and
• Prices: 71.1, coming in flat compared to July, increasing, at the same rate, for the 23rd consecutive month, with 15 sectors reporting higher prices

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

“The economy is annoying; it is getting in the way of otherwise good business,” said a Chemical Products panelist. “We are making great new products but struggling to compete when prices escalate due to things like tariffs and the conflict in the Strait of Hormuz. I fear that the inflation caused by these factors will lead to lower sales and lower spending power of our customers. Call it inflation! At some point, it leads to an economic downturn or at least an economic pain for many consumers. It’s an uncertain year, our second in a row.”

A Miscellaneous Manufacturing panelist explained that commentary this month echoes that of recent months: (1) significant availability/price challenges in commodities heavily consumed by AI, (2) great uncertainty over when the Iran conflict will end, and (3) another round of shifting U.S. tariff policy.

In an interview with LM, Susan Spence, Chair of ISM’s Manufacturing Business Survey Committee, said that while manufacturing posted another month of growth in August, the PMI reading fell short of estimates by 0.5%, coupled with declines in a few key categories: the aforementioned 3.0% decrease in New Orders; a 3.2% Backlog of Orders decrease, to 51.8; a 3.2% decrease in Imports, to 52.5; and the flat Prices reading.

“While the report is still positive overall, the demand sentiment in July was 3.5 positive:1 negative and is now down to 2:1,” said Spence. “And Production went from 3.3 positive:1 negative to 2.2:1. That indicates that people are feeling less positive than they were last month, but we are still in expansion. You also need to take into account that our August survey closed before the most recent verbal war between the U.S. and Canada over tariffs.”

To that end, Spence observed that depending on how things progress in the coming months, for certain parts of manufacturing, that should there be ongoing declines in some of the report’s key metrics, it could portend into what she called a big production drop—with the caveat that there is a possibility that the New Orders and Backlog of Orders declines could be temporary.

Looking at the remainder of 2026, Spence said that its prospects are comprised of both growth and challenges.

“Customers’ Inventories nudged up in August but were still pretty low, which offers some hope,” she said. “There is also the question of if the pricing volatility chokes off demand. The consumer has been fairly resilient, based on the most recent University of Michigan Consumer Sentiment Index, and there is also the Iran situation, and what may happen with interest rate hikes. If rates go up, it shows that policymakers are more concerned with inflation than jobs—which are in expansion, with manufacturing making up 10% of that.

For the former, the company said that on the heels of completing its Amazon volume glide-down and network reconfiguration in June, it has “shifted its focus to accelerating profitable growth.”

Company officials explained that this will take place by evolving from an international company to what it called a truly global enterprise through its new operating model that will better leverage the power of its worldwide network.

“The new model will enable UPS to serve customers with greater consistency, agility, and scale,” said UPS. “It also supports the company's continued evolution from a small package carrier to a provider of integrated logistics solutions. Under this approach, UPS will standardize critical operational processes across geographies while maintaining the flexibility necessary to meet the unique needs of local markets.”

This move is not surprising in that UPS has made it clear it is focusing on moving significantly into certain sectors and moving away from low-yield residential, e-commerce delivery, which is essentially what happened with its business relationship with Amazon. 

On the company’s second quarter earnings call, UPS CEO Carol Tomé said that the company’s Amazon glide down efforts, which commenced in early 2025 and ran through June 2026, were executed as designed, calling it a complex undertaking.

“Over that period, we executed a deliberate structural reset of our U.S. business,” she said. “Specifically, we eliminated approximately two million pieces per day of lower-quality Amazon volume. We reconfigured and further automated our U.S. network for higher return opportunities. We removed approximately $4.5 billion of related expense, with more to come as we finish out 2026.”

Rob Martinez, founder of San Diego-based parcel consultancy Shipware, said that this operating model shift acknowledges that UPS’s next chapter of growth won’t come from simply putting more packages through the network, but rather getting more value out of the network they already have by connecting transportation, healthcare, international and logistics into a more unified global offering.

“The strategy is increasingly less about how many packages UPS can carry and more about how much value—and margin—it can extract from each customer,” said Martinez. “UPS has spent several years deliberately walking away from lower-margin volume and reengineering its network. Now it has to prove it can grow profitably without simply extracting more from existing customers through higher rates and surcharges.

It’s important to note that customers don’t care whether UPS calls itself ‘international’ or ‘global.’  They’ll care whether this makes UPS easier to do business with, improves service and creates better solutions without simply producing another avenue for higher prices.” 

John Haber, a longtime parcel industry consultant, said that this move makes sense for UPS, as it relates to reducing its consumer-focused e-commerce efforts and moving towards more growth-focused areas like healthcare, as an example. 

"This is something UPS has been signaling for a while," said Haber. "How effecrtive it will be remains to be seen, as they have not executed for a significant period of time and the stock price has been lagging the competition and the overall market. They will have to prove it." 

Executive announcements: UPS said that Nando Cesarone, EVP and President U.S., has been named Executive Vice President and Chief Global Operations Officer. In this role, Cesarone will lead the company’s global air network and gateways, surface transportation, building and engineering operations, Intelligent Network of the Future initiatives, automotive operations, and sustainability functions. And Matt Guffey, EVP and Chief Commercial Strategy Officer, has been named Executive Vice President and Chief U.S. Domestic Officer, and will oversee UPS’s U.S. businesses—Small Package, Roadie, Happy Returns, The UPS Stores, and Mail Innovations.

UPS also said that Kate Guttman, Executive Vice President and President, International, Healthcare, and Supply Chain Solutions, is retiring from the company for personal family reasons. Guttman was with UPS for 37 years in various capacities, and has spent the last six years focused on advancing UPS's strategic differentiation, positioning the company as the global leader in complex healthcare logistics. UPS added that Guttman also led the international business through the most significant changes in U.S. trade policy in nearly a century while delivering industry-leading operating margins across the three business units under her leadership.

Taking Guttman’s role as Executive Vice President and Chief International, Healthcare and Supply Chain Solutions Officer is Wilfredo Ramos, a 20-year UPS veteran, whom currently oversees the company’s Asia Pacific and Brokerage businesses.

The company also noted that it is a new role of Executive Vice President and Chief Global Commercial Strategy Officer, responsible for global strategy, marketing and communications, product management, and pricing, with a search underway to identify the executive who will fill this position.

Robert Persuit, senior director of business development, at ShipMatrix, said that UPS naming Nando Cesarone Global COO is recognition of the phenomenal job he did managing the Amazon "glide down" of nearly 2 million packages per day and taking costs out as swiftly as revenue decreased.

"Building its 'Network of the Future,' UPS put its ‘best man on it’; however, the scale and the stakes just got higher," said Persuit. "Cesarone will need to navigate closing outdated manual facilities and bring highly automated hubs online all while right-sizing the operation for its high-yield target market on a global scale. While the global model is clearly the focus, Matt Guffey’s Domestic Operations role is just as intriguing and possibly more difficult. Overseeing both the unionized Small Package operation along with non-union business segments—Roadie, UPS Stores, Happy Returns, and UPS MI –Guffey will need to devise a strategy that can slow the retreat of daily delivery volume." 

For the first half of this year, Persuit observed that UPS handled 16.95 million Domestic packages daily, down from 19.3 million just two years ago and precipitated  78,000 UPS domestic job cuts since January 2025–including many Teamster jobs.

"With July 31, 2028 looming, Mr. Guffey and [Teamsters President Sean] Mr. O’Brien will need to have creative discussions to maintain Teamster headcounts while dramatically reducing cost of service to reverse the daily volume slide—and additional job losses," he said. 

The acquisition price was roughly $120 million, according to Descartes. This deal marks Descartes’ 39^th acquisition going back to 2014.

Descartes explained that bringing Extensiv into the fold strengthens its warehouse and inventory management offerings and expands its presence in both the 3PL and e-commerce fulfillment markets. It also noted that Extensiv provides tools to manage inventory, orders, fulfillment, and billing across multiple sales and shipping channels, coupled with its extensive fulfillment data and AI capabilities helping warehouse operators gain insights, make better decisions, and reduce manual work.

"3PLs are under constant pressure to fulfill faster, scale flexibly, and support the evolving needs of modern brands," said Mikel Richardson, GM, Ecommerce Operations at Descartes.  "Descartes has long been a trusted technology provider for 3PLs. Extensiv strengthens that position by adding more participants, more contextually rich operational data and fulfillment intelligence to the Descartes Global Logistics Network.”

And Scott Sangster, GM, Logistics Services Providers at Descartes said that the combination of Extensiv with Descartes' transportation, connectivity, visibility, trade intelligence, customs compliance, and last mile delivery solutions, enables logistics service providers to expand their offerings and scale operations with a single technology provider versus a patchwork of vendors.

This deal comes on the heels of the company’s August 24 acquisition of Tai, an AI-powered freight brokerage software provider.

Descartes paid approximately $100 million in cash for Tai, which helps brokers manage truckload, less-than-truckload, drayage, and cross-border shipments.

Together, the two deals give Descartes a bigger role in both warehousing and transportation. Extensiv helps manage orders inside warehouses, while Tai helps freight brokers move those orders once they are ready to ship.

The acquisitions cost Descartes a combined $220 million.

Mikel Richardson, General Manager, Ecommerce at Descartes, provided LM with some additional details on this deal in the Q&A below. 

LM: What drove the need for Descartes to acquire Extensiv? How long had it been planned or in the works?

Richardson: Descartes is deeply embedded in logistics and supply chain technology for product sellers and 3PLs. Until now, our solutions hadn't gone deep into the 3PL warehouse itself. Extensiv adds warehouse and inventory management capabilities, more network participants, and rich fulfillment data to further enable the Descartes Global Logistics Network.  We are always looking at and evaluating strong, complementary businesses through as part of our M&A strategy, and Extensiv was a good fit inside our business.

LM: What are the main benefits of this deal for Descartes' customers? 

Richardson: Descartes serves thousands of 3PLs today.  With Extensiv, we can now help those 3PLs even more by bringing efficiency, automation and flexibility to their warehouse operations.  3PL operators are under constant pressure to fulfill orders faster and flex their operations to meed the needs of the product sellers they serve. With Extensiv, they can serve those needs easier and better than ever before, while running profitable efficient operations.

LM: What are the main competitive advantages of this deal, from Descartes' perspective?

Richardson: Bringing our full suite of 3PL solutions together in a shared portfolio alongside Extensiv helps customers scale on a single platform rather than stitching together disparate vendors and siloed solutions.

**

For the week of August 31, the national average declined 5.3 cents to $5.599, following a 19.8-cent gain to $5.662, for the week of August 24, which was preceded by near-identical 19.7-cent increase to $5.454, for the week of August 17.

The most recent decline was the week of August 10, when the national average fell 9.1 cents to $5.257, following a 3.5-cent increase, to $5.348, for the week of August 3, and 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.

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.

Before 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 is up $1.865, below the $1.944 annual increase seen for the week of August 24. WTI crude is currently trading at $88.38 per barrel on the New York Mercantile Exchange, topping an $82.31 reading a week ago at this time.

Ronald Reagan popularized the Russian proverb doveryai, no proveryai—“trust, but verify”—when describing the relationship between the United States and the Soviet Union during the 1980s. The proverb assumes that trust exists, but verification is required for important matters.

That idea fits today’s logistics environment. Shippers must trust carriers to move their freight. Carriers must trust shippers and brokers to provide accurate information and pay as promised. Managers must trust transportation systems, visibility platforms, and business partners to support decisions involving service, cost, safety, and customers. Increasingly, they are also being asked to trust AI-enabled technologies and outputs.

Last year’s Annual Study identified a gap between knowing and doing. Logistics leaders understood the disruptive forces reshaping the industry, but many organizations had not moved from awareness to meaningful execution.

This year's findings suggest that the gap is narrowing, particularly in AI adoption, employee usage, organizational support, and training. However, moving into execution has exposed a new gap: Organizations are adopting AI faster than they’re building the confidence, accountability, and verification needed to support it.

This examination of our 35^th Annual Study of Logistics and Transportation Trends explores that tension—and the results suggest that trust is becoming more selective, consequential, and evidence-dependent.

The trust-but-verify era

Respondents divided into three groups when asked how overall trust among trading partners in the logistics and transportation industry compares with five years ago. Thirty-nine percent said trust had deteriorated, another 39% said it was about the same, and 22% said it had improved. Those perceiving a deterioration in trust outnumbered those perceiving an improvement by nearly two to one.

A more revealing result may be where respondents place their trust. Asset-based carriers and shippers/customers received the highest ratings, with approximately 53% expressing high or very high trust in each. Freight forwarders and technology vendors occupied the middle, at 33% and 31%, respectively. Only 23% expressed high or very high trust in third-party logistics providers, and 16% said the same about freight brokers.

The survey was conducted shortly after the May 2026 U.S. Supreme Court Montgomery v. Caribe Transport II ruling, which held that certain state negligent-selection claims against freight brokers are not preempted by federal law. The survey did not ask whether this ruling affected respondents’ trust in freight brokers or other transportation partners.

However, its timing provides important context. The decision unsettled longstanding assumptions about risk and liability among trading partners. Brokers now face greater pressure to demonstrate effective carrier selection and monitoring procedures while shippers may require verification that those processes are working.

The survey can’t tell us whether the ruling influenced respondents’ trust ratings. However, taken together, the findings suggest that the industry is entering a “trust, but verify” era that increasingly depends upon documented, defensible verification.

The methods companies use to verify the identity and legitimacy of carriers, brokers, or service providers remain largely traditional despite changing risk dynamics. Contractual requirements, such as insurance certificates and letters of authority, were the most frequently reported method, followed by manual verification processes, including callbacks and document reviews, as well as checks of FMCSA or other regulatory databases. AI-assisted fraud detection tools were the least frequently reported verification method.

AI adoption

Fraud detection tools notwithstanding, AI adoption accelerated across nearly every measure tracked in the study. The share of organizations that were the most passive adopters (traditionalists, gatekeepers, and observers) fell from 64% in 2025 to 30% in 2026, while the share of organizations with a more active approach (optimizers and pioneers) increased from 16% to 43%. Explorers also increased, indicating that more organizations have at least begun to determine how and where AI may fit into their operations.

Employee use is also increasing as more organizations roll out access and provide guidance, support, and training on AI use. In 2025, only 16% reported using AI with their manager's or organization's knowledge and approval compared with 47% in 2026. Overall use, with or without formal approval, increased from 45% to 65%.  

Organizations are also providing more support. Formal or informal training and guidance increased from 16% to 47%. The percentage actively encouraging or allowing employee use increased from 39% to 59%, while those with no formal position declined from 55% to 32%.  

Together, these differences suggest the industry may have reached an AI inflection point and is beginning to move from awareness to more widespread adoption. However, adoption alone does not indicate complete trust and confidence in AI. While respondents appear increasingly comfortable using AI and likely have organizational permission and support to do so, their trust in its outputs is more measured.

Fifty-five percent reported moderate trust in AI-generated outputs and recommendations, compared with 38% reporting low or no trust and only 7% reporting high or very high trust. AI also ranked last among the seven data and information sources evaluated in the study.

The results suggest that logistics professionals have some trust in AI: enough to use it, but not enough to rely on it without review. In that sense, AI may be the clearest example of the industry’s emerging “trust-but-verify” era. Whether moderate trust develops into stronger confidence will depend on experience, transparency, demonstrated accuracy, and the controls organizations put around its use.  

Threats to trust

Concerns about fraud and cyberattacks represent additional threats to trust. Phishing and cyberattacks targeting logistics operations generated the greatest concern, with 62% very or extremely concerned.

AI-generated or fabricated documents ranked next at 53%, followed by double brokering at 47%, carrier identity fraud at 45%, fictitious pickups or phantom loads at 43%, and invoice or billing fraud at 42%.

The results suggest a threat environment in which cyberattacks and fabricated documents join more familiar freight-fraud risks. While AI makes information easier to produce, it also makes trust harder to earn. The same technology that helps organizations analyze information and make decisions faster can also be used to create increasingly convincing fraudulent documents, identities, and communications.

Organizations are responding with a range of risk mitigation strategies. The most frequently reported strategy was employee training in fraud awareness and data verification. Organizations also implemented or upgraded fraud-detection or carrier-vetting tools and added human review requirements for AI-assisted decisions. Others established formal policies for verifying AI-generated content.

Trust and the workforce

Hiring processes are one place where the trust gap is already apparent. Thirty-four percent said AI-generated resumes, cover letters, and applications had reduced their confidence in evaluating candidates for logistics and transportation positions. Only 7% said their organization had effectively adapted hiring processes to account for the new AI environment.

This is particularly important for an industry still struggling to attract talent. The industry's image problem remained the leading attraction challenge in 2026, accounting for 35.6% of reported challenge selections, nearly unchanged from 2025. Demanding work ranked second. Difficulty finding qualified candidates and limited career paths followed.

The result adds a new dimension to a recurring concern in the Annual Study. Prior studies emphasized industry perceptions, development opportunities, training, credentials, and career paths. Those needs have not disappeared. AI now complicates the first step in the talent process by making application materials less reliable. Structured interviews, work samples, internships, and verified credentials may become more important as employers try to distinguish presentation from performance.

Window for action

The trust and AI findings are emerging at a time when the operating environment is improving. When comparing their performance with competitors, average ratings increased across all five performance measures compared with 2025, though the size of the change varied.

Customer satisfaction increased from 3.93 to 4.03, competitive position from 3.56 to 3.65, revenue growth from 3.54 to 3.62, return on assets from 3.50 to 3.56, and profitability from 3.53 to 3.54.

Survey respondents also continued to rank economic uncertainty, workforce shortages, and government policies among the forces expected to have the greatest impact over the next three to five years. AI remained first. Transportation capacity and infrastructure constraints moved from seventh to fifth, indicating respondents’ concern that recent capacity constraints may continue unabated.  

Respondents expressed more confidence in their ability to navigate those forces. The percentage of respondents who described their organization as very or somewhat prepared increased from 63% to 77%. However, only 15% said they were very well-prepared with clear strategies and resources, while 62% said they were somewhat prepared but still had gaps.

Making trust operational

The survey results point to a management challenge that extends beyond deciding whom or what to trust. The more important question is how organizations determine when trust is sufficient, when verification is required, and the tools that can be used to reduce trust-related risks. The following actions can help managers turn “trust but verify” from a familiar expression into an operating practice.

Align verification with the consequences of failure: Not every decision requires the same level of scrutiny. A routine planning recommendation does not carry the same risk as changing a carrier’s payment information or releasing a high-value shipment. Managers should identify the decisions with the greatest operational, financial, safety, or legal consequences and establish commensurate verification requirements. Firms can’t verify everything but must have a handle on the essential information.

Turn partner trust into a managed process: The findings should not be interpreted as a reason to distrust brokers, third-party logistics providers, or other intermediaries. However, they do suggest that dynamic logistics risks require implementation of processes to build trusting relationships with reputable partners. Partner onboarding should establish what must be verified, who owns the verification, how frequently information is reviewed, and what conditions trigger additional scrutiny. Trust can remain relational, but there should be visible, verifiable, and current evidence supporting it.

Match AI oversight to the risk of the decision: Organizations have moved quickly from AI awareness to adoption, but confidence in AI output has not kept pace. Managers should classify AI uses by the consequences of an incorrect answer. Low-risk uses, such as summarizing a meeting or producing an initial draft, may require little or no review. Recommendations affecting inventory, routing, capacity, pricing, hiring, safety, or customer commitments, as well as those with regulatory or legal implications, should receive a more detailed analysis.

Measure whether AI and verification controls are working: Training and written policies are necessary, but they do not demonstrate effectiveness. Useful measures include how frequently employees override AI recommendations, what types of errors are discovered, which sources are used to validate important outputs, how long verification takes, and what losses, service failures, or compliance violations the controls prevent.

Managers should also assign responsibility for periodically confirming that AI-enabled processes and verification practices remain consistent with applicable laws, regulations, contractual obligations, and internal policies. These measures can help managers determine where AI is improving decisions, where additional safeguards are required, and where controls create delay without meaningful benefit.

Hire and develop employees who know how to question an answer. As qualifications change faster than employers can define them, resumes and traditional interviews provide limited evidence of capability. Critical thinking and problem-solving become essential when professionals must evaluate incomplete or conflicting information, question an AI-generated recommendation, and decide what to verify before acting.

Managers can reduce uncertainty through hiring candidates with internship experience, using scenario-based interviews, and verifying credentials. Candidates for positions involving AI-assisted decisions should be asked to evaluate conflicting information, identify warning signs, and explain what they would verify before acting. Judgment may be as important as technical proficiency in a trust-but-verify environment.

Use the current window to strengthen controls before the next disruption. Performance and preparedness improvements provide organizations with a window of opportunity to act before a major fraud event, cyberattack, or AI-related failure. Managers should assign ownership of critical verification processes, test whether those controls work, and track whether they reduce risk without creating unnecessary delays. The number of documents reviewed and approvals added is less meaningful than prevented losses, faster exception resolution, reduced identity failures, and better decisions.

Bottom line

Trust remains essential to logistics and transportation. No supply chain can operate if every transaction begins from suspicion. But trust can no longer depend solely on history, reputation, or confidence in a system’s output.

The organizations best prepared for the next operating environment will be those that know what they trust, why they trust it, and when the evidence requires them to verify it.

Shifting tariffs and trade policies, changes in the timing of peak season, geopolitical conflicts and disruptions along key shipping routes continue to reshape capacity, rates and global cargo flows. At the same time, uneven import volumes are complicating decisions around demand, inventories and sourcing.

Joining us for Logistics Management’s Annual Ocean Cargo Roundtable to assess these challenges and explore the current state of the market are Philip Damas, director and head of the supply chain advisors practice at London-based Drewry; Jon Monroe, president and founder of Jon Monroe Consulting; and Ben Hackett, founder, and Daniel Hackett, partner, at maritime consultancy Hackett Associates.

Logistics Management (LM): Will we see a traditional peak season this year, or has the ocean market moved beyond the predictable seasonal patterns of the past?

Philip Damas: I agree that we’re now in a period where peak season is no longer the annual occurrence it once was. Ask any logistics executive and they’ll tell you that geopolitical disruptions and shifting tariffs, which now occur in some form most years, are causing volumes to rise or fall outside the traditional seasonal patterns of the past. The heightened volatility in volumes that emerged during the Covid period has continued.

Daniel Hackett: I’ll add that peak season has evolved over the past decade or two, first as we saw the increased importance of the back-to-school shopping period and the accompanying secondary import peak in May, and then as shippers focused more on resiliency through a just-in-case approach rather than just-in-time, the result of which was muted peak seasons.

Some combination of the two now seems to be the favored approach, with just enough inventory in place to meet demand. More recently, shippers have become more reactionary as trade policies shift and supply chains adjust. This year we’ve seen shippers front-load volume into May and June to hedge against looming tariff implementations and fuel surcharge increases.

This has seen the peak season shift toward a raised baseline with surges driven by external events. And while seasonal swings remain, the traditional late-summer rush is now a flatter, more fluid window where risk mitigation dictates shipping timelines far more than traditional holiday retail schedules.

Ben Hackett: Peak seasons have been impacted by a mix of change in supply and demand as well as by consumer demand with further complication since the start of the Trump administration’s tariff policy—or for a better term ‘chaos.’

Historically, importers worked on the basis of just-in-time deliveries, which allowed them to increase or decrease their imports based on the normal peak seasons of demand usually tied to back-to-school, Thanksgiving, and Christmas linked to maintaining inventories. 

Carriers anticipated the seasonality and increased capacity to cater for the increase in demand. The tariff policy, with its uncertainty, played havoc with import planning, resulting in front-loading of cargo ahead of anticipated tariff cost increases.          

Jon Monroe: Well, it depends on how we define ‘peak.’ Traditionally, peak season was the time before the holidays, when Christmas goods were arriving. This was typically from June-July through August-September, sometimes lasting through October. A large percentage of container imports moved during this time.

Recently, however, peak has come to mean anytime that demand exceeds available vessel capacity. With so much uncertainty, on occasion, importers may front-load or fast-forward their orders creating a false peak, but a peak, nonetheless.

COVID changed the formula carriers use to manage their vessels, and now rather than commit to service strings, vessels are shifted to the most profitable market in a heartbeat. This creates an environment that feels like a peak, but is simply a vessel management strategy designed to keep rates at a certain minimum level. Peak season can now happen anytime during the year that carriers can justify peak season charges based upon their vessel space utilization.

LM: How do you view the current state of U.S.-bound import volumes amid concerns over tariffs, consumer confidence and employment, as well as the continued shift in consumer spending from goods to services?

D. Hackett: Volume trends this year are defined less by consumer demand and more by protective front-loading ahead of potential tariffs, fuel costs, and trade policy shifts. While a solid labor market supports baseline retail spending, consumers continue to prioritize services, travel, and experiences over discretionary hard goods.

Elevated interest rates and persistent inflation further temper consumer appetite for heavy goods. Elevated mortgage rates have limited home sales, which also acts as a limit on appliance and furniture sales. Consumer confidence has been in broad decline since 2021, but the connection between consumer confidence and spending is less strong than it used to be, in part because of the impact of the K-shaped economy.

B. Hackett: Indeed, consumer confidence appears to have ignored the shipping pressures as demand has shown resilience. Consumers dug into their savings and pre-bought goods in anticipation of price increases which has had an impact on the timing of the peak seasons.

Monroe: In the meantime, U.S. import levels remain surprisingly persistent, but there is a growing disconnect between what the consumer economy is telling us and what the container numbers are telling us.

Consumer confidence is weak, tariff uncertainty is still with us, long-term unemployment is rising, and consumers are increasingly spending their money on services and experiences rather than discretionary goods. Yet containers continue to move. Why?

Because today’s import volumes are being driven by more than consumer demand. Importers are delaying orders, waiting for tariff clarity, then releasing pent-up cargo in concentrated bursts. They’re also replenishing successful products, repositioning inventory, diversifying sourcing, and occasionally front-loading shipments to get ahead of potential tariff increases.

The result is a freight market that’s imbalanced and can look extremely tight, even when demand is questionable. In my view, the biggest mistake is equating a temporary surge in containers with a fundamental surge in consumption.

Damas: I think that we should look at the current period to July differently from how we look at the period from August. Having spoken to Drewry’s shipper customers, I can say that most of them front-loaded import shipments or increased safety inventory because of fears that either shipping costs or product costs or tariffs would increase if they waited.

This had nothing to do with demand or consumer confidence—it was more a cost-avoidance or a risk-avoidance decision. Look at the recent volumes of container imports to the U.S., which are up about 15% year-on-year, with high volumes earlier than usual in the year. But, Drewry Shipping Consultants and the National Retail Federation have warned the industry that ocean import volumes will decline from about August.

LM: How have these things affected consumer demand, import levels, and freight flows over the past year?

Monroe: Despite significant month-to-month swings in freight demand over the past year, U.S.-bound freight volumes have remained remarkably steady when viewed over a longer time horizon. Much of the volatility has been driven by shifting tariff policies, changing sourcing strategies and importers adjusting the timing of shipments to manage inventories and avoid potential trade disruptions. Import demand from Asia is expected to remain relatively strong through August, with current booking backlogs indicating strong cargo volumes.

Let us not forget the surge in demand for non-consumer-related goods, especially AI infrastructure products related to the massive data center buildouts. During my most recent trip to China, I had lunch with a friend who represents a U.S. Tier 1 automotive supplier. He related how his company has pivoted from automotive products to AI infrastructure connectors and expects a surge of business to last at least for the next three years.  

Damas: Our benchmarking data shows that new annual contracts that took effect May 1 came with somewhat lower base rates, reflecting the weakening supply-demand balance leading up to the negotiations. However, fuel surcharges were higher due to the Iran conflict.

Meanwhile, off-contract, or spot rates have reflected the sharp fluctuations in capacity availability, vessel utilization and fuel prices over the past year, with both spot rates and surcharges spiking since March. For example, between April 2 and June 18, the Drewry World Container Index rate from Shanghai to Los Angeles jumped 63% to $5,756 per 40-foot container.

D. Hackett: Over the past year, shifting consumer habits and policy uncertainty have created choppy, unpredictable freight flows. Global events, including trade-policy decisions and safety-concerns at critical choke points, have resulted in importers repeatedly pulling cargo forward, creating sudden demand bursts that have seen surges in freight spot-rates.

Freight flows to North America have seen regional shifts as importers actively diversified gateways and adjusted manufacturing sourcing to increase supply chain resiliency and redundancy. One stand-out area is for the materials related to data-center expansions, including the necessary building materials and infrastructure required to power and cool them. 

B. Hackett: Importers have worked hard to adjust their sourcing strategies, using increasingly sophisticated logistics capabilities to shift purchases toward countries with lower tariff rates. That transition took time, but carriers ultimately adjusted their network capacity to accommodate changes in the countries of origin. This has been particularly evident in the shift in sourcing from China to Southeast Asian countries.

LM: How do you view the current state of inventory levels, and how is the current inventory outlook making an impact on ocean cargo volumes?

Damas: When I look at U.S.-wide aggregate data concerning both retailers’ inventories and manufacturers’ inventories from the U.S. Census Bureau and others, it looks as if inventories in recent months were low, by historical standards. The recent surge of imports may have brought them to a more normal level and could trigger an early end of high import volumes.

D. Hackett: For sure, inventories-to-sales ratios have decreased for both retailers and wholesalers since the start of the year. Businesses have shifted to a just-enough approach where sufficient stock exists to insulate against volatility in the supply chain while not risking working capital during a period of elevated interest rates.

This cautious approach has resulted in importers favoring smaller, more frequent shipments that align more closely with real-time sell-through, with a strategic safety stock maintained for core SKUs to cushion against supply disruptions. Long term, this should result in ocean volumes that are more closely tied to actual end-consumer demand.

Monroe: Importers have become more disciplined in managing inventories, walking a fine line between ‘just-in-case’ and ‘just-in-time’ strategies. They’re also diversifying their sourcing networks so that if one country is hit with higher tariffs, they have the flexibility to shift sourcing to a country with lower tariff exposure. At the same time, companies are placing greater emphasis on inventory velocity, cash flow and demand forecasting rather than simply maximizing warehouse stock.

This buying behavior reflects a more cautious approach, with importers preserving cash and delaying commitments until market conditions become more predictable. However, that strategy can create temporary surges in cargo volumes that make the market appear tighter than actual demand would suggest. The result can be a perception of sustained capacity shortages even when annual demand remains relatively flat and substantial new vessel capacity continues to enter the market.

LM: How do you view the current state of ocean contract rates and pricing? Are rates sticking?

D. Hackett: Vessel deliveries anticipated over the coming three-year period will likely result in excess capacity as vessel supply exceeds cargo demand. In the short term, the re-routing of vessels around the Cape of Good Hope has absorbed significant capacity, but the cellular fleet is projected to increase by about 9% in 2027 and more than 12% in 2028.

In contrast, spot rates and temporary general rate increases [GRIs] have resulted in surging costs for some cargo as the early peak front-loading window coincided with capacity management efforts by the carriers. These rate spikes are event-driven rather than structurally permanent, though.

Monroe: Carriers are much smarter than pre-pandemic days. They’ve stopped chasing market share, instead preferring to focus on increasing margins and introducing peak season surcharges. While shippers expect some type of mitigation of rates, carriers have no such intention, instead taking rates as high as they can for as long as they can.

Since they control the assets, they can pretty much do whatever they want. There was a time when the Federal Maritime Commission acted as a watchdog for the U.S. trades, but they seemed to have turned a blind eye to today’s carrier actions. Rates are sticking because it is no longer a supply versus demand world, where it concerns container shipping.

Carriers will use blank sailings, vessel diversions, geopolitics, fuel shortages, and any hint of disruption to increase rates. Multiple carrier GRIs every two weeks are now a common occurrence. Rates will stick—until they don’t.  

Damas: The ocean contract market today is tighter than it was at the beginning of the year. Carriers are asking shippers to accept various emergency fuel surcharges and peak season surcharges, which many shippers are accepting to some extent.

But the expected decline in import volumes, combined with an increase in capacity and, at some point, a more stable Middle East situation, will lead to reductions in contract rates. This may not happen for months.

LM: Do you think that ocean carriers will be able to sustain the current rate structure, or do you see things changing in the coming months?

Monroe: Eventually, rates will come down as the carriers don’t want to look too greedy. Rates will follow the same trend as last year, albeit at a higher level. If we look back over the past two years, we see the same rate trajectories. And that is lower rates in the first quarter, complete contracts by end of May, and take rates up from June through August. Carriers have learned the importance of profitability and will attempt to keep rates higher as much as possible. We do expect rates to come down though before the end of the third quarter. The shipping lines have created their own shipping cycle to remain profitable.

Damas: Well, it depends on which period you’re referring to. In the first quarter, most ocean carriers were barely breaking even or were losing money. But the Iran conflict and other recent disruptions have caused a big spike in freight rates in the second quarter, which will prove profitable for ocean carriers as long as the knock-on effects last. For next year, when the Middle East impact on the market should no longer exist, the Drewry Container Forecaster sees carriers returning to losses.

B. Hackett: Carriers have become very adept at managing their networks and adjusting capacity to support their P&L strategies. At the beginning of the year, carrier profitability began to decline, with some carriers reporting losses despite steady or increasing demand. Much of that pressure was driven by the significant oversupply of vessels and capacity.

By the end of the second quarter, carriers began managing capacity more aggressively through blank sailings and by shifting capacity to other trade lanes. As a result, effective capacity tightened and freight rate increases began to hold. The latest reports from forwarders indicate that the $1,000 rate increases announced for August on the trans-Pacific trade also appear to be holding.

LM: Do you expect shippers to leverage volume for favored status?

Monroe: Shippers will always try to leverage volume for favored status. Unfortunately, the carriers don’t always respond to this tactic, instead preferring to keep margins as high as possible. During a prolonged peak, shippers can expect limited space allocation, GRIs every two weeks, and the implementation of high PSS and other surcharges.

During times when the carriers are uncertain and vessel utilization begins to fall below 90%, carriers may give favored status to shippers who can commit a volume over an extended period. Favored status in this case often includes a rate discount and guaranteed space allocation.

D. Hackett: It’s likely that larger BCOs will seek some form of advantage—favored status or otherwise—in the future as capacity levels increase and freight rates likely decrease. 

B. Hackett: I’ll add that shipper policy is unlikely to change as they will maintain several volume contracts to ensure that they have flexibility when booking.

LM: How do you view the current state of service in terms of carriers being able to deliver on what they promised or guaranteed?

Damas: This year, carriers continue to struggle with schedule reliability. According to our monitoring of major trade lanes, only about 50% of ships arrive within 24 hours of their estimated time of arrival.

Service quality and reliability in container shipping have been high on shippers’ agendas for at least three years, but significant challenges remain. Hopefully, as conditions stabilize, service quality and reliability will become more important differentiators among carriers—and play a greater role in shipper bid criteria next year.

B. Hackett: Carrier service can be impacted by wars, weather, and congestion. These impact the service reliability, which is not desirable to carriers as their network structure suffers with potential vessel bunching and delays at ports all of which impacts their cost structure. 

Monroe: Promise? What’s that? With few exceptions, as soon as carriers have the opportunity to create an environment of tight space, they begin to limit vessel allocations, and push shippers to NVOCCs at higher FAK rates. There are no guarantees here. 

LM: Where do you see this market in five years?

D. Hackett: In five years, the ocean market will likely be dealing with structural overcapacity combined with more strict environmental regulations. Record temperatures and the resulting wildfires will re-energize the environmental debate about IMO decarbonization targets and carbon surcharges. Perhaps there will be an opportunity for the scrapping of older, less efficient vessels, that will also address the issue of excess fleet capacity.

Supply chain networks will remain noticeably more regionalized than where they were before the pandemic and trade war. The shift toward nearshoring in North America and sourcing diversification across Southeast and South Asia has permanently altered trade flows: supply chains are sticky, and there is no certainty that the next five years will be less tumultuous than the past five.

B. Hackett: In today’s world of geopolitical uncertainty and climate change, projecting five years out has become increasingly difficult. Even one year can be challenging, and carriers are working with shorter-term outlooks than they have in the past.

The exception appears to be the orderbook, particularly for larger, more fuel-efficient vessels, which represents a relatively speculative investment in capacity extending beyond 2028. The largest carriers are also expanding their investments in non-marine aspects of their businesses as part of broader diversification strategies.

Monroe: U.S. imports will continue to grow, but at a much slower pace than we’ve experienced over the past decade. Growth will be driven less by consumer demand and more by structural changes in global sourcing, while demand for AI infrastructure—including server racks and data center buildouts—should also contribute to import growth for some time.

While the era of relying exclusively on China is over, U.S. importers will increasingly find themselves sourcing from Chinese-owned factories located in other parts of the world. As sourcing continues to shift through Southeast Asia and toward the Indian subcontinent, carrier routings will evolve, potentially favoring East Coast ports over their West Coast counterparts.

For carriers, the biggest challenge will be excess vessel capacity. Between 2023 and 2028, the industry will have absorbed one of the largest vessel-building programs in its history, adding millions of TEUs of global capacity. In the first half of 2026 alone, carriers introduced more than 800,000 TEUs of new vessel capacity, with approximately 55% deployed in the trans-Pacific trade.

According to Transport Intelligence’s latest “Global Freight Forwarding Market Sizing Report,” the global market was valued at approximately $240 billion in 2025. But growth is expected to slow sharply in 2026 with an expansion of just 2.5%. Some researchers estimate its market value to hover around $235 billion and reach over $340 billion by 2033.

According to Evan Armstrong, CEO of Armstrong & Associates (A&A), 2026 is shaping up to be a favorable market for international transportation management (ITM) third-party logistics (3PL) providers. “This year has turned into a tight-capacity, rising-rate market, and ITM 3PLs are the ones capturing the spread,” he says.

Mordor Intelligence attributes that growth to rising container demand out of Asia, expanding cross-border e-commerce, supply chain diversification through China-plus-one manufacturing strategies, and increasing demand for temperature-controlled pharmaceutical logistics. Based on those trends, the firm forecasts the market will reach $776.04 billion, growing at a 5.19% CAGR between 2026 and 2031.

Winners and losers

One fact remains: global forwarders continue to face pressure from weaker trade volumes, falling freight rates, tariff uncertainty and geopolitical disruption.

“Sea freight is also facing significant overcapacity, while airfreight remains comparatively more balanced,” say analysts at Transport Intelligence (Ti).

Overall, analysts are hesitant to identify clear winners and losers in the industry, as performance varies considerably by geography, trade lane and business model. “However, we believe companies with strong financial resilience, diversified capabilities and the ability to adapt quickly are generally better placed to navigate the current uncertainty,” says Ti.

According to Ti’s research, DSV was the major outlier, with its 31.4% revenue growth largely reflecting the consolidation of DB Schenker rather than organic growth.

In the meantime, A&A’s research found that, by mid-summer 2026, Kuehne + Nagel (K+N), DHL, DSV, and Maersk had all raised their estimates and forecasts for the full year. “All are anticipating that the second half of 2026 should be at least as strong as the first half,” says Armstrong, who admits that this is not what anyone forecasted in December. “Acquisition-driven consolidation reshaped the leaders,” adds Armstrong. “Freight forwarding is where consolidation has been most concentrated.”

Based on revenue and international freight forwarding volumes, Armstrong & Associates' (A&A) Top 25 Global Freight Forwarders ranking places Kuehne+Nagel and DSV at the top, followed by DHL Supply Chain & Global Forwarding, Sinotrans, Nippon Express and CEVA Logistics. (See chart)

“DSV is the archetype,” says Armstrong. “DSV consolidated the segment almost single-handedly. The megadeal era turned a one-leader field into a three-way race.”

DSV climbed to number two through four transformative acquisitions: Uti Worldwide (2016), Panalpina (2019), Agility’s Global Integrated Logistics business (2021), and DB Schenker (2025).

Armstrong emphasizes that when he compares A&A’s Top 25 Global Freight Forwarders for 2010 against the 2025 list, it shows that major forces (M&A, ocean-carrier integration, and the rise of Chinese providers) are operating with even greater intensity in this single segment.

“The top tier tripled in scale, and one acquirer, DSV, absorbed four separate 2010 top 25 forwarders,” says Armstrong. “In 2010, DHL led with $30.5 billion in gross revenue. No other forwarder was close on the combined metric. DSV, a provider who ranked 10^th in 2010 and acquired its way to the very top of global freight forwarding, is the clearest single illustration of M&A over organic growth anywhere in logistics.”

By 2025, three forwarders (DSV at $37.4 billion, DHL at $35.5 billion, and K+N at $33.8 billion) sit within roughly 10% of one another at the top.

Its report, “Top 20 Global Freight Forwarders by Revenue and Market Shares 2025,” reveals that 16 global forwarders posted year-over-year revenue declines, with Sinotrans, C.H. Robinson, Dachser and Yusen Logistics among those experiencing the steepest drops.

Meanwhile, the freight forwarding landscape continues to evolve. Well-known names that ranked among the Top 25 in 2010, but have since disappeared, include Toll Holdings, whose operations were sold to Allcargo; Hyundai GLOVIS, which now generates more than half of its revenue from in-house logistics for the Hyundai Kia Automotive Group; and Sankyu. Others, including Kerry Logistics (now KLN) and Pantos (now LX Pantos), remain in the market but operate under new ownership or branding.

“Of the 2010 top 25, at least seven were acquired or dissolved into competitors,” Armstrong says.

Note: Ranks 1 (Kuehne + Nagel and DSV), 7 (C.H. Robinson and KLN), 15 (DACHSER and LX Pantos) are ties, yielding 25 providers through rank 22. *Revenues cover all four 3PL Segments (DTM, ITM, DCC, and VAWD) and are company-reported or Armstrong & Associates, Inc. estimates. Currencies have been converted to US$ using the average annual exchange rate. Freight forwarders are ranked using a combined overall average based on their individual rankings for gross revenue, ocean TEUs, and air metric tons.

Directional moves

Noteworthy trends continue to shape the direction of the industry. For example, digital entrants such as Flexport, Forto, and Beacon have structurally transformed global logistics by replacing opaque, paper-heavy legacy processes with cloud-based automation, real-time data transparency, and AI-driven workflows.

According to Mordor Intelligence, this has intensified competition since these companies are leveraging venture funding to scale carriers and utilizing web-based API protocols and visibility tools to attract small and medium-sized enterprises and mid-market shippers that prefer transparency over legacy relationships.

Driven by cost efficiency on dense lanes, ocean carriers are also moving into freight forwarding, capturing, according to Mordor, a 61.77% market share in 2025. Two of the most significant carrier-owned players last year were Maersk Logistics—which absorbed 2010 member Damco—and Cosco Shipping Logistics.

“Both rank in the top tier, reflecting container lines integrating forward into transportation management and integrated solutions offerings,” says Armstrong. “CEVA, now under CMA CGM, is a third example of the shipping-line playbook, and it absorbed 2010 member Bollore/SDV along the way.”

Another trend is the surge of Chinese freight forwarders. Sinotrans was the lone mainland-China name in A&A’s 2010 top tier ranking. It’s 2025 list now includes Sinotrans, Cosco Shipping Logistics, CIMC Wetrans, AWOT Group, and CTS International. “These five Chinese providers mirror the broader shift toward Chinese mega-3PLs and cross-border e-commerce volume,” Armstrong says.

Driving the market

The largest driver affecting the industry is the cross-border e-commerce parcel boom. With a +1.2% impact on the CAGR forecast, this global segment is most largely concentrated in North America, Europe, and the Asia Pacific, Mordor reports.

The Asia-Pacific region is the fastest growing and largest regional market for global forwarders. According to Mordor Intelligence, that region generated 36.49% of forwarding revenue in 2025. It predicts the Asia-Pacific region to grow 7.80% CAGR between 2026-2031.

China remains the largest single origin, yet Mordor researchers maintain that Vietnam, India, and Indonesia collect rising investment under China-plus-one diversifications.

Another key driver is sourcing trends. Ti finds that 29% of shippers responding to its Freight Procurement Survey reveal that over the next 12 months they prefer to source from multiple locations to create more resilience and diversification within their supply chains.

Near-shoring is also increasing in importance with 21.5% of shippers responding to Ti’s survey indicating they will look for suppliers near home and 20.4% saying they will bring production closer to end markets. Ti’s research also finds interest in dual/multi-shoring (per 18.3% of respondents), and re-shoring (10.8%).

Mordor research finds increasing early adoption of end-to-end shipment visibility in North America and Europe, and increased use of multimodal and intermodal forwarding as shippers balance speed, cost, and carbon impact.

“The freight forwarding market is restricting networks to blend ocean trunk haul with rail or air final legs, reducing buffer inventory without incurring full air premiums,” Mordor says.

Business segments

A&A’s “Convergence: Trends in 3PL/Customer Relationships 2026” report shows that the three fastest-growing segments over 2016-2026E are Technological (8.7% CAGR), Retailing (7.9%), and Healthcare (7.8%). Each is propelled by a structural demand driver: the AI and semiconductor buildout, the e-commerce revolution, and the biologics and cold-chain expansion accelerated by COVID-19. 

“However, AI and semiconductor demand is replacing e-commerce as the growth engine,” Armstrong says. “AI as freight, moving GPUs, servers, racks, power, and cooling gear, is where freight forwarders are responding aggressively. DHL announced 10 dedicated data-center logistics warehouses totaling over 7 million square feet in North America, slated to launch in 2026, and called it ‘only the beginning of our group-wide expansion.’”

AI as an operating tool—and the use of AI within forwarders' own operations—is much less developed. “And this is where the structural risk sits,” he says. At the other end, Automotive has grown at just 1.8%, weighed down by the costly EV transition, tariff volatility, the semiconductor shortage, and intensifying Chinese competition.

Challenging phase ahead

Meanwhile, circumstantial challenges abound, most notably the continuing conflict with Iran and uncertainty in the Red Sea.

“Iran and the Strait of Hormuz is the dominant story,” Armstrong says. Also impacting, the industry has been the practice of tariff-driven front-loading, where importers pulled volume forward ahead of the July 24 U.S. tariff decision and Section 301 deadlines

“This resulted in a roughly 15% month-over-month jump in inbound U.S. volume that created an artificially early peak season,” says Armstrong.

Meanwhile, there remains a severe shortage of 40-foot containers across China and Southeast Asia in addition to consolidation and network churn by ocean carriers.

But Armstrong remains optimistic. “For ITM 3PLs, volatility is their business model,” he says.  “Chaos widens the spread between what they buy capacity for and what they sell it for, pushing shippers toward asset-light intermediaries who can reroute quickly. “The problem for freight forwarders in 2024 and 2025 was too much stable, cheap capacity.”

This year presents the opposite situation. Today, ITM 3PLs are critical in assisting customers in providing preemptive rerouting before they ask. In essence, they are playing an important advisory role especially when it comes to “destination-based routing triage.”

Early adoption of AI is the next game changer

As Artificial Intelligence (AI) weaves its way into many aspects of the business world, forwarders find they are not immune. That’s because AI is no longer experimental, but increasingly applied to tasks such as quoting, customer service, document processing, visibility, forecasting and decision-making.

“The key differentiator will likely be how effectively companies integrate AI into their wider operations and digital platforms, rather than treating it as a standalone technology project,” says analysts at Transport Intelligence (Ti).

Ti’s first half of 2026 Logistics Playbook identified CMA CGM, Amazon, C.H. Robinson, DHL Group and ID Logistics as leading adopters based on their AI initiatives.

In its research, Ti found that AI adoption across the air and sea freight forwarding industry is further advanced in live operational deployment than many comparable sectors with 94% of identified use cases classified as live rather than experimental. 

Ti also found that in-house development dominates. Unlike contract logistics, where external technology partnerships account for the majority of AI deployments, freight forwarders -- particularly the largest global operators, are building proprietary AI capabilities at scale.

“This reflects the strategic importance of routing intelligence, TMS integration, and customer data as competitive assets, and signals a growing divergence in AI capability between major global forwarders and smaller regional players,” Ti says.

Secondly, the concentration of deployment in network and route optimization reflects the fundamental commercial logic of the sector: transport costs, fuel efficiency, emissions, and schedule reliability are the defining variables in freight forwarding competitiveness. AI optimization of these variables is directly material to margin, customer retention, and sustainability performance.

--Karen E. Thuermer

A catch-all category, SCM encompasses enterprise resource planning (ERP), supply chain execution (SCE) applications such as warehouse management systems (WMS) and transportation management systems (TMS), and supply chain planning (SCP) solutions that help organizations manage demand, inventory and production.

The list doesn’t end there. SCM also covers sourcing, procurement, forecasting and visibility applications that help companies manage suppliers, anticipate demand and track goods across the supply chain. Operating individually as best-of-breed applications or as part of a larger suite, these solutions generally fall into one of three categories: planning, execution or visibility.

Today, most SCM vendors deliver their software through cloud-based platforms, while artificial intelligence (AI) is reshaping how these applications operate and raising user expectations.

“I almost see 2026 as an inflection point because of where we are with AI,” says Howard Turner, director of supply chain systems at St. Onge Company. “It’s really about finding the type of solution that prepares you for this AI future and lets you adopt the next wave of automation, whatever that may be, without having to rip out and replace the system down the line.”

Buyers also have more options right now. They can choose a best-of-breed application, add a system to existing software or invest in a broader suite with built-in capabilities. The challenge is figuring out which approach gives the company what it needs today without limiting what it can add later.

Turner says that the vendor’s AI strategy will also influence how well the application can support new automation and other capabilities over the next several years. “I think AI is inevitable, and it’s definitely going to provide tangible benefits,” he says. “The question is just how prepared the system you’re considering is for what’s coming next.”

With SCM continuing to evolve, supply chain managers should keep an eye on several developments, especially when investing in new applications or upgrading existing suites within the next 12 to 24 months. As they say, forewarned is forearmed, and that’s a good position to be in when making the case for substantial software investments to the powers that be in today’s cost-constrained business environment.

Software spending jumps 65%

Companies are upgrading core systems and preparing for the next wave of automation and AI right now. According to Peerless Research Group’s “2026 Software/Automation Outlook,” they’ll spend an average of $846,450 on supply chain software licenses, integration and training over the next 12 months, up 65% from $512,500 in 2025.

Their median planned investment also rose 21% to $295,800 this year. Over the next 24 months, 25% of respondents plan to evaluate, purchase or upgrade warehouse management software, followed by warehouse execution systems (WES) at 21%; supply chain management and planning applications at 18%; robotic control systems at 17%; and asset-tracking software at 15%. Based on current trends, much of that investment will likely focus on preparing organizations for the next wave of automation and AI.

Christian Titze, research VP and chief of research at Gartner, says that the firm divides its SCM software spending forecast into five major segments: planning, procurement, manufacturing, fulfillment and orchestration. It looks at AI across four categories: applications without AI, AI assistants, AI agents and end-to-end agentic AI that coordinates multiple agents across a process.

In 2026, traditional applications still account for 57% of forecast SCM software spending. Assistants powered by AI, including chatbots and other tools that help users communicate with or query a system, represent another 30%. AI agents account for 11%, while end-to-end agentic AI receives just 2%.

Those percentages will shift over the next three years. By 2029, Gartner expects the share going to applications without AI to fall to 21%. AI assistants drop to 15% as more spending flows toward systems that can handle specific tasks. AI agents jump to 47% of forecast spending, while agentic AI rises to 16%.

“There’s a change in prioritization,” Titze says. “Today, applications without AI still receive the largest share of spending. By 2029, nearly everything will have some type of AI embedded in it.”

Gartner’s forecast also draws an important distinction between the AI that companies can use today and the more autonomous systems getting so much attention. Assistants powered by AI already have established use cases because they help planners and other supply chain professionals find information, analyze data and complete tasks while keeping a person involved in the decision.

The next step is agent orchestration, which uses multiple AI agents to coordinate tasks across a larger supply chain process or within a company’s own ecosystem. Most supply chain organizations are still figuring out where it fits. “Adoption is still low at this point, and there are few established business cases or examples of return on investment,” Titze says. “A handful of highly mature organizations are experimenting with it, but most supply chain organizations are focused on assisted AI right now.”

All this to say that SCM software is in an interesting transition period. For now, companies are using AI assistants to reduce manual effort and help employees make decisions faster. As the technology matures and vendors establish stronger business cases, Titze expects companies to direct more spending toward agents that can manage larger portions of a planning or execution process.

Preparing supply chain data for what comes next

As he surveys the current logistics space, Michael Taelman, senior manager of performance improvement at Crowe, sees companies paying closer attention to the connections between their supply chain data, especially as tariffs change the cost of imported materials and the prices charged to customers.

Take the manufacturer that has to trace a tariff increase from a specific part number through the bill of materials and into the final customer price, for example. That sounds simple enough until the part, supplier, product and pricing records sit in different systems or use inconsistent data.

Taelman says companies with global supply chains are strengthening those connections so their SCM applications can calculate the impact faster and with fewer manual steps. They’re also using AI to review large SKU files, identify missing links and analyze how tariff or price changes flow through the supply chain.

Supply chain applications can now handle more of that analysis, provided the company has configured the system correctly and maintained reliable data. “Even five years ago, it was interns in a conference room grinding out that work,” says Taelman. “Now, AI can help scan your SKUs and improve efficiency.”

Looking ahead, Taelman expects logistics managers to pay more attention to how applications connect product, supplier, cost and customer information, along with how easily users can adjust those relationships when trade policies or sourcing strategies change.

“When you’re making that buying decision, you have to ask what you’re going to be doing with that software over the long term,” Taelman adds. “How do you imagine it operating in your business three years from now?”

Poking holes in AI’s logic

Humans are inquisitive and skeptical by nature. Artificial intelligence tends to deliver answers with confidence, even when the analysis includes a questionable assumption or misses an important exception.

An analyst can ask the software to compare several years of demand, identify unusual shifts or calculate how closely a material’s price follows a specific index. The technology can complete that analysis much faster than someone who has to build the same comparisons manually.

Even though the AI models themselves have improved over the last six months, Taelman says users still need to challenge the answers they produce. “The AI is going to spit out an answer, and it’s not very critical of that answer,” he says. “I think where humans are still excelling relative to those AI tools is by asking, ‘What doesn’t make sense here?’”

Taelman says that human skepticism will be even more important as companies give AI access to more supply chain data and larger portions of the planning process. The software can find exceptions, flag outliers and reduce the time employees spend searching for problems, but supply chain professionals still have to decide which findings make sense, which need more investigation and what to do next.

Avoiding shiny object syndrome

For companies evaluating SCM software, Taelman recommends looking beyond the immediate need. They should consider how easily an application can exchange data with other systems, support new automation and accommodate new capabilities as vendors add them.

A company buying a WMS today, for example, may later want to connect it with robotics, labor management tools, yard systems or more advanced analytics. A planning system may need to absorb more outside data, respond faster to disruptions or recommend specific actions instead of simply alerting planners to a problem.

Organizations should also avoid shiny object syndrome. A new application may solve an immediate problem, but consider how that solution will fit into the business three years from now, align with the vendor's product roadmap and support implementation across the operation.

“A lot of times, companies buy software, use it for six months and then let it become shelfware,” Taelman cautions. “Have a plan for it, make sure it’s being used and think about how it will fit into the business over the long term.”

Companies continue to invest in warehouse automation and software to combat labor shortages, improve throughput and squeeze more value out of every inch of warehouse space. Transportation gets similar attention, with systems handling everything from routing and scheduling to load planning and last-mile delivery

The proof is in the numbers: According to sister publication Modern Materials Handling's 2026 Software & Automation Outlook, warehouse management systems (WMS) and transportation management systems (TMS) have become mainstream technologies, with adoption rates of 49% and 27%, respectively. Yard management systems (YMS), however, continue to lag behind, with just 16% of companies currently using a YMS and only 9% planning to evaluate, purchase or upgrade one within the next 24 months.

Old habits die hard, it seems, especially in operational areas that have been managed manually for decades. Bart De Muynck, an industry thought leader with 30+ years of experience in logistics and supply chain technology, sees a lot of companies using the “clipboard-and-walkie-talkie” way of handling yard activity, while others rely on spreadsheets or proprietary systems built and updated in-house.

Still others rely on basic gate management, dock scheduling or other functions included in their larger WMS or ERP systems. “None of these approaches factor in the whole picture of the yard, where people, vehicles and freight have to work together to keep goods moving into and out of the facility,” says De Muynck. “So even as money is being poured into warehouse automation, a lot of companies still have a major blind spot right outside the building.”

A lot can go wrong out in the yard

Think of the yard as the elbow that connects the warehouse and transportation arms of the supply chain. It may take up less space than the two behemoths on either side of it, but when that joint doesn’t function properly, the whole system breaks down.

The same goes for the supply chain, where the yard is a relatively small slice of the operation, but it’s also a place where a lot can go wrong. Demurrage charges accumulate when trailers sit for days, lost trailers delay outbound orders and a malfunctioning refrigeration unit can ruin an entire load before anyone realizes the temperature has changed.

The automation boom puts an even sharper spotlight on the problem. A highly automated warehouse operation can’t keep freight moving when employees can’t find the right trailer, for example, and even the best-laid transportation plans won't prevent detention charges when a driver spends hours waiting at the gate or dock. Put simply, a delay or equipment failure originating in the yard can quickly ripple across receiving, production, fulfillment and transportation.

Simon Tunstall, a Gartner senior research director, says companies are beginning to understand the risks of running a yard on manual or disconnected systems. “More of them are looking at YMS this year,” he says, “and [particularly] companies that are using Excel spreadsheets, whiteboards or basic dock appointment scheduling that comes with their WMS.”

According to Tunstall, companies in that latter group often just scratch the surface of what their systems can do in the yard, but like the option because it’s easy to deploy. Still, he says most of them “haven’t really exploited it as much as they should be.”

Hitting the target

As shippers manage increasingly complex yards, YMS vendors are giving them more reasons to invest in dedicated platforms to handle those operations. Tunstall points to new capabilities, broader partnerships and continued development by both YMS and WMS providers as factors expanding what companies can do outside the four walls.

Computer vision is one area gaining traction. “AI-enabled vision is starting to become more common,” says Tunstall, who also sees more collaboration between yard management vendors and WMS developers that are adding new yard functionality or partnering with other providers to offer it.

Those developments give companies more options, with the best choice depending heavily on the operation itself. The number of shunter drivers per shift, the complexity of the yard and the size of the company’s facility network all influence that decision. A company may get enough yard functionality from its existing WMS, for example, while a complex or congested operation may need the deeper capabilities of a best-of-breed YMS.

“If you have a WMS, examine what you get from that vendor first,” Tunstall says. “Then, look at the complexity of your yard operations. If you’ve got two or more shunter drivers per shift, a specialized yard management solution may produce some good benefits.”

Some of those benefits extend beyond the yard. On-time, in-full (OTIF) delivery ranks among the supply chain’s most important measures, and poor yard performance can undermine it before a shipment ever leaves the facility. De Muynck says YMX Logistics is one provider that approaches the problem by combining yard technology with standardized processes and operational oversight.

Taking this well-rounded approach is important because the yard touches every point in the supply chain, delivery performance included. “Yard inefficiencies aren’t just tech problems; they’re system problems,” De Muynck explains. “Without a well-run yard, even heavily automated warehouse and transportation operations won’t consistently hit their OTIF targets.”

YMS in action

Cost containment is a common justification for a new software implementation, and YMS is no different. Howard Turner, director of supply chain systems at St. Onge Company, recently worked with one company that was paying high detention charges while drivers waited for paperwork, dock access or instructions on what to do next.

After studying the operation, Turner’s team found that the potential savings from lower detention costs alone could justify the investment in a dedicated system.

The driver shortage added another layer to this particular business case. Every hour a driver spends waiting in the yard is time that person isn’t moving freight. “If you can get drivers back in their vehicles and back on the road faster,” says Turner, “that reduces some of the strain around driver availability.”

The company is now going through the YMS selection process and plans to implement it once it makes its choice. This is just one project reflecting a broader pattern Turner continues to see across the market: the need to digitize yard activity. “Some companies already use a dedicated YMS, but many others still rely on Excel spreadsheets and manual processes to manage trailer locations, appointments and driver activity,” he says. “Software can help fill that gap.”

What’s coming next?

The experts we talked to for this article expect interest in YMS to continue building, even if that momentum doesn’t immediately appear in industry adoption numbers. Behind the scenes, companies are improving their yard operations, replacing manual systems and getting more from the yard capabilities included with their WMS.

Vendors are also adding new capabilities to their platforms and using more AI to meet shipper demand for better yard visibility and control. Computer vision can identify trailers as they enter the yard and track their locations, for example, while autonomous yard trucks can hitch trailers and transport them to dock doors. AI can also analyze carrier arrival patterns and recommend appointment windows that reduce peak congestion.

Going forward, Turner sees integration becoming a bigger factor in YMS selection. Some companies already have yard management capabilities within their WMS packages but use only certain components, often alongside Excel spreadsheets. For those operations, the next step is transferring more yard processes into technology they already own.

De Muynck says both shippers and vendors will continue to push YMS beyond basic trailer tracking and into more active decision-making in the yard. Digital twins can help by giving companies a live view of yard activity. “Knowing where a trailer is in the yard only solves part of the problem,” he says. “Companies also need to decide which trailer moves next, which dock takes priority and how to assign labor and equipment.”

Coming next: tighter connections across YMS, WMS and TMS platforms. Turner says that will allow a carrier to schedule an arrival and select a dock door, for example, while the WMS receives that information and the YMS coordinates the trailer movements needed to have that door ready. Employees will no longer have to jump among separate systems to coordinate those tasks.

For companies evaluating YMS this year, Turner recommends starting with their functional needs and then examining how closely the YMS connects with their existing supply chain management systems. “When it comes to YMS, I think integration serving as that connective piece between a TMS and a WMS can be a real differentiator,” says Turner. “There are just so many benefits associated with having all of that system data integrated.”

The distance between your suppliers and your warehouses or production sites impacts far more than freight costs. It defines agility, working capital needs, risk exposure, and customer responsiveness. In today’s volatile environment, distance has become one of the most underappreciated yet strategic levers in network design.

Distance as a strategic variable

The physical distance between suppliers and warehouses influences the flow, cost structure, and flexibility of an organization’s logistics network. It determines how fast materials move, how much inventory must be carried, how predictable deliveries are, and ultimately how responsive the business can be to its customers.

When suppliers are located closer to key warehouses or production sites, every part of the system becomes more agile. Shorter distances mean shorter lead times, more frequent replenishment, and fewer opportunities for disruption along the way. Local and regional suppliers can often deliver smaller, just-in-time shipments, reducing the need for large safety stocks and freeing up working capital.

Conversely, when supply points are located thousands of miles away, the flow of goods slows down and becomes less predictable. Longer transit routes introduce more nodes, more handoffs, and more potential failure points—from port congestion and customs delays to extreme weather or geopolitical risk.

To offset that uncertainty, companies are forced to carry larger buffer inventories or rely on costly expedited shipments when something goes wrong.

But proximity alone doesn’t guarantee efficiency. The optimal distance between suppliers and warehouses depends on each company’s priorities of cost, service level, market speed, and risk tolerance.

For some businesses, it may make sense to source certain components from overseas suppliers that offer specialized capabilities or lower production costs. For others, a regionalized or nearshore supply base creates far greater long-term value through reliability and speed.

The key is to approach distance as a strategic design choice rather than a fixed limitation. With sourcing patterns, trade policies, transportation costs and geopolitical risks constantly shifting, supplier distance should be periodically re-evaluated rather than treated as a permanent characteristic of the network.

Ultimately, the most competitive supply chains are built with intentional proximity. They are close enough to be fast and responsive, but diversified enough to manage cost and risk. Distance is no longer a passive outcome of where suppliers happen to be but a deliberate choice that determines how a company performs under pressure.

The Cost Equation: Beyond freight

When evaluating supply chain costs, transportation is typically the most noticeable expense. But the true cost of distance extends far beyond freight. Longer supply lines come with a network of hidden costs in inventory, cash flow, flexibility, and risk that often outweigh the savings from lower unit prices.

Every additional mile between a supplier and a warehouse adds time in transit and increases exposure. Longer lead times mean materials are tied up in transit instead of available for use. To compensate, businesses build larger safety stocks, which in turn increase storage, handling, and insurance costs.

Extended supply lines essentially become a drag on financial agility. At the same time, transportation costs are highly volatile. Fluctuating fuel prices, capacity constraints, and longer routes all magnify the expense of every additional mile.

And then there are the less visible but equally significant risks. The farther goods must travel, the more touchpoints they encounter with each one a potential point of failure. Port congestion, labor strikes, political instability, or natural disasters can all disrupt distant supply lanes, and the result is an unpredictable flow of goods that forces companies to rely on expensive countermeasures like air freight or emergency replenishment.

Leading organizations now take a broader view, focusing on the total cost to serve rather than the purchase price alone. They use network optimization models to determine how supplier distance affects lead times, transportation cost, and inventory requirements. These data-driven tools allow decision-makers to quantify trade-offs, rather than relying on intuition or short-term savings.

The goal isn’t always to minimize distance, but to optimize it. In certain cases, a slightly longer supply line can make financial sense, as long as it does not compromise service reliability. In others, the added speed, flexibility, and resilience of a closer supplier network create value that far outweighs a marginal cost increase.

Never overlook distance

Supplier distance is one of the most overlooked levers in supply chain design. When integrated into total landed cost analysis, it transforms from a logistical detail into a true source of competitive advantage.

Freight costs are only part of the equation. The deeper impact lies in inventory, risk, and responsiveness. Companies that plan supplier distance strategically build faster, more reliable, and more customer-focused supply chains.

Tom Schaefges is a Senior Project Manager with St. Onge Company with more than 25 years of experience in supply chain and logistics across corporate and consulting roles. His experience spans food service, retail, manufacturing, transportation, food production and third-party logistics, with expertise in supply chain network, inventory, sourcing and transportation optimization.

Longtime LM readers will remember that this research once served as a fairly straightforward report card on how they felt they were managing their own transportation operations—and, of course, how well their carriers were working with them to keep costs in line and service levels as high as possible.

I would then moderate a session at CSCMP where our research team would share the findings in what was traditionally one of the best-attended sessions of the conference—conveniently scheduled in the room right outside the imminent cocktail reception.

Those high-level measures were always important areas to examine, of course. But over the years, something interesting has happened. As the role of the logistics professional has evolved, so has our Annual Study.

Today, transportation management is about much more than managing freight rates, capacity and service. Logistics professionals are being asked to navigate technology transformation, workforce challenges, economic uncertainty, cybersecurity, fraud, changing regulations and, increasingly, artificial intelligence (AI).

In fact, I think the evolution from last year’s study to this year’s 35^th installment illustrates just how quickly that management challenge is changing. Last year, our research team identified what it called “The Great Disconnect”—the gap between knowing and doing. Logistics leaders clearly understood the forces reshaping the profession, but many organizations had yet to turn that awareness into meaningful action.

AI was perhaps the best example. Everyone knew it was coming, but relatively few organizations were actively embracing it. Well, what a difference a year makes.

This year’s study finds that the knowing/doing gap is beginning to narrow. AI adoption has accelerated dramatically, employee use is growing, and organizations are providing more training, guidance and support. But taking action has exposed the next challenge: trust.

As our research team discovered, logistics organizations are adopting AI faster than they’re building confidence in its outputs. At the same time, concerns around cyberattacks, freight fraud, fabricated documents and carrier identity are forcing managers to think much more carefully about the information—and the partners—they rely on every day.

That’s why the team has appropriately titled this year’s study “Trust, but verify.”

But to me, there’s an even bigger story here. Over 35 years, this study has evolved from measuring how effectively logistics professionals manage transportation into examining how effectively they manage increasingly complex organizations and make increasingly complex decisions.

And I think that says a lot about how far the profession itself has come. Today’s logistics manager isn’t simply worried about moving freight from Point A to Point B. They’re managing technology, people, partners, data and risk—and making faster decisions with more information coming at them than ever before.

Last year, the challenge was moving from knowing to doing. Well, this year we’re clearly doing a lot more. Now the challenge is knowing what—and who—to trust, and when it’s time to verify. After 35 years, I’d say our Annual Study has grown up right alongside the logistics profession.

The objective of the Joint Task Force Crossroads of America, which the United States Department of Transportation (DOT) described as a multi-state partnership focused on securing United States highways and strengthening border security, is to partner across federal, state, and local agencies and target criminal networks and fraud, with a focus on reducing highway fatalities and also protect Americans.

DOT’s key initiatives in the Joint Task Force Crossroads of America are: emergency removal of 110 commercial drivers license (CDL) schools associated with more than 500 drivers who failed English language proficiency (ELP) tests; launching a nationwide audit of third-party CDL testers and states’ oversight of the testers; and results from a 40-state investigation of additional training schools.

DHS will focus on: synchronized single-day sweep targeting more than 200 training schools across 23 states; joint coordination with USDOT; and HIS and ICE updates on ongoing investigations targeting CDL-related businesses and schools. And DHS will focus on the formation of the Joint Task Force Crossroads of America to safeguard the nation’s highway system and strengthen the security of U.S. borders.

DOT officials said that this is the White House’s most aggressive effort to root out fraud, waste, and abuse in trucking, adding that the task force aligns DOT’s regulatory authorities with federal law enforcement operations, in order to take aggressive action to safeguard the U.S. highway system and augment U.S. border security.

“USDOT has spent the last year-and-a-half strengthening the rules of the road and removing dangerous foreign drivers from our trucking industry,” said U.S. Transportation Secretary Sean P. Duffy. “To fully root out the scourge of fraud, hold criminals accountable, and restore safety, we need the support of federal law enforcement. I am so grateful for President Trump raising the alarm on this issue, and to Vice President Vance for leading the charge to crack down on fraud nationwide. From states failing to follow the law to shady training schools and illicit companies, together we will tackle every link in the chain.”

Secretary Mullin added that there is a growing and alarming trend of illegal aliens being granted CDLs.

“Many of them don’t speak English or understand the rules of the road, and yet they’re driving among us, endangering our loved ones,” said Mullin. “As a result, far too many Americans have lost their lives because an illegal alien was behind the wheel. Under the strong leadership of President Trump, DHS and ICE are delivering on our mission to protect Americans by taking these dangerous threats OFF our roadways and getting them OUT of our country. Additionally, our partnership with the Department of Transportation will help root out CDL fraud so that illegal aliens are no longer able to obtain CDLs and put American lives at risk. The Trump Administration will ALWAYS put the American people first.”

Going back over the last 18 months, DOT said that through various initiatives that has resulted in removing more than 28,000 drivers off of U.S. roads, due to failing to speak English, and has also forced states to cancel more than 30,000 licenses illegally issued to foreign drivers, and removed more than 8,000 unqualified training schools from the FMCSA’s registry.

Moving forward, DOT said that FMCSA is rolling out three enforcement measures that focus on stopping fraudulent driver training and testing practices that have allowed non-English-speaking drivers to be able to operate commercial vehicles: the emergency removal of training providers; performing targeted investigations and proposing removals; and conducting a nationwide audit of third-party skills testers.

The Homeland Security Investigations (HIS) unit of DHS, the U.S. Attorney Office, and FMCSA will roll out a national criminal investigation initiative addressing public safety vulnerabilities and criminal activity in CDL and commercial trucking sector. Which will focus on CDL fraud, unauthorized employment, identity-document fraud, financial crime, money laundering, labor exploitation, and potential links to human smuggling, drug trafficking, and cartel activity.   

Industry organizations offered up their support for this announcement.  

“ATA applauds the Trump Administration, the U.S. Department of Transportation, and the Department of Homeland Security for continuing their aggressive crackdown on fraudulent CDL training providers and other bad actors that have undermined safety and integrity within the industry,” said American Trucking Associations Chief Advocacy & Public Affairs Officer Henry Hanscom. “Strong enforcement measures like these send a clear message that commercial trucking is a profession that demands skill, responsibility, and adherence to the highest standards. Removing noncompliant carriers, unqualified drivers, and fraudulent training operations strengthens public confidence in our industry while ensuring that the next generation of professional drivers enters the workforce properly trained and fully qualified. The result is a safer highway system, a stronger supply chain, and a more level playing field for the thousands of motor carriers that follow the rules every day.” 

Todd Spencer, President, Owner-Operator Independent Drivers Association, said that nobody cares more about highway safety than professional truck drivers and it is basic common sense that anyone operating an 80,000-pound commercial vehicle on public roadways should be properly trained, able to read critical road signs, follow emergency instructions, and communicate with law enforcement and first responders in English. 

“OOIDA and professional truck drivers across America commend Secretary Duffy and Administrator Barrs for taking concrete actions to crack down on fraudulent training operations and restore rigorous English language proficiency enforcement,” said Spencer. “Congress must now do its part and pass Dalilah’s Law to ensure CDL mills remain closed and English language proficiency enforcement is permanently made the law of the land.” 

Jeff Tucker, CEO of freight brokerage Tucker Company Worldwide, noted in a LinkedIn post that that these measures may be good news for enforcement and safety—but they comes at a consequential moment for trucking capacity.

"Fewer schools means fewer new drivers. Fewer drivers means less capacity," wrote Tucker. "And when capacity is already tightening, every constraint matters. Shippers waiting for the market to get softer may want to rethink that assumption."
 

That is for the most obvious reasons, of course, in the wake of what could be viewed as an elevated trade way, for the North American neighbors, with the U.S. recently moving forward with additional 50% tariffs on certain Canadian goods “in response to Canada’s discriminatory treatment of American products,” under Section 338 of the Tariff Act of 1930, that went into effect on August 22.

Which was followed by the Canadian government stating that, effective September 8, counter-tariffs on various U.S. goods will go into effect, at 15%, 25%, and 50% on products drawn from those targeted by U.S. Section 338 and Section 232 tariffs, noting that the rate for each product will match the corresponding U.S. rate. As previously reported, these counter-tariffs will apply to products covering $27.6 billion in U.S. imports, “and will focus on sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, that are most impacted by U.S. tariffs.” Looking at different sectors, Canada said that goods subject to 50% counter-tariffs include steel and aluminum products that were previously at a 25% counter-tariff, furniture, clothing, and apparel.

What this means for the U.S.-Canada cross-border supply chain remains to be seen. That was made clear in recent comments provided to LM by Andrei Quinn-Barabanov, Moody’s Supply Chain Industry Practice Lead, whom observed that with thousands of products involved in U.S.-Canada trade, it will likely take time to negotiate tariff rates that will be acceptable to both sides and put an end to the current trade tensions.

“Even when discussions are organized by product category, such as aluminum, trade negotiations can be complex because they often involve both upstream inputs, including raw materials, and downstream fabricated products used in industrial and consumer goods,” he said. “In the meantime, supply chain costs will be elevated for many industries as a result of a combination of direct tariff charges and additional compliance, risk management and processing expenses.”

What’s more, the possibility, or, at this point, the likelihood, of Canada increasing trade with non-U.S. countries is very much gaining traction, according to the Canadian government, who has an objective to double its non-U.S. exports over the next decade, which could add around $300 billion (Canadian) in trade.  

That is not to say Canada is looking to eradicate trade with the U.S. altogether. That is not feasible, especially when considering around 75% of its merchandise exports go to the U.S. Data from the Canadian government in the country’s State of Trade 2026 report showed that non-U.S. exports rose 11.1% in 2025, with exports to the U.S. down 3.7%—and non-U.S. markets accounted for 32.8% of Canadian exports, for the largest tally going back over the last four decades.

Paul Bingham, Director, Transportation Consulting, S&P Global Market Intelligence, explained that Canada looking to increase activity with non-U.S. trade partners is reinforced by these recent developments.

“The will of the Canadian people and their leaders seems clear that they are intent on progressing with advancing trade with other countries to reduce Canada’s economy being so tied to the U.S. for trade,” said Bingham. “Even if a deal is reached relatively quickly to reduce the tariffs on both sides, the momentum and desire to diversify Canada’s trade partnerships won’t be reduced. With the USMCA renegotiations already on hold, the new U.S. Section 338 import tariffs, and Canada’s response with new tariffs add economic pressure on both sides to find a way towards some new deal.”

Looking at some key numbers, Bingham noted that S&P Global Market Intelligence estimated that the U.S. exports to Canada covered by the new Canadian import tariffs amounted to almost 24% of U.S. exports of those products in the 12 months through June 2026.  And he said that for U.S. export commodities covered, for capital goods the share of U.S. exports is 34.5%, where commodities such as materials handling machinery and railway equipment are prominent.

And for the materials commodities covered, he said the U.S. exports include wood and paper products with a 41% share of U.S. exports and steel materials with 31% of U.S. exports. For the U.S. consumer goods category, he said exports covered include furniture with a 45% share of US exports and leisure goods at (33% of U.S. exports).

While the new Canadian tariffs, ranging from 15%-to-50% are not taking effect until September 8, Bingham observed that leaves a window of this week to expedite cross-border shipments of U.S. exports to Canada to get ahead of those new tariffs. Cross-border trucking demand will be high until then, as well some demand for warehouse space to store accelerated inventory builds for those firms where it is possible and financially in their interest, according to Bingham.

“Of course, the tariff situation can change very quickly, and with Canada being so important as a trade partner for the U.S., the bigger picture remains dealing with the future of the USMCA,” he said. “Even if Canada eventually succeeds in significantly increasing the share of their international trade with other countries, there will not be the same level of reduction in Canada—U.S. trade shares as seen in the last decade already between the U.S. and Mainland China. The geographic proximity and the efficient cross-border transportation costs make long-term forecasts for U.S.-Canada two-way trade to have the U.S. remain as, by far, the top Canadian trade partner and Canada to remain in the top 2 (with Mexico) as a U.S. trade partner.  From a U.S. perspective there are no easy alternatives to the substantial imports of oil by pipeline and electricity by wire from Canada.  As NAFTA was replaced by the USMCA negotiated during the first Trump administration, it still is likely a new deal will be negotiated ultimately in this Trump administration, despite the current high tariffs.

Also, as there were legal challenges to the earlier US IEEPA import tariffs imposed on Canada, ultimately successful, there are likely to be legal challenges to the never-before-used Section 338 import tariffs as well, adding to the uncertainty about the ultimate impact of these tariffs.”

Given the current frost between the U.S. and Canada, coupled with the aforementioned Canadian tariffs on U.S. goods set to take effect soon, short of a deal being made, which, at this moment, seems less than likely, it seems like it could be more than a while before U.S.-Canada relations thaw out and things get back on track. Either way, it is sure to be interesting in the meantime.

This report is based on monthly data from more than 50 TIA member companies, focusing on analyzing shifts in broker activity, which it said is largely dominated by the truckload sector and is produced by TIA in conjunction with FTR.

Truckload (TL) activity represented 72% of second quarter broker activity (down 1%) annually, followed by Miscellaneous (which includes ocean, air, warehousing, and special services), at 18%, less-than-truckload (LTL), at 12%, and intermodal, at 2%.  

Total quarterly shipments saw a sequential 8.8% increase, to 1.55 million, and were up 4.8% annually, marking the fourth consecutive quarter of annual growth. Total revenue was up 23.9% from the first quarter to the second quarter, and saw a 25.7% annual gain, driven by higher shipment volume and higher invoice amounts per shipment, with per-shipment invoices rising 13.7% sequentially and 19.6% annually, to $1,989.

Gross margin percentages fell 0.2%, to 17.8% and were off 120 basis points, or 1.2%, annually, in the second quarter, easing for the first time in this cycle, said TIA. Which it added “reflects the usual pattern of volume and pricing recovery preceding margins as carrier rates offset price gains initially,” adding that the strong sequential improvement in the second quarter suggests growing margin recovery assuming some stabilization of rates.  

On the volume side, truckload headed up 7.4% sequentially and 0.3% annually, and LTL was up 5.8% sequentially and 10.4% annually. Intermodal volume posted a 26.6% sequential gain and was up 25.2% annually, and Other, including air, ocean, warehousing, and Misc.) was volume rose 15.2% sequentially and 19.4% annually. Regarding intermodal, TIA explained that intermodal was the fastest-growing mode by far, with shipments up 26.6% sequentially as tight truckload capacity and a spring diesel price surge drove modal conversion—with intermodal volumes hit their highest weekly level since November 2021.

The report noted that the while the first quarter is traditionally soft for volumes, the sequential gains were considered notable. And it also explained it was “especially reassuring” that invoice amount per shipment and revenue outpaced the increase in volume, coupled with the quarter seeing gross margin expansion—collectively serving as indications of a market that has moved beyond early-stage recovery.  

“As noted in the Q1 2026 report, industry metrics show the normal recovery path,” the report stated. “Volume and pricing have improved, and even in Q2 there were signs of margin improvement. As carrier rates stabilize, stronger pricing should require the ongoing—but moderating—gross margin compression that many brokers experienced during the quarter. Moreover, brokers that took advantage of more time on their hands during the tough years to improve efficiency and reduce costs should fare well even if gross margin expansion doesn’t quite match that enjoyed in earlier cycles.”

TIA President & CEO Chris Burroughs said the report’s second quarter results reflect an accelerating recovery for freight brokerage that tracks with the sharp inflection within freight transportation in general, especially in terms of revenue.

“The rapid upturn in carriers' financial fortunes accounts for the one area where brokers no doubt seek further improvement: margin,” he said. “But the compression is easing, suggesting broker margins may be catching up with the pricing recovery. The report's economic outlook…points to continued manufacturing strength—the ISM Manufacturing PMI hit its strongest level since May 2022 —offset by a still-struggling housing sector, with mortgage rates above 6.5% continuing to weigh on related freight demand.”

Life sciences shipments often contain high-value medicines and materials that can be damaged by even a small temperature change. In this interview, Brian Bralynski, Senior Director, Life Sciences Healthcare Americas at DHL Express, explains how sensors, real-time tracking, and around-the-clock monitoring help spot problems early and protect shipments from pickup through delivery.

Supply Chain 24/7: What has changed about life sciences shipments that makes tracking location alone no longer enough?

Brian Bralynski: The primary change has been the development of new therapies, such as complex biological drugs, cell and gene therapies, and personalized medicines. These treatments are developed for a much smaller patient population or, in some cases, an individual patient. Their composition and characteristics require transportation at variable cold temperatures, ranging from chilled to deep frozen, and they can be highly sensitive to minor temperature fluctuations that may cause complex molecules to break down.

SC247: Where during a shipment are temperature changes or other problems most likely to occur?

Bralynski: The highest risk typically occurs when temperature-controlled packaging is approaching the end of its validated duration. In other words, the packaging is validated to maintain the product within an indicated temperature range for a certain number of hours (e.g., 72, 96, or 120 hours).

Please click here to read the complete article. 

Consumers expect products to be available where and when they want them. E-commerce and omnichannel fulfillment continue to reshape distribution networks. Artificial intelligence is changing forecasting and decision-making. At the same time, retailers must balance speed and service with cost, labor availability and increasingly complex operations.

Those challenges, and the strategies leading retailers are using to address them, will be a major focus of the 2026 NextGen Supply Chain Conference, taking place Oct. 21-23 at the W Nashville in downtown Nashville.

Retail will represent one of several industry-focused paths attendees can follow throughout this year’s conference, alongside logistics and fulfillment, food and beverage, and chemicals and pharmaceuticals. Across keynotes, presentations, executive panels and interactive Small Group Sessions, attendees will hear directly from the practitioners implementing new technologies and operating models inside their organizations.

Leading the retail conversation will be two of the conference’s most prominent sessions: Thursday morning’s opening keynote from Wayfair and the Visionary Award keynote featuring Tractor Supply.

Wayfair opens Thursday programming with keynote

Following Thursday morning’s NextGen Supply Chain End User Awards, Nitin Kapoor, vice president of technology at Wayfair, will join Supply Chain Management Review Editor-in-Chief Brian Straight for a keynote fireside conversation, “Building the Future of Home Delivery: Wayfair's Logistics Evolution.”

Please click here to read the complete article. 

Rail carloads, at 235,885, headed up 3.2% annually, topping the weeks ending August 15, at 233,261, and August 8, at 231,628, respectively.

AAR reported that seven of the 10 carload commodity groups it tracks posted annual gains: metallic ores and metals, up 2,054 carloads, to 23,663; chemicals, up 1,923 carloads, to 33,850; and grain, up 1,844 carloads, to 22,260. Commodity groups posting annual declines were: motor vehicles and parts, down 1,837 carloads, to 15,849; miscellaneous carloads, down 773 carloads, to 8,301; and nonmetallic minerals, down 27 carloads, to 32,632.

Weekly intermodal containers and trailers, at 296,577 units, rose 5.0% annually, topping the weeks ending August 15, at 291,838, and August 8, at 295,396, respectively.

Through the first 33 weeks of 2026, AAR reported that U.S. rail carloads volume, at 7,511,910 carloads, is up 2.7% annually, and intermodal units, at 9,301,986, are up 3.8% annually.

The Stop the Rail Merger Coalition is comprised of Class I railroads BNSF Railway and CPKC, as well as the American Chemistry Council, the American Farm Bureau Federation, the Teamsters Rail Conference (which consists of the majority of Union Pacific and Norfolk Southern’s unionized workforce), the Alliance for Chemical Distribution (ACD), the National Industrial Transportation League (NITL), the Vinyl Institute, the Agricultural Retailers Association, the Brotherhood of Railroad Signalmen, and the Fertilizer Institute.

The letter explained that if this merger is approved it would place nearly half of United States rail traffic under control of a single company, adding that it would result in harming American farmers, domestic manufacturers, energy producers, and railroad workers—and also increase costs for consumers and put critical supply chains at risk.

“This outcome runs contrary to your administration’s economic agenda, and we do not believe it serves the American people who support your administration’s goals,” the letter stated. “Consolidating the country's freight network into fewer hands concentrates risk in a single operator, so that any disruption, whether from staffing shortfalls, service failures, or weather, ripples across the entire economy with no competitor able to absorb the shock. This is not a theoretical concern. 

What’s more, the letter also noted that a merged UP and NS would eliminate competitive options that keep freight rates and service reductions in check, observing that without those checks, the merger’s costs, which includes the $85 billion purchase price, would ultimately be passed along to businesses and consumers.

“American manufacturers, energy producers, and farmers would face the greatest risks from Union Pacific’s heightened market power, and the increased cost and added service problems of moving grain, fertilizer, coal, and refined products would ultimately be reflected in the prices Americans pay for food, fuel, and everyday goods,” said the letter. “The American Farm Bureau Federation has been direct on this point: farmers are already under considerable economic strain, and further rail consolidation would compress farm margins while raising food costs nationwide.”

The Stop Rail Merger Coalition letter also highlighted various economic and operational risks related to the proposed merger:

• Integrating two large rail networks with different systems could disrupt service. The Teamsters Rail Conference says there are no binding commitments to maintain adequate staffing during the transition, potentially leading to delays, stranded shipments, and job losses;
• The merger could affect consumers, farmers, manufacturers, energy producers, rail workers, and communities that depend on reliable rail service. Nearly 100 members of Congress and numerous state officials have raised concerns with the Surface Transportation Board;
• The Stop the Rail Merger Coalition said that further consolidation would reduce competition, potentially increase shipping costs and raise prices for everyday goods; and
• Citing a McLaughlin & Associates survey, the letter said about 71% of Americans oppose the merger after learning about its potential effects, while 20% support it.

On August 18, the STB issued a decision in which it officially restarted its review of the proposed merger, following a May decision in which it accepted the companies revised merger application but placed the proceedings in abeyance, as it awaited additional information, which included an environmental review of the transaction and ordered the railroads to submit supplemental information by late July. This decision effectively removes the proposed merger from abeyance, while laying out a timeline for the next stages of the review process.

Key deadlines established by the STB going forward, for the merger, are: September 4, 2026, notices of intent to participate; November 18, 2026, opposition comments/protests and responsive applications; December 3, 2026, preliminary DOJ and USDOT comments; February 16, 2027, responses to opposition and merger applicants’ rebuttal; March 29, 2027, rebuttals supporting responsive applications; and May 28, 2027, final briefs.

Union Pacific CEO Jim Vena recently stated that the companies have more than cleared the threshold to move review of this transaction forward, adding that opponents’ efforts to kill the deal do not change facts.

“We submitted an unprecedented amount of evidence showing why this transaction is good for our employees, customers and America,” said Vena. “The facts show this merger will create a stronger, more efficient single-line rail network that improves service for farmers and American industry, strengthens competition and moves more freight off the highway and onto rail—a service product our opposition is afraid to compete with.”

And Norfolk Southern President and CEO Mark George said that the application clearly shows that this merger is about growth.

"While delivering great public benefits, including better affordability for shippers and, ultimately, consumers,” said George. “Additionally, we’re guaranteeing unionized employees’ jobs for life, while creating new jobs to support increased demand and expanded service. By bringing these two great networks together, we will reverse the loss of share to the highway and actually grow rail's share of freight transportation, creating new opportunities for our workforce while delivering long-term benefits for the customers and communities we serve.”

The Stop the Rail Merger Coalition letter is far from the only one voicing opposition to the merger.

Earlier this month, in a joint motion filed with the STB, five United States-based shipper groups called on the STB to not approve the proposed Union Pacific (UP)-Norfolk Southern (NS) merger application.

The shipper groups—The Alliance for Chemical Distribution (ACD), American Chemistry Council (ACC), The Fertilizer Institute (TFI), and the National Industrial Transportation Group—stated that UP and NS have not provided enough information regarding the merger and its impact to enable the STB to “find it meets the statutory public-interest standard,” or prima facie (accepted as correct until showing otherwise).

To that end, the shipper groups said that the prima facie is a preliminary screen that is based on the sufficiency of the evidence submitted by UP and NS in their application and supplemental filings, in the most favorable light.

“In 2001, the Board revised its merger rules, to reflect a fundamental shift that made future mergers harder to justify by placing a heavier burden on future merger applicants to demonstrate that their transactions meet the public interest standard,” the shippe groups said in a filing with the STB. “Among the more significant changes were a new focus on enhancing competition and assessing downstream and cumulative effects, the exclusion of benefits that could be obtained by alternative means, a more skeptical ‘show me’ attitude towards benefit claims, and transitional service disruption plans. The objective of the 2001 Merger Rules was to codify the Board’s concerns that any future mergers—with a particular focus on end-to-end transcontinental mergers—could have transformative, serious, and irremediable consequences for the rail industry, its consumers, and the North American Rail network.”

Nancy O’Liddy, Executive Director, National Industrial Transportation League, observed that despite the Board repeatedly asking for additional information and data, UP-NS has failed to transparently demonstrate how the combined railroads will enhance rail-to-rail competition and how the touted benefits of the merger will outweigh its harms.

The transaction is expected to close in the fourth quarter and is subject to customary closing conditions, said Arrive.

Established in 2014, Arrive moves freight, for more than 5,500 customers, including various Fortune 500 brands, throughout the United States, Canada, and Mexico, leveraging its network comprised of more than 10,000 core carriers.

While Mubadala Capital will be Arrive’s majority owner, the company said that other investors, including ATL Partners and Lead Edge Capital, among others, “will retain meaningful stakes in the business,” with the company’s management team, who are putting equity into the transaction. Arrive officials explained that this development will enable Arrive to spur growth on various fronts: expanded service offerings; talent acquisition; and technology innovation.

“This transaction positions Arrive to continue building on our unprecedented growth,” said Matt Pyatt, CEO and Co-Founder of Arrive Logistics, in a statement. "Our business is driven by our talented team, sales culture, deep customer and carrier relationships, relentless focus on service, and a technology platform that gives us a structural cost advantage. We have been deliberate about high-quality investors from day one, selecting partners who share our belief that being the leading North American truckload provider is within reach and who bring a partnership approach to working with our team. Mubadala Capital's track record and conviction in the team and strategy make them the right partner for this next chapter."

And Sam Merksamer, Partner at Mubadala Capital, said in the same statement that Arrive has continuously grown load volume and market share through multiple freight cycles and without compromising on service or culture.

“That kind of consistent execution is rare and it reflects the quality of the business Matt Pyatt and Eric Dunigan have built,” he said. “We are excited to support Arrive’s next chapter of growth alongside the Company’s management team and equity holders.”

As for the main benefits of this announcement for Arrive as a company going forward, Arrive’s Pyatt told LM that this transaction will support accelerated investments in the Arrive team.

“We have already begun to increase our hiring for sales, mode expansion, and technology,” he said. “We will hire 1,000 new team members in 2026 with even more growth slated for 2027 and beyond. Having a fully aligned investor group allows us to keep running the same playbook while targeting even more ambitious outcomes.

In terms of customer benefits, Pyatt said that Arrive’s model is built around best-in-class service at scale and every investment the company makes is designed to deliver an even better experience for its customers and carriers.

“We are going to keep expanding modes, keep expanding our reach in segments such as SMB and produce, and keep investing in technology so our structural advantage delivers massive value for our shippers for years to come,” he said.

For service expansion efforts related to this announcement, Pyatt explained that these investments will grow Arrive’s existing truckload business while creating new teams and services to offer customers a more comprehensive suite of services.

On the technology side, he noted that Arrive continues to pair talent with proprietary technology and AI.

“The brokers that grow the next five years will be the ones who translate technology investments into measurable productivity gains and service improvements,” he said.

Ben Gordon, founder and managing partner of Palm Beach, Florida-based Cambridge Capital, and managing partner of Ben Gordon Strategic Advisors (BGSA), observed in a LinkedIn post a noteworthy about the Arrive Logistics-Mubadala investmentis that many investors are deploying capital in tech-enabled supply chain companies.

"What's special about this is that it's a recapitalization," wrote Gordon. "Unlike the dozens of high-profile venture capital and growth equity investments in the sector, this transaction includes liquidity for management. That's a higher bar. One reason why we've seen very few recaps in the last 5 years is because of the COVID valuation spike. Companies that raised capital in 2020-2022 were likely to do so at valuations that were materially higher than prior and subsequent periods. That made it harder for them to raise capital or sell thereafter, since nobody wants to do a write-down or take on dilution unnecessarily. So, it's a good sign that Arrive just completed a recap. It illustrates that Mubadala has confidence in Arrive. And it's a good sign for the tech-enabled supply chain industry. I expect that we will see more buyouts and recaps in the coming year."

Total July volume, at 1,680,569 units, posted a 5.3% annual gain, trailing June’s 11.6% increase and topping May’s 4.4% increase.

Trailers, at 41,576, headed up 6.4% annually, and domestic containers, at 814,855, posted a 12.3% annual gain. All domestic equipment, which is comprised of trailers and domestic containers, at 856,431, rose 12.0% annually. ISO, or international, containers, at 824,138, fell 0.9%.

Through the first seven months of 2026, IANA reported that total volume, at 11,045,747, increased 2.9% annually. Domestic containers, at 5,354,977, were up 8.2% annually, and trailers, at 274,848, saw a 3.3% annual gain. All domestic equipment, at 5,629,825, was up 7.9%. ISO containers were the lone sector to see a decline, at 5,415,922, for a 1.8% annual decrease.

In IANA’s recently-issued Intermodal Volume Index (IVI), the organization’s findings pointed to annual growth remaining intact.

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. 

The August IVI estimate, at 101.3, trailed July by 2.8% and was also behind June’s 107.7. 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.

“The August estimate, though down, reads as a continuation of the strength that we've seen for much of the 2026," said Andrew Sibold, Director of Economics. "Although this month's forecast carries a bit more uncertainty, we're seeing no reason for any near-term reversal of the positive trend we've seen this year.”

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

IANA’s Sibold recently told LM that while higher energy prices have served as a driver for some shippers in switching to intermodal—with the caveat that there are other factors at play, too.

“Diesel prices are a factor, but the labor supply shortage that is happening in trucking has been the primary driver of that shift, I think,” he said. “And I expect that to continue in the future, especially during this administration. There is no reason that will change over the next two-to-three years, with the same going for diesel prices. Even if there is a durable ceasefire, it is likely that diesel prices will remain elevated just because that risk now that needs to be factored in.”

As trucking capacity has exited the market, due in large part to a supply-side contraction, that led to shippers figuring out where that capacity is going to be coming from, in order to meet their needs, according to Rick LaGore, CEO InTek Intermodal Logistics. He also noted shippers need to pay close attention to future capacity shifts, for both intermodal and trucking, should demand return in a meaningful way.

“Shippers need to be paying attention to these dynamics earlier than later and plan for them,” said LaGore. “It definitely falls into a plan for the worst and hope for the best-type of situation. Intermodal currently presents a great opportunity for shippers to find capacity, particularly in tight-capacity markets that exist today. There are really some green shoots in intermodal today, which go back to what is happening on the truckload side, where we are seeing significant price increases as well as capacity issues. The natural place for shippers to go, if that is what they are seeing, is for them to transition more of their freight over to intermodal.”

USPS said that this planned peak season change was approved by the Postal Service’s Board of Governors and be applied to various retail and commercial domestic competitive parcels:  Priority Mail Express (PME), Priority Mail (PM), USPS Ground Advantage, and Parcel Select, with no other products or services being affected. Pending favorable review by the PRC, USPS said the temporary rates would go into effect at 12 a.m. CT on Oct. 4 and remain in place until 12 a.m. CT on Jan. 17, 2027.

“This seasonal adjustment will bring prices for the Postal Service’s retail and commercial customers in line with competitive practices,” said USPS. “As a part of the Postal Service’s transformation plan, these temporary changes will support the organization in achieving our public service mission—providing a nationwide, integrated network for the delivery of mail and packages at least six days a week—in a cost-effective and financially sustainable manner over the long term, just as the U.S. Congress has intended.”

The largest of the proposed price changes are directed towards heavier packages and long-distance shipments:

• retail rate increases from around $0.30-to-$20.80, based on service, zone, and package weight;
• commercial rate increases ranging from around $0.40-to-$18.20, with Parcel Select increases up to $2.35;
• lightweight package increases largely under $1-to-$2;
• heavy packages, ranging from 26 pounds-to-70 pounds and oversize shipments see the largest increases, for Zones 5-9; and
• Large Flat Rate Box increases between $1.75-$2.10, with other Flat Rate products rising by roughly $0.85-$1.00

Paul Yaussy, head of parcel contract intelligence, at Loop, told LM that on the surface, this looks like a roughly 2%-to-10% temporary increase on Priority Mail commercial rates and is not flat across the board—adding that the proposed increased are front-loaded toward lightweight packages and especially longer zones, where the USPS still often holds advantages over other alternative carriers in both rate and service. And for Ground Advantage (comprised of two-to five- day service standards for packages up to 70 pounds, including three services—USPS Retail Ground, Parcel Select Ground, and First-Class Package Service—into the Ground Advantage service) rates, he said it is roughly a 5%-to-8% increase

“USPS is doing what FedEx and UPS have done for years: carving out a peak surcharge window instead of baking holiday costs into base rates,” explained Yaussy. “The difference is that USPS is calling it a filed 'temporary rate' subject to PRC review, which gives them regulatory cover the other parcel carriers don't need for their peak surcharges. For shippers, the real story isn't the surcharge itself; it's the stacking effect. If you're already absorbing FedEx/UPS peak surcharges, this adds a third layer of peak cost variability to plan for.  Assuming USPS is still your low-cost provider compared to FedEx or UPS after this increase might be a mistake and this will require some analysis on every shipper's part. It's also worth watching to see if the rates simply become permanent as part of an overall USPS strategy to become more solvent once the ‘temporary’ tag expires.  Either way, shippers should plan for significant annual increases during peak, regardless of their primary and secondary carriers.”

In looking at the proposed peak season price increases, Dave Sullivan, Director of Professional Services at ShipScience, observed in a customer update that shippers should model the increase using current, post-billed July weights and their actual product and zone mix, as opposed to relying on last year’s package weights. Sullivan also noted that parcels currently billing near 24 pounds-to-27 pounds, especially for low-density packages exceeding one cubic foot, deserve immediate review because a relatively small dimensional or packaging change could move them into the highest temporary-increase band.

“Repacking to reduce dimensional weight may provide savings, but splitting one package into two should not be assumed to lower cost because it creates two base postage charges and two temporary price increases,” wrote Sullivan. “Priority Mail Flat Rate and Parcel Select may reduce incremental peak exposure for certain shipments, but comparisons should be based on total postage, packaging and entry requirements, service needs, and eligibility—not solely on the holiday increase. USPS-produced Flat Rate packaging is required for Flat Rate pricing.

For cubic-priced shipments, the holiday filing maps Priority Mail Cubic tiers 1–3 to the 0–3 lb. increase and tiers 4–5 to the 4–10 lb. increase. USPS Ground Advantage Cubic tiers 1–3 map to 0–3 lbs., tiers 4–9 to 4–10 lbs., and tier 10 to 11–25 lbs. Peak pricing will remain in effect for the first 16 days of January, with the lower post-expiration prices beginning January 17. Shippers operating under Negotiated Service Agreements should also confirm how the temporary price adjustments are treated under their specific terms.”

In its fiscal third quarter earnings announcement earlier this month, USPS said quarterly operating revenue, at $19.9 billion, fell 6.1% annually, following a 2.3% annual fiscal second quarter gain. And its net loss under generally accepted accounting principles came in at $2.5 billion, down from $3.1 for the same quarter a year ago, while steeper than a $2.0 billion fiscal second quarter loss.

Operating revenue, at $19.9 million, headed up 6.1%, or $1.1 billion, annually, paced by what USPS described as ongoing growth in its USPS Ground Advantage Shipping and Packages subcategory and also gains in Marketing Mail. What’s more, it added that operating revenue gains were supplemented by First-Class Mail and Marketing Mail price hikes, as well as a transportation-related, time-limited price increase that took effect on April 26, for various Shipping and Packages category offerings, which it noted were partially offset by declining First-Class Mail and Shipping and Packages volume declines.

In the spirit of that connection, I have some sad news to share.

We received word last week that our former colleague Roberto Michel lost his courageous battle with cancer. He was 66 years old. Following his diagnosis, Roberto retired in April after a career spanning nearly three decades covering software, materials handling and manufacturing trends.

Roberto was a well-known and loved contributor to Modern since the early 2010s and was our full-time senior editor since 2020. He was known for his thoughtful coverage of warehouse software systems, robotics, lift trucks and automation technologies. Before he joined our team, he was the chief editor of Manufacturing Business Technology magazine. He was a bit of an industry icon.

But Roberto was also way more than that.

He was an avid reader (he carried a degree in English Literature from the University of Oregon and a master’s in journalism from Marquette) and loved the outdoors, biking, fishing and cooking/grilling. Smart, quick witted, humble and good company, he was truly not only a professional, but someone you wanted to have interesting conversations with.

He had a gift for explaining the most complex ideas and systems in a simple, digestible way. Roberto always brought a seasoned ability to get to the heart of the story, whether that story was work-related or personal. He had a curiosity that just made him great.

I loved sending Roberto out to cover booth assignments at ProMat and Modex, because he would connect all the dots. It was not just the one product at the booth I sent him to. He always came back with a post-show report or blog tying multiple technologies and ideas together.

Roberto and I worked together in some capacity for 20 years at Modern, and after he joined our staff full-time in 2020, we truly became friends. I think we only met in person a handful of times, but he was a great teammate—thoughtful, kind and always willing to go the extra mile to make things better.

Roberto’s contributions to Modern and to our industry will no doubt leave a lasting impact. On behalf of all of us here at Peerless, I send our deepest sympathies and love to his wife, Karen, his family, and everyone in our industry who got to know him. I will miss him. He was one of the good ones.

“The Government of Canada has negotiated intensively and in good faith with the United States (U.S.) toward a fair and comprehensive trade agreement that would protect Canadian workers and their families, strengthen the economy, provide greater certainty for businesses, and respect Canada’s sovereignty,” stated the Department of Finance Canada. “In recent days, however, the U.S. proposed new terms that were not in Canada’s best interest, basically, asking too much of Canada, and offering too little in return. Canada therefore suspended negotiations rather than accepting a bad deal that would undermine Canadian workers, businesses, strategic sectors, and our national interest. Canada did not choose this trade conflict, but we need to respond to provide a level playing field to our businesses.”

Canada said that, effective September 8, counter-tariffs on various U.S. goods will go into effect, at 15%, 25%, and 50% on products drawn from those targeted by U.S. Section 338 and Section 232 tariffs, noting that the rate for each product will match the corresponding U.S. rate.

And it added that these counter-tariffs will apply to products covering $27.6 billion in U.S. imports, “and will focus on sectors such as steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, that are most impacted by U.S. tariffs.” Looking at different sectors, Canada said that goods subject to 50% counter-tariffs include steel and aluminum products that were previously at a 25% counter-tariff, furniture, clothing, and apparel.

And it also said that goods subject to 25% tariffs include appliances, dairy products, such as cheese, fish and seafood, and certain steel and aluminum derivative products. Other existing counter-tariffs against the U.S., including autos, remain in place and Canada’s tariff remission framework also remains available to assess requests for exceptional relief. 

"Canada will match the new U.S. tariffs dollar for dollar," Canadian Prime Minister Mark Carney said in a social media post. "In addition, we are introducing $7.5 billion in new and enhanced measures to support Canadian workers and businesses. That builds on the nearly $25 billion in supports introduced since the implementation of the U.S. unjustified tariffs. Defending Canadian jobs, industries, and families.

The tariffs placed by the U.S. on Canada, which took effect on August 22, are on products ranging from cement, electronics, and packaging materials to furniture, dairy products, and industrial equipment. They apply to roughly 5% of Canadian exports to the United States.

The White House has not released a consumer-friendly product list, but officials said the tariffs apply across a broad range of Canadian goods. Examples include: industrial machinery; commercial refrigeration equipment; cement and other building materials; wine, beer and distilled spirits; hockey sticks and other sporting goods; and certain dairy products and ingredients.

The official proclamations identify affected products using Harmonized Tariff Schedule codes rather than plain-language product names.

Canadian exports that are exempt from the new U.S. tariffs include: energy products; potash; critical minerals; fish and seafood; and goods already covered by Section 232 tariffs, including steel, aluminum, copper and many auto parts.

Prior to the new U.S. tariffs on Canada taking effect on August 22, 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.

Following the breakdown in U.S.-Canada trade negotiations, President Trump said the U.S. would impose 50% tariffs on Canadian automotive products and steel, effective January 1, 2027, for cars and trucks made in Canada, Canadian auto parts, and Canadian steel and alumimum. 

Andrew Caridas, a partner at Washington, D.C.-based Ashurst Perkins Coie, whom has more than two decades of experience advising clients on international trade regulations, said prior to the negotiations reaching a stalemate, the most important takeaway is that the new Section 338 duties apply regardless of whether goods qualify under USMCA.

“Companies that previously had largely ignored USMCA and its predecessor NAFTA—because U.S. duties on Canadian products were low in any event—have spent six years building compliance programs around origin certification, and that certification does not help here,” said Caridas. “A shipment can be fully USMCA-originating and still carry the additional 50% duty.”

And he added that another thing to keep in mind for shippers is that coverage depends on HTS code, not broadly by industry. There are roughly 554 eight-digit HTS classifications across the three proclamations, and the motor vehicles action in particular reaches well beyond vehicles: cement, furniture, fishing rods, hockey equipment.

In a research note, Chris Rogers, Head of Supply Chain Research, at S&P Global Market Intelligence, observed that the talks held between the U.S. and Canada were about more than only the Section 338 tariffs, with the USMCA negotiations also now on hold, which extends supply chain investment uncertainties for shippers.

“It is unlikely that USMCA will be abandoned given the importance to both sides, including an expected 63.6% of Canada’s non-energy exports and 18.0% of U.S. non-energy exports in 2027, although Canada’s export economy is steadily becoming less reliant on the U.S.,” stated Rogers.

Looking ahead, Andrei Quinn-Barabanov, Moody’s Supply Chain Industry Practice Lead, observed that with thousands of products involved in U.S.-Canada trade, it will likely take time to negotiate tariff rates that will be acceptable to both sides and put an end to the current trade tensions.

"Even when discussions are organized by product category, such as aluminum, trade negotiations can be complex because they often involve both upstream inputs, including raw materials, and downstream fabricated products used in industrial and consumer goods," he said. "In the meantime, supply chain costs will be elevated for many industries as a result of a combination of direct tariff charges and additional compliance, risk management and processing expenses.”

Supply Chain 24/7 Editorial Director Andy Gray contributed to this report. 

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

The report’s primary observations were:

• truckload spot rates (linehaul only, excluding fuel) increased 32.4% annually, topping the first quarter’s 16.5% annual gain, for its highest annual and sequential increases, going back to the second quarter 2021;
• truckload contract rates were up 6.0% annually and up 2.4% sequentially;
• through August 21, the Curve is on track to end up the third quarter at a higher mark than the second quarter;  
• all-in rates (the actual amount paid to carriers rose to their highest level in four years;
• despite improving spot rates, carriers remained under significant cost pressure, exacerbated by higher fuel prices;
• federal policy enforcement has eliminated carrier capacity and the carrier market, leading to a noticeable reduction in the overall driver pool;
• the cost to operate a truck (excluding fuel) is up 29% compared to the last market peak in 2021;
• overall freight volumes remain muted

The report explained that the ongoing rate gains are due to the continued attrition of carrier capacity related to federal regulation enforcement and subsequently resulted in a supply imbalance relative to demand.

“In the second quarter, truckload spot rates rose at an even faster pace than in the first quarter and consistently outpaced contract rates, which put increased strain on shippers’ routing guides,” said Corey Klujsza, vice president of pricing and procurement at RXO. “That trend is not only continuing but picking up steam as we head into peak season. Though we’ve been in a year-over-year inflationary environment for over two years, the truckload market is starting to feel materially different.”

In an interview with LM, Jared Weisfeld, RXO chief strategy officer, explained that the two main themes—in both the report and for the market—continue to revolve around a very muted demand environment and a supply-driven economy that continues to take shape. For the former, he pointed to the Cass Freight Index, as a proxy for overall industry volume, which has seen annual declines for every single month since January 2023.

To that end, Weisfeld observed that this continues to be supportive of RXO’s view that supply continues to exit the market, given the myriad changes to federal enforcement, including May’s Supreme Court ruling in Montgomery v. Caribe Transport, an FMCSA rule closing CDL eligibility loopholes; a CDL mill crackdown; English Language Proficiency); and Chameleon Carrier Enforcement, among others.

“That is structural in nature, from our standpoint, in terms of the supply [capacity] that is coming out,” he said. “That is not likely to come back, coupled with the fact that spot rates on an annual basis have been up anywhere, depending on the week you are looking at, from 30%-to-50% annually. With demand doing what it's doing, I think that speaks to how fragile the market is from a supply-demand balance perspective, and any increase in demand has the ability to move rates meaningfully higher from here and introduce just more volatility in the market in terms of rate volatility.”

As far as how long a supply side recovery could be, Weisfeld noted that based on RXO’s estimates there could be as much as 20%-to-25% of overall supply coming out of the market, from a for-hire truckload perspective, labeling it “not an immaterial amount,” with the market currently halfway through that.

Looking at the third quarter and the remainder of the year, the report said that the amount of carrier capacity leaving the market, paced by the aforementioned federal government initiatives, represents what it views as the biggest structural change to the U.S. carrier market since industry deregulation in 1980, and to a steeper level than 2017’s ELD (electronic logging devices) mandate.

Addressing the lag in contract rates relative to the spot market, especially for larger enterprise-based shippers that go through different bid cycles that take time, Weisfeld said that ultimately it continues to be the case that carriers are needing to put through higher rates to reflect current market conditions, given how much capacity has exited the market.

“The reality is even though we're in a soft demand environment, you have reduced so much supply from an industry standpoint, where even though aggregate demand is still muted, you sort of think about that intersection between supply and demand, and you've reached that point where you have seen rate increases in terms of spot rates that are in the market…up about, 30 to 50% year over year. And when you think about what that means in terms of the contract market, the contract market is coming through on a lag basis. But I do think our view is, as we think about Q3, is that the market is likely to tighten between now and quarter-end peak. The question really is if it is going to be a function of what happens to consumer demand, which I don't know yet. Trying to predict consumer demand has been a fool's errand for a while, especially as relates yeah to freight demand.”

Those pressures and the strategies logistics leaders are using to address them will be a major focus of the 2026 NextGen Supply Chain Conference, taking place Oct. 21-23 at the W Nashville in downtown Nashville.

Logistics and fulfillment will represent one of several industry-focused paths attendees can follow throughout this year’s conference, alongside retail, food and beverage, and chemicals and pharmaceuticals. Across keynote presentations, fireside conversations, an executive panel and interactive Small Group Sessions, practitioners will share how new technologies and operating models are changing execution inside warehouses, transportation networks and customer fulfillment operations.

Ryder and BJC demonstrate the value of 3PL partnership

Thursday’s program will open with the NextGen Supply Chain End User Awards, including the Partnership in Execution Award for Ryder and BJC HealthCare.

Thys Visser, vice president of operations, healthcare and high tech at Ryder, and Jason Luby, vice president of value chain management and sourcing operations at BJC HealthCare, will discuss how the organizations’ redesigned healthcare logistics around patient outcomes.

Please click here to read the complete article. 

For the week of August 24, the national average headed up 19.8 cents to $5.652, following a near-identical 19.7-cent increase to $5.454, for the week of August 17, while also seeing its highest weekly average since the week of May 25, when it came in at $5.525.

This was preceded by the week of August 10, when the national average fell 9.1 cents to $5.257, following a 3.5-cent increase, to $5.348, for the week of August 3, and 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.

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.

Before 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 is up $1.944, topping the $1.741 and $1.503 annual increases, for the weeks of August 17 and August 10, respectively. WTI crude is currently trading at $82.31 per barrel on the New York Mercantile Exchange, below the $85.00 reading a week ago at this time.

The tariffs cover products ranging from cement, electronics, and packaging materials to furniture, dairy products, and industrial equipment. They apply to roughly 5% of Canadian exports to the United States.

Canada now plans to introduce retaliatory tariffs on American products beginning Sept. 8, expanding the dispute to goods moving in both directions across the border.

“Canada will match Washington's new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses,” Canadian Prime Minister Mark Carney said.

Please click here to read the complete article. 

ATA’s move comes in the wake of the sudden resignation of Chris Spears in August.  ATA’s Board of Directors is charged with establishing a search committee to identify the organization’s next president and CEO.

The move comes at a tenuous time for the ATA and the various sized trucking companies it represents. Nearly all national trade organizations based in Washington have suffered from lack of funding during both Trump administrations as companies pull back from national lobbying to focus on state and local activities.

Greg Hodgen, the current ATA chairman of the board and CEO at bulk carrier Groendyke Transport Inc., said ATA is well positioned to continue its lobbying  efforts on behalf of the trucking industry during this latest leadership transition.

“Our work continues full speed ahead, and ATA will remain a strong, unified and effective voice for America’s trucking industry,” he said in a statement. Hodgen was scheduled to be replaced as ATA chairman by Derek Leathers, chairman and CEO of Werner Enterprises, a huge truckload carrier, during the ATA convention in October.

“As that process moves forward, our members can have full confidence in ATA’s leadership team and staff,” Hodgen said. “We have a clear mission, strong momentum and the people in place to execute.”

Spear became ATA’s ninth president in July 2016. His salary and total compensation for 2024, the last year for which IRS records are available publicly, was $3,014,727 in “reportable compensation.”

Spears succeeded Bill Graves, a former two-term governor of Kansas who retired after leading the federation for more than 13 years.

Of course, the most notable ATA leader was Thomas Donohue, who greatly expanded the ATA’s national lobbying effort, as chairman and president from 1984 through 1997 before leaving to run the U.S. Chamber of Commerce.

Donohue’s salary was a reported $3.7 million in total compensation during one of his latest years at ATA. That total compensation figure could include the cost of operating Donohue’s private jet, a source of consternation for some in Washington who viewed it as over the top.

Under Spear, ATA secured legislative victories for the trucking industry on many fronts, including highway infrastructure funding and workforce development. He also tirelessly worked to combat rising “nuclear verdicts” in wrongful death and injury lawsuits by aggressive plaintiffs’ attorneys.

ATA also moved its headquarters from suburban Arlington, Va., to its current location in downtown Washington, D.C. That was done to move ATA closer to policymakers and regulators on Capitol Hill.

A primary driver for that expectation was, and remains, the rapid escalation in energy prices. The average price per gallon of diesel gasoline has increased roughly 28% since the Iran conflict began, and the average price per barrel of WTI crude oil has increased by around 28%, for the same period.

But in the early days of the war, as energy prices began to quickly jump, a material shift by shippers to intermodal was slow to materialize. But that began to change for a few different reasons. One being an ongoing tightening in both trucking capacity and demand. What’s more, a research note published at the beginning of the Iran conflict by Baird & Co. analyst Daniel Moore observed that intermodal operates under what he called a distinct model that not only benefits economically from higher fuel prices, in that intermodal carriers are profitable on higher share, as well as increasing market share.

“Intermodal is roughly [around] 70% more fuel-efficient than traditional truckload, which means rising fuel costs widen its relative advantage and drive incremental volume,” wrote Moore.

To that end, it now appears that since then that more shippers are leveraging intermodal, due to the aforementioned rising energy prices and tighter trucking capacity, with the latter being largely related to various federal government actions related to non-domiciled CDL (commercial driver licenses) revocations and English language proficiency provisions, and increased oversight of driver training schools.

That was made clear in data provided to LM by the Intermodal Association of North America (IANA), which pointed to an 11.6% annual gain in June intermodal volumes, with year-to-date volume through June up 2.5% annually. This was also evident in data from the Association of American Railroads (AAR), which showed intermodal volumes up nearly 4% annually on a year-to-date basis through the week of August 8, with total July volume setting a new record for the month.

“Year-to-date intermodal volume through July this year is a record high,” said AAR Chief Economist Rand Ghayad. “That’s no accident. It reflects a combination of excellent current rail service levels; higher trucking costs associated with higher diesel prices and fewer available drivers; and continued strong consumer demand for goods. Together, those factors have put 2026 on pace to be the best year in intermodal history.”

Andrew Sibold, Director of Economics and Freight Policy, at IANA, explained that the Iran conflict has definitely played a role in the shift to intermodal, with energy prices being a driver—with the caveat that there are other factors at play, too.

“Diesel prices are a factor, but the labor supply shortage that is happening in trucking has been the primary driver of that shift, I think,” he said. “And I expect that to continue in the future, especially during this administration. There is no reason that will change over the next two-to-three years, with the same going for diesel prices. Even if there is a durable ceasefire, it is likely that diesel prices will remain elevated just because that risk now that needs to be factored in.”

As trucking capacity has exited the market, due in large part to a supply-side contraction, that led to shippers figuring out where that capacity is going to be coming from, in order to meet their needs, according to Rick LaGore, CEO InTek Intermodal Logistics. He also noted shippers need to pay close attention to future capacity shifts, for both intermodal and trucking, should demand return in a meaningful way.

“Shippers need to be paying attention to these dynamics earlier than later and plan for them,” said LaGore. “It definitely falls into a plan for the worst and hope for the best-type of situation. Intermodal currently presents a great opportunity for shippers to find capacity, particularly in tight-capacity markets that exist today. There are really some green shoots in intermodal today, which go back to what is happening on the truckload side, where we are seeing significant price increases as well as capacity issues. The natural place for shippers to go, if that is what they are seeing, is for them to transition more of their freight over to intermodal.”

Total volume, at 960,464 TEU (Twenty-Foot Equivalent Units), fell 5.82% annually, trailing the July 2025 record-month, which saw the impact of shippers front-loading cargo ahead of tariff changes while posting a 7.5% increase over the port’s five-year average for the month.

“After topping 1 million container units in June, we nearly reached that mark again in July,” said Port of Los Angeles Executive Director Gene Seroka. “Businesses continue to move cargo when they see windows of opportunity amid an evolving trade environment, while resilient consumer demand is helping keep imports at historically strong levels. We expect another strong month in August, although some cargo that traditionally arrives later in the season has already moved,” Seroka added. “Consumer demand remains the most important variable as we look toward the balance of the year.”

Imports, at 499,552 TEU, fell 8% annually and were 6% above the five-year July average, while on a year-to-date basis averaging more than 450,000 TEU per month, for a near record-high. And exports, at 111,776 TEU, were down 8% annually, with the port seeing annual declines in four of the last seven months, reflecting headwinds U.S. shippers continue to face in overseas markets.

Empty containers, at 349,137 TEU, saw a 2% annual decline, for its highest tally in a year and 12% above the five-year running average.

Through the first seven months of 2026, POLA volume, at 6,083,067 TEU, is up 1.8% annually.

On a POLA-hosted media call, Seroka said that the volume outlook over the coming months is steady.

“We have had two very strong months based on what we are seeing today and expect to handle more than 900,000 TEU in August,” he said. “That said, this pace won’t continue indefinitely. The National Retail Federation is forecasting strong imports nationwide in August, followed by a gradual moderation through the remainder of the year. That tracks with what we are seeing here. Some cargo that arrives traditionally later in the season has already moved. Even as the pace of cargo flow levels off, consumer demand remains the most important indicator. As long as people keep spending, there is a foundation for healthy cargo activity.”

To that end, he said that it is not just retail-focused, as POLA is hearing from customers about the continued movement of parts and components for American manufacturing, as well as some equipment supporting AI and data center development across the country. And he also observed that there are global factors at play, including the Strait of Hormuz and the Red Sea routes remaining unsettled, and also drought conditions potentially again constraining traffic through the Panama Canal—with each of these issues having the ability to quickly upend shipping patterns.

ATA reported that trucking tonnage fell 1% in July, following a 1.5% June gain, in its advanced seasonally-adjusted For-Hire Truck Tonnage Index.

ATA reported that its July Seasonally Adjusted (SA) For-Hire Truck Tonnage Index reading, at 113.5 (2015=100), fell 1.2%, from June’s 114.7 reading (which was revised from an original reading of 114.7), and was off 0.5% annually, steeper than June’s 1.2% annual decline. On a year-to-date basis, ATA said the index is up 1.4%, driven by what it called robust annual gains from February through April.

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 117 in July, trailing June’s 118 by 0.9%.

"Tonnage levels have been choppy recently, and this trend was reflected in July’s decline,” said ATA Chief Economist Bob Costello.  "Aside from a couple pockets of strength, including the boom in data center construction for AI, freight has been lackluster. It is also true that the industry is seeing a recovery, but that is nearly all due to excess capacity leaving the market.”

For the week of August 17, the national average increased 19.7 cents, coming in at $5.454 per gallon, for its highest weekly average since the week of May 25, when it came in at $5.525.

This was preceded by the week of August 10, when the national average fell 9.1 cents to $5.257, following a 3.5-cent increase, to $5.348, for the week of August 3, and 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.

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.

Before 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 is up $1.741, ahead of a $1.503 annual increase a week ago at this time. WTI crude is currently trading at $85.00 per barrel on the New York Mercantile Exchange.

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

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

While the countries are currently in negotiations, in hopes of striking a deal that would prevent these tariffs from taking effect, the current status of the talks is unclear.

Jamieson Greer, ambassador of the Office of the United States Trade Representative (USTR), said in a New York Times report that negotiators were reviewing options, adding that he expected Canada to drop certain measures it had already taken in response to U.S. tariffs.

“If a country retaliates against us, we’re obviously not going to tolerate that,” said Greer. “We’ll take action. My sense is the Canadians want to have a more conciliatory approach, but we’ll see.”

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 July research note that the implementation of the tariffs not a certainty.

“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.

Andrew Caridas, a partner at Washington, D.C.-based Ashurst Perkins Coie, whom has more than two decades of experience advising clients on international trade regulations, said that if a deal between the U.S. and Canada is not reached, the most important takeaway is that the new Section 338 duties apply regardless of whether goods qualify under USMCA.

“Companies that previously had largely ignored USMCA and its predecessor NAFTA—because U.S. duties on Canadian products were low in any event—have spent six years building compliance programs around origin certification, and that certification does not help here,” said Caridas. “A shipment can be fully USMCA-originating and still carry the additional 50% duty.”

And he added that another thing to keep in mind for shippers is that coverage depends on HTS code, not broadly by industry. There are roughly 554 eight-digit HTS classifications across the three proclamations, and the motor vehicles action in particular reaches well beyond vehicles: cement, furniture, fishing rods, hockey equipment.

“So ‘does this affect me?’ is a classification question, not a sector question, and a lot of companies that don't deal in autos, dairy or alcohol will find themselves on the list,” he said. “This mean added or changing compliance burdens, and significant price competition pressure, in sectors of the Canadian economy that have been largely spared to date. In the immediate term the story is primarily about compliance: verifying import classifications against the annexes and considering entry timing. Over a longer horizon you are likely to see the same pattern as with other major tariff changes: dual sourcing, contract renegotiation over duty allocation and Incoterms, and closer attention to customs valuation. What I don’t expect to see quickly is wholesale re-sourcing away from Canada for affected HTS codes. Automotive components in particular cross the border several times before a vehicle is finished. That integration took thirty years to build and won’t be quick to unwind.”

When asked what things could look like if a partial deal were to be reached, Caridas explained that what is being discussed publicly is a tradeoff rather than a tariff reduction.

To that end, on the U.S. side, he pointed to suspending the Section 338 proclamations and easing the Section 232 duties on steel and aluminum. And on the Canadian side, he cited withdrawing retaliatory measures, lifting provincial bans on U.S. alcohol, movement on dairy quotas, and commitments on energy, critical minerals and defense.

“While it is possible we could see, say, 25% Section 338 tariffs based on partial concessions from Canada, the more likely scenario is selective suspension of one or more of the three Section 338 tariff measures depending on some perceived progress in negotiations regarding the corresponding Canadian measures,” he said. “My expectation, based on prior rounds of U.S. trade negotiations, is an interim or framework agreement rather than a comprehensive one: enough to stop the clock on Section 338 tariffs, but with the more difficult negotiations deferred to the USMCA review process.”