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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Please cick here to read the complete article. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

One business, the company said, will retain the project44 name, and serve enterprise shippers as a Decision Intelligence Platform. And the other business, entitled LSP44, will debut as a dedicated, profitable, AI-Native company, with purpose-built AI Agent and API Infrastructure for logistics services providers: 3PLs, freight forwarders, and brokers.

Founded in 2014, project44 entered the market with a focus on replacing manual processes with a real-time API covering rate quotes, dispatch, visibility, and documentation. The company explained that early adoption by leading logistics service providers (LSPs) helped build the carrier network, integrations, and data infrastructure that comprise its current platform. Which is now used by nine of the world's ten largest LSPs, making LSP44 a key foundation for industry leaders. Over the past decade, project44 expanded into the enterprise shipper market, evolving into a Decision Intelligence Platform, spanning TMS, visibility, yard management, and last-mile operations, all powered by its core API and agent infrastructure.

Jett McCandless, project44 Founder and CEO, provided LM with a detailed overview of the announcement in the Q&A below.

LM: What drove the need for project44 to create two separate businesses? How long had it been planned or in the works?

McCandless: project44's Decision Intelligence Platform was built for enterprise shippers, who need a living ecosystem of the supply chain in motion. Orders, inventory, transportation, carriers, yards, last mile, and risk signals are all critical components of that picture for shippers.

3PLs need something categorically different: agentic infrastructure they can run their own operations on and embed directly into their own products, carrier procurement, dispatch, exception recovery, freight audit, and the work their teams do manually today, all supported by AI agents that take action and keep the team focused on strategic, value-add work

Those are different products, different buyers, different roadmaps, and if we kept building both inside one company, the 3PL-specific work would always be competing for engineering time against the shipper roadmap. This isn't a new idea for me. I started project44 in 2014 after owning and operating a 3PL myself, so LSP44 is really the completion of a thought I've had since day one: formalized once it was clear 3PLs needed their own dedicated leadership, roadmap, and speed, not a division inside someone else's company.

LM: What are the main benefits, as well as notable, or significant, changes of these moves for project44 customers, on both the enterprise shipper side and the 3PL, freight forwarder, and broker side?

McCandless: For enterprise shippers, nothing changes. project44 continues exactly as it is today. Same Decision Intelligence Platform, same agentic workflows, same team, same contract. If you're a shipper, you won't feel this at all.

The benefit is that roadmap no longer shares engineering bandwidth with 3PL-specific work, so it gets full focus. For 3PLs, the change is substantial: they now get LSP44, agentic infrastructure built exclusively for logistics service providers. That means production-grade AI agents that automate the workflows a 3PL runs manually today—carrier procurement, rate and quote, tender and booking, dispatch and appointment scheduling, carrier onboarding, exception and disruption recovery, documents, and freight audit and settlement.

It deploys in weeks, not quarters, connects into the systems a 3PL already runs without a rip-and-replace, and most customers have agents live and handling real volume within their first month. These aren't assistants that surface a recommendation for someone to act on, they execute autonomously, around the clock, across every lane and shift.

LM: Are there any areas, or ways, in which project44 and LSP44 will overlap, or collaborate, when working with customers?

McCandless: Yes. Both run on the same underlying network and data foundation: 280,000-plus carriers, 8 billion signals, more than a decade of live freight data.

In practice, that overlap shows up most directly through our 3PL customers themselves. Some run their own fleet as a carrier on our network while also using LSP44 to manage carrier relationships and visibility as a 3PL. Their own shipper customers, meanwhile, often already run on project44's Decision Intelligence Platform, supported by the world's largest, most accurate, real-time logistics data graph—now trusted by more than 1,300 leading brands moving over a billion shipments a year across 185 countries.

This means the shipper on the other end of that shipment sees the same data, through the same underlying infrastructure, no matter which company's product they're touching. That's the collaboration in practice: one network, two purpose-built businesses sitting on top of it.

LM: Will your enterprise shipper customers continue using the same platform? If not, what will it look like?

McCandless: Yes. Nothing shifts for our shipper customers. project44 continues to operate as the full Decision Intelligence Platform it is today—transportation management, visibility, yard management, and eCommerce logistics, all orchestrated by AI agents—same team, same integration, same contract.

What's new is additive: LSP44 standing up as its own business for the other side of the relationship, the 3PLs, who haven't had infrastructure built specifically around their operations before.

LM: Will any existing products move exclusively to LSP44? Can customers use both companies' offerings together? How will product roadmaps differ?

McCandless: LSP customers will get the benefit of the project44 with an added focus of LSP specific solutions through our dedicated roadmap.

The agent and infrastructure layer built specifically for 3PL operations including agents for carrier procurement, rate and quote, tender and booking, dispatch and appointment scheduling, carrier onboarding, ocean execution, exception and disruption recovery, documents and eBOL, and freight audit and settlement LSP44 has a dedicated roadmap, built and prioritized entirely around how 3PLs actually run.

The network and data foundation underneath stays shared. Because of that, and because a meaningful number of 3PLs are also project44 shipper customers or carriers on our own network, the two are already working together inside the same freight ecosystem today, even as separate businesses with separate teams.

Regarding product roadmaps: project44's stays shipper-centric—iTMS, Visibility, YMS, Ecommerce Logistics, and agentic workflow tools for shippers. LSP44's is built entirely around 3PL operations: the agentic infrastructure I just described, deployed in weeks and running in the background from day one.

There are different buyers and different priorities—and now each roadmap gets full engineering focus instead of splitting it with the other.

For the week of July 13, the national average price per gallon rose $1.058, to $4.796 per gallon. This marks the first weekly increase since a $0.001-cent decrease, to $5.639, for the week of May 11. Patrick De Haan, analyst at GasBuddy, observed in a social media post that new escalations in the Middle East between the United States and Iran are pointing towards diesel heading back to the $5 per gallon mark, coupled with the average price per gallon of WTI crude oil coming in above $80 per barrel, whereas it was at $70.37 a week ago this time.

On an annual basis, the current average price per gallon of diesel is up $1.058.

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

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

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

In explaining what drove the need for this strategic partnership, the companies observed how trust between LTL carriers and shippers can erode by the invoice, noting that when around 30% of LTL shipments result in a discrepancy between the quoted charge and the final invoice, the cumulative effect is a carrier-shipper relationship that they said is defined by suspicion rather than confidence.

“Shippers brace for unexpected charges,” they said. “3PLs frequently absorb the cost of disputes, carriers deal with delayed payments, and all parties suffer from the administrative burden and friction created. The freight moves, but the trust does not grow. FreightSnap and Shiplify are partnering to build something better—from the ground up.”

Scooter Sayers, VP of Business Development, FreightSnap, told LM that the companies did not have a previous relationship prior to this announcement, while having had a relationship with Shiplify in having worked with them during his time at ABF.

“As I continued to contemplate the fact that everyone who knows anything about LTL invoicing talks about the massive challenge of quotes not matching invoices, and that these mis-matches largely are due to reweighs/reclasses or location-based accessorials, it just made sense to me that FreightSnap and Shiplify should combine our efforts,” he said. “They agreed.”

Regarding the main benefits of this partnership for both LTL carriers and shippers and if this partnership fills a gap that was needed or missing, Sayers was direct, saying that FreightSnap and Shiplify are targeting the same customers: shippers, carriers, warehouses, 3PLs, technology providers, and any other firms who see the value in deploying the companies’ solutions to reduce the invoicing friction present.

“But we both realize that while FreightSnap may be engaged deeply with a client on the reweigh/reclass front, that client may not be having a similar conversation with Shiplify about accessorial issues,” he said. So, it is about filling the gap where those dealing with LTL invoice issues do not know about either of our solutions. And by providing curated referrals, we also have the opportunity to extend discounts to these customers that they might not get on their own.”

When asked to provide a basic example of this strategic partnership at work, Sayers put into a current situation in which he is talking to a 3PL about partnering with FreightSnap so the 3PL can help convince its customers that they should deploy dimensioner solutions.

“This 3PL is even considering the option of making the purchase themselves…and had heard about Shiplify but was not fully familiar,” he said. “Now I am getting them connected to Shiplify to learn more.”

As for the future, Sayers noted that the companies’ plans are to share notes on who they work with and already partner with, and to socialize each other’s offering when talking to current and prospective clients. 

“In other words, we want to see more customers made aware of our solutions by working together,” he said. “We plan to do case studies with 3PLs in particular as they choose to partner with both FreightSnap and Shiplify.”

North Winship, President, Shiplify, said in a statement that Shiplify was built on the belief that transparency is the foundation of trust, adding that when every party in a freight transaction has access to the same accurate information such as what the shipment weighs, what it measures, and what the origin and destination requires, there is nothing left to dispute.

“Our partnership with FreightSnap brings that level of certainty to both dimensions of the problem,” said Winship. “Together, we are giving carriers the tools to bill with confidence and shippers the assurance that what they are quoted is what they will pay. That is how you build trust in a relationship the industry depends on.”

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

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

“The result is a real-time picture of the intermodal freight economy,” it said.

IANA’s June volume data has not been issued yet. In May, it reported that total volume, at 1,618,761 units, increased 4.4% annually, following a 0.6% annual decline in April. Through the first five months of 2026, IANA reported that total volume, at 7,725,501 units, were up 0.8% annually. Domestic containers, at 2,957,463, are up 5.1% annually, and trailers, at 152,139, are down 2.1% annually. All domestic equipment, at 3,109,602, are up 4.8% annually. ISO containers fell 4.7%, to 2,997,138.

On an IANA-hosted call earlier this month, IANA Director of Economics Andrew Sibold said that the impact of the Iran conflict has been significant for domestic intermodal

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

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

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

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

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

Larry Gross, president of Gross Transportation Consulting, said on the call that there are two independent things simultaneously happening in intermodal right now.

One is on the international side, in terms of import levels, driven by tariffs, being depressed and related difficulties, coupled with tailwinds on the domestic side, with fuel being a key part of that.

“I would say that there is a tightening of truckload supply, mainly driven by exterior events, which are government actions, with regard to English proficiency, immigration non-domiciled CDLs, and, and, and tighter trucking regulations with regard to zombie truckers,” he said. “Now those folks are being forced out of the business. A lot of the less reputable driver training institutes are being forced out of the business. This created a tightening in the truckload supply, and as consequence higher rates, and that's where intermodal has an opening in terms of truckload conversion, you know, so we've got some tailwinds now, and we're starting to see that, I think, in the domestic numbers.”

And Sibold pointed to what he called a miniature rally in domestic manufacturing, paced by AI data construction efforts and also the secondary effects of the White House’s federal reconciliation bill, also known as the “One Big Beautiful Bill,” that was signed into law last summer. Which helped to incentivize corporate investments into domestic manufacturing.

“You are starting to see some of those effects,” he said. “If domestic manufacturing was not [increasing], it would not be as easy for intermodal to make that swap and capture some of that domestic share. There is also the trucking labor story, too. It will be interesting to see how this develops going forward.”

And Rick LaGore, CEO of InTek Intermodal Logistics, told LM that with intermodal volume up annually, especially on the domestic side, it is great to see, given that in recent years, the 53-foot marketplace has been mired in the freight recession.

“It's great to see that we're on the other side of that, or at least trying to work ourselves to the other side of it,” said LaGore. “We're starting to see some, some green shoots over there, and it really has to do with what we're seeing on the truckload side. On the truckload side, all the shippers that play in that market are seeing significant price increases, and also, they're having capacity issues on the truckload side, and the natural place to go for shippers, if that's occurring on the truckload side, is to move and transition more of their freight over to intermodal.”

Addressing the impact of high diesel prices on intermodal, LaGore said that were some market shifts related to that, with the caveat that shift had already been happening.

“The impact of diesel fuel definitely helped accelerate it. Before that, we were seeing shippers move from truckload to intermodal, as they were experiencing problems finding capacity and at a price that worked for their, for their business,” he said. “A lot of it is driven by what has been occurring with the FMCSA (Federal Motor Carrier Safety Administration) and the tighter regulations that it has put on legal truck operators and legal truck drivers, and that's what's making this this market a whole lot different than what we've seen previously, because typically when this type of situation happens—when capacity tightens and pricing goes up—I look at it in the 53-foot capacity market between truckload and intermodal, and when this always happens, it's always driven by demand.”

Logistics Management (LM): How do you view the current state of how trade policy is implemented, especially in light of the temporary stay of the White House’s tariffs temporary Section 122 10% tariffs, following an appeal made by the U.S. Department of Justice to the Court of Appeals for the Federal Circuit, which reinstated the tariffs as the appeal is considered”

John Lash: Early last year, we quickly learned that “on-again, off-again” is the adjective that best describes the country’s new trade policies. The same goes for tariff lawsuits, except the order is flipped to “off-again, on-again.” The pattern is clear. Plaintiffs sue over the legality of tariffs; justices rule that tariffs exceed executive authority; a court of appeals issues a stay within days; and the case gets punted to higher courts. That’s what went down with IEEPA and is currently in play with Section 122 tariffs.

While we’re not sure whether Section 122 will reach all the way to the Supreme Court, we can be sure this will take a while to play out. Worse yet, tariffs remain in effect while the case works its way through the courts, so businesses and consumers continue to pay without relief.

LM: How long could this be the case for, do you think?

Lash: With IEEPA, it took more than eight months from the appeal to reach a final ruling. That’s a lot of unnecessary tax payments that companies could have used to grow their business. And it’s been slow to get back. Now, [a little more than four] months after the Supreme Court ruling, the federal trade court ordered the head of the U.S. Customs and Border Protection to appear at a hearing to explain why so few refunds are issued.

LM: What have been this biggest pain points for consumers and businesses related to tariffs?

Lash: These delays and lack of transparency add to growing consumer and business frustration, especially amidst economic unease, inflationary pressure, and affordability concerns. Call it tariff fatigue, combined with a sense of injustice. 

A sense of injustice on several levels. First, for being forced to pay unnecessary tariffs that squeezed our pocketbooks. Second, for how long it takes to get refunds once the tariffs were ruled illegal. Third, whether those truly entitled to receive refunds will actually get them. Will they be kept by businesses or passed on to consumers?

LM: How would you describe the federal government’s approach to tariff refunds?

Lash: From the government’s perspective, the answer to who they refund is simple: the importer of record. But we all know that’s not necessarily the party that bore the cost of the tariffs. Some businesses temporarily absorbed tariffs and took a hit to margins. Others opaquely passed through tariffs bundled into price hikes. A few transparently listed tariffs as a discrete line item. Most used some combination of the above. 

In a perfect world, refunds would flow through to whoever paid the actual cost of tariffs. But in the real world, it’s a function of transparency and power dynamics between buyers and sellers, especially when there is an asymmetric power imbalance. When there’s clear transparency or the power dynamic favors consumers, refunds are more likely to be passed on. When the power dynamic favors businesses, refunds are more likely to be kept. 

LM: In May a proposed class-action lawsuit was filed in the U.S. Disrtrict Court for the Western District of Washington, with the plaintiffs representing consumers who allegedly paid higher prices for imported goods sold by Amazon because of the challenged tariffs. What are the key takeaways of this case?

Lash: The class-action lawsuit filed against Amazon is an interesting bellwether. While there are many aspects to this case, at the center is one fundamental question: who keeps the hundreds of millions of dollars in unlawful tariff costs collected by Amazon?  Will it be the consumers who indirectly paid tariffs through higher prices? Will it be Amazon who keeps it all for a big windfall? Or will Amazon avoid filing for a refund altogether to curry favor with the administration? Time will tell. To date, Amazon has reportedly not sought refunds from the government.

The big-picture issue is that for every Amazon, there are thousands of smaller businesses that aren’t at risk of a class-action lawsuit but still face the same question. Do you lean into customers or favor yourself? For some CEOs, it’s a moral dilemma; for others, it’s an opportunity – and a good reminder that how we respond in times of adversity defines who we are and who we aspire to be. 

This the 58th edition of the Global Shipping Report, going back to its debut in August 2021.  

May U.S.-bound container imports—at 2,400,627 TEU (Twenty-Foot Equivalent Units)—were off 1.2% compared to May but rose 8.2% annually, which the firm said reflects typical seasonal easing seen in the month of June. On a year-to-date basis through June, volumes are down 0.3% annually and up 22.2% compared to the same period in pre-pandemic 2019.

The firm added that while overall import volumes remain stable, geopolitical events and changes in tariffs are likely to be the biggest drivers of supply chain decisions over the balance of the year.

“Over the first six months of the year, aggregated U.S. containerized imports showed little variance compared to the same period last year,” said Jackson Wood, Director of Industry Strategy at Descartes. “However, as we head into the second half of 2026, global trade continues to face high levels of volatility from Middle East maritime risk, elevated tariff uncertainty, new Panama Canal draft restrictions and ongoing Red Sea disruption. For U.S. importers, sourcing diversification, landed cost visibility and risk mitigation remain key strategies to manage in this environment.”

Other key findings in the report were:

• June containerized imports from the top 10 countries of origin were down 0.3%, or 4,644 TEU, with China down 0.2%, or 1,723 TEU, following a strong May gain, with Vietnam seeing the biggest increase, up 2.5%, or 6,724 TEU, followed by Indonesia, which rose 11.6%, or 6,286 TEU, and Germany saw the steepest decline, decreasing 13.2%, or 8,453 TEU;
• Container volumes at the top 10 U.S. ports were down 0.9%, or 18,533 TEU, from May to June, with Los Angeles up 16.1%, or 70,495 TEU, and New York/Newark up 1.7%, or 5,813 TEU, with New York/Newark down 18.4%, or 68,449 TEU, and Houston seeing the biggest decline, Houston seeing the biggest decrease, down 21.7%, or 42,137 TEU; and
• East and Gulf Coast ports’ market share accounted for 39.6% of total imports, down from 42.0% in May and West Coast ports’ share rose to 44.6%, from 42.3% in May, and the top 10 ports handling 84.3 of total U.S. containerized imports, up from May’s 83.9%
   

Trucking capacity has been reduced. The government is cracking down on foreign-born truck drivers, affecting capacity. Tariffs are in place on both power units and trailers, affecting cost and capacity. Cross-border trucking is in limbo as the U.S.-Mexico-Canada trade agreement revisions are ongoing as annual changes by any of the three partners increases uncertainty.

But housing starts are only modest, at best. Where growth is occurring is a slight boost from construction of data centers. But that does not signal a broad economy-wide boost in construction. Fuel prices are uncertain, at best. And inflationary pressures are felt by nearly everyone.

Avery Vise, vice president of trucking at research firm FTR, said the combined dry van, flatbed and refrigerated transport rates are up around 45% year over year. Contract rates for 2027 truckload are forecast to rise by 17% year over year, and 35% for spot rates.

 “We expect bullish commentary from TL (truckload) carriers in Q2, driven by continued momentum on the supply side due to regulatory enforcement,” Jason Seidl, trucking analyst for T.D. Cowen said in a note to investors.

Carriers are seeing stable demand with early positive reads on peak season, Seidl added.  He is predicting that the outlook for core demand (both retail and industrial) continue to produce the next leg of earnings momentum.

Spot rates continue to track well above last year's levels, Seidl noted. Kendra Phillips, vice president of transportation management for Ryder System, said spot rates are up 60% year over year while contract rates have risen 15% since January.

“The industry has been affected by regulations affecting the driver work force,” Phillips told LM. “You could feel capacity tightening.”

Oddly, the rate strength is almost entirely driven by capacity reductions, according to Seidl and other top trucking analysts.

“We estimate that nominal spot rates still need to be 20% higher to reach parity with 2014 levels on an inflation-adjusted basis,” Seidl said in a note to investors.

Carriers, meanwhile, are describing freight demand levels as "stable.” The highly respected Cass Freight Index shows shipments improving but still negative year over year, pointing to a gradual recovery in freight demand.

“We are beginning to hear early signs of optimism surrounding peak season. This may be the first real peak season since 2021," Seidl added.

Carrier executives hint they are very bullish on this trucking cycle and capacity reductions. In fact, one of the reasons cited is not that demand for freight services has increased. Rather, it’s a “supply-driven” recovery that is responsible for the latest boost.

The Department of Transportation (DOT) has not taken its foot off the gas on its English-language proficiency enforcement crackdown of non-domiciled drivers. That has effectively reduced trucking capacity, perhaps as much as 5 to 10%. One trucking executive, when asked recently what inning we are in this recovery, quipped, “We are still in batting practice."

Nevertheless, trucking executives say it’s about time the pendulum swung in their direction. The Federal Motor Carrier Safety Administration reports as many as 600 drivers placed out of service every week for lack of English proficiency.

Carrier executives say they welcome the government’s crackdown on unsafe drivers.

“As I have said many times, ours is a people business and professional drivers are the backbone of everything we do,” Peter Latta, chairman and CEO of A. Duie Pyle, the nation’s 16^th-largest LTL carrier, told LM. “With respect to the recent focus on non-domiciled CDL (Commercial Driver’s License) requirements and driver qualification standards, I believe the important starting point is that every motor carrier has a responsibility to operate safely and comply with the rules that govern our industry. At Pyle, we have always taken that responsibility very seriously. We verify credentials, ensure compliance with employment eligibility requirements and never believe there is a shortcut when it comes to safety.”

Currently there are about 3.5 million CDL-qualified drivers. FTR is forecasting that number to rise by about 150,000 by the end of next year in an effort to match supply with demand.

Orders for Class 8 trucks in the current order season are up a stunning 36% year over year after several below-par years. Carriers report the new trucks are for replacement needs and better utilization. Tight capacity is supporting demand, analysts said. But they warned this additional capacity could eventually negate rate increases paid by shippers.

The Global Supply Chain Resilience Outlook, based on a survey of 515 CEOs at companies with more than $500 million in annual revenue, found that 72% would accept paying more than a 10% increase in supplier costs if it guaranteed greater supply chain resilience. On average, CEOs said they would accept a 17.3% increase.

Nearly 30% said they would accept an increase of more than 20%, while less than 1% said they would not be willing to pay anything extra for resilience.

Please click here to read the complete report. 

Rail carloads, at 212,691, posted a 3.7% annual gain, with volumes coming in lower than previous weeks, due to the timing of the July 4 holiday, and trailed the weeks ending June 27 and June 20, at 232,408, and 233,259, respectively.

AAR reported that nine of the 10 carload commodity groups it tracks saw annual gains, including: grain, up 2,490 carloads, to 21,622; metallic ores and metals, up 2,134 carloads, to 22,262; and farm products excl. grain, and food, up 1,961 carloads, to 17,346. The lone commodity group posting an annual decrease was coal, down 4,197 carloads, to 48,841.

Weekly intermodal containers and trailers, at 269,340 units, posted a 12.9% annual gain, trailing the weeks ending June 27 and June 20, at 293,060, and 288,739, respectively.

Through the first 26 weeks of 2026, AAR reported that U.S. rail carloads, at 5,894,302, were up 3.2% annually, and intermodal units, at 7,254,412, are up 3.6% annually, for the same period.

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

The June Van TVI, at 262, rose 11% compared to May and was flat annually, said DAT. The Reefer TVI, at 184, was up 5% compared to May and down 8% annually. And the Flatbed TVI, at 308, increased 12% over May and fell 4% annually.

The biggest takeaway of the report, cited by DAT, was that the national average van truckload spot rate, at $3.00 per mile, topped the van contract rate, at $2.89 per mile, for the first time since February 2022, with overall rate growth coming in ahead of volume growth. The firm added that spot linehaul rates rose at least 39% annually for van, reefer, and flatbed, as volumes came in flat to lower.

“Capacity has continued to tighten amid regulatory changes and immigration enforcement, reducing the supply of available truck drivers,” said DAT.

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

• the national average spot van rate was up $0.11 sequentially and $0.98 annually, to $3.00 per mile;
• the national average spot reefer rate was up $0.04 sequentially and up $0.97 annually, to $3.39 per mile;
• the national average flatbed rate increased $0.04 sequentially and $1.12 annually, to $3.69 per mile;
• the national contract van rate, at $2.89 per mile, was down $0.03 sequentially, and the national contract reefer rate, at $3.22 per mile, fell $0.06, and the national contract flatbed rate, at $3.80 per mile, rose $0.03;
• the national average contract linehaul rate saw across-the-board gains, with van up $0.07, to $2.26 per mile, reefer up $0.04, to $2.53 per mile, and flatbed up $0.15, to $3.05 per mile, with annual gains, for the three segments, up $0.49, $0.48, and $0.71, respectively

In an interview with LM, DAT industry analyst Dean Croke described the current state of the market as being supply-led, with truckload pricing firming faster than freight demand, with the structural capacity loss doing what he called the heavy lifting, as opposed to any broad-based demand.

“We're not seeing broad-based demand in the economy, it's still a split, two-tiered freight economy, certainly on the spot market side of things, where consumer confidence and retail spending is soft, and imports are not really delivering any broad-based freight lift, although that we are seeing some sort of front-loading and peak season activity now, and into July. Demand is still fragmented rather than economy-wide, but I think anything tied to industrial freight and related to data centers continues to dominate the freight landscape. That AI data center and power build out is one of the biggest freight supporters in the market, for steel, concrete modules, transformers, racks—any sort of open deck freight related to that, is doing exceptionally well, and is part of the reason we're seeing record high spot rates that have just bumped over $3 this week, which is a record high.”

Addressing the TVI, Croke said that the findings in the June report collectively point to what are considered normal seasonal trends in the markets it covers.

Croke added that the June data serves as an indicator that spring seasonality flowed into May and also continued into June, with the “flip side” of that being rates continuing to climb higher than volumes.

“This wasn't a hard prediction back in January,” said Croke. “My headline for 2026 year was ‘stabilizing demand meets constrained supply,’ and whenever that happens, at the bottom of this market, where we get to equilibrium, any shock in the market sends rates skyrocketing, and then they come back down. We saw it during Road Check week, we saw it during Mother's Day, Valentine's Day, even back to Super Bowl, when produce volume soared in that week before. So, when you get to sort of this equilibrium part of the market, where roughly loads equals trucks, in a fairly simplistic manner, anytime you get a surge in volume and the capacity has sort of lost its elasticity and is largely exited the market before we start adding capacity back in, you see these surges in spot rates, which is what we saw during Road Check week was record high week-over- week increases in spot rates. The crazy thing is the market has held onto those gains from Road Check week right through to July 4, which is extraordinary, but it really points to how much capacity has exited and how tight the market is from a spot market capacity perspective.”

Rail carloads, at 3.00 million, posted a 2.3%, or 67,894 carloads, annual increase, with total weekly average carloads, at 230,577, marking the highest quarterly tally going back to the fourth quarter 2019. The weekly average for the month of June, at 231,176, is the highest average for any month in more than five years, with June representing the highest-volume month of 2026 for eight of the 20 carload categories tracked by AAR and the second-highest-volume month for five carload categories. What’s more, a total of 16 of the 20 carload categories saw annual gains.

“The breadth of these increases suggests that industrial activity has strengthened across a wide range of sectors rather than being driven by gains in just a few,” said AAR. “This is a good sign for the overall economy, and, obviously, a positive for railroads.”

When excluding coal loadings, rail carloads increased 4.5% annually, matching the first quarter. And over the first half of 2026, total carloads, at 5.682 million, are up 3.2% annually, the highest level since 2019, with carloads, excluding coal, the highest going back to 2008.

Intermodal remains solid: Second quarter intermodal volumes, at 3.67 million containers and trailers, increased 6.7%, or almost 231,000 units, annually, marking the second-highest for any quarter on record, just behind the second quarter 2021.

For the month of June, AAR said that weekly average intermodal volume, at 291,245 units, was up 11.7% annually, topping May’s 8.1% annual gain. June set a new weekly intermodal average, at 291,245 units, topping April 2021’s 290,955, while marking the fifth straight month of annual gains.

Through the first six months of 2026, AAR reported that total intermodal volume, at 6.98 million units, posted a 3.3%, or 224,387 units, annual gain, the second-highest tally for that period, trailing 2021.

“Because August, September, and October are usually the peak intermodal months, the best for intermodal might still be ahead,” said AAR.

AAR explained that containers represented 97.1% of total first half volumes, with rail container traffic, excluding trailers, hitting a new June record, as well as a new quarterly record for the second quarter, and a new year-to-date record—and trailer volumes, which have seen declines for several years, saw a 10.4%, or 9,483 trailers, annual gain, and were up 3.6%, or 6,934 trailers, through the first six months of 2026.

AAR laid out various key drivers for intermodal’s strength:

• strong service levels that are adding a level of reliability that appeals to shippers;
• sharp gains in trucking rates, largely due to higher prices and regulatory changes impacting capacity;
• importers pulling-forward freight ahead of likely changes in trade policy in the coming months;
• resilient consumer spending;
• concerns over higher costs are leading to retailers to rebuild inventories

The investment—totaling $1.73 billion—is going towards 127 projects, on various fronts, including critical roadway, transit, rail, maritime, and aviation infrastructure improvements for American families and businesses, according to DOT.

“America is fortunate to have a Builder in the White House who knows America is only as great as our infrastructure,” said U.S. Transportation Secretary Sean P. Duffy. “That’s why this Department is investing in repairing critical roads and bridges that connect Americans to job opportunities, port infrastructure that bolsters our national security, and aviation and transit projects that move American families. The impact of these dollars will be felt in communities nationwide for years to come.”

Key areas of investment for these projects, cited by DOT, are:

Roads and bridges, which received $1.3 billion, roughly 77% of the total funding, to upgrade critical arteries for commuters and America’s hardworking truckers who keep our economy moving;

Port infrastructure, which received $136.8 million to expand capacity, reduce bottlenecks and help restore America’s maritime dominance;

Transit projects, which received $169.9 million to enhance safety and improve reliability of public transit for American families;

Truck parking, which received $62 million to address the truck parking shortage across states;

Aviation infrastructure, which received more than $11 million to improve airport roadways; and

Freight and passenger rail initiatives, which received $87.7 million to modernize America’s railroads and move passengers and goods more efficiently

Funding for these projects comes from the Better Utilizing Investments to Leverage Development (BUILD) grant program, which DOT said provides grants for surface transportation infrastructure projects with significant local or regional impact.

“The eligibility requirements of BUILD allow project sponsors, including state and local governments, counties, Tribal governments, transit agencies, and port authorities, to pursue multi-modal and multi-jurisdictional projects that are more difficult to fund through other grant programs,” said DOT. “The BUILD program, previously known as the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) and Transportation Investment Generating Economic Recovery (TIGER) discretionary grants, was established under the American Recovery and Reinvestment Act of 2009 and operated under annual appropriations acts until authorized in November 2021.”  

Transportation infrastructure-related activity has been active inside the beltway recently.

In May, DOT rolled out its 2026 National Freight Strategic Plan, a multi-year roadmap for improving the freight that moves more than 54 million tons of goods worth more than $68 billion each day.

The plan focuses on the country’s nearly 7-million-mile freight network and lays out six goals for the next five years: safety, efficiency, security, resiliency, innovation, and workforce development. DOT says the plan is meant to guide federal freight policy, investment, and partnerships with state and private-sector groups.

The plan calls for reducing freight bottlenecks, improving supply chain visibility, streamlining federal project reviews, and helping states and regions plan more effectively across the transportation network.

It serves as a follow-up to the DOT’s 2020 National Freight Strategic Plan (NFSP), which was released during the first Trump administration. Which DOT, at the time, said was a first of its kind and focused on bolstering the nation’s economic competitiveness through long-term investments in infrastructure, the workforce, and other key parts of the national freight system.

Industry stakeholders were largely supportive of the 2020 plan, calling it a serious effort to understand and put a framework in place to better understand freight and put emphasis on programs and data that will allow DOT and the U.S. to make better investment decisions—adding that continuing to highlight the importance of freight will only help to make the U.S. freight system more effective and help U.S. consumers, manufacturers, farmers, etc. compete internationally and continue to have low logistics costs, fast transit times, and many options.

Another transportation infrastructure-related initiative released in May came from the House Committee on Transportation & Infrastructure with new legislation for a bipartisan five-year surface transportation authorization, investing in the nation’s roads, bridges, transit, rail transportation, and highway and motor carrier safety programs.

Entitled “BUILD America 250 Act—Building Unrivaled Infrastructure and Long-term Development for America’s 250^th Act—the House T&I Committee said that this legislation, “emphasizes moving people, goods, and freight safely and efficiently across the country,” adding that it, “provides the largest ever investment in America’s bridges, focuses on proven surface transportation infrastructure programs, provides passenger rail investments and reforms, improves rail safety, ensures that transportation projects and programs are more efficient, encourages innovation, and provides the first ever autonomous commercial motor vehicle framework.”

The Washington, D.C.-based Coalition for America’s Gateways and Trade Corridors (CAGTC) issued a statement on the BUILD America 250 Act.

“The Coalition for America’s Gateways and Trade Corridors thanks Chairman Sam Graves, Ranking Member Rick Larsen, and members of the House Transportation and Infrastructure Committee for their bipartisan efforts to develop a five-year surface transportation authorization proposal,” said CAGTC Executive Director Elaine Nessle. “While the bill makes important progress in several areas—including identifying the first new revenue contribution to the Highway Trust Fund in 30 years—it fails in its commitment to freight infrastructure investment. For decades, the nation’s freight assets were overlooked in federal surface transportation programs.

The progress achieved through the last two infrastructure laws to prioritize investment in supply chain infrastructure would be significantly weakened under this proposal. Dedicated federal freight investment is essential. Programs such as the Nationally Significant Multimodal Freight & Highway Projects Program (INFRA), National Infrastructure Project Assistance Program (Mega), Consolidated Rail Infrastructure and Safety Improvements (CRISI) Program, and Port Infrastructure Development Program (PIDP) strengthen the infrastructure that connects communities to commerce, supports economic growth, and enhances America’s global competitiveness. Further, INFRA must continue to receive dependable and long-term funding from the Highway Trust Fund as it has since its creation over a decade ago. We urge Congress to build on the momentum of recent years and continue making these critical investments in the next surface transportation reauthorization law.”

FTR reported that preliminary June Class 8 preliminary net orders, at 30,500, were up 16% over May and up 241% annually compared to what it called a very weak comparison, adding that over the past five months, annual comparisons have topped the 100% mark. What’s more, FTR said June orders were roughly 68% above the 10-year June average, marking the second-largest June net total since the firm started tracking Class 8 orders—indicating that demand momentum remains intact despite tightening 2026 build availability.

On a year-to-date basis through June, FTR said orders are up 125% annually, with the 2026 order season, which is from September through June, posting a 36% gain, with remaining 2026 build slots expected to fill up over the course of the July order month, moving the focus to allocation, cancellation risk, and OEM build ramp execution. Over the last 12 months, FTR said that Class 8 orders are at 334,160 units.
Demand continues to be supported by replacement needs, firmer freight rates, tighter capacity/increasing utilization, limited remaining 2026 build slot availability, and some EPA 2027 NOx pull-forward, according to FTR. It also noted that with remaining 2026 build slots likely to fill within weeks, the market is moving from an order-driven phase to a capacity-allocation phase. Going forward, it said that policy developments—not underlying demand—are likely to become the bigger swing factor for fleet timing into 2027.

“With 2026 demand exceeding build slots, an increasingly important question is EPA’s enforcement posture in the early months of the regulation,” said Dan Moyer, FTR senior analyst, commercial vehicles. “Key questions on the score are whether the proposed changes include non-conformance penalties (NCPs) and, especially, the size of those penalties and the duration of their availability if they are included. If NCPs were to cost materially less than the 2027 NOx hardware upcharge, OEMs could find it more feasible to slot excess demand into the first half of 2027. USMCA also adds policy uncertainty going forward. For now, USMCA remains in place, which continues to limit the effective impact of Section 232 truck and parts tariffs. However, as of July 1, any of the three countries can withdraw with six months’ notice. The risk is that prolonged uncertainty or future changes could expose more North American content to higher costs.

Moyer also said that June orders confirm that the Class 8 cycle remains constructive, as monthly intake continues to surprise to the upside. The bigger question now, he observed, is not demand but how much of the 2026 backlog converts to production before uncertainty over EPA, tariffs, and USMCA reshapes fleet timing for 2027.

ACT data: ACT reported that June preliminary North America Class 8 net orders, at 31,400 units, were up 231% annually.

“Strong orders this month, adding to an already full Class 8 backlog, suggest either higher than expected industry builds into year-end or orders increasingly spilling into 1H’2027,” said Carter Vieth, Research Analyst at ACT Research. “Underpinning the 7-month run of strong Class 8 order activity has been the ongoing, supply lead and demand supported recovery in the trucking industry. As we say, truckers only buy trucks when they make money. Underscoring the rapid change in carrier fortunes, freight rates continue to soar.”

The companies said the change applies to a single service in their Gemini Cooperation network and shows the improving security conditions in the region. Other services will continue operating on their current routes while the carriers monitor the situation.

The announcement marks a cautious step rather than a major return to the canal. Since late 2023, most container lines have avoided the Red Sea due to attacks on commercial vessels, routing ships around the Cape of Good Hope instead. The longer route added transit time and increased shipping costs on Asia-Europe trade lanes.

Please click here to read the complete article. 

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

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

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

For May, the most recent month for which data is available, U.S. imports, for the ports covered in the report, handled 2.24 million TEU (Twenty-Foot Equivalent Units), increasing 10.1% sequentially and 14.9% annually, with May 2024 seeing lower import numbers, due to the timing the of White House’s “Liberation Day.”

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

• June, at 2.33 million TEU, up 18.7% annually, which would bring the first half of 2026 to 12.77 million TEU, for a 2% annual increase;
• July, at 2.47 million TEU, up 3.3% annually, which would mark a new monthly record, topping May 2022’s 2.4 million TEU, when the economy was recovering from the pandemic;
• August, at 2.22 million TEU, down 4.5% annually;
• September, at 1.99 million TEU, down 5.7% annually;
• October, at 1.99 million TEU, down 3.8% annually; and
• November, at 1.92 million TEU, down 5.2% annually

The report explained that the volumes, from May through July, are estimated to be the highest in 2026, adding that the peak shipping season, which typically occurs around October, has commenced earlier in recent years, for various reasons, including port labor disputes and also expected tariff increases.

Hackett Associates Founder Ben Hackett wrote in the report that various factors, including pressures on international trade related to on-again-off-again peace deals in the Persian Gulf and the July 24 expiration of the temporary 10% Section 122 tariffs, which will likely lead to a new round of higher tariffs, are key industry themes.

“Import volumes have risen sharply, with strong growth seen in May likely continuing into July,” wrote Hackett. “Much of this increase reflects frontloading ahead of expected tariff increases from July 25 onward. The surprisingly resilient US economy has encouraged consumers to keep spending with greater confidence. Meanwhile, the uneasy truce with Iran that has helped bring West Texas Intermediate crude oil prices down nearly 40% from their recent high of almost $120/barrel has begun to reduce fuel costs for consumers at the pump.

The logistical issues that surround the uncertainty of passage through the Strait of Hormuz continue to create shifting strategies for supply chains. Carriers have responded by adding capacity while tightly managing deployment to support higher freight rates. This strategy has been successful and is ensuring their profitability. This is a major turnaround from a few months ago when pessimism was prevalent.  As a result of these developments, we have raised our June and July projections as shippers respond to the uncertainty over the administration’s upcoming tariff policy.” 

In assessing the steps and legwork it took to bring FedEx from a subsidiary of FedEx into a separate company, Smith explained it was the culmination of a yearslong initiative, stemming from the evolution of FedEx Freight going back to 2001, when FedEx Corp. acquired and merged the assets of American Freightways, and subsequently Viking Freight and Watkins Motor Lines. It has since become the largest carrier in the LTL space, according to figures compiled by SJ Consulting.

A major part of that effort, he said, came on the technology side, with FedEx, in 2009, elected to mesh the companies back-office technology functions across all of its business units. But that came with the caveat that the majority of the technology was parcel-centric, leaving the LTL unit to figure out a way to tie the LTL pieces in, he said.

“When you think about unbundling that, it is just a massive effort,” he said. “From May 2025, after a meeting with Fred Smith [the company’s late founder and president and CEO], the amount of work that we had to do to get to June 1, 2026 was huge, and I cannot say enough about the team that accomplished that. Doing a tax-free spin-off, it makes it even that more complicated to make sure you follow the processes the IRS has. It has been a tremendous journey through last year, not a lot of sleep. But we were able to accomplish it and make sure we made all of the requirements. The number one thing we focused on was doing this without any impact to our customers, and, secondly, without any impact to our employees—and that is what we are most proud of.”

In addition to the technology piece, some of the key focus areas in getting FedEx Freight up and running into a separate company were hiring 500 experienced LTL sales representatives, as well as building out its team, from the executive level to the back office—which involved needing to rebuild its accounting, legal, HR, and IT groups, with the latter requiring 900 new hires.

“In that short amount of time, we really had to build the back office back up with group of people that is incredibly motivated and dedicated,” said Smith.

In terms of the size and scale of FedEx Freight’s operations, the company is the largest pure-play LTL carrier in North America, with 40,000 team members, 365 terminals, 26,000 doors, 30,000 vehicles running more than 1 billion miles per year, and around a 17% share of the entire LTL market.

When asked what leadership position the company needs to take in setting a new course for the industry, Smith said it is important to think about where FedEx Freight is today as a company.

“From a FedEx Freight perspective, we have built new technology that makes it easier to do business with that would help our sales team sell and ease customers’ pain points, especially in small and medium verticals,” he said. “That is the number one priority we had in getting to the spin-off, besides making sure it was tax-free and making sure we had the sales team and technology in place.

When you think about the LTL footprint we have and the size of this company, having 26,000 doors is a lot. We basically have zip code coverage for everywhere in the U.S., a North American operation, and a Mexico-based operation, which gives us an advantage. But our speed of our Priority service, for the most part, is about 40% faster [on average] than our nearest competitor. And when you think about not only the speed of that, but we're the only one that has a dual service within one network, and that's one of the things that we have an opportunity that we have to truly retrain our sales team, because the market doesn't understand. The investor questions that I got throughout this whole process were more about ‘why do you want two products when nobody else does?’ Well, number one, it's hard to set a network up to run. It's difficult, but over the years, that's what we've done. We've transformed this network with these two priorities and give the customer the opportunity for speed or economy if they can choose that and live with that circumstance for about 50% of our customers. So, we know it's the right thing from the customer perspective, and we've got that in place.”

At its April investor day, in which FedEx Freight outlined its key market focus areas, outside of traditional industrial-based freight movements, the company said it would aggressively target high-potential verticals like the SMB market, healthcare, energy, data centers, and grocery—areas that the company historically had minimal penetration.

Looking at SMB, Smith said that, in terms of its reach for a percentage of market share, it is not close to its commitment, with a key reason being that over the years FedEx Freight had pain points related to technology, billing, and invoicing, which are all important for small customers.

“We have fixed that, and we feel like we have fixed that, and we feel that is an opportunity for us,” he said. “We are really good at the healthcare piece and are one of the leaders [in healthcare logistics] but have not transitioned that to the LTL company yet. We're basically starting from scratch, but we also brought over Custom Critical, which gives us a one-two punch, because Custom Critical is really into the time-sensitive but temperature-controlled therapies, but we haven't gotten into the doctor's offices and the different service to our pets. We have the opportunity to sell both when we go into a customer, so we feel really good about that. For the food and beverages piece, we've just never sold that. We have an opportunity there to integrate into that market. And as everybody knows in this room, flatbed, truckloads and LTL are going to benefit from all the computer and electrification efforts going on right now.”

When asked what broader trends are currently shaping the future of the LTL market, Smith was quick to point out the long market downturn over nearly the last four years, whereas a typical downturn is about a year, followed by the sector climbing out of it.

To that end, he said that the company’s strategy will allow it to effectively complete, with the market having made a lot of companies better.

“You are going to have to get better in order to compete, so from a customer perspective, I think this market has really changed in a good way,” he said. “We are going to continue to watch the industrial piece, and truckload capacity has been very interesting over the last few months, with crackdowns [related to CDLs]. We are thinking it is going to be on the upside to recovery side, but we don’t think it will be in a straight line.”

As for how he views current LTL competitive dynamics, Smith said it is a sector that has evolved over the years, especially going back to around 2000.

One example of that is improved operating ratios over that duration, as carriers have improved, not only from a customer-facing perspective, but also in the form of the aforementioned operating ratios and the ability to survive in a tough market.

“It is not especially easy to become a national carrier with the amount you have to invest in to make sure that you have the ability to run an LTL network nationwide,” he said. “What we are going to do is continue to focus on our strategy, which we think is the right strategy. That is what we can control, and we feel really good about that.”

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 June LMI reading, at 71.1 (a reading above 50 indicates growth is occurring), rose 1.6% over May’s 69.5, with the index expanding, at a faster rate. This reading represents the first time the LMI has topped the 70-mark, since March 2022’s 76.2 reading, marking a robust rate of expansion, according to the report.

Most of the LMI’s key metrics turned in strong performances, leading to the strong June reading:

• Inventory Levels, at 60.5, increased 5.7%, expanding, at a faster rate, and flat annually with a 0.7% annual increase and up 13.1% compared to June 2024. The report’s authors said that this gain is likely due to consumer spending holding through the first half of 2026, amid high inflation and giving retailers confidence in bringing forward goods for the second half, in addition to the possibility of new tariffs coming, with the higher levels acting as a Peak Season pull-forward;
• Inventory Costs, at 75.9, fell 8.1% from May’s 84.7, and down 5.0% annually and up 12.3% compared to June 2024;
• Warehousing Capacity, at 47.5, was off 3.0% compared to May, nearly flat annually, and down 5.1% compared to June 2024;
• Warehousing Utilization, at 69.4, was down 6.5% compared to May and up 7.2% and 17.2%, respectively annually and compared to June 2024;
• Warehousing Prices, at 73.8, increased 3.1% compared to May and were up 5.5% annually and up 9.3% compared to June 2024;
• Transportation Capacity, at 30.8, was down 0.9% compared to May, contracting for the seventh consecutive month and at historically low levels;
• Transportation Utilization, at 74.7, rose 5.2%, setting a new eight-year high, and a 21.8% annual gain; and
• Transportation Prices, at 92.4, fell 3.6%, down from record highs, while still at what the report called “historically elevated levels

“Whenever we see an LMI score of over 70 it shows that the logistics components—or at least some of them—are expanding rapidly,” wrote Dr. Dale Rogers in the report. “We have not seen this level in the overall LMI since March 2022 which was as we were still getting things back online from Covid and experiencing the beginning of the Russian invasion into Ukraine. It was a time of great inflation and global uncertainty. It seems like we are feeling that uncertainty again, although many of the current economic signs show the economy is in good shape. We are just a little bit fearful of the dramatic amount of uncertainty swirling around the U.S. and its global suppliers and customers. It is an odd time where we are setting stock market records and beginning to see tremendous benefits from technological investments such as AI and advancements in semiconductors, paired with a nervousness about global and domestic policies.”

The report explained that the June LMI reading, at 71.1, is well above the all-time average of 61.6, with the robust rate of expansion largely driven by larger respondents seeing significantly faster logistics activity, at 71.3, higher than smaller respondents reporting expansion at 63.3.

What’s more, the LMI highlighted various logistics moves that both can reflect and preceded real economic movements, like: the economy as it deals with disruptions from war, tariffs, and resulting inflation; trade policy creating uncertainty, with the White House indicating the U.S. will not renew the USMCA, as well as U.S.-EU trade tensions; an uncertain job market; and the potential for rate increases from the Federal Reserve later this year.

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

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

Prior to that, the national average price per gallon, for the week of May 25, at $5.523 per gallon, fell 7.3 cents compared to the week of May 18, which came in at $5.596, and was off 4.3 cents compared to the week of May 11, at $5.639. which eked out a $0.001-cent sequential gain. That followed a 28.9-cent cent sequential gain, for the week of May 4, when it came in at $5.640, which represented the largest sequential increase since the week of March 16, when it increased $0.21.

For the week of April 27, the national average decreased 5.2 cents, to $5.351, and for the week of April 20, it fell 20.5 cents, to $5.403, marking the highest weekly decline, since the week of December 22, 2008, when it fell 24.5 cents, and a 3.5-decline decline to $5.608, for the week of April 13.

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

Various reports cited declining oil prices early earlier this month, after a preliminary agreement was reached between the U.S. and Iran, which remains the case.

EIA officials said that the Strait of Hormuz handles about 20% of the world’s petroleum supply (roughly 20 to 21 million barrels per day) and about 20% of global liquefied natural gas (LNG). It added that due to recent conflicts, this vital energy chokepoint has experienced significant blockades and military standoffs, leading to major global supply disruptions and price volatility.

WTI Crude is currently trading at $70.37 per barrel. And the national diesel average is up 83.9 annually.

The all-cash deal includes up to an additional $5 million in performance-based payments if revenue targets are met during the first two years after the acquisition. Any earn-out would be paid in fiscal 2029.

Headquartered in Santiago, Chile, Drivin provides software that helps distributors, retailers, consumer goods companies, and logistics service providers manage deliveries from route planning through dispatch and real-time execution. The company has built a customer base across Latin America, particularly in dense urban markets where delivery operations are often more challenging.

Please click here to read the complete article. 

The June Services PMI reading, at 54 (a reading above 50 represents expansion and below 50 indicates contraction), was off 0.5% compared to May, growing, at a faster rate for the 24^th consecutive month, with the overall economy growing, at a slower rate, for the 73^rd consecutive month.

The June reading is 0.9% above the 53.1 12-month average, with February’s 56.1 and September 2025’s 50.3 marking the respective high and low readings over that span.

ISM reported that 17 of the services sectors it tracks grew in June: Arts, Entertainment & Recreation; Mining; Wholesale Trade; Transportation & Warehousing; Finance & Insurance; Accommodation & Food Services; Retail Trade; Other Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; Information; Construction; Utilities; and Real Estate, Rental & Leasing. The four sectors reporting contraction in the month of June were: Agriculture, Forestry, Fishing & Hunting; Educational Services; Management of Companies & Support Services; and Public Administration.

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

• Business Activity/Production, at 55.4, down 2.3%, growing, at a slower rate, for the 24rd consecutive month, with 13 sectors seeing gains;
• New Orders, at 55.1, fell 2.2%, growing, at a slower rate, for the 13^th consecutive month and expanding in 40 of the last 42 months, with 12 sectors reporting increases in new orders;
• Employment, at 51.2, rose 3.3%, growing, after three months of contraction, with nine sectors reporting employment gains; and
• Supplier Deliveries, at 54.4 (a reading above 50 indicates contraction), were down 0.8%, slowing, at a slower rate, for the 19^th 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.

“We continue to experience higher prices due to the Persian Gulf conflict through rising diesel fuel costs and increased input costs for resin-based packaging,” said an Accommodation & Food Services panelist. “The brunt of the impact will be experienced in the third quarter (Q3) of 2026, but we are feeling the impact now. Suppliers are aggressively attempting to pass through price increases.”

A Retail Trade panelist noted that business has been very strong during what is usually a less active time of the year, adding that pricing is stable, and employment just where we want it to be. Supply chain strong with no challenges.

In an interview with LM, Steve Miller, Chair of the ISM Services Business Survey Committee, said that, in assessing the report’s key findings, each of the its subindexes are in expansion territory and above their respective 12-month averages.

“If you look from January through June, you can't find a six-month stretch like this until you get into the second half of 2022,” said Miller. “I think that is really good. One thing that is a kind of back and forth for me is that the 54 [Services PMI reading] means that 0.5% are now saying that things were the same in June as they were in May.”

The June Prices reading, at 67.7, fell 3.6% compared to May, snapping a months-long stretch of Prices’ readings in the 70s, which, in many ways, was a byproduct of the Iran conflict. Which was also reflected in fewer panelists comments citing the war, in assessing business conditions.

That was backed up by Miller, whom observed that comments about the war are getting the same amount of attention as other topics, like tariffs and oil—while also noting that the coming months will be interesting to monitor, especially as it relates to energy prices.

“Prices remain the biggest risk factor and are completely dependent on what happens in the Persian Gulf,” said Miller. “But even if that were to continue to be a problem, it seems if China demand is down 40%, I think some of those other dynamics will help us out. I think we've seen, the worst of it. The ISM semiannual report indicated that as well. In the first half of the year, we saw significant pricing increases, and with the AI and data center-related items, we're going to continue to see significant escalation in those, but they are very isolated and offset in general by oil prices. Capitalists don’t like to see prices drop too fast. It will be interesting to see if there is an irrefutable cost impact reduction for food, for example, of if we see a shortage of fertilizer from Ukraine continue to impact production, which keeps food prices elevated.”

And he also observed that if conditions remain at current levels, coupled with the coming mid-term elections, which has significant advertising spending going into the debt services side, that the Services PMI will remain in the mid-50s.

According to Eric Fullerton, vice president of data insights at project44, the recent disruption serves as another reminder that supply chains are operating in what many leaders now describe as a never-normal environment—one where resilience is less about recovering from disruption and more about adapting to constant change.

Speaking on a recent episode of the Talking Supply Chain podcast, Fullerton said the reopening of the critical trade corridor is only the first step in a much longer recovery process that will include clearing port congestion, repositioning equipment, restoring commercial confidence, and determining which emergency workarounds developed during the crisis become permanent operating practices.

Please click here to read the complete article. 

LM: Do you think USMCA has been beneficial for DHL and its customers?

Williams: The USMCA, as one of the world's most important trade agreements, has strengthened North American trade lanes, supported economic growth, and played a critical role in supply chain resilience and business success. For DHL Express, the importance of the agreement is reflected in our own network flows. Mexico is the leading destination for U.S. outbound Express shipments, with Canada close behind. Likewise, the U.S. remains the primary export destination from both Mexico and Canada. These highly integrated trade lanes support thousands of businesses that rely on predictable cross-border commerce, and this is especially important for small and medium-sized enterprises, who benefit from a stable framework that helps them plan, invest, and operate with greater confidence.

LM: What aspects of USMCA are you the most focused on, with the Joint Review coming up soon?

Williams: For DHL, our focus is on helping customers build resilient supply chains and maintain efficient cross-border flows. We pay close attention to areas that affect customs processes, regulatory predictability, and overall supply chain continuity. Any measures that reduce friction and complexity help sustain the highly integrated regional supply chains that businesses rely on every day.

Our role is to help customers prepare for change rather than react to it. From an operational standpoint, our priority is helping customers stress-test their supply chains with scenario mapping, evaluate potential impacts of policy changes, and identify the best responses.

LM: What types of things would you like to see in USMCA that are needed, or missing, in your opinion?

Williams: At DHL our focus is not on prescribing cross-border trade policy. Our priority is having a clear understanding of trade policies so that we can help customers navigate customs coordination, design their networks, develop sourcing and inventory strategies, and identify opportunities for growth and efficiency. Trade policies that help goods to move efficiently across borders, while reducing friction and complexity, enable companies to plan, invest, and expand with confidence.

From a logistics perspective, predictability is often just as important as policy outcomes. Businesses can adapt to change when the rules are clear. Frameworks that promote efficient customs coordination, transparent processes, and smooth cross-border movement help companies of all sizes participate more effectively in regional trade and keep North America's supply chains competitive. This is especially important in a region where trade flows are deeply interconnected across all three countries.

LM: Were the USMCA not to be renewed—and the U.S. entered into separate trade deals with Mexico and Canada—how much of a difference/impact would that be, in terms of operations, and why?

Williams: At DHL, we often say that “trade is like water, it always finds a way.” Companies will continue to do business across North America, but moving from a trilateral framework to separate bilateral agreements could add complexity for cross-border operations, particularly around customs, compliance, sourcing, and transportation planning.
No matter the outcome of the joint review, DHL’s role remains the same: to help customers understand policy changes, adjust their networks as needed, and keep goods moving as efficiently as possible.

“As a result, the USMCA is not renewed,” said United States Trade Representative Ambassador Jamieson Greer in a statement. “The United States will continue to engage with Mexico and Canada to address the Agreement’s shortcomings and our trade deficits with these countries. However, the Agreement remains in force pending resolution of these issues or until the Agreement’s termination. As previously announced, the United States will meet with Mexico the week of July 20 for a third round of bilateral negotiations related to the USMCA joint review.”

The USMCA agreement went into effect on January 29, 2020, during President Trump’s first term in the White House, replacing its predecessor, the North American Free Trade Agreement.

USMCA, in various ways, is based on many of the same rules, procedures, and products as NAFTA, which took effect in 1994. Analysts say that it includes stronger environmental and labor regulations and incentivizes domestic production of cars and trucks. It is also the first free trade agreement to include intellectual property protections, which are especially timely given the current trade wars triggered by the alleged theft of American intellectual property by China and other nations.

Former United States Trade Representative Robert Lighthizer said at the time that USMCA marked a significant improvement over NAFTA through its objectives to create more manufacturing jobs, protect America’s competitive advantage in technology and innovation, secure greater market access for American businesses, farmers, and ranchers, and, critically, change the stale politics of trade by creating bipartisan consensus around a new model that works better for all Americans.

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

According to the Office of the USTR, goods qualifying under the USMCA’s rules of origin have 0% tariffs on most trade between the three countries. And with the current 10% Section 122 tariffs on non-qualifying goods set to expire on later this month, non-USMCA goods could go back to standard MFN (Most Favored Nation) rates of 3%-to-4%, noted Jade International, while 50% Section 232 tariffs on steel and aluminum remain intact. For goods that do not qualify under USMCA, they are generally subject to a 25% tariff, noted United States Customs and Border Protection (CBP).

Keith Prather, Managing Director and Co-founder of Armada Corporate Intelligence, told LM that this annual renewal approach allows the U.S. to take on trade relations and policy with Canada and Mexico independently, while pointing out a high level of animosity between President Trump and Canadian Prime Minister Mark Carney and a willingness to work with Claudia Scheinbaum, President of Mexico—adding that the Trump wants Mexico negotiating as a single country and not with the additional power and positioning of Canada alongside Mexico.

“Trump needs to protect UAW workers (and many Republicans who have auto manufacturing in their districts) headed into mid-terms,” said Prather. “But he also needs to protect the southern border and an economically strong Mexico (with a government willing to crack down on cartels) is vitally important. Those two are countervailing, and it is pushing him to play a bit tough, and push the USMCA into an annual review cycle. But the principles in the agreement are in place until 2036 at least, unless he opts for an Article 34 withdrawal—and it would be economic and political suicide to do that. That doesn't mean that he wouldn't go to that length, but I don't think executives are changing their FDI (Foreign Direct Investment) into Mexico based on that risk (the probabilities of a rolling, tweaking, annual adjustment to the agreement out-weigh the odds of a full withdrawal). Therefore, we get annual ‘tweaks.’” 

As for what could be viewed as the biggest risk, Prather said it could be that some FDI could sit on the sidelines in the near-term, waiting on clarity from the annual review process, with the caveat that it may not shift existing sourcing or slow down long-term sourcing plans. And he also noted that an unfortunate side effect of this development is that industry stakeholders now need to keep a close eye on every announcement and side agreement between the three nations.

“The only good thing is any tariff action will come through an official Section 301 investigation (as we have seen recently) or a new Section 232,” he said. “At least those typically come with a lot of warning, but they can have an impact for sure.”

And when it comes to sourcing going forward, Pete Mento, Director of Global Trade Services, at Baker Tilly, observed in a LinkedIn post that the biggest supply chain takeaway is that every sourcing made today should come with an asterisk.

“Expect more North American content requirements. Expect more scrutiny. Expect more compliance,” wrote Mento. “And expect the phrase “strategic supply chain” to appear in approximately 487 PowerPoint decks by Friday. The good news? USMCA is still in effect. The bad news? Your sourcing strategy just got invited to couples’ therapy.”

In comments provided to LM before yesterday’s announcement, Andrew Williams, DHL Express Americas CEO, cited the company’s saying, “trade is like water, it always finds a way,” adding that if the USMCA is ultimately not renewed, companies will continue to do business across North America—but moving from a trilateral framework to separate bilateral agreements could add complexity for cross-border operations, particularly around customs, compliance, sourcing, and transportation planning.

“No matter the outcome of the joint review, DHL’s role remains the same: to help customers understand policy changes, adjust their networks as needed, and keep goods moving as efficiently as possible,” said Williams.

From the perspective of Eric Fullerton, VP of Data Insights at project44, the impact cannot be understated, in that the last thing the market needed, following 18 months of tariff turmoil and a three-month-plus Strait of Hormuz disruption, was another major blow to planning confidence across supply chains.

“Annual trade negotiations create operational uncertainty, and uncertainty is expensive,” said Fullerton. “Companies can't confidently plan sourcing strategies, transportation networks, and supplier relationships around rules that could look different in 12 months. The ones that manage this well won't be waiting for certainty to arrive. They'll be the ones who can see what's actually moving across their network right now and make decisions off that instead of off assumptions.”

But Chris Rogers, Research Director for S&P Global Market Intelligence, said that this action by the White House is not a surprise, given President Trump’s prior negotiating tactics.

“We had not expected a resolution to negotiations in 2026 anyway,” said Rogers. “We would expect shippers to continue with business-as-usual until a formal notice to terminate the deal is made.”

The deal, which is expected to close this year, has an enterprise value of $1.4 billion, which CMA CGM said would almost triple the value of the North American contract logistics operations of CMA CGM subsidiary CEVA Logistics.

FedEx Supply Chain operates warehousing, fulfillment, transportation management and reverse logistics services for customers across multiple industries, including retail, healthcare and consumer products. The business was built around FedEx's acquisition of Genco Distribution System in 2015.

The acquisition adds another major logistics business to CMA CGM's portfolio. Since purchasing CEVA Logistics in 2019, the company has steadily expanded into warehousing, air cargo, port terminals and e-commerce fulfillment as it builds a broader transportation and logistics network.

What’s more, CMA CGM said this acquisition speaks to its 25-plus year commitment and investment into the U.S. supply chain, boosting its focus on providing what it called “comprehensive end-to-end logistics solutions.” And to that end, it explained that through the integration of FedEx Supply Chain’s assets, coupled with its roughly 10,000 staffers, CEVA Logistics is poised to become a leading North American contract logistics services provider—with the new organization running around 150 warehouses, and representing 20,000 staffers at more than 240 locations.

Other key aspects of the deal include:

• CMA CGM and FedEx expected to enter into multi-year commercial agreements, focusing on air and ocean freight, with CMA CGM to be a preferred ocean carrier for FedEx and provide ocean transport and carrier services under a non-exclusive agreement; and
• Collaboration on select air cargo capacity solutions to enhance their respective global networks, with a focus on higher aircraft utilization and flexible long-haul capacity

“The acquisition and partnership with FedEx represent a major step in the development of CEVA Logistics and our logistics activities in North America,” said Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group. “We are strengthening our ability to provide customers with integrated supply chain solutions. These deals also reinforce our long-term commitment to investing in the United States and supporting the resilience and efficiency of its supply chain.”

And Raj Subramaniam, FedEx President and CEO, said that this deal enables FedEx to further increase its focus on providing its unique expertise for high-value verticals, including healthcare, automotive, aerospace and data centers.

“By streamlining our portfolio, FedEx is better positioned to execute our long-term vision and continue to serve as the heartbeat of the industrial economy, delivering unmatched connectivity, reliability, and value to our customers globally,” he said. “We look forward to leveraging our complementary relationship with global logistics solutions provider CMA CGM to support the next chapter for FedEx Supply Chain and its team members.”

Feedback regarding the deal from industry observers was largely positive.

Ben Gordon, founder and managing partner of Palm Beach, Florida-based Cambridge Capital, and managing partner of Ben Gordon Strategic Advisors (BGSA), noted that CMA CGM made a commitment prior to the April 2025 White House “Liberation Day” to make major investments into its U.S. operations, calling the acquisition of FedEx Supply Chain a step in that direction.

“FedEx made a decision to simplify and focus their business,” he said. “The spin-off of FedEx Freight is one step in that direction. The sale of the FedEx supply chain business is a second step in that direction. In this respect, it's worth noting that they are following in the footsteps of XPO, which simplified its business through the spin-offs of GXO and RXO. Public market shareholders like to invest in pure play companies, and this is a step that the markets should like. In addition, management teams tend to do better when they are focused on doing one thing, and this move is consistent with that philosophy as well.”

Evan Armstrong, president of Brookfield, Wis.-based supply chain consultancy Armstrong & Associates noted that with roots in express small-package transportation, FedEx acquired GENCO Distribution in 2015 for $ 1.4 billion, believing it could be leveraged to increase small-package volumes. And he added that with this announcement that it is selling the GENCO-rebranded FedEx Supply Chain for the same $1.4 billion emphasizes that, at its heart, FedEx is a transportation provider and floundered in the Value-Added Warehousing & Distribution (VAWD) 3PL space. 

“For CMA CGM, this deal will more than double CEVA's North American VAWD network overnight,” said Armstrong. “North America has always been CEVA's soft spot compared to its strength in Europe. Not anymore. GENCO's traditional returns-and-reverse-logistics muscle becomes an engine for CEVA's U.S. growth, supporting its longstanding experience in high-tech and automotive. CMA CGM becomes a preferred ocean carrier for FedEx, and it gains air-cargo capacity through a phased-in cooperation agreement through 2028, feeding its core ocean shipping and air freight forwarding businesses. Globally, it's incremental. CEVA is already a Top-5 global 3PL (according to our list) with $18.3B in gross logistics revenue. This is a targeted North American bolt-on, not a step change at the group level.”

According to the Financial Times, the companies are in advanced negotiations and could announce an agreement as soon as Wednesday.

Expanding its logistics business

FedEx Supply Chain operates warehousing, fulfillment, transportation management and reverse logistics services for customers across multiple industries, including retail, healthcare and consumer products. The business was built around FedEx's acquisition of Genco Distribution System in 2015.

The acquisition would add another major logistics business to CMA CGM's portfolio. Since purchasing CEVA Logistics in 2019, the company has steadily expanded into warehousing, air cargo, port terminals and e-commerce fulfillment as it builds a broader transportation and logistics network.

The Financial Times also reported that the companies are expected to establish freight-forwarding partnerships linking FedEx's air cargo network to CMA CGM's ocean shipping business over the coming years.

FedEx continues narrowing its focus

For FedEx, the reported sale follows last month's spin-off of FedEx Freight into a standalone public company and continues the company's effort to simplify its business.

If completed, the acquisition would give CMA CGM a much larger presence in North American contract logistics by adding FedEx Supply Chain's warehousing and fulfillment network to CEVA Logistics.

The deal would also continue a wave of consolidation across the logistics industry, as providers look to offer customers a broader mix of transportation, warehousing and fulfillment services through a single provider.

Maryland Gov. Wes Moore joined CSX executives and federal, state and port officials at a ribbon-cutting ceremony to celebrate the start of double-stack rail service through the tunnel, which had long been a bottleneck because of height restrictions.

The project lowered the floor of the 131-year-old tunnel by 18 inches and included clearance improvements at 21 other locations in Maryland, Delaware, and Pennsylvania. Together, the upgrades create a continuous double-stack rail corridor connecting the East Coast from Massachusetts to Florida.

Please click here to read the complete article. 

Kapoor will participate in a fireside chat with Brian Straight, editor-in-chief of Supply Chain Management Review, during the conference, which takes place Oct. 21-23, 2026, at the W Nashville hotel in Nashville, Tennessee.

The session, titled “Building the Future of Home Delivery: Wayfair’s Logistics Evolution,” will explore how Wayfair has built and refined its logistics network to support speed, reliability, scalability, and customer experience in one of retail’s most demanding fulfillment environments.

Please click here to read the complete article. 

With that in mind, March data from the International Air Transport Association (IATA) showed total demand declined 4.8% compared to March 2025 (-5.5% for international operations), while capacity fell 4.7% (-6.8% for international operations).

IATA attributed the declines to severe disruptions at major Gulf hubs tied to the conflict in the Middle East, combined with the typical post-Lunar New Year slowdown. Despite those headwinds, the association maintains that underlying air cargo demand remains strong.

“Importantly, air cargo networks are providing the flexibility needed to support global supply chains as they adjust to geopolitical, tariff, and operational strains,” IATA notes.

Meanwhile, shippers are breathing a sigh of relief, particularly those that delayed third- and fourth-quarter transportation tenders. Market analysts say the air cargo market is beginning to stabilize.

Although air cargo spot rates surged more than 30% year-over-year in April to their highest level since October 2022, analysts believe market fundamentals are gradually reasserting themselves.

“April’s spot rate levels, which also included an 18% jump in long-term rates, stirred uncomfortable memories of the pandemic era for shippers, when supply chains buckled under capacity shortages and freight costs soared,” reports Xeneta.

“But unlike the pandemic, today’s market conditions are largely influenced by the regional U.S.-Iran conflict. Capacity has largely recovered to pre-shock levels,” says Xeneta chief airfreight officer Niall van de Wouw. “And while jet fuel shortages have reportedly spread, they have yet to significantly impact long-haul intercontinental routes.”

Fuel remains a major concern. The margin between crude oil and refined jet fuel has exceeded peaks recorded during the pandemic, creating a cost burden airlines cannot easily absorb, according to Xeneta.

Still, Van de Wouw believes the worst may be over: “Rate increases are beginning to ease, even on corridors most affected by the conflict.”

On trans-Atlantic routes, rates declined in April despite rising fuel prices. And while fuel costs remain elevated, Van de Wouw notes that supply and demand continue to be the primary drivers of air freight pricing.

Fuel prices also have not forced airlines to significantly reduce long-haul schedules. “These will be the last flights airlines will cut,” Van de Wouw says.

Lufthansa Cargo, for example, plans to operate its full fleet of 18 Boeing 777 freighters this summer, with 87 weekly flights serving up to 35 destinations worldwide. The carrier will maintain 48 weekly connections to 17 destinations in Asia while expanding select routes to North America, including additional frequencies to Los Angeles and Toronto.

The consensus among analysts is that global air freight rates have likely peaked and that market conditions are stabilizing. However, shippers should remain cautious. Labor shortages, elevated fuel costs, supply chain disruptions, cybersecurity risks, infrastructure constraints, geopolitical uncertainty, and evolving customer expectations continue to present significant challenges for the air cargo sector.

CMA CGM’s first-quarter profits fell 8.5% to $8 billion. Maersk reported an EBIT loss of $192 million, while Hapag-Lloyd posted Group EBITDA of $494 million, down 55% compared to the first quarter of 2025.

And with peak season now underway, the challenges continue to mount.

Operational bottlenecks remain a significant concern. India's transshipment ports—including Mundra and Nhava Sheva—as well as Khor Fakkan in the UAE remain heavily congested, a situation expected to persist as long as the Strait of Hormuz remains closed or unsafe.

At the same time, alternative routings are creating additional pressure on already strained transportation networks, contributing to worsening schedule reliability ahead of peak season.

Spot rate increases are another concern as carriers attempt to restore profitability.

Peter Sand, chief analyst at Xeneta, reports that spot rates have already increased 37% on China-to-U.S. West Coast routes, driven in part by congestion spreading from Middle East disruptions into major Asian transshipment hubs, including Singapore, Tanjung Pelepas, and Port Klang.

Drewry Supply Chain Advisory reports that annual contract rates on several major trade lanes declined during spring contract negotiations. However, much depends on what happens next in the Strait of Hormuz.

“If it does not reopen soon, rates will remain high for longer,” says Philip Damas, managing director and head of Drewry Supply Chain Advisory.

Longer term, capacity concerns remain. Drewry forecasts global container shipping capacity will increase 7% in 2027 and 10% in 2028—well above expected cargo demand growth. At the same time, carriers continue to trim effective capacity on key trades, including North Europe–North America and Asia–West Coast North America routes.

“This means strong relationships with preferred carriers will make a difference in securing access to capacity and provide greater bargaining power for exporters and importers,” Damas says.

Fuel surcharges tied to elevated bunker costs are expected to be a major factor in transportation spending this peak season. As a result, Drewry recommends that shippers implement independent bunker adjustment policies and closely monitor carrier fuel surcharges to ensure they remain aligned with market-based fuel indices.

“Question regular fuel surcharges and new ‘exceptional fuel surcharges’ to prevent double billing,” Damas advises.

For now, Damas recommends that shippers build additional buffer time into their supply chains and prioritize reliable carrier relationships to reduce the risk of delays.

The bottom line: while ocean shipping has avoided the severe disruption many feared, geopolitical uncertainty, congestion, fuel costs, and schedule reliability concerns continue to create a challenging environment for shippers heading into peak season.

“Asia-Europe ocean container rates are rising again because Suez and Red Sea routing remains unsafe,” says Evan Armstrong, CEO of Armstrong & Associates (A&A). “Routing via the Cape of Good Hope adds 10 to 14 days and significantly increases fuel costs. With capacity tightening, air freight rates on both Asia-Europe and Asia-U.S. trade lanes are also rising.”

War-risk insurance premiums have climbed sharply, with some coverage being reduced or canceled altogether for portions of the Gulf region.

“Domestically, fuel costs are where the conflict is hitting hardest right now,” Armstrong adds. “Diesel volatility resulting from oil price spikes is affecting U.S. line-haul fuel surcharges.”

At the same time, importers are shifting more freight to West Coast gateways rather than relying on Suez Canal-dependent East Coast routings, placing additional pressure on drayage capacity in Los Angeles and Long Beach.

“Third-party merger and acquisition activity involving freight risk management, insurance technology, and air freight charter capacity is worth watching,” Armstrong says.

Leading logistics providers are responding with new service offerings. On June 1, DHL Global Forwarding launched a dedicated Asia-U.S. heavy-freight air service to address disruptions in global air cargo markets. Earlier this year, DHL also introduced its TRUCKAIR multimodal service connecting China and Europe, providing a lower-cost alternative to pure air freight.

“Although launched before the conflict, it has become even more relevant under current conditions,” Armstrong says.

Flexport has taken a similar approach with its Sea-Air Express service, designed to help shippers navigate Asia-Europe disruptions while reducing exposure to Middle East bottlenecks and elevated air freight costs. The company has also launched Flexport Atlas, an interactive platform that provides real-time visibility into global ocean freight movements.

“It’s become a valuable source of real-time vessel movement data,” Armstrong notes.

While it remains too early to determine the full impact of today's disruptions on 3PL financial performance, Armstrong notes that international transportation management (ITM)—which includes air and ocean forwarding, customs brokerage, warehousing, compliance, and inland transportation—was the fastest-growing 3PL segment in 2025, increasing 7.7% to $85.9 billion in gross revenue.

“The growth can largely be attributed to concerns over tariffs and trade wars,” Armstrong says. “Importers moved aggressively to bring goods into the country ahead of anticipated tariff increases, while uncertainty surrounding the Red Sea and Suez Canal continued to influence transportation decisions.”

Looking ahead, A&A expects reduced shipper uncertainty following the removal of International Emergency Economic Powers Act (IEEPA) tariffs and a more stable trade environment.

“However, with ongoing discussion around sector-specific tariffs, the future remains somewhat uncertain,” Armstrong cautions.

A&A forecasts domestic transportation management (DTM)—including freight brokerage, managed transportation, intermodal management, and last-mile delivery—will be the fastest-growing 3PL segment in 2026, increasing 8.3% to $139 billion in gross revenue.

ITM is projected to grow 4.1% to $89 billion, while dedicated contract carriage (DCC) and value-added warehousing and distribution (VAWD) are expected to increase 4% and 3.5%, respectively.

After a challenging 2024, when U.S. rail carloads fell 2.4% annually to their second-lowest total since 2020, volumes have steadily improved. According to Association of American Railroads (AAR) data, U.S. rail carloads increased 1.5% in 2025 to 11,508,767, marking the largest annual gain since 2001.

That momentum has continued into 2026. Through May, total U.S. rail carloads were up 3.4% year over year, reaching 4,756,909. On a weekly basis, May rail carloads rose 2.5% annually, extending gains to a fifth consecutive month. The average weekly carload total of roughly 226,500 was the highest for the period since 2018.

Intermodal volumes have also remained on an upward trajectory. Through May, total U.S. intermodal volume reached 5,820,002 containers and trailers, up 1.8% annually. May alone posted an 8.1% gain, with growth recorded in every month from February through May. Container volumes also reached a record year-to-date high in May.

Those gains follow a solid 2025, when intermodal volume increased 1.5% to 14.06 million units—the second-highest annual total on record, trailing only 2018's 14.36 million units.

AAR said the results reflect continued resilience in consumer-related freight demand and international trade flows.

"Rail traffic strengthened again in May, extending a pattern that has become increasingly evident throughout 2026," said AAR chief economist Rand Ghayad. “More importantly, growth is becoming broader. Freight gains are no longer concentrated in a handful of commodity groups but are increasingly visible across much of the rail network. That breadth may be the most important signal coming from freight markets today.”

Heading into 2026, expectations for rail volumes were generally flat, according to Tony Hatch, principal of New York-based ABH Consulting. Economic uncertainty, trade concerns, and difficult year-over-year comparisons tied to inventory front-loading in 2025 all tempered expectations, particularly for intermodal traffic.

“Railroad management said to expect a pretty modest first half—or at best flat volumes—followed by improvement in the second half,” said Hatch. “Things started off stronger than expected, but management did not raise guidance. Some suggested the upper end of their forecast range may be more likely, but nobody is saying things have fully turned.”

Hatch pointed to four key growth pillars for railroads: domestic intermodal, industrial development, stronger short-line partnerships, and technology adoption. He said technology improvements are helping reduce derailments while supporting new operational models, including autonomous single-stack container trains currently being tested.

“After a four-plus-year freight recession, the green shoots we've been seeing for the last few months may actually be sprouting into trees,” said Hatch. “We're seeing capacity leave the truckload market, while consumer demand remains steady despite ongoing uncertainty and higher fuel prices. People are still spending, and those goods move in containers and trucks. If railroads are going to prosper through the rest of this decade and beyond, domestic intermodal has got to be cooking.”

On the service front, Hatch said rail performance remains strong and continues to improve, making service a far smaller concern than it was several years ago. Instead, he said, the bigger question is where future volume growth will come from.

“I wish service had improved even more, but you're not hearing service complaints at the Surface Transportation Board,” Hatch added. “The metrics are slightly better across the board, and safety remains at a very high level. There is never a finish line when it comes to safety and service. When service was poor, it was usually driven by capacity constraints, labor shortages, and rising prices, which frustrated shippers. Today, rail offers a compelling value proposition, and we're not hearing those complaints. That tells us service is pretty good.”

An improving industrial economy, resilient consumer spending, and tighter trucking capacity are fueling cautious optimism among LTL carriers.

Jason Seidl, transportation analyst at TD Cowen, says LTL pricing momentum continued to build in the first quarter of 2026. Excluding fuel surcharges, LTL yield at XPO increased 4% year-over-year.

Perhaps more importantly, carriers are successfully renewing contracts at higher rates. Across most publicly traded LTL carriers, contract renewals are generating rate increases in the mid- to high-single-digit range.

While shipment counts declined for many of the same reasons affecting the truckload sector, revenue per shipment increased due to general rate increases (GRIs) and wider adoption of dimensional pricing technology, which allows carriers to more accurately capture shipment density and freight classification for billing purposes.

XPO management recently told analysts that it expects yield and revenue per shipment, excluding fuel surcharges, to accelerate sequentially throughout the remainder of 2026. According to TD Cowen, that outlook is supported by improving service metrics, growing penetration of premium services, and an expanding local account base.

Premium services now account for roughly 12% to 13% of revenue at XPO, the nation’s fourth-largest LTL carrier, which generated approximately $4.8 billion in LTL revenue last year.

At industry leader Old Dominion Freight Line (ODFL), executives are looking for improvements in industrial freight demand to complement what has been a relatively strong retail environment.

“Business levels in the LTL industry can change very quickly, and being able to respond to growth opportunities in an improving demand environment is one of the primary areas that differentiate us from our competition,” says Kevin Freeman, president, CEO, and director of ODFL.

“We believe it is important to consistently invest throughout the economic cycle despite the short-term cost headwinds associated with this strategy,” Freeman adds.

That philosophy helps explain why ODFL invested nearly $2 billion in capital expenditures over the past three years and plans to invest an additional $265 million in 2026.

ODFL’s operating ratio rose to 76.2% in the first quarter from 75.4% a year earlier, while operating income declined 6.1% to $317 million.

Like most LTL carriers, ODFL also benefits when freight that might otherwise move via full truckload is consolidated into multiple LTL shipments.

“When truckload carriers go out of business, it shrinks overall truckload capacity,” says Satish Jindel, principal of SJ Consulting. “That raises prices and puts shippers on edge. Eventually, some of that freight begins to migrate back into the LTL market.”

Jindel says he remains “cautiously optimistic” about the industry's prospects in 2026, provided carriers remain disciplined and avoid adding excessive terminal capacity to the market.

Analysts say the improvement is not being driven by a sudden surge in economic activity. Instead, they point to a combination of deferred demand, retail inventory replenishment, improving industrial activity, and a long-awaited correction in trucking capacity.

Load counts and revenue per load remained pressured in parts of the market due to softer consumer and industrial demand, as well as shorter haul lengths resulting from ongoing supply chain adjustments.

At the same time, excess capacity that weighed on the industry for several years is beginning to exit the market. Analysts point to a combination of carrier failures, capacity rationalization, and increased enforcement efforts targeting non-domiciled drivers and commercial driver training schools that fail to meet federal standards.

At J.B. Hunt, the nation's second-largest truckload carrier with approximately $4.1 billion in truckload revenue last year, first-quarter revenue increased 23% on 19% load growth. However, gross profit declined 5% as purchased transportation costs continued to rise.

During a recent earnings call, J.B. Hunt executives cited several ongoing pressures despite improving market conditions:

         -- Persistent inflation in insurance premiums, medical costs, and diesel fuel prices continues to pressure margins.

         -- Higher purchased transportation costs reduced gross profitability by 5%.

         -- Driver shortages remain a challenge in certain markets, pushing compensation higher and making recruiting more difficult.

“Throughout the first quarter, there’s been an evolving narrative from customers that tightening in the truckload market would be temporary in nature,” says Spencer Frazier, J.B. Hunt's executive vice president of sales and marketing.

That perception is beginning to change.

According to Frazier, many shippers now recognize a meaningful shift in truckload capacity across the market.

Landstar, the nation's seventh-largest truckload carrier with more than $2 billion in annual revenue, also delivered first-quarter results that exceeded analyst expectations and reinforced optimism about the industry's recovery.

“April trends show momentum into the second quarter, and we expect industrial demand to build through spring based on positive commentary during earnings season,” says Jason Seidl, transportation analyst at TD Cowen.

Landstar's truck pricing significantly outperformed normal seasonal patterns. Revenue per load increased 5.6% year-over-year and rose sequentially during the quarter—an uncommon occurrence during a period that typically experiences seasonal declines.

Monthly pricing trends strengthened throughout the quarter, with February and March results outperforming pre-pandemic seasonal benchmarks. Management also reported that April revenue per load was tracking 13% above 2025 levels, suggesting pricing momentum continued beyond the first quarter.

“While comparisons become slightly more difficult as the year progresses, we see little reason for momentum to slow and are encouraged by the ongoing pricing recovery,” Seidl adds.

For truckload carriers, the combination of improving demand and tighter capacity is creating the strongest pricing environment the sector has experienced in several years—setting the stage for improved profitability if market discipline holds.

That’s one of the central themes emerging from the latest State of Logistics (SoL) report, the supply chain industry’s most closely watched annual assessment of logistics and transportation trends. The message is clear: If disruptions and rising costs haven’t yet impacted your operation, chances are they soon will.

The 37^th edition of the SoL report finds that ongoing disruption—from geopolitical conflicts and trade policy shifts to energy challenges, labor shortages and rising operating costs—is reshaping global supply chains and creating a new operating reality for logisticians.

Titled Forged in disruption, this year’s report concludes that the organizations best positioned for success are those that have embraced adaptability as a core competency rather than a temporary response to crisis.

The Council of Supply Chain Management Professionals (CSCMP) unveiled the report during a June 16 press briefing at New York City’s Empire State Building. The report is authored annually by global consulting firm Kearney and presented by Penske Logistics, a leading provider of supply chain solutions.

According to the report’s authors, logistics performance today depends less on demand recovery or scale and more on resilience, pricing discipline and digital productivity. The defining shift in supply chain management, they write, is the move “from periodic optimization to continuous adaptation.”

In 2025, trade policy changed on average every 1.5 weeks, turning tariff complexity into a “permanent operating variable.” As a result, risk has evolved from “network debt”—the inefficiencies created by delayed redesigns—to “network drift,” the growing danger of making reactive adjustments that gradually weaken supply chain performance.

As it has for more than three decades, Logistics Management has analyzed the findings of the State of Logistics report to provide readers with a concise overview of the key trends shaping domestic and global logistics markets—and the strategies companies are using to navigate an increasingly volatile business environment.

Just the facts

The latest State of Logistics report offers a revealing snapshot of the U.S. economy through the lens of supply chain and logistics performance. Among the report’s key findings:

         • U.S. business logistics costs totaled $2.4 trillion, or 7.8% of GDP. That compares with $2.6 trillion and 8.7% of GDP in 2025. To put the industry's long-term efficiency gains into perspective, logistics costs consumed roughly 19% of GDP in 1979, prior to trucking deregulation.

         • Five structural forces continue to shape the global logistics landscape, with no immediate resolution in sight: asymmetrical global growth; tightening financial conditions driven by persistent inflation and rising public debt; accelerating trade-flow and geopolitical realignment; labor and productivity constraints; and ongoing energy-price volatility

         • Artificial intelligence has moved from experimentation to measurable business value. According to the report, AI creates value through four primary capabilities: interpreting, predicting, recommending and executing. Adoption, however, remains uneven, with a significant gap between organizations that have embedded AI into core workflows and those still relying on isolated pilot projects—or not using AI at all.

         • Companies are responding to labor constraints through increased automation and digital investment. Many organizations are accelerating investments in AI and automation technologies to improve productivity, offset workforce shortages and enhance operational resilience.

The report also outlines several strategic priorities for organizations navigating today's environment, including designing supply chains for resilience rather than efficiency alone, prioritizing asset productivity over network expansion, strengthening end-to-end visibility and decision intelligence, accelerating returns on digital and automation investments, and reassessing capital allocation and investment pacing.

The modal picture

As in years past, trucking remains the engine that drives the domestic freight economy.

The U.S. truckload market is emerging from one of its longest downturns through a supply-driven reset rather than a demand-led recovery. Since 2022, roughly 89,000 carriers have exited the market after a wave of new entrants arrived during the post-pandemic freight boom.

As capacity has tightened, pricing has begun to firm even as demand remains mixed.

According to the report, the truckload market increasingly behaves less like a single national marketplace and more like a collection of lane-specific markets, with pricing, capacity and service levels varying significantly by corridor.

Leading shippers are moving away from traditional annual bids and toward dynamic procurement strategies, while technology-focused challengers continue to pressure incumbent carriers to accelerate investments in fleets, technology and operations.

On the rail side, the proposed merger between Norfolk Southern and Union Pacific—which would create the nation's first coast-to-coast, single-line rail network—dominated industry headlines. A revised merger application was submitted to Surface Transportation Board regulators in April.

Supporters argue the combination would improve transit times and encourage freight diversion from highways to rail. Critics, however, continue to raise concerns about competition, rates and service levels.

The proposal follows what report authors describe as a challenging year for railroads. Class I revenues were largely flat, carload volumes posted only modest gains and intermodal revenue declined despite higher shipment volumes.

Air cargo, meanwhile, delivered record freight volumes in 2025, with global demand increasing 3.4%. Yet the report notes that regional trade lanes—not global averages—ultimately defined market performance.

Tariff-driven front-loading fueled strong demand early in the year. Asia-Europe volumes surged 10.3%, while Asia-North America traffic declined 0.8%. Rising fuel costs, sustainable aviation fuel (SAF) requirements, constrained routing through the Persian Gulf and ongoing geopolitical tensions continue to inject volatility into the sector.

“The air cargo market is shifting toward value-dense freight, where speed and reliability outweigh transportation costs,” the report states.

Parcel and last-mile delivery have undergone what the authors describe as a structural reset rather than a post-pandemic normalization. The elimination of de minimis treatment for China-origin parcels reduced daily air cargo volumes by roughly 85%, forcing many shippers to shift toward domestic fulfillment strategies

Carrier costs have also reset, with general rate increases averaging 5.9%, in addition to fuel and accessorial surcharges. Demand remains supported by the nation's $1.23 trillion e-commerce market, but service models have increasingly split between ultra-low-cost regional delivery and premium-speed offerings.

Ocean shipping remains oversupplied, although ongoing disruptions continue to reduce effective capacity. Fleet growth outpaced demand in 2025, and a wave of new vessel capacity entering service has deepened the imbalance

At the same time, multiple global chokepoints—including the Red Sea, Strait of Hormuz, Panama Canal and Black Sea—have provided short-term rate support while limiting routing alternatives.

The warehousing sector has largely absorbed the disruptions of recent years and entered a period of recalibration. Employment has stabilized at roughly 1.8 million to 1.9 million workers, though labor shortages persist in higher-skilled technical and supervisory positions. Annual turnover rates in many warehouse operations remain above 40%.

The third-party logistics (3PL) sector has reached what the report calls a “strategic inflection point” as shipper expectations evolve from transactional execution toward end-to-end supply chain orchestration. Regulatory complexity, tariff uncertainty and changing cross-border trade flows are prompting companies to seek partners capable of coordinating transportation, warehousing, data and decision-making across increasingly complex networks.

In response, leading 3PLs are expanding their scale, increasing node density and warehouse capacity, embedding real-time visibility tools and deploying AI-enabled solutions to support more integrated supply chain operations.

Reaction to the report

Industry leaders attending the release of the State of Logistics report agreed that this year's findings arrive at a pivotal moment for supply chain and logistics professionals.

“This year's report comes at a time when the forces reshaping global supply chains are no longer temporary disruptions, but enduring features of the operating environment,” says Korhan Acar, Kearney partner and lead author of the State of Logistics report.

According to Acar, rising costs fueled by energy volatility, inflation and geopolitical instability are putting continued pressure on margins and forcing companies to rethink traditional operating models. “At the same time, we’ve reached a genuine turning point in the autonomous era,” he says. “AI, robotics and autonomous trucking are moving rapidly from pilot programs to scaled deployment.”

Modern supply chains generate more information than organizations can realistically absorb on their own, Acar adds. AI is increasingly helping supply chain professionals focus on the decisions that matter most by improving visibility, strengthening forecasting capabilities and enabling earlier intervention when problems arise.

Against that backdrop, profitable growth has become the defining objective for many organizations.

“The companies that will lead are those combining resilience, intelligent logistics and disciplined execution to protect margins and outperform in an increasingly volatile world,” Acar says.

For Stacy Schlachter, senior vice president of sales at Penske Logistics, the report accurately reflects the challenges companies face every day. “The report captures how organizations are responding to rising cost pressures and ongoing supply chain turbulence with the technologies and solutions needed to improve performance,” she says.

Doug Cantriel, Ford's head of North American transportation and modernization, says the report's theme—Forged in disruption—captures today's logistics environment well. “It's no longer one size fits all,” he says.

Mark Baxa, president and CEO of CSCMP, agrees that continuous adaptation has become an essential business requirement. “The supply chain of today is incredibly complex and requires constant adjustment,” he says.

According to panel participants, this year's report provides an accurate assessment of the many forces shaping modern supply chain networks and the strategies companies are using to navigate an increasingly uncertain business and geopolitical landscape.

“Last year's supply chain looks different than today's supply chain,” Baxa adds. “I suspect next year's logistics network will be hardly recognizable.”

Beth Rooney, port director for the Port Authority of New York & New Jersey, believes many of the changes underway are structural rather than temporary. "We've seen more onshoring, particularly in the automotive sector,” she says. “Diversification is increasing as shippers become wary of concentrating too much freight through a single port.”

AI takes center stage

For the first time, the State of Logistics (SoL) report includes a dedicated section on artificial intelligence, underscoring how central the technology has become to the future of supply chain and logistics operations.

According to SoL lead author Korhan Acar, the addition of AI to this year's report marks an important milestone.

“Over the past year, AI has rapidly moved from experimentation to execution,” says Acar. “The more volatile supply chains become, the greater the role AI will play.”

Until now, supply chain managers have had to process and react to thousands of variables on their own. AI, says Acar, offers a powerful new tool for improving decision-making, increasing productivity and strengthening competitive advantage.

“For companies that haven't already begun the journey, the challenge now is embedding AI into everyday decision-making,” he says.

Among the report's key takeaways:

AI as the engine of logistics efficiency. Logistics is one of the most data-rich industries in the world, yet much of that information remains siloed, unstructured and difficult to use. AI's potential depends on organizations first establishing a strong, connected data foundation.

The AI agent as a logistics worker. Many logistics professionals spend significant time on repetitive tasks such as communicating with suppliers, generating forms and dispatching loads. AI agents can automate much of this transactional work, allowing employees to focus on higher-value activities such as strategy, analysis and problem-solving.

The future of work in logistics. Concerns about job displacement are real, but manageable. Workers in highly transactional roles face the greatest risk, while those who develop new skills and learn to work alongside AI will be better positioned for long-term success.

Elevated costs are here to stay. With fuel prices, inflation and operating expenses continuing to pressure margins, AI is emerging as one of the most effective tools available for improving productivity and offsetting costs that can no longer be negotiated away.

That recovery has benefited carriers while creating new challenges for shippers. Reduced over-the-road capacity has fueled gains in both spot and contract rates, giving carriers leverage they have not enjoyed in years.

What’s more, with less capacity available, coupled with increasing compliance costs, larger well-capitalized carriers are favored in this current market cycle, while also raising barriers to entry for smaller carriers.

With that as a backdrop, shippers need to act wisely, as rates increase, coupled with reduced access to spot market capacity, greater service variability, and increased competition for quality carriers.

To help make sense of these moving parts, we’ve gathered three of the industry’s top freight transportation experts for this year’s Truckload Roundtable: John Larkin, operating partner, transportation and logistics, Clarendon Capital; Avery Vise, vice president of trucking, FTR Transportation Intelligence; and Lee Klaskow, sector head and senior analyst, freight transportation and logistics, Bloomberg Intelligence.

Logistics Management (LM): How would you define the state of the truckload market?

John Larkin: After four years of sheer agony, the truckload supply-demand imbalance finally appears to be ending. A combination of large-carrier capacity reductions, FMCSA enforcement actions targeting non-compliant ELDs, CDL mills, chameleon carriers, non-English-speaking and non-domiciled CDL holders, along with a gradual freight recovery fueled by lower interest rates, tariff-driven reshoring and booming data center construction, has created the tightest truckload market since the height of the COVID-19 pandemic.

Adding to emerging supply/demand tightness was a recent unanimous ruling by the Supreme Court stating that brokers are liable for accidents involving carriers that they have matched with loads tendered by shippers.

This ruling should force freight away from small carriers and small brokers to large carriers and brokers—as a premium will be placed on large carriers with adequate insurance and carriers with evolved safety programs. So, the truckload market is in great shape with pricing power squarely shifting from shippers to carriers.

Lee Klaskow: I’ll add that it’s moving beyond recovering to thriving. Tighter conditions are pushing spot and contract rates higher, and we expect this trend to continue for the remainder of the year, as federal initiatives to crack down on English language proficiency, non-domiciled commercial driver's licenses and B-1 cabotage persist.

Higher fuel surcharges from the conflict in Iran is also boosting revenues, though the increased costs present a margin headwind as well. The Supreme Court's ruling in favor of the plaintiff in Montgomery v. Caribe Transport could also help drive out more trucking capacity and make asset-based fleets more attractive to shippers.

Avery Vise: I’ll define it as extraordinarily expensive and disrupted. Spot rates are at or close to record levels, depending on equipment type. Driver utilization is the strongest in nearly five years.

However, what isn’t happening—at least in van freight—is a surge in volume. Truckload carriers’ sharp financial upturn appears to be a function of extremely tight capacity coupled with disruptions from regulatory enforcement—primarily directed at foreign drivers—and the surge in fuel costs.

The flatbed sector, however, is being fueled by both tight capacity and strong demand, driven by data center construction and a relatively early-stage recovery in the industrial sector.

While freight rates are very strong, carriers do not seem to be rushing out to add capacity—a dynamic that likely is a combination of limited supply of drivers, a focus on margins over revenue after several difficult years, and perhaps even some lingering skepticism after the experience in recent years.

LM: How should shippers approach this market?

Klaskow: Relationships matter to me and they should matter to shippers no matter where we are in the cycle. Maintaining strategic partnerships during weak freight markets should put them in a better position during more tight markets in which we find ourselves today.

If you don’t have those relationships today, you should be working overtime because the market continues to tighten—which could be exacerbated if demand increases beyond the low-single digits expected. 

Vise: This is the most challenging truckload market shippers have faced since 2021—and in some ways, it may be even more difficult to navigate given the uncertainty surrounding several competing market forces.

On one hand, strong U.S. job growth and a strengthening industrial sector point to rising freight demand and continued pressure on capacity. On the other, elevated energy prices, persistent inflation and ongoing tariff-related concerns threaten consumer spending and manufacturing growth. The rapid buildout of artificial intelligence infrastructure adds yet another variable to the equation.

Taken together, these dynamics are forcing shippers to place greater emphasis on cost control and securing capacity than they have in recent years. While true market stability remains elusive, the next few quarters should provide a clearer picture of how durable the truckload recovery will be.

Larkin: With spot rates at or above contract rates for the foreseeable future, we would advise shippers to consider contracting with core carriers, implementing dedicated fleets, or shifting some freight to rail-based intermodal. Relying on the spot market in 2026, and perhaps beyond, could prove dangerous to shippers’ budgets.

LM: What can shippers expect in terms of service over the course of the next year?

Vise: The rebound in freight rates is still relatively fresh, so it might be too early to assess the capacity response. However, available data so far suggests that truckload carriers are adding only modestly to their headcount, and they likely will face challenges in adding large numbers of drivers quickly—assuming they even want to.

Meanwhile, the spot market obviously has been very disrupted by fuel costs, regulatory enforcement, and so on. The result will be a tough period for shippers in terms of accessing route guide capacity. Service through brokers might be smoother, but it will come at a price.

Larkin: As marginal carriers exit the industry and more freight shifts to well capitalized, rule-following carriers, service, at the margin, should improve. However, the price of obtaining this more consistent, high-quality service could easily rise by double-digit percentages in 2026. 

Klaskow: Avery and John both make great points and what I would also say is that the AI revolution that we are seeing should yield better service as it’s moving the industry to be more predictive than reactive.

By analyzing real-time data from vehicle sensors and market demands, AI actively eliminates delivery delays, prevents equipment breakdowns and making for safer roads. The purge of the supply could also result in safer roads and better service overall.

LM: Is pricing where it needs to be for truckload rates from both a contract and spot market perspective?

Larkin: No. Contract and spot pricing has been sitting below fully allocated cost at most carriers for the better part of four years. It’s been difficult, if not impossible, for legitimate carriers to make respectable profits. As demand is poised to soon outstrip supply, shippers should prepare to pay up for capacity, whether it is purchased in the spot or contract markets. 

Klaskow: From a trucker’s standpoint, they’re getting better but we are a far cry from the highs seen during the pandemic. While we don’t expect that kind of growth, rates need to move higher for trucking fleets to earn enough of a return that will warrant them reinvesting in their businesses. Longer-term we see the floor to rates being risen as many bad actors are pushed out of the market.

Vise: Spot pricing can’t really get much stronger, and for van equipment, it appears finally to be outpacing fuel cost recovery substantially now—something that wasn’t true in March and April.

From the carrier perspective, contract rates need to rise more to provide a solid margin considering high costs, but they are headed in that direction in short order. FTR’s current forecast envisions total truckload contract rates excluding fuel surcharges hitting record levels by the end of 2026 and rising beyond that next year before leveling off by next summer.

LM: How do you view the state of driver availability, in light of the various initiatives the federal government has undertaken—CDL ‘mills’ crackdown, non-domiciled CDL/ELP?

Klaskow: Trucking, especially the over-the-road market has a persistent retention problem, which some may equate to a driver shortage. Drivers are facing increased scrutiny from carriers, shippers and brokers following the aforementioned federal initiatives and the C.H. Robinson case it lost in front of the U.S. Supreme Court.

Safety is moving to the foreground, which is a good thing for the industry, shippers and the general public. Also, elevated rates may slow the turnover rate as truckers weigh the trade-offs from being away from home.

Vise: Very tight capacity was not caused by these initiatives. Capacity had been heading sharply and consistently downward since the middle of 2023. The effect of the Federal Motor Carrier Safety Administration’s various enforcement measures—especially those pressuring foreign drivers—has been mainly to disrupt the fluidity of capacity.

We doubt that the shutting down of CDL mills will seriously hurt the driver supply, because driver demand will quickly create replacement training capacity. The efforts regarding non-domiciled drivers and those removed due to poor English skills so far seem to be more of a disruption than a large cut in raw capacity.

However, pressure on foreign drivers will impact capacity over time and—perhaps more important in the near-term—will reduce one of the potential sources of drivers as truckload carriers attempt to rebuild headcount. The impact will become even more significant as enforcement moves more toward fighting cabotage.

Larkin: Driver availability is in the midst of becoming a major challenge for carriers, given the FMCSA crackdowns. Carriers are budgeting more for driver recruiting efforts and are preparing to pass along some of their much-needed price hikes to drivers that meet more stringent criteria.

LM: What will the truckload market look like five years from now?

Vise: We are likely at the dawn of autonomous trucking becoming a routine option for long-haul freight, though it will still represent only a small share of the overall truckload market.

While it may take another decade or more before autonomous trucking becomes the norm rather than the exception, the gradual shift toward a model in which human drivers primarily handle local moves to and from interstate and expressway hubs could introduce greater stability to freight pricing by reducing the volatility associated with driver compensation and recruiting costs.

Beyond automation, we expect the continued separation of core carrier functions, with freight booking and dispatch increasingly distinct from the ownership and operation of trucks and trailers. This trend is developing independently of autonomous trucking, but it aligns well with and could accelerate the industry's evolution.

Larkin: Five years from now, autonomous vehicles will have carved out a meaningful share of the long-haul truckload and the distribution center-to-store markets. Given that autonomous trucks need not comply with hours-of-service regulations, some intermodal rail freight will be recaptured by the truckers.

Alternative fuels will be more popular with ethanol, hydrogen, and electricity providing serious alternatives to diesel. Look also for many clerical activities handled by trucking companies to be automated with AI-enhanced applications.

Lastly, optimization tools will become commonplace across the industry as carriers maximize productivity, minimize empty miles, systematically select the highest rated/most profitable freight available. These changes will favor the large, well-capitalized carriers who have the bandwidth and capital to implement these new technologies. 

Klaskow: I don’t see autonomous electric trucks dominating the highways. We could see these technologies making inroads, but not widespread. It will be much as it is today. Trucking is a business that has relatively low-entry barriers, which makes it prone to cyclicality and booms and busts.

Given the duration of the recent downturn, I would hope the upcycle will have a longer duration. The weak part of the past cycle was as long as a total freight cycle, which averages three to four years.

LM: How do you view the impact of the trade war and related tariff actions on truckload shippers, and how do you think it could impact the 2026 peak season at this point?

Larkin: Who said tariffs were bad for trucking? Tariffs have stimulated $10 trillion-plus in investment in the U.S. by foreign and domestic companies—all seeking to avoid the tariffs.  Demand will increase as new plants are constructed and eventually come on line. Tariffs may also contribute to short term inflation, which could suppress some consumer demand. However, we believe the benefits, associated with tariffs, will, ultimately, outweigh the costs.

Klaskow: Peak season will likely come early, as shippers get ahead of supply chain dislocations created by the Iran War and recently proposed tariffs. Consumers will have a lot to say about the strength of the peak.

The University of Michigan’s final Consumer Sentiment Index for May came in 14% below last year's level and 7.1% below consensus as inflationary pressures weigh on households.

In addition to higher fuel prices, consumers could face higher prices from the Trump administration’s latest threat to impose new tariffs going up to 12.5% on imports coming from 60 trading partners, due to concerns over their failure to address goods made with forced labor.

Vise: From what I’ve seen, tariffs do not seem to be affecting the trucking market much so far, but truckload probably was not really in line for a big near-term impact anyway. One intended consequence of higher tariffs is greater domestic production, which would mean more truckload volume and more pressure on capacity and rates.

However, even if that happens eventually, it’s not a near-term dynamic because of the need to build or refurbish facilities and hire workers. Instead, changes mostly are where sourcing occurs globally, and those decisions do not make that much difference in domestic transportation.

Moreover, actual tariff rates are far milder than what was announced in April 2025, so many companies probably are just sticking with foreign sourcing for now except in situations with very large tariffs—steel and aluminum, for example.

Looking ahead, though, the next push will be over USMCA [United States-Mexico-Canada Agreement], which could have a big impact on cross-border trucking.

LM: With the Iran conflict driving up fuel prices, what are ways in which shippers can hedge against the ongoing increases?

Klaskow: Outside of actually making hedging investments, there really isn’t much you can do. Look for carriers that prioritize fuel efficiency and that operate newer fleets.

Vise: I agree. I’m not sure there’s very much that shippers can do about the situation other than shift more volume to intermodal, which certainly does seem to be happening to a considerable degree.

I suppose other steps are possible, such as trying to stage truckload shipments for maximum cube capacity to reduce the number of trips needed and, thus, the amount of fuel burned. Of course, tight capacity’s impact on spot rates is as much or more of a reason to do that as fuel costs are.

If fuel costs surged in a weaker truck freight market—as was the case in 2022, for example— then shippers might have more leverage to restructure fuel surcharge arrangements to at least reduce some of the impact. That approach is unlikely to work in the current market.

Larkin: Carriers have most of the power in a rising fuel price environment, thanks to commonly used fuel surcharge mechanisms. However, carriers can harness tools, such as those offered by Breakthrough Fuel, to better manage fuel surcharges and to ensure that any greedy carriers are kept honest.

Of course, shippers can shift to more fuel-efficient modes during periods of high fuel cost. LTL shippers can shift to truckload. Truckload shippers can shift to rail intermodal. And rail intermodal shippers can consider rail carload or barge options. 

LM: Given the up-and-down nature of the economy and the market, can you offer up some words of advice to shippers?

Vise: So, here’s where being a reasonable business partner with carriers over the past four years could help a bit. If a shipper took significant steps to help their key carrier partners minimize the financial impact of weak rates and sluggish overall volume, it’s time to call in those chits, so to speak, and ask for help in minimizing the pain.

If nothing else, it’s an opportunity to expose which truckload carriers truly value their relationships and which are always looking out only for themselves.

Of course, being a “shipper of choice” is not something a shipper can do retroactively, so barring that option, transportation sourcing and management probably means going back to 2021—near-term tactical actions, mini-bids, greater use of intermodal, and the whole range of “blocking and tackling” steps that largely haven’t been necessary for at least three years for most shippers.

Larkin: Batten down the hatches. Rates are rising, and rising quickly. Shippers that were merciless during the past four years—when it comes to rates—should prepare for the worst of it. Tight capacity should rule the day for at least the next year or two.

Shippers that treated carriers as partners over the past four years, can expect more modest increases in rates and easy access to sufficient capacity. The old adage ‘what goes around, comes around’ comes to mind. 

Klaskow: Those are great points. Your costs are going up, and you need to start to prepare your bosses for that reality. Shippers that move commoditized freight in which they value price over service will be facing tougher times finding capacity.

Those that value strategic relationships with their capacity providers will have a better time securing capacity. Work with them to find ways to lower your costs, entertain dedicated capacity if it makes sense and don’t lose your sense of humor.

Each new challenge was viewed as another obstacle to overcome before the industry could finally return to some version of normal. This year’s State of Logistics report suggests it may be time to stop waiting.

In fact, I would say that the report’s central message is both simple and profound: the forces reshaping global logistics are no longer temporary disruptions. They’re becoming permanent features of the operating environment—and that reality is evident throughout this year’s analysis.

“First and foremost, trade policies are changing more frequently and carrying greater consequences,” says contributing editor John Schulz, whose overview of the annual report appears this month in LM. “Geopolitical events that once seemed distant are now directly affecting transportation costs, sourcing decisions, and network design.”

At the same time, supply chains are becoming more fragmented and more regionalized. Many discussed China “plus one” strategies have moved beyond theory and are now being put into practice. Companies are diversifying sourcing, redesigning networks, and building flexibility into operations that were once optimized almost exclusively around cost and efficiency.

“Perhaps most interesting is how organizations are responding,” says Schulz. “According to the report’s authors, the companies making the greatest progress are not necessarily those with the largest budgets or the most sophisticated technology stacks. They’re the ones accepting that volatility is no longer an exception to manage—it is the baseline condition under which they must operate.”

And, of course, it’s impossible to ignore the growing role of artificial intelligence. Unlike previous years, when AI was discussed primarily in terms of potential, this report documents a growing number of real-world deployments producing measurable business results.

“The lesson is not that AI will magically solve every supply chain challenge,” says Schulz. “Rather, it is becoming another essential tool for managing complexity, improving decision-making, and increasing productivity in an environment where uncertainty has become a constant.”

What makes this year's report particularly intriguing is that it doesn’t portray the industry as being in crisis—quite the opposite. Despite ongoing geopolitical tensions, persistent economic uncertainty, and continued disruption across multiple transportation modes, the report highlights how logistics providers, carriers and shippers continue to adapt.

And let’s face it. The logistics industry has never had the luxury of standing still. Its history is one of innovation and resilience in the face of constant change.

What feels different today is the pace. The forces reshaping supply chains—from geopolitics and trade policy to labor dynamics and artificial intelligence—are arriving simultaneously and showing little sign of easing.

Yet, if this year’s State of Logistics report proves anything, it’s that this industry continues to evolve right alongside them.

Supply chain management (SCM) sits squarely in the middle of these conversations. Supply chain planning (SCP) platforms use AI to help companies forecast demand, balance inventory and plan capacity. Supply chain execution (SCE) applications like warehouse management systems (WMS) and transportation management systems (TMS) manage the day-to-day physical flow of goods, labor and assets.

These are natural places for AI to step in. When it takes on some of the monitoring, analysis and repetitive decision support that would otherwise consume hours, AI gives planners, dispatchers and warehouse managers time back in their days. Then, they can spend that time handling exceptions, solving problems and making the judgment calls that require human judgment.

AI’s expanding role in SCM

The business use cases for AI in SCM continue to expand. For example, when AI is integrated into a WMS, it can analyze warehouse activity, identify developing bottlenecks and help managers make faster labor or inventory decisions.

Within a planning platform, AI can process larger volumes of data and help planners evaluate demand changes or inventory needs. Built into a TMS, it can support route planning, carrier selection and final-mile orchestration as conditions change.

Not every AI implementation has lived up to expectations, and the technology still has some catching up to do. One recent Gartner survey found that AI has yet to change supply chain operating models on the scale that many companies expected. The firm surveyed 140 senior supply chain executives and found that just 17% of their organizations were pursuing an immediate redesign of their processes and workflows.

The remaining 83% were applying AI incrementally to specific use cases or gradually expanding it into integrated processes. “Persistent volatility is driving interest in evaluating AI-orchestrated capabilities,” said Caleb Thomson, senior director analyst in Gartner’s Supply Chain practice, “but investment remains constrained by foundational readiness.”

Gartner says data problems, employee training needs and a fragmented vendor market continue to restrict broader AI adoption. Companies also depend on information from suppliers and other trading partners that may be incomplete or unreliable.

As with all types of software (even those basic AI chatbots that are freely available online), “garbage in, garbage out” still applies here: incomplete, outdated or inaccurate data often produces unreliable answers and poor decisions.

So, there’s still work to be done, but that doesn’t take away from AI’s growing impact on SCM. Here are six more developments to watch as this story continues to unfold:

1) Vendors jumped into the SCM game with both feet. Software developers didn’t waste any time hopping on the AI bandwagon. According to Nathanael Powrie, senior director, digital solutions at SGS Maine Pointe, supply chain software has been re-platformed around AI faster than most operators can absorb.

“In the last 18 months, nearly every major SCM vendor has rebuilt its planning, visibility, and execution stack around machine learning, generative AI, and now agentic AI,” says Powrie, who adds that the AI-centric marketing has outpaced the reality, but not by as much as the skeptics suggest.

“AI is delivering measurable P&L impact in specific pockets of the supply chain,” he explains. “GenAI is useful but narrower than the slide decks claim, [and] agentic AI is on the cusp of changing how decisions get made, for the companies prepared to govern it.”

2) AI is starting to pay off by handling routine work. Supply chain teams are still trying to figure out how to measure the value of their AI investments, but Balaji Abbabatulla, VP, analyst at Gartner, says some of the early gains are coming from routine tasks that take up too much time. Data aggregation, document validation, standard acknowledgements and responses to supplier or customer questions are producing some of the earliest measurable gains.

AI doesn’t have to take over the whole process to be useful either. It can, say, review a supplier’s invoice question, pull information from a defined data source and generate a more specific response than the standard “we received your email” reply.

This helps operations teams handle high-volume questions faster without forcing someone to research and respond to every message manually. “Those are the kind of use cases with very clear and discernible value,” says Abbabatulla.

3) Decision-heavy work is becoming the sweet spot. Powrie says the fastest, most defensible returns are in the data-rich, decision-dense parts of the supply chain, like demand forecasting, inventory optimization and transportation execution. These domains have the cleanest signal, he says, the highest decision frequency and the most direct line to working capital and service.

Powrie breaks down the key areas where AI is having the biggest impact right now:

--Demand forecasting and inventory: Machine-learning forecasts are routinely cutting forecast error by 20% to 40% over statistical baselines in mid-complexity SKU portfolios. The inventory consequences are larger than the forecasting gain alone. Better signals upstream let companies hold less safety stock without degrading fill rates.

--Transportation and logistics: Dynamic routing, load consolidation and carrier-rate optimization are producing 5% to 12% landed-cost reductions in clients with reasonably clean lane and tender data. Gartner's most recent surveys point to logistics execution as one of the top areas where AI investment is producing measurable cost takeout today.

--Warehouse and DC operations: AI is improving slotting, labor planning and throughput forecasting. The bigger shift is computer vision and robotics orchestration, which is finally scaling beyond pilot sites.

“Forecasting, inventory, and transportation execution are where AI is paying for itself today,” says Powrie. “Everywhere else, the value case is real but the data foundation usually isn't.”

4) Physical AI is bringing vision and decision-making into the warehouse. Physical AI lets systems perceive, interpret and respond to what’s happening around them through cameras, robots and other automated equipment. In a warehouse, that could reduce dependence on barcode labels and scanners by allowing a system to identify a package, read its description, confirm the quantity inside and understand what it’s handling.

“The first thing that comes to mind when you talk about physical AI is vision capabilities that are tied to robots or pieces of automation,” says Howard Turner, director of supply chain systems at St. Onge Co. “A system can look at a package, quickly read the description of what’s on the package and the quantity that’s in the package, and know what it’s holding and interacting with.”

Turner says those AI-enabled capabilities could improve packing and shipping efficiency and pick accuracy. They’re also changing inventory management, where robots can travel down warehouse aisles, view the inventory stored on every shelf and rack level and help determine whether the system’s records match what’s physically in the facility.

5) AI is taking inventory counting off the calendar. Warehouse employees have traditionally had to stop, scan and count products at scheduled intervals to confirm inventory accuracy. It’s a time-consuming process that only captures what’s in the facility at that point in time.

Now, AI-enabled robots can perform that work as they travel through the warehouse. That connects directly to SCM because inventory accuracy affects replenishment, purchasing and order fulfillment decisions. “There are robots on the market that can drive down the aisle, look at every shelf and every level of the racking, and determine inventory accuracy,” says Turner.

That gives warehouse managers a more current view of inventory without depending entirely on periodic manual counts. It can also help them catch misplaced products, quantity discrepancies and other inventory problems sooner

6) Agentic AI is the next real frontier. Unlike conventional AI, which analyzes information and recommends an action, agentic AI can also take the next step within the rules and limits set by the company.

In SCM, that could mean responding to a forecast change, transportation disruption or supplier problem instead of waiting for a planner or analyst to intervene. Powrie says agentic AI is still maturing in areas like S&OP, network design and autonomous procurement. Here’s what it can look like in a supply chain setting:

Planning agents that rebalance inventory across DCs when a forecast shifts, rather than flagging the imbalance for a planner to resolve manually.

Execution agents that re-tender freight, adjust ETAs and notify customers when a disruption is detected, without waiting for a control-tower analyst to act.

Procurement agents that monitor supplier performance, flag deviations and initiate sourcing events against pre-approved guardrails.

“Agentic AI is the real frontier, and the companies that get there first will be those with clean data, clear decision governance, and the discipline to tie every AI dollar to a P&L line,” Powrie adds. “2026 separates the companies that piloted from the companies that scaled. The difference won't be the technology. It will be the operating discipline behind it.”