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

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

For March, the most recent month for which data is available, the TCI reading came in at -1.11, a steep fall-off from February’s 10.2, which marked the highest reading in four years. FTR explained that the March decrease was expected, due to what it called “the unprecedented surge in diesel prices.”

And it added that that fact that the TCI was only slightly negative, despite the impact of high fuel costs, points to the strength of freight-related factors, especially rates, and also noted that the positive contribution from freight rates alone helped to offset most of the impact of rising fuel costs, calling the outlook mostly favorable for motor carriers.

“Carriers of all stripes are in store for a strong year from a rates perspective, but for much of the market, the recovery remains driven by the combination of very tight capacity and disruption,” said Avery Vise, FTR’s vice president of trucking. “We are still skeptical that van freight will benefit much from volume growth, but the open deck sector is benefiting not only from very tight capacity but also from an ongoing surge in data center construction and a modest improvement in manufacturing output.”

Rail carloads, a 235,049, increased 4.0% annually, topping the week ending April 15, at 229,828, and the week ending April 18, at 230,749.

AAR reported that nine of the 10 carload commodity groups it tracks saw annual gains, including: metallic ores and metals, up 3,950 carloads, to 23,164; grain, up 3,734 carloads, to 24,973; and nonmetallic minerals, up 1,602 carloads, to 32,530.

Intermodal containers and trailers, at 283,724 units, rose 3.9% annually, topping the weeks ending April 25 and April 18, at 281,788 and 277,554, respectively.

Through the first 17 weeks of 2026, AAR reported that U.S. rail carloads, at 3,837,643, are up 3.6% annually, and intermodal units, at 4,697,928 units, are up 0.4%, for the same period.

Speaking at the Gartner Supply Chain Symposium/Xpo in Orlando, analysts warned that companies pulling back on early-career hiring today could create talent shortages later.

According to Gartner, 75% of supply chain organizations that paused entry-level hiring in 2026 will end up paying more than 15% extra for early-career professionals by 2030.

“Many organizations are attempting to manage uncertainty today by pausing entry-level hiring, but they will face talent shortages for themselves in the near future,” said Simon Bailey, VP Analyst, Gartner. “AI is not a ‘plug and play’ replacement for people. Organizations that stop hiring, and fail to develop early-career professionals, will soon face talent pipeline gaps, employee dissatisfaction, and elevated hiring pay premiums, especially for AI-native talent.”

The comments come as many companies continue to experiment with generative AI and agentic AI tools across their supply chain. A Gartner survey of 509 supply chain leaders found that 55% expect entry-level hiring to decline because of advances in agentic AI.

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When it scheduled these hearings in March, not long after the United States Supreme Court ruled against the legality of the implementation of the White House’s IEEPA tariffs in late February, USTR explained that these investigations will determine whether those acts, policies, and practices are unreasonable or discriminatory and burden or restrict U.S. commerce. It said that the economies subject to the Section 301 investigations are China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.

“The United States will no longer sacrifice its industrial base to other countries that may be exporting their problems with excess capacity and production to us. Today’s investigations underscore President Trump’s commitment to reshore critical supply chains and create good-paying jobs for American workers across our manufacturing sectors,” said USTR Ambassador Jamieson Greer in March. “The Trump Administration’s reindustrialization efforts continue to face significant challenges due to foreign economies’ structural excess capacity and production in manufacturing sectors. Across numerous sectors, many U.S. trading partners are producing more goods than they can consume domestically. This overproduction displaces existing U.S. domestic production or prevents investment and expansion in U.S. manufacturing production that otherwise would have been brought online. In many sectors, the United States has lost substantial domestic production capacity or has fallen worryingly behind foreign competitors.”

In his comments before the USTR, Jonathan Gold, Vice President for Supply Chain and Customs Policy at the National Retail Federation (NRF), explained that NRF strongly supports efforts to address unfair and non-market policies that distort trade, and he added that remedies must be carefully calibrated to sector realities and to the interests of U.S. consumers and downstream industries.

“In consumer goods—apparel, footwear, consumer electronics, toys, and furniture—high import volumes typically reflect enduring U.S. demand and long-standing production patterns, not necessarily ‘dumping’ driven by excess capacity,” said Gold.

Sourcing diversification, Gold explained, is a central fact that should guide this investigation, as U.S. retailers and brands have spent the last decade deliberately diversifying sourcing across many countries. To that end, he observed that China was the dominant supplier for many consumer goods in the 2000s, but rising costs, followed by Section 301 tariffs imposed starting in 2018 and subsequent pandemic-era disruptions, led to what he called a clear shift to multi-country supply chains, using the apparel, footwear, and consumer electronics supply chains as examples.

Other factors cited by Gold that need to drive this investigation included how broad tariffs and overbroad remedies carry real risks for American families and for U.S. competitiveness, noting that when domestic production is limited or absent—as it is for many goods—tariffs do not create new supply in the near term. Instead, they function primarily as consumption taxes paid by U.S. households and by the businesses that employ millions of Americans. He recommended a targeted, evidence-based approach focused on the following:

• Distinguishing between sectors where excess capacity truly displaces viable U.S. production and sectors where imports fill persistent, structural U.S. demand gaps;
• Focusing any remedies on strategic or sensitive areas tied to national security, rather than broad coverage of non-sensitive consumer goods;
• Incorporating downstream business impacts and consumer impacts into any assessment of burden on U.S. commerce—especially price and availability effects;
• Recognizing that diversification across many countries is often evidence of market discipline and risk management, not evidence of predatory overcapacity; and
• Avoiding one-size-fits-all remedies; where action is warranted, pursue sector-specific findings and narrowly tailored measures.

“We share the goal of confronting unfair trade practices—but success depends on precision,” said Gold. “A balanced, sector-specific approach will better protect U.S. competitiveness, supply chain resilience, and the American consumer.”

In comments provided to the USTR during the comment period prior to this week’s hearing, Sean O’Neill, Senior Vice President of Government Affairs at the America Cement Association, explained that structural overcapacity and unreasonable subsidization occurring in various countries—including Turkey, Vietnam, Egypt, Saudi Arabia, the United Arab Emirates, and Thailand—result in an increased burden for U.S. producers.

“Exports from these countries create an unreasonable competitive disadvantage for U.S. cement producers in the U.S. market and have a chilling effect on U.S. cement producers’ investments in domestic production,” he said. “Reliance on such exports increases the odds of supply chain disruptions. The share of U.S. consumption met by imports from countries with excess cement production capacity has sharply increased.”

Patrick Lozada, Senior Director of Global Policy at the National Electrical Manufacturers Association (NEMA), noted in his comments yesterday that NEMA’s membership supports targeted efforts to address structural capacity, calling it a real and serious issue in certain sectors.

“But precision matters,” said Lozada. “Overcapacity is not uniform across industries—or even within them. For example, while there may be global excess capacity in semiconductors overall, that is an issue specific to certain process nodes. In others, such as leading-edge AI and memory chips, the reality is the opposite. In markets like this—where supply may be structurally inflexible—additional import duties will not stimulate new domestic capacity in the near or medium term. What they will do is raise costs for downstream manufacturers and ultimately American consumers.”

He added that targeted duty relief would allow USTR to address overcapacity concerns while avoiding higher electricity prices, supply bottlenecks, and setbacks to U.S. competitiveness in AI and advanced manufacturing.

One of the primary takeaways of the report highlighted how first-quarter industrial leasing activity saw a 17.8% annual increase, with 145 million square feet (SF) of leases executed—and 71.6% representing new leases. JLL added that asking rates stayed modestly positive, up 0.8% annually to $10.34 per SF, as “landlords balanced competitive pressures with the superior specifications of newer inventory.” It also noted that average direct asking rates for mega-box warehouses rose 14.5% annually, topping all other Class A size segments.

JLL Senior Analyst, Industrial Research Elizabeth Holder told LM that first-quarter leasing strength was driven by a combination of factors, including supply chain diversification, nearshoring manufacturing, and increased demand for modern logistics space in core markets.

“Our data shows that supply chain resilience strategies are accelerating the build-out of redundant inventory networks and safety stock positioning, requiring tenants to secure additional warehouse capacity across multiple geographies rather than relying on centralized distribution models, directly contributing to the 17.8% year-over-year increase in leasing activity,” said Holder. “Additionally, we’ve seen a new wave of industrial-using tenants enter the industrial world. The surge in data center development has created substantial ripple effects throughout the industrial real estate market, as these facilities require extensive supply chain infrastructure to support their operations. Beyond the data centers themselves, companies are leasing significant warehouse and distribution space to house critical components, including servers, cooling systems, backup power equipment, and networking hardware that must be staged, tested, and deployed on accelerated timelines.”

When asked if it was surprising that, despite this strong growth, asking rates were only up 0.8% to $10.34 per square foot, Holder said it was not, as rates remained modestly positive, with landlords balancing competitive pressures with the aforementioned superior specifications of newer inventory.

“In other words, leasing demand improved, but the market still had enough competitive pressure and supply to keep asking rates in check,” explained Holder. “More broadly, the U.S. industrial market is experiencing a period of stabilization, as the recent wave of new deliveries has contributed to a gradual rise in vacancy rates from cyclical lows. This rebalancing between supply and demand is tempering the previously accelerated pace of rental rate growth while creating a more normalized market environment. That said, there are certain size segments (specifically mega-box buildings) with limited inventory that could put upward pressure on rates.”

Looking at big-box leasing, for spaces of at least 500,000 SF, JLL said the first quarter saw an 80.7% annual increase, pointing to renewed confidence in long-term commitments and also reversing the cautious approach that was in place in 2025.

Holder said that demand for new bulk warehouse space has rebounded after a subdued period caused by an uncertain trade and tariff landscape. She also noted that the surge in big-box leasing reflects a strategic consolidation trend, with tenants seeking to house multiple operations under one roof to achieve economies of scale in automation deployment, labor management, and inventory control.

“While we certainly saw a diverse mix of tenants in the big-box leasing space, 3PL tenants are one of the core drivers of this demand,” she said. “This sustained demand has reignited construction activity, with developers responding to limited availability of quality big-box inventory by launching new projects to capture tenant requirements. I do believe that this growth is sustainable. Supply chain volatility is accelerating a fundamental strategy shift: bringing both distribution and production closer to end consumers is now a baseline requirement. The sector is positioned for continued growth, as consumer proximity and supply chain resilience become paramount to competitive advantage.”

Third-party logistics (3PL) service providers’ activity was viewed as the “most notable trend observed in Q1 leasing,” according to JLL, with 3PL leasing activity up 65.2% annually and more than 30 million SF leased in the first quarter.

To that end, Holder observed that the surge in 3PL leasing exceeded expectations.

“It reflects companies’ growing reliance on logistics partners who can navigate supply chain complexity and provide network flexibility during periods of elevated disruption risk, with these providers securing large-format facilities that offer scalability and advanced automation capabilities to efficiently manage volatile demand patterns,” she said.

Looking ahead, Holder explained that this momentum is expected to continue, noting that, given the supply chain shocks experienced over the last five years—from pandemic disruptions to port congestion—3PLs have become essential partners offering the flexibility and expertise that many industrial-using tenants need to navigate volatility.

The first-quarter national vacancy rate came in flat at 7.5%. JLL said that the rate is expected to begin trending downward as existing supply continues to be absorbed and new construction starts remain relatively flat.

A lower vacancy rate does not represent a cause for concern, according to Holder, as it is a sign of market normalization, suggesting a healthier balance between supply and demand.

“In Q1, absorption leasing activity remained resilient at 145.2 million square feet, and net absorption reached 50.9 million square feet, while 50.9 million SF of new deliveries were recorded,” she said. “In this context, a gradual decline in vacancy should be viewed positively, supporting rent stability and a more balanced industrial market rather than raising alarms. While external headwinds warrant careful monitoring and may create short-term volatility in leasing decisions, these structural forces position the sector for continued growth as proximity to consumers and supply chain resilience become paramount to competitive advantage.”

“We’re juggling two timelines at once, delivering today while knowing we need to prepare for what’s next,” Azim said.

That tension is showing up across supply chain operations. Costs remain high, geopolitical risks continue to shift, and expectations from CEOs around AI are only growing. At the same time, many companies are still trying to figure out what real value those investments will deliver.

Supply chain organizations spent an average of $24 million on AI in 2025, but many projects have gone over budget and are not expected to produce results for at least a year, Azim said.

She compared the moment to the early 2000s, when companies were dealing with global disruption and trying to understand how new technologies would reshape their businesses. Back then, the question was whether companies like Amazon would ever turn a profit. Today, the focus has shifted to how AI will change the way supply chains operate.

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FTR reported that preliminary March Class 8 truck net orders, at 25,500 units, declined 34%, from March to April, while increasing 199% annually, up against what the firm called “a very low base” in April 2025. What’s more, it reported that April marked the third consecutive month that annual growth topped the 140% mark, with orders over the last 12 months coming in at 298,105 units.

While April orders fell compared to March, FTR said that the decline appears to be a typical seasonal pullback after an unusually strong March rather than a sign of weakening demand. In 2026, orders have surged 110% annually, bringing total order growth for the season to 23%. It added that demand is being driven by stronger freight rates, constrained capacity, higher equipment utilization, replacement cycles, some modest fleet expansion by financially stronger carriers, and efforts to lock in remaining 2026 production slots ahead of expected cost increases tied to EPA 2027 NOx regulations. Soft retail truck sales and uneven carrier profitability indicate the recovery is not uniform, it said.

Looking ahead, 2026 order books are expected to fill sooner than usual, as demand is likely to stay well above last year’s levels until remaining production slots are taken in the next few months, said FTR, while adding that comments from manufacturers are pointing to tightening availability, with second-quarter slots filled at some companies and much of the second half of 2026 already reserved.

“The abrupt shift in demand in recent months has brought some risks as we have noted previously,” said Dan Moyer, senior analyst, commercial vehicles, at FTR. “One risk is that fleets will act out of ‘fear of missing out,’ or FOMO, to order earlier or in larger quantities than needed to avoid being shut out of 2026 production, thus raising cancellation risks. We still believe that risk is limited unless freight recovery stalls. The more notable risk from elevated orders is build execution. Demand is very strong, but OEMs and suppliers must now ramp production from a low Q1 base without creating labor, supply chain, quality, or inventory issues.

Other risks remain, including uncertainties over regulatory policy and the durability of the freight recovery, elevated financing costs, and geopolitical developments that could keep fuel prices elevated. Overall, April orders reinforce the main message: Class 8 demand remains strong, but the focus is shifting from demand recovery to backlog quality and production execution.”

ACT data: ACT reported that preliminary North America Class 8 net orders, at 24,800 units, headed up 201% annually.

“With April signifying the beginning of weak order seasonality until 2027 order boards open in September, it’s little surprise that preliminary April Class 8 order activity fell from March levels,” said Carter Vieth, Research Analyst at ACT Research. “Seasonally adjusted, Class 8 orders declined 24% [sequentially].”

The national average price per gallon, at $5.640, rose 28.9 cents sequentially (its largest sequential increase since the week of March 16, when it increased 0.21), following a 5.2-cent decline, to $5.351, for the week of April 27 and a 20.5-cent decline, to $5.403, for the week of April 20, 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.

This week’s average price marks the highest in any week since 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.

For the week of April 6, the national average rose 3.5 cents to $5.643. Prior to that, the national average, for the week of March 30, came in at $5.401, with the week of March 23 at 5.375. The average price per gallon, for the week of March 16, was $5.071, topping the week ending March 9, at $4.859. What’s more, prior to the last five weeks, the last time the national diesel average topped the $5 per gallon mark was the week of November 28, 2022, when it was at $5.141 per gallon.

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

WTI crude is currently trading at $101.72 on the New York Mercantile Exchange, up from $99.76 a week ago at this time.

The April Services PMI, at 53.6 (a reading above 50 represents expansion and below 50 indicates contraction), fell 0.4% compared to March, growing, at a slower rate, for the 22^nd consecutive month, with the overall economy growing, at a slower rate, for the 71^st consecutive month.

The April reading is 1.1% above the 12-month average of 52.5, with February’s 56.1 and May 2025’s 50.2 marking the respective highest and lowest readings over that period.

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

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

• Business Activity/Production, at 55.9, up 2.0%, growing, at a faster rate, for the 22^nd consecutive month, with 14 sectors seeing gains;
• New Orders, at 53.5, fell 7.1%, growing, at a slower rate, for the 11^th consecutive month and expanding in 38 of the last 40 months, with 13 sectors reporting increases in new orders;
• Employment, at 48.0, rose 2.8%, contracting, at a slower rate, for the second consecutive month, with eight sectors reporting employment gains; and
• Supplier Deliveries, at 56.8 (a reading above 50 indicates contraction), were up 0.6%, growing, at a faster rate, for the 17^th consecutive month

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

“Current business conditions continue to place pressure on purchasing operations due primarily to ongoing supply chain volatility, elevated transportation costs and inflation-driven pricing from key suppliers,” said a Transportation & Warehousing panelist.

A Management of Companies & Support Services panelist said that the Iran conflict has caused many banking customers to back off equipment purchases and other spending, adding that just as the recovery was underway, it turned off.

In an interview with LM, Steve Miller, Chair of the ISM Services Business Survey Committee, said that, overall, the state of the services economy is in a good place.

“The Services PMI has come in above the 12-month 52.5 average in every month since December,” he said. “Things look pretty solid. The only caveat is that, for Supplier Deliveries, they came in about 4% above average over the last two months and partially attributed to the Iran conflict.

Addressing the 7.1% decline in New Orders, Miller explained that in looking back at recent months, New Orders in February and March, came in at 58.6 and 60.6, respectively, with commentary in March indicating there was buying activity ahead of increased oil price impacts.

“The April 53.5 reading is 4% below the average, so even with February and March’s [higher] numbers, it just looks like we are in normal business conditions,” he said.

When asked about the biggest concerns for services economy companies, Miller said that oil prices are at the top of the list, with general prices being up next, as evidenced by April Prices remaining above 70 in April. Tariffs, which have been widely cited in panelists’ comments in previous reports, did not show up as much in this report, he noted.

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

The report’s first quarter shipment index value, at 75.9, fell 0.3% compared to the fourth quarter and was up 0.6% annually. The report explained that this reading aligns with most macroeconomic metrics, in that “not too much is surging or freefalling.” To that end, it observed that manufacturing output through the first two months of 2026 is up 1.9% annually, coupled with mixed first quarter retail sales.

On a regional basis, shipments saw a 1.9% sequential increase and a 6.4% annual gain in the Western U.S.; a 5.7% sequential gain and a 9.5% annual gain in the Midwest; a 2.7% sequential decrease and a 5.3% annual increase in the Northeast; a 3.0% sequential decrease and a 7.2% annual decrease in the Southwest; and a 3.0% sequential decline and a 7.2% annual decline in the Southeast. The report explained that the Northeast region saw a sequential decline for the first time since the fourth quarter of 2024, due to extreme winter weather impacting volumes compared to the fourth quarter of 2025.

On the spending side, the first quarter spend index value, at 216.7, posted a 12.9% sequential gain and was up 21.8% annually, for its second straight annual increase and fourth straight quarterly increase, with the report citing a sharp rise in diesel prices and tightened capacity as drivers for the increases. To that end, it observed that spending increasing faster than shipments reflects a significant contraction after a freight recession going back to mid-2022.

“In March, diesel prices surged, adding another pressure point for small fleets and owner-operators already short on credit,” the report noted. “As fuel costs jumped, many likely hit their limits and struggled to cover operating expenses, prompting some to exit the market or park trucks until prices eased. Capacity tightened sharply in the first quarter of 2026, driving a surge in shipping costs even as freight volumes remained largely unchanged. Overall, capacity tightened during the quarter, lifting shipper costs through fuel surcharges and higher rates. Freight volumes were roughly steady versus Q4 2025, signaling subdued demand. The late-quarter rise in gasoline prices also weighed on consumer spending, which can soften freight; because the increase came late, the full impact is not yet evident in the data.”

Spend data largely showed gains across the board, including the West, up 8.5% sequentially and 20.5% annually; the Southwest, up 11.5% sequentially and 21.4% annually; the Midwest, up 19.6% sequentially and 26.7% annually; the Northeast, up 8.9% sequentially and 22.1% annually; and the Southeast, up 9.9% sequentially and 16.7% annually.

“What makes this quarter stand out is how abruptly costs moved higher even though freight activity itself did not,” said Bobby Holland, director of freight business analytics at U.S. Bank. “For shippers, that creates a much harder environment to plan and budget, because the usual volume signals weren’t there. March’s fuel spike added volatility at the margin, but the broader takeaway from the data is that pricing dynamics shifted faster than demand conditions.”

American Trucking Associations Chief Economist and the report’s lead author, Bob Costello, wrote in the report that the national truck freight market experienced low freight volumes in Q1 2026, as well as a sharp rise in diesel prices and tightened capacity.

“Spending increased faster than shipments, reflecting a significant contraction after a freight recession dating back to mid-2022,” he wrote. “This downturn lasted longer in part because spot-market carriers had surplus funds from the pandemic boom, which helped many stay afloat. A few trends helped to create a long, painful environment of rising costs, but with lower volumes and rates in the first quarter. For example, the move to power-only freight, with carriers providing a tractor and driver to pull trailers owned, leased, or managed by others, fewer fleet foreclosures due to a weak used truck market, and an increase in the number of truck drivers. The good news for motor carriers is that a supply-side recovery may be budding, which was even more evident in the first quarter data.”

In its announcement, Amazon explained that the rollout of ASCS extends the company’s entire portfolio of freight, distribution, fulfillment, and parcel shipping solutions to businesses of all types and sizes, adding that these services were originally developed to power Amazon’s own retail operations and to support independent selling partners worldwide.

The move brings in some major early adopters. Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters are already using pieces of the network, from freight to last-mile delivery.

Peter Larsen, vice president of Amazon Supply Chain Services, told LM that the impetus for the eventual rollout of ASCS goes back to Amazon’s earliest days, when the company began building a fulfillment network to place inventory closer to customers, which was subsequently expanded toward transportation, with the recognition that fast, reliable delivery wasn’t just a feature—it was the product. Over time, he explained, it evolved into a fully integrated, end-to-end supply chain capable of handling major challenges like sudden demand surges, peak seasons, and geopolitical disruptions.

As the network grew more robust, Larsen noted that sellers began asking if they could use it for orders beyond Amazon—and, seeing the impact on its own partners, the question shifted from “should we offer this externally?” to “how quickly can we make it available?”

In terms of the shipper benefits this new offering provides, Larsen pointed to three core strengths Amazon has developed that can be viewed as hard to replicate, including:
• Capacity. While most carriers focus on just one segment of the supply chain, ASCS covers the entire process—freight, distribution, fulfillment, and last-mile delivery—all within a single network, reducing handoffs and limiting the number of vendors involved when issues arise. Amazon also builds its network to handle peak demand at a level higher than most companies, so when ASCS customers need capacity, it’s available;
• The standard ASCS operates at. Larsen explained its network was designed to meet the expectations of Prime members—often considered among the most demanding customers. The company can closely monitor every defect and ensure it’s addressed, and now businesses using the network can benefit from that same high bar; and
• AI capability. Larsen observed that with decades of supply chain data, businesses can leverage advanced models—like forecasting demand for over 400 million products daily or using freight technology that combines satellite imagery, road networks, and delivery history to support drivers.

Looking ahead, Amazon is focused on continuously improving the ASCS experience for businesses in a few key ways.

One approach it is taking is through significant investments in AI, automation, and robotics. With more than a million robots in operation today—and systems like Sequoia using AI and computer vision to process inventory up to 75% faster—the network keeps evolving, and so do the capabilities available to customers, according to Larsen.

He also addressed how Amazon is broadening its reach, as evidenced by a $4 billion investment to triple its delivery network by the end of 2026, with a focus on small towns and rural areas. This will allow ASCS customers to serve more end customers with fast, dependable shipping and ensure businesses can reach their customers wherever they are.

In a research note, Ravi Shanker, transportation analyst at Morgan Stanley, wrote that it could be a watershed moment for North American freight transportation companies.

“ASCS is differentiated less by any one feature and more by how its scale, speed, and reliability are built across all parts of the system,” he wrote. “It combines several logistics functions into one network. First, its freight capabilities cover multiple transportation modes (such as ocean, air, rail, and trucking), allowing businesses to move goods globally with different speed options while also handling booking, customs, and tracking in one place. Second, its distribution and fulfillment system lets companies store inventory within Amazon’s network and position it closer to where customers are, which can improve delivery times and accuracy across various sales channels, not just Amazon. Finally, its parcel shipping service handles last-mile delivery, offering two-to-five-day shipping speeds, along with flexible pickup options and end-to-end tracking.”

Paul Yaussy, head of parcel contract intelligence at Loop, said that through the opening of its entire logistics network to any business, not just Amazon sellers, this has real potential in the long term to disrupt the 3PL landscape.

“First, this signals that Amazon's parcel shipping network is more mature than most people realized,” said Yaussy. “You don't make this kind of offer unless you're confident in your capacity and reliability. Second, it gives businesses a credible new option when negotiating with their existing logistics providers. Just having Amazon in the mix changes the conversation on pricing. The bottom line: Amazon is doing to supply chain what AWS did to IT infrastructure, taking capabilities it built for itself and making them available to everyone. That's a long game, but it's one worth paying attention to.”

The visibility component of this announcement is especially significant, according to Paul Tonsager, CEO of IMS Advisory.

The reason for that, he stated, is that Amazon spent 15 years making visibility a function of its delivery network, not a feature layered on top of it—with ASCS being that architecture going commercial.

“The thesis applies directly: the party that controls the data controls the relationship,” explained Tonsager. “P&G, 3M, American Eagle, and Lands' End are signing up for an arrangement in which Amazon sees their inbound raw materials, cross-channel demand, returns velocity, and fulfillment SLAs at a granularity their incumbent 3PLs never had. Structurally, each of them is a USPS in waiting. That's the same data architecture playing out one node further downstream from where it played out last month. The USPS relationship looked permanent at $5 billion in revenue too.”

The report, entitled “Convergence: Trends in 3PL/Customer Relationships—2026,” is based on the company’s proprietary database, comprised of more than 8,404 3PL customer relationships throughout 46 countries and 22,000 individual services, in a market that hit an estimated $1.3 trillion in 2025 and is pegged to come in around $1.4 trillion in 2026.

One of the biggest takeaways of the report addressed how 94% of domestic Fortune 500 companies work with at least one 3PL, marking a 46% rise compared to 2001, with U.S. 3PL revenues estimated to hit $424.3 billion in 2025.

The report explained that this significant growth rate over a 25-year period signals “that future growth will increasingly come from deeper service integration, geographic expansion, and penetration into mid-market segments.”

Digital freight brokers were highlighted in the report and are helping to “reshape the middle,” with the report observing that technology-forward intermediaries like Arrive Logistics and RXO, among others, are continuing to pressure traditional brokerage models by trading margin for productivity and scale, with shippers taking steps to rationalize their 3PL bases.

“The digital freight brokerage segment seems to be doing well and is capacity-driven, currently benefiting from capacity that has exited the market,” said Evan Armstrong, president of Armstrong & Associates. “It is not like demand is going through the roof, but it is pretty solid, especially for infrastructure-related demand tied to the infrastructure spending bill and things like that. A lot of flatbed demand has been pretty substantial, too. If you look at carrier revocations over the past few years and what happened from 2023 into 2024 and into 2025, and the net loss of carriers, we are on pretty solid footing in terms of supply and demand. It is a good year for Domestic Transportation Management (DTM) and freight brokerage.”

From a growth perspective by sector, the report found that technology, retail, and healthcare were the pacesetters, posting compound annual growth rates of 8.7%, 7.9%, and 7.7%, respectively, paced by AI and cloud buildout, e-commerce-driven fulfillment, and sustained expansion of cold-chain logistics biopharma. The automotive sector also has a high share of 3PL penetration but is dealing with various challenges, noted the report, including structural headwinds from the costly transition to electric vehicles, Chinese competitive pressures, trade disputes, and other factors.

3PLs that tend to be good in automotive also tend to be good in high-tech and healthcare, explained Armstrong.

“They work with a lot of serialized types of products and also pick-and-pack operations,” he said. “It also applies to manufacturing line-type operations, as well as spare and service parts logistics. On the healthcare side, there is a lot of serialization to avoid counterfeiting of different pharmaceuticals. 3PLs that grew up in automotive, like Penske and Ryder, tend to have pretty good relationships on the high-tech side and also some penetration into healthcare. Those verticals go together pretty well, whereas retail tends to align more with food, grocery, and consumer.”

Retail e-commerce logistics, he said, leverages pick-and-pack operations as well, while being a little different from traditional import deconsolidation shippers’ distribution centers for B2B business, with the retail side seeing the most activity in e-commerce.

“Everybody orders from Amazon, and it was not on our top 3PL lists 10 years ago, and now it is the largest 3PL globally,” said Armstrong.

Looking at value-added services, the report observed that these providers are different from what it called transactional transportation companies and basic warehousing operations, adding that, going back to 1995, there has been an increase in the degree and clustering of these services.

“The global reach of major 3PLs has expanded considerably, driven in large part by strategic acquisitions that have extended operational coverage across countries representing the majority of world GDP,” the report noted. “However, this growth through acquisition brings with it an ongoing challenge: integrating disparate operational systems, processes, and cultures into a cohesive service offering. Approximately 18 3PLs have now achieved the network scale necessary to deliver single-source global solutions to large multinational corporations. These Global Supply Chain Managers (GSCMs) are positioned to become increasingly dominant as shipper demand for consolidated, cross-border logistics management intensifies.”

From a contractual perspective, the report pointed out that net revenues for 3PL engagements see a lot of variation, ranging from a few hundred thousand to more than $500 million per account, adding that contracts with Fortune 100 companies often top $50 million annually, with the larger ones often in automotive and technology.

Armstrong noted that, for large accounts coming in at more than $100 million, those often see a fair amount of subcontracting, with a Leading Logistics Provider managing other 3PLs.

“These accounts tend to be very integrated and very strategic in terms of overall relationships, but that is a smaller percentage, because smaller, mid-size shippers are just using 3PLs for transportation management or warehouse management, and fewer services per relationship,” he said. “There is bifurcation there, with the very large shippers working with a lot of 3PLs. Volkswagen, for example, works with 74 different 3PLs. A lot of the very big shippers with big contracts are going to work with 3PLs very strategically and then have a bunch of subcontracted 3PLs underneath them.”

The proposed rail merger, first announced in July 2025, aims to create the first truly transcontinental railroad in the United States, spanning more than 50,000 route miles across 43 states and connecting roughly 100 ports from coast to coast. However, in January, the Surface Transportation Board (STB) rejected the initial application, stating it was incomplete and lacked key required information. The agency emphasized that this decision was based only on missing details and did not reflect any judgment on the merger’s overall merits.

According to the STB, merger proposals must include comprehensive system-wide impact analyses, such as market share projections, traffic data, and the full merger agreement, including all related contracts. These requirements are intended to evaluate how the deal would affect competition and the broader rail network. In response, Union Pacific (UP) and Norfolk Southern (NS) submitted an amended application with additional data and analysis, arguing that the merger would boost growth, reduce costs for shippers, and strengthen the national supply chain while enhancing competition.

“After completing the additional work requested by the STB, the facts remain clear: This merger enhances competition and delivers real public benefits that make America’s supply chain stronger,” said Union Pacific CEO Jim Vena. “Our analysis uses complete, systemwide traffic data provided by all Class I railroads to identify even more opportunities for our combined railroad to grow and compete.”

Union Pacific (UP) and Norfolk Southern (NS) maintain that the revised merger application shows the combined railroad would deliver faster, more reliable service while lowering costs for shippers by reducing delays and eliminating handoffs. Their analysis says competition would remain intact across all regions, with no loss of alternative rail options, while improved efficiency could shift freight from trucks to rail—removing millions of trucks from roads, cutting emissions, and saving shippers about $3.5 billion annually. The companies also project growth in capacity, expanded intermodal routes, and the creation of roughly 1,200 new union jobs.

The updated filing also addresses prior regulatory concerns by including more detailed market share data and broader system analysis. UP and NS say they increased transparency by submitting additional merger-related documents and agreed to conditions such as relinquishing control of the Terminal Railroad Association of St. Louis. Overall, they argue the merger would strengthen competition, expand service options, and improve the national supply chain.

The Washington, D.C.-based National Industrial Transportation League (NITL) stated it does not support the proposed merger.

“NITL has consistently been on the record as opposing further consolidation in the freight rail industry,” said Nancy O’Liddy, NITL Executive Director. “As a result of prior mergers, rail competition has been drastically reduced, and many NITL members have facilities that are captive to only a single railroad. Despite past promises that rail customers would benefit from mergers through more efficient service, today captive rail customers pay increasingly higher prices for unreliable and inadequate service,” added O’Liddy.

What’s more, the organization said that the proposed merger must be denied by the STB if UP and NS are unable to show how the merger will enhance competition, coupled with its benefits outweighing its harms. It cited that, for captive shippers, this points to increased rail-to-rail competition—not just rail and trucking competition—calling it “critically important” and stating that a transcontinental merger will result in a single mega-railroad with enormous market share and power from coast to coast.

Feedback from the Freight Rail Customer Alliance (FRCA) was in line with NITL’s sentiment.

“The Freight Rail Customer Alliance has long been opposed to continued consolidation in the rail industry based on past experiences resulting in increased rates, higher fees, and unreliable service,” said FRCA President Emily Regis. “In the end, shippers, particularly captive shippers, need guaranteed competitive solutions that are workable, effective, and enforced by the STB. Even if this imperative can be achieved in a transcontinental merger, there are concerns about how long it would take for the improvements to be successfully implemented and whether the integration problems and service meltdowns of past mergers can be avoided.”

FRCA spokesperson Ann Warner explained that with four Class I railroads now controlling 90% of U.S. rail freight—which she called demonstrated market power—it is a continuing concern. She added that freight rail has lost market share to trucking for more than 20 years due to dismal service and high rates, even as railroads’ profits rise and operating ratios decline.

A new organization, entitled the Stop the Rail Merger Coalition—which is comprised of Class I railroads BNSF Railway and CPKC, as well as the American Chemistry Council, the American Farm Bureau Federation, the Teamsters Rail Conference (which consists of the majority of Union Pacific and Norfolk Southern’s unionized workforce), the Alliance for Chemical Distribution (ACD), the National Industrial Transportation League (NITL), and the Vinyl Institute—also stated its opposition to the proposed merger.

The organization said the merger would reduce competition, increase costs for American manufacturers, farmers, and consumers, and inject new vulnerabilities into the U.S. workforce and supply chain.

To that end, data from a national poll the Stop the Rail Merger Coalition conducted with McLaughlin & Associates, a national survey research and strategic services company, cited the following data points opposing the merger:
• Nearly 71% of Americans oppose the merger after learning about its impacts, while just 20% support it;
• The majority of voters believe the merger would increase costs for shipping by rail, raise prices on everyday goods, and hurt jobs;
• 68% believe the merged company would keep promised cost savings for itself rather than passing them on to businesses or consumers;
• Concerns about monopoly power cut across party lines. The national survey confirms nearly 70% of Americans, including Republicans, Democrats, and Independents, overwhelmingly agree with Vice President J.D. Vance that when “one or two companies dominate an entire sector, it’s bad for liberty and it’s bad for prosperity”; and
• 54% say they are more likely to support a candidate who opposes the merger.

“This did not begin with a customer asking for a UP-NS merger to happen,” said President and Chief Executive Officer of BNSF Railway Katie Farmer. “It’s driven by Wall Street on the promise of a big shareholder payout. It will eliminate competition, raise costs for consumers, and destabilize the supply chain that powers the American economy.”

The company announced Amazon Supply Chain Services, giving businesses access to the same logistics network it has spent years building to power its own operations. That means companies can now use Amazon to move inventory, store products, fulfill orders, and deliver packages across multiple sales channels.

The move brings in some major early adopters. Procter & Gamble, 3M, Lands’ End, and American Eagle Outfitters are already using pieces of the network, from freight to last-mile delivery.

“Amazon is bringing the infrastructure, intelligence, and scale of its supply chain services—proven over decades—to businesses everywhere, much like Amazon Web Services did for cloud computing,” said Peter Larsen, vice president of Amazon Supply Chain Services. “Supply chain wasn’t just a function at Amazon—it was core to providing an exceptional shopping experience. Our differentiator. The reason we could offer fast, dependable delivery that nobody else could. And with the launch of ASCS, we’re confident we can give any other business access to the same cost efficiency, reliability, and speed that we’ve built for Amazon customers.”

Please click here to read the complete article. 

The report’s benchmark reading, the PMI, came in at 52.7 in April (a reading above 50 indicates growth), matching March’s level and signaling expansion at the same pace for the fourth straight month. January and February posted readings of 52.6 and 52.4, respectively, with January representing the first positive PMI reading since February 2025’s 50.0. ISM noted that the overall economy expanded at the same pace for the 18th consecutive month.

The April PMI was 2.8 percentage points above the 12-month average of 49.9. Over that period, the high and low readings were 52.7 (March) and 47.9 (December), respectively.

ISM reported that 13 manufacturing sectors expanded in April, including Textile Mills; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Miscellaneous Manufacturing; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; Paper Products; Fabricated Metal Products; Computer & Electronic Products; Chemical Products; and Furniture & Related Products. Sectors reporting contraction included Wood Products; Petroleum & Coal Products; and Food, Beverage & Tobacco Products.

ISM cited the following key metrics for April:

• New Orders: 54.1, up 0.6 percentage points, growing at a faster pace for the fourth consecutive month, with 12 sectors reporting growth;
• Production: 53.4, down 1.7 points, growing at a slower rate for the sixth consecutive month, with 11 sectors reporting growth;
• Employment: 46.4, down 2.3 points, contracting at a faster rate for the 31st consecutive month and declining in 39 of the last 40 months, with five sectors reporting growth;
• Supplier Deliveries: 60.6 (readings above 50 indicate slower deliveries), up 1.7 points, with 14 sectors reporting slower deliveries;
• Inventories: 49.0, up 1.9 points, contracting at a slower rate for the 12th consecutive month, with five sectors reporting higher inventories;
• Customers’ Inventories: 39.1, down 1.0 point, remaining too low at a faster rate for the 19th consecutive month, with one sector reporting higher inventories; and
• Prices: 84.6, up 6.3 points, increasing at a faster rate for the 19th consecutive month, with 17 sectors reporting higher prices. This marks the highest reading since April 2022, when it also reached 84.6.

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

“Demand for manufactured goods is trending higher versus last year; however, geopolitical uncertainty and rising oil and diesel prices continue to weigh on demand,” said a Transportation Equipment panelist. “Many customers are exercising caution and remain in a wait-and-see mode.”

The panelist added that ongoing tariffs on products used in the company’s lines are being closely monitored, with efforts underway to mitigate risk. Geopolitical concerns—particularly in the Middle East and their impact on commodity and energy markets—also remain under review.

“Supply chain risks include increased costs and longer transit times for rerouted shipments due to conflict in the Red Sea, Strait of Hormuz, and Suez Canal,” the panelist said. “These conditions are being monitored, and rerouting measures have been implemented where possible.”

In an interview with LM, Susan Spence, Chair of ISM’s Manufacturing Business Survey Committee, said April’s 52.7 PMI reading offered some relief, given that the Iran conflict has been ongoing for more than 60 days.

“I had expected it to be a bit worse,” she said. “The New Orders Index had seen sequential declines in recent months, so even a modest uptick is encouraging. Is that due to very low Customers’ Inventories? Possibly. But demand sentiment is slightly improved, with a 1.6-to-1 ratio of respondents seeing increased demand versus those who are not—up from March.”

While the PMI remains in expansion territory, Spence noted that Employment continues to lag, with limited hiring activity and increasing mentions of layoffs across the sector.

She added that several additional factors warrant close attention.

“Tariff uncertainty may have eased somewhat, even though new or replacement tariffs are likely, and there has been a sharp and credible spike in Prices,” she said. “There is also the Iran conflict, along with growing frustration among some nations that view the U.S. as a less friendly place to do business.”

Looking ahead, Spence said demand sentiment appears to be improving, based on panelist comments, as references to tariffs have somewhat diminished.

“I don’t think that reflects fatigue in talking about tariffs,” she said. “Rather, conditions have improved since the February Supreme Court ruling, with less unpredictability than before.”

Assessing manufacturing performance through the first four months of 2026, Spence said January’s return to expansion validated panelists’ earlier expectations, with further gains in the months that followed.

However, rising prices remain a wildcard, raising the question of how much further increases can go before they begin to dampen momentum.

“If we’re in mid-summer and there’s still no end in sight to this conflict, I wouldn’t expect employment to improve in manufacturing sectors that produce for consumers,” she said. “Ultimately, everyone is a consumer—whether directly or through business demand. If prices rise 25% or more, people will start making tough choices. Not everyone can absorb those increases or maintain discretionary spending, such as travel. That may be out of reach for some time. And we also have midterm elections approaching.”

That gap between insight and execution is becoming one of the defining challenges in supply chain transformation. According to Nick Banich, chief revenue officer at Miebach Consulting, the issue is not for a lack of tools or data; it’s the difficulty of turning those inputs into decisions that drive real performance improvements.

“One of the biggest requests we’re seeing is how can we get more tangible results operationally out of the digital investments that we’re putting into place,” he told Supply Chain Management Review in an interview at the Modex 2026 conference in Atlanta.  

Please click here to read the complete article. 

Rail carloads, at 229,828, fell 1.5% annually, trailing the week ending April 18, at 230,749, and topping the week ending April 11, at 228,666.

AAR reported that five of the 10 carload commodity groups in tracks saw annual gains, including: motor vehicles and parts, up 1,050 carloads, to 16,675; metallic ores and metals, up 935 carloads, to 21,223; and farm products excl. grain, and food, up 854 carloads, to 17,649. Commodity groups posting annual declines included: coal, down 4,642 carloads, to 55,082; chemicals, down 1,080 carloads, to 34,093; and miscellaneous carloads, down 916 carloads, to 8,900.

Intermodal containers and trailers, at 281,788, rose 4.9% annually, topping the weeks ending April 18 and April 11, at 277,554, and 271,374, respectively.

Through the first 16 weeks of 2026, AAR reported that U.S. rail carloads, at 3,602,594, are up 3.5% annually, and intermodal units, at 4,414,204, are up 0.2% annually.

With growth moderating, carriers like UPS and FedEx are prioritizing profitability through cost reduction, network optimization, and investment in automation and technology. At the same time, competition is intensifying as Amazon, regional providers and new last-mile entrants continue to gain ground.

For shippers, the result is a more dynamic and less predictable environment—one in which pricing is more complex, service strategies are evolving, and success depends on diversification, visibility and constant optimization.

To help readers stay informed in this fast-changing market, Logistics Management brings together three of the industry’s top analysts for our annual Parcel Express Roundtable. This year’s panel features John Haber, chief strategy officer at Transportation Insight; Paul Yaussy, head of parcel contract intelligence at Loop; and Robert Persuit, senior director of business development at ShipMatrix.

Logistics Management (LM): How would you describe the current state of today’s parcel marketplace?

Robert Persuit: Crowded, competitive, and cloudy. Before the pandemic, the Big 3—UPS, FedEx, and USPS—handled 85% of domestic parcel volume. By 2025, that share had dropped to just 61% of the 23.9 billion deliveries made annually.

Beyond retailers like Amazon and Walmart, and regionals/super-regionals such as SpeeDee, LSO, and OnTrac, a wave of newer entrants—including Jitsu, UniUni, Better Trucks, Maersk, SpeedX, DoorDash, and GoBolt—is now competing aggressively for market share. In 2026, shipper adoption of these non-traditional carriers will help determine which names are still on that list in 2027.

Paul Yaussy: The parcel marketplace is more dynamic than ever—but in a very different way than it was just a few years ago. The industry has largely moved beyond reacting to sudden e-commerce shocks and unpredictable volume spikes. Instead, both carriers and shippers are operating in a more deliberate, efficiency-driven environment.

On the carrier side, the focus has shifted heavily toward cost reduction and network optimization. FedEx is in the middle of its Network 2.0 transformation, consolidating its previously separate networks into a more unified system. UPS is pursuing a similar strategy through its ‘Network of the Future’ initiative. Both carriers are investing in automation, consolidating operations, upgrading facilities, and, in many cases, closing locations—all with the goal of improving efficiency and lowering operating costs.

At the same time, carriers are not expecting significant parcel volume growth in the near term. As a result, the emphasis has shifted toward improving yield and increasing revenue per piece rather than simply chasing more packages.

For shippers, that creates both risk and opportunity. With carriers focused on margin and efficiency, pricing pressure can intensify. That means shippers need to stay vigilant in monitoring transportation spend and using data to guide decisions. The most sophisticated shippers understand how to maintain leverage with carriers, while those without strong visibility or analytics may increasingly feel the squeeze.

John Haber: I would say it's very focused on margins as opposed to volume growth. The market is soft. FedEx is currently going through the whole transformation of their network and recently passed UPS in market cap and is very focused on optimizing profitability. On the UPS side, the shareholder return of the stock over the last four or five years has not been where shareholders would like it to be, whereas FedEx has been skyrocketing.

FedEx adds a lot of costs that they could take out of their operational plans because they had separate networks, and so their network integration and the optimization of just their different operating companies is going very well, and the stock is performing very well.

UPS is obviously moving big into certain sectors like healthcare and moving away from low-yield residential, e-commerce delivery, which is essentially what's happened with [its business relationship with] Amazon. UPS’s cost structure is still a problem for them with the union contract, and now they're cutting jobs. It's creating a legal issue, that FedEx doesn't necessarily have to deal with.

It’s a challenging, profitability-focused environment, but carriers still need to cover fixed costs—keeping the overall pricing environment relatively favorable for shippers. At the same time, rate pressure continues to show up through shifting fuel surcharge indexes, dimensional weight changes, and other mechanisms. In many ways, it’s the same playbook we see year after year.

LM: Can you describe the current rate and pricing environment?

Yaussy: The current rate and pricing environment has shifted somewhat in favor of the carriers. Both UPS and FedEx are increasingly focused on cost control, network efficiency, and consolidation of their operations. As a result, they’ve signaled that they’re less interested in chasing incremental volume and more focused on protecting yield and increasing revenue per piece.

Both carriers again implemented a 5.9% general rate increase (GRI) this year, which has become the familiar headline each January. However, that number rarely reflects the real impact shippers experience. Many surcharges are increasing at significantly higher rates than base transportation charges. When those changes are factored in, the effective increase for the average shipper often lands closer to 8% to 9% percent, depending on their shipping profile.

Beyond the annual GRI, pricing pressure continues throughout the year. Fuel matrix adjustments, Delivery Area Surcharge zip code realignments, and expanding demand or peak surcharges all contribute to incremental cost increases. In many cases, peak-related charges are also lasting longer each year, effectively extending the higher-cost shipping window.

Another emerging trend is the carriers’ interest in more dynamic pricing models. As their networks become more automated and data driven, pricing may increasingly adjust based on capacity, network utilization, and shipment characteristics. For shippers, that could mean less predictable pricing and an even greater need for strong data visibility and disciplined spend management.

Haber: It’s a challenging environment that’s far more focused on profitability than growth. At the same time, carriers still have fixed costs to cover, which keeps pricing pressure in the market—even if the broader environment remains relatively favorable for shippers. Rate pressure continues to show up through familiar levers like fuel surcharge index changes, dimensional weight policies, and contract terms. In many ways, it’s the same playbook we see year after year.

Carriers are trying to improve profitability through pricing mechanisms and contract structures. Those contracts are becoming increasingly sticky, with tougher penalties built in to discourage volume from shifting to regional carriers. But what you’re seeing is that more sophisticated supply chains are still finding ways to divert volume and manage risk more actively.

That’s where diversification becomes critical. Look at what’s happening in the Middle East right now—if you’re overly dependent on one provider, that’s not a sound risk management strategy. Diversification across the parcel network, maintaining optionality, and managing it closely every day are becoming more important than ever. With tariffs and broader uncertainty still in play, shippers need to stay flexible.

Persuit: Current parcel pricing shows battles on different fronts. UPS and FedEx are highly targeting healthcare, aerospace, automotive, data centers and high-value goods. Amazon Shipping and Door Dash are competing for high-volume B2C shippers.

Other carriers like Jitsu, Veho and GoFo are working to quickly expand network coverage to establish relevance. Pricing is extremely competitive; you just need to know which carriers to invite to the RFP that match your shipping profile.

LM: How are market conditions affecting service, and what role is the current state of the U.S. economy playing?

Haber: There’s a huge focus on automation and AI to optimize supply chains, and take costs out of the supply chain, as well as improve service. Service levels are very solid for the most part, in controllable environments. Uncontrollable environments are different when you're dealing with wars, tariff changes, and things like that, and we have to change rating systems and technology, but service levels are solid.

The USPS levels are pretty good, but it's a soft environment right now, so the service should be good. You're seeing a lot of consolidation and facility closures, so there are some speed bumps where, for example, UPS is shutting down facilities and moving towards more automated facilities. You’re seeing some service issues there. Overall, service very solid. As far as what we've been tracking, it should be very solid, because there's plenty of capacity.

Persuit: Obviously, the Iran conflict will continue to be the story for the near future. While international air and surface operations are feeling the immediate impact, there are domestic ripple effects as well. If oil prices climb to $180 per barrel, shippers could face more than a 10% increase in overall transportation spend due to higher fuel surcharges—triggering decisions on possible downgrades to lower service levels or exploring new carriers with lower cost/slower transit.

Yaussy: With economic growth moderating and consumer demand flattening, carriers are not expecting significant parcel volume growth in the near-term. That has led both UPS and FedEx to focus heavily on cost control and network efficiency as they adjust operations to match current demand levels. At the same time, broader macro factors such as tariffs and shifting global trade dynamics are creating additional uncertainty for shippers, particularly those with cross-border supply chains.

From a service perspective, these changes can create mixed results. Increased automation and network optimization can improve consistency and reliability in many areas. At the same time, periods of transition within the networks can introduce service variability as facilities, routes, and processes are adjusted. You may not necessarily see dramatic declines in reported on-time performance, largely because carriers have adjusted published transit times to better align with their current networks.

LM: How are the more established carriers adjusting to the ongoing influx of new, last-mile competitors?

Persuit: UPS and FedEx have both indicated a focus on B2B, SMB and healthcare—higher margin business. As 75% of parcel deliveries are B2C and growing, lack of focus on this addressable market will limit volume and revenue growth. I expect UPS and FedEx will find options to leverage their network and technology strengths while finding a way to get consumer delivery costs competitive.

Yaussy: UPS and FedEx lost some market share to last-mile competitors in 2025. Regional carriers, delivery startups, and retailer-built networks have taken share in certain lanes, particularly lighter-weight shipments and shorter zones. I expect that trend to continue into 2026 as shippers increasingly diversify their carrier mix.

You can see the large carriers responding through their pricing strategies. In recent annual rate increases, both UPS and FedEx have acknowledged competitive pressure in lighter weights and short-zone shipments. Those segments have generally seen slightly smaller increases compared to heavier packages and longer zones, where competition is less intense, and the national carriers still maintain an advantage.

This dynamic is another reason both carriers are prioritizing network efficiency and per-package yield rather than simply pursuing volume growth. Their ongoing network transformation initiatives are focused on lowering operating costs while protecting margins.

Haber: I’d say the established carriers are being forced to adapt to them—and, in some cases, effectively leverage the environment they’ve created. In fact, if you look at some major retailers today, they’ve essentially become parcel carriers themselves. That shift accelerated during the pandemic, when rates surged and companies were pushed to take more control of their own supply chains. Since then, they’ve had time to build out alternative networks and delivery options.

In large metro areas like Chicago or Atlanta, and within roughly a 200-mile radius around those markets, there are now plenty of courier and last-mile providers that can handle deliveries through lower-cost, gig-style models. They don’t carry the same cost structure as UPS or FedEx, and they’re not burdened by the same large-scale network and infrastructure requirements.

But you can have great service at a very cheap price, and with the new technology platforms, the technology is the key to be able to dual source, multi-source, and have visibility and be able to integrate. There's still an integration problem. Technology isn't perfect, obviously, but integrating it has become easier, so that you can have a lot of different carriers.

LM: How do you view Amazon’s current position in the parcel and last-mile markets—and where do you see it headed next?

Yaussy: When it comes to last-mile delivery, Amazon has firmly established itself as a major force in the parcel market. The company now delivers more packages annually than either UPS or FedEx. While Amazon does not publicly disclose detailed delivery performance metrics, the available indicators suggest its service levels are generally comparable to those of the traditional carriers.

Amazon also continues to expand its logistics ambitions. Although the company remains private about its long-term strategy, there are clear signals that Amazon Shipping is steadily growing. We’re increasingly seeing Amazon pursue opportunities with mid-size and larger shippers when the shipping profile aligns with its network. In many cases, those proposals are highly competitive, which is causing shippers to strongly consider Amazon as a carrier but also the big two must decide if they want to compete on price.

I’d speculate that we’re two to three years away from Amazon Shipping being a full-fledged competitor to UPS and FedEx—given that they’re already in 30-plus origin metros and counting. But it’s coming, and it only makes sense given Amazon is already delivering its own products nation-wide because the network and infrastructure already exist.

Haber: Amazon is moving big into the LTL and the heavy-freight market and having success in a couple of European countries, but I'm still skeptical about it in the U.S. and the heavier LTL and heavy freight market. It has a lot of capacity, but I’d like to see some results proving that out. Its reporting is a little bit murky, because they have so many different businesses, coupled with how its costs are allocated. UPS and FedEx transfer pricing between business unions and things like that.

We know that Amazon has been subsidizing the logistics business with profits from other business, mainly the cloud, but it’s definitely moving into different areas of freight to grow its parcel volumes. Like Paul said, its going to be the biggest parcel provider here in a couple of years. I don't see that changing.

Persuit: Think about this: Amazon delivered 6.7 billion U.S. packages in 2025—more than any other carrier—despite Amazon Shipping still not fully scaled for non‑Amazon customers. Amazon will keep moving more UPS and USPS ‘glide down’ parcels in‑house while growing Amazon Shipping, widening its lead in U.S. package delivery in 2026.

LM: Do you think the USPS has made strides as a parcel carrier in recent years, based on its 10-year strategic plan and the Postal Service Reform Act?

Haber: The USPS lost $9 billion for fiscal 2025, but it’s making progress. There’ve been new services rolled out and price increases have been pretty hefty. But it’s still not making any money. I don't see that changing drastically, even with the reforms they've put in place. Is it a private business or not? It's a quasi-government entity, and handcuffed in certain areas. The USPS tries to act like a private business, but it’s not. It does not have the same rules.

It also doesn’t have the same sales force that UPS and FedEx have, and its technology is still not up to speed with some of the other providers. Their billing systems are still hard to use, and the visibility is still not where it needs to be. In many cases, it is offering the service and cost, especially on the ground side, in certain zones. It's kind of like a regional—they're making money on the short zone stuff and can inject into delivery destination units. The USPS has made progress, but I think there's still a lot of work to be done.

Persuit: Yes, 100%. Emphasizing Ground Advantage—and deemphasizing Priority Mail—has been a big win for the USPS. ShipMatrix analytics show that USPS Ground Advantage on-time performance scores are competitive and this product continues to gain favor with shippers.

Yaussy: Yes, I do think the USPS has made meaningful progress as a parcel carrier in recent years, largely driven by its 10-year transformation initiative, Delivering for America. The goal of that plan has been to stabilize the organization financially while modernizing the network and improving operational performance.

One of the biggest changes has been a stronger focus on parcels as a core part of the business rather than just something that moves alongside traditional mail. USPS has invested heavily in new sorting technology and redesigned parts of its network, including the rollout of regional processing and distribution centers intended to improve efficiency and increase package throughput.

USPS still plays a slightly different role than UPS or FedEx, but its strength in lightweight, residential delivery continues to make it an important part of the parcel ecosystem.

LM: How are parcel carriers and service providers viewing the need for increased investment in things such as automation, digital technology, and AI in order to drive operational throughput and productivity—as well as from a service perspective?

Persuit: The UPS Network of the Future initiative plans to save $3 billion by 2028—converting manual to automated sortation. An Amazon October 2025 press release boasts 1 million robots have been deployed for sortation. AI deployment by major carriers for route optimization, robotic sortation, predictive maintenance are rapidly evolving and carriers are willing to spend IF it improves productivity.

Yaussy: AI is becoming a foundational layer for both carriers, helping them run more efficient networks while protecting margin in an increasingly competitive parcel market.  Right now, their investments in AI don’t necessarily show up in flashy, forward-facing ways, but they’re helping both carriers drive operational efficiency, improve network design, and optimize pricing.

Haber: In a soft volume environment, carriers still have to deliver profitability and shareholder returns, and if that’s not going to come from higher package volumes, it has to come from running the network more efficiently.

That’s why investment in automation, digital technology and AI has become so important. Carriers are looking for ways to take cost out of the network, improve throughput and rely less on labor-intensive processes wherever possible. For large players like UPS in particular, that’s a major priority, especially as international operations become more complex and harder to predict.

If you look at where the major parcel carriers and integrators are investing, a lot of that money is going into technology and AI because it remains one of the most effective ways to protect margins until volumes improve.

At the same time, much of the parcel market’s growth is coming from residential e-commerce, which is not always especially profitable. That’s why carriers are also focusing on lockers, pickup and drop-off points, micro-fulfillment and other strategies that improve delivery density. Delivering one package to one home is a difficult economic model.

LM: How do you view the impact of tariffs on the parcel market?

Yaussy: This is one of the more popular questions I get, and I don’t know if anyone in the parcel space has a great answer because the rules of engagement keep changing. Tariffs have added complexity for shippers as they try to get ahead of these massive cost increases by shifting where they manufacture or source product or shifting when they ship.

With uncertainty, shippers see unpredictable fluctuations in shipping costs and demand shifts. So, to combat this, I often advise shippers to counter by seeking cost savings in their parcel agreement and parcel operations, like looking at ways to reduce costs through deeper discounts and making changes to things like packaging or consolidating volume.

Haber: It's a distraction. It's very hard to forecast and plan your costs and budget, as well as to manage your systems and build customers amid of the ongoing tariff-related developments.

Persuit: ShipMatrix analytics show UPS and FedEx carrier billing would increase by $4 billion annually under the previous tariffs. If the administration finds a way to circumvent the Supreme Court ruling, Tums consumption by CFOs will continue to escalate—and tighten transportation budgets. Otherwise, the refund of roughly $297 billion in collected tariffs could be a windfall shot in the arm for the economy that will drive GDP and parcel volume growth.

LM: What advice do you have for parcel shippers in 2025?

Haber: My advice for parcel shippers is that you can’t be dependent on one provider. You can’t be dependent on one geographical region. You have to have a risk management strategy, and you've got to be able to move very quickly, because things change on the dime.

You need to have the technology, visibility, transparency strategy and execution. That's the model I developed a long time ago, and nothing has changed. You have to be very nimble, and you've got to manage it every day. You can't just negotiate a contract and put it on the shelf. Things are very dynamic. They change very rapidly. Your shipping costs can be a competitive advantage, or it can put you out of business.

Persuit: You need to manage your spend monthly, not every three years. Parcel dynamics, surcharges and carrier options are changing rapidly. Use metrics dashboards for spending trends and manage carrier/service selections to stay on budget and strike while the iron is hot. Shippers have never had so many options for parcel services. Significant savings can be attained. Research, plan and onboard one or more new carriers—then monitor, adjust, and repeat. 

Yaussy: In recent months, we’ve seen a seen slight shift towards carriers having a little more leverage than shippers because they’re overtly stating margin yield is more important than volume gains as the overall parcel volume has leveled off. I bring this up because it’s important for shippers to understand this, but also know that savvy shippers are still seeing very positive results in carrier negotiations.

My advice doesn’t change from year to year—parcel has almost become a constant negotiation. Yes, there is such a thing as negotiation fatigue, so you have to pick your spots.  But, when the carriers introduce new charges or price increases on a regular, almost monthly basis now compared to annually, shippers should view that as opportunities to reexamine and renegotiate.

Transport Intelligence (Ti), in its “Global Freight Forwarding Mid-Year Market Size & Forecasts 2025” report, says the global freight forwarding market is expected to increase in real terms by 2.9% in 2025. However, the jury is still out on how 2026 figures will fare.

Cumulative challenges

On the surface, the industry is facing a host of growing challenges, such as President Trump’s “Liberation Day” in early April 2025 that implemented sweeping, controversial tariffs on nearly all imports. Subsequent and frequent tariff rate changes continue to keep shippers on high alert, therefore, increasing demand for freight forwarder and logistics professionals.

“Add to this the rollback of de minimis thresholds, which led to increased activity in freight forwarders’ compliance departments, and uncertainties surrounding shipping routes in the Red Sea,” says Evan Armstrong, CEO of Armstrong & Associates (A&A). “Tariff volatility and shifting trade policies, especially U.S.-China tensions, are making routing and cost forecasting extremely difficult. Red Sea-Suez disruptions from Houthi attacks are forcing longer routes around the Cape of Good Hope, adding to cost and transit time.”

Then there’s the impact of the 2026 Iran conflict, which has caused a significant supply chain shock, particularly in air cargo capacity at key Middle East hubs in addition to a sharp surge in global freight rates.

Consequently, today’s global freight forwarding market in 2026 is operating in what many are calling a “perpetual disruption” environment, where volatility has become the norm rather than the exception. As a result, research by London-based Transport Intelligence (Ti) shows that across the sector, revenue performance has weakened despite resilient demand.

“This trend is largely driven by falling air and ocean freight rates, even as shipment volumes have remained stable or increased,” says Ti researchers.

In its recent research work, Ti finds that more diversified players such as DP World, DSV, NTG and Scan Global Logistics have achieved revenue growth. But this growth is largely driven by acquisitions and adjacent business segments—including terminals, road freight, and contract logistics—rather than traditional forwarding.

“Soft demand and ample freight capacity continue to define much of the market, creating a fragile, but generally shipper friendly environment, though persistent geopolitical risks, tariff adjustments, and regulatory shifts inject ongoing uncertainty,” says Marc Sawaya, chief commercial officer at CEVA Logistics.

Structural disruptions, value added

DHL Global Forwarding executives observe how shippers are operating in a market where disruption is no longer episodic, but structural.

“The main challenges today are geopolitical volatility, sudden route disruptions, constrained or shifting capacity, cost swings driven by fuel and security surcharges, and growing pressure to make supply chains both more resilient and more sustainable,” says Caspar Ellerback, global head of ocean freight, DHL Global Forwarding.

Ellerback finds that customers no longer ask: ‘Can you move my freight?’ “They are asking, ‘Can you help me manage risk, cost, compliance and carbon in a market that keeps changing underneath us?” he says.

And that’s where forwarders add value today—by combining network reach, local expertise, digital visibility and contingency planning to keep supply chains moving.

Today most forwarders are making operational and strategic adjustments in response to these changing market conditions. “They are diversifying their carrier mix and routing options and establishing redundancy by securing multiple carrier contracts and exploring alternative trade lanes to mitigate risks, such as rerouting around the Red Sea,” says Armstrong.

Ellerback concurs: “Forwarders are moving beyond pure transportation execution and acting more as orchestration partners. That means helping customers redesign routings in real time, shift between modes when needed, build contingency options, improve visibility over cargo flows, and navigate customs, regulatory, and sustainability requirements with more precision.”

In essence, companies are prioritizing efficiency, cost control, and productivity gains operationally to protect margins in a low-rate environment.

Technology to build resilience, capturing growth

One way that forwarders are scaling and diversifying to build resilience and capture growth is through the increase in buy-side mergers and acquisitions (M&A) activity aimed at achieving greater scale and enhancing service capabilities.

“This includes geographic coverage, vertical expertise, value-added services, and technology platforms,” says Armstrong says. One example is DSV’s expansion through absorbing Schenker (see sidebar).

Indeed, technology is rapidly becoming a core competitive differentiator in freight forwarding, as the sector shifts from basic digitization toward integrated, intelligent, and increasingly autonomous logistics ecosystems.

Sawaya of CEVA Logistics finds that customers increasingly expect real time visibility, integrated digital workflows, and proactive disruption management. “Surveys show only 23% of forwarders have digitized at least 75% of their processes, while 38% of shippers remain dissatisfied with their forwarders’ technology capabilities, highlighting a widening expectation gap,” he says.

According to Sawaya, forwarders are also consolidating fragmented systems into unified digital platforms covering quoting, booking, documentation, and end-to-end tracking, reducing booking time by up to 30% and improving visibility by 25%. “These platforms give customers a more seamless experience while improving internal workflow efficiency,” he says.

Enter AI

Artificial intelligence (AI) applications are currently the most popular area in freight forwarding technology—and one of the fastest scaling areas of investment. According to freightos.com, AI is expected to handle 20% of route tasks within five years.

“Forwarders are eager to implement new capabilities across various key functions,” says Armstong. “Automated quoting and rate management tools are streamlining what used to be a labor-intensive, e-mail-driven process.” He adds that new “predictive pricing” and estimated time of arrival (ETA) engines provide both forwarders and shippers with increased confidence in costs and timing, while anomaly detection in shipment data helps teams identify issues—such as misrouted cargo, unexpected delays, and billing discrepancies—before they escalate.

“The most sophisticated digital platforms are embedding AI directly into everyday workflows, combining data, context, decisions and execution for agentic supply chains,” remarks Matt Castle, vice president, global forwarding products at C.H. Robinson.

Castle describes how C.H. Robinson’s in-house team of 450 software engineers and data scientists has custom-built hundreds of connected AI agents orchestrating millions of shipping tasks. “Lean AI, our unique disciplined approach to applying AI, makes smarter, faster decisions and gives shippers premium service round the clock,” he adds.

Beyond software, companies are upgrading physical infrastructure and automation capabilities, Ti notes. DHL Group is investing in advanced sorting systems to handle e-commerce growth, while Maersk and DP World are modernizing terminals with automation technologies such as BOXBAY and exploring autonomous freight systems.

Strategic partnerships are further accelerating innovation. For instance, in 2025, the CMA CGM Group partnered with Mistral AI, backed by a €100m investment, to scale AI adoption across shipping and logistics.

“Furthermore, digital twins are becoming increasingly popular in supply chain planning,” says Armstrong. “They allow companies to simulate disruption scenarios and optimize logistics network design before committing resources in the real world.

Armstrong notes how AI agents and voice bots are increasingly managing routine customer inquiries, allowing operations staff to focus on exceptions and complex shipments. “Automated document processing is addressing the significant paperwork involved in international shipping by extracting and validating data from bills of lading, customs forms, and invoices with minimal human intervention,” he says.

Furthermore, smart route optimization now considers not just cost and transit time, but also carbon emissions, highlighting the growing importance of sustainability in logistics decision-making.

In for a landing

In summary, technology enables forwarders to move from reactive transport providers to proactive, data-driven orchestrators of global supply chains by delivering tangible operational, strategic, and customer-experience benefits to global shippers.

Shippers are increasingly using these tools not just to track shipments and actively manage supply chains, but to plan proactively and mitigate risk. Not only are these technologies improving efficiency, accuracy and speed of execution, shippers are more able to experience faster order fulfilment, fewer errors, and more reliable delivery performance.

A closer look at forwarder investments

Freight forwarders are expanding their investments across multiple fronts—from digital visibility and AI to sustainability and autonomous logistics. Here are a few examples:

Kuehne + Nagel (K+N) is making a substantial investment in its myKN digital platform, which provides cross-carrier visibility by aggregating data from more than 1,200 shipping lines. The platform offers predictive ETAs and AI-powered analytics and is expected to deliver significant efficiency gains. K+N is also positioning tracking and visibility as a key differentiator, while reportedly upselling AI consulting services to customers. Its Seaexplorer platform now provides transit-time analytics to help customers assess congestion, capacity trends, and schedule reliability across trade lanes.

DHL Global Forwarding continues to develop advanced air freight management systems that integrate tracking, customs compliance, and automated documentation, with a strong emphasis on time-sensitive shipment management.

To sharpen its digitalization strategy, the company launched an “Accelerated Digitalization” structure designed to scale digital capabilities, deploy AI-powered solutions, and improve customer responsiveness. That effort builds on ongoing enhancements to myDHLi, DHL Global Forwarding’s customer platform, which gives shippers end-to-end visibility and control and now includes GenAI-supported assistance, improved exception management, and stronger analytics for resilience and sustainability.

In addition, the company launched its GoGreen Plus portfolio in February, including GoGreen Plus Base, which offers a default 10% emissions reduction for eligible shipments at a fixed flat rate.

DSV is building “ONE DSV” as part of its post-Schenker acquisition strategy—an integrated digital freight forwarding ecosystem focused on cargo visibility and optimized air capacity. The move represents the largest integration in freight forwarding history. To support greater real-time visibility and control, DSV also offers SecureShip, which combines GPS tracking, geofencing, and AI-based threat detection to secure cargo end-to-end.

Nippon Express implemented AI-powered load prediction software in 2025 as part of a broader push toward digital transformation and autonomous logistics processes, aimed in part at addressing Japan’s shrinking workforce.

Hellmann Worldwide Logistics is implementing AI agents to automate complex processes such as quoting, supported by large-scale systems integration. Together, these developments point to increasingly predictive and self-optimizing freight operations.

The modern supply chain is in the midst of a seismic shift. In our previous installment we chronicled how “Control Tower” capabilities emerged from the need to consolidate fragmented data and provide a single pane-of-glass view across planning, order management, transportation, warehousing, and fulfillment.

That original objective—achieving end-to-end visibility—was a pivotal first step, but visibility alone is no longer sufficient. Today’s global networks confront unprecedented volatility: geopolitical shocks; environmental events; regulatory changes; and rapid swings in consumer demand.

As organizations move from Industry 4.0 into the era commonly referred to as Industry 5.0, the aspiration has progressed from reactive monitoring to truly prescriptive, and in select cases autonomous, orchestration. Artificial intelligence (AI), machine learning (ML), and generative AI (Gen AI) are not merely new tools; they represent a fundamentally different operating paradigm.

These technologies ingest and interpret vast data sets, learn from prior outcomes, and propose—or even execute—optimized responses in real time. The result is a control-tower environment that operates less like a remote “Dispatcher in the Sky” and more like an active decision-making partner, capable of simulating scenarios, prescribing trade-offs, and driving coordinated action across suppliers, carriers, and customers

In our previous installment we looked at the development of Control Tower capabilities and the issues facing a truly holistic Dispatcher in the Sky view of complex global networks. In this issue we will look at the current challenges and the new capabilities on the horizon, as we move into a truly transformational era.

Vision and inception

Supply chain control towers were born of the need for end-to-end visibility. What started as a means of aggregating data from various systems soon evolved into leveraging new capabilities that arose during Industry 4.0 (“Big Data”). 

This included gathering data from planning, transportation, and warehouse systems, sensors, RFIDs and IoT devices combined with early cloud computing capabilities to stitch all of the information together, providing full end-to-end picture of the supply chain. This approach allowed organizations to monitor their supply chains in near real time, readily identify issues, and take action to minimize impacts across the supply chain.

With the advent of Industry 5.0, organizations are evolving from these early reactive systems to a more robust prescriptive approach that allows the control tower to recommend changes in the supply chain. Artificial intelligence and advanced cloud computing capabilities are rapidly changing the way organizations construct and leverage supply chain control towers. 

Instead of static queries that stitch together disparate data, immense datasets are now consumed by AI/ML models. AI agents monitor network-impacting events and simulate numerous solutions.

Generative AI enables an understanding of organizational policies and past responses, thus allowing agents to prescribe solutions. The most sophisticated systems are leveraging agentic AI to autonomously execute changes with minimal human engagement or oversight.

Enter AI and Generative AI

Advancing technology has enabled great strides in managing supply chains from the simple O-D pair to complex global, multi-SKU networks. The advent, growth and maturity of systems like transportation management systems (TMS), warehouse management systems (WMS), order management, supply chain planning and predictive analytics has substantively improved the ability of supply chain professionals to more effectively manage their business. Yet, much remains to be done.

The entry of AI and Gen-AI is the next “Big Leap Forward." They are revolutionizing the capabilities logistics and supply chain systems across the board, transforming these systems and solutions into sophisticated, intelligent platforms that hold great promise for enhancing supply chain management.

Before motoring too far ahead, let’s take a deeper dive into what AI and Gen-AI is and is not. AI is a broad field of computer science focused on creating systems capable of performing tasks that typically require human intelligence. These tasks include learning, reasoning, problem-solving, perception, and language understanding.

AI encompasses various subfields such as machine learning, where algorithms learn from data to make predictions or decisions, and natural language processing (NLP), which enables machines to understand and generate human language. AI systems are designed to analyze vast amounts of data, recognize patterns, and make data-driven decisions, often generally with greater speed and accuracy than human capabilities

On the other hand, Gen-AI is a specialized subset of AI focused on creating new content, such as text, images, music, and even code, based on the patterns learned from existing data. Models like Generative Pre-trained Transformer, or GPT, are prime examples of Gen-AI, capable of generating human-like text predicting the next work in a sequence based on the context provided. Leveraging deep learning techniques, Gen-AI excels in producing outputs that are often indistinguishable from those created by humans.

AI and Gen-AI are not single technologies or one-size-fits-all solutions. AI and Gen-AI do not possess human-like consciousness or emotions (at least not yet), and they can’t think independently or creatively in the way humans do. Both AI and Gen-AI systems are limited to the tasks they’re trained for and rely heavily on the quality and quantity of the data fed into the system. Neither is a replacement for human judgment and expertise, rather AI and Gen-AI are tools designed to augment and enhance human decision-making and creativity.

Key functionalities of AI/Gen-AI

Let’s take a deeper dive into the key functionalities of AI/Gen-AI in supply chain control towers. As a key transformational element within modern control towers, AI and Gen-AI enhance various aspects of supply chain management. AI algorithms analyze historical data to forecast demand, anticipate disruptions, and optimize inventory levels helping organizations make proactive decisions and reduce inefficiencies.

By continuously processing data from IoT devices, transportation management systems, and warehouse management systems, AI provides real-time insights and recommendations, enhancing the agility and responsiveness of the supply chain. Additionally, AI automates routine, non-value-added tasks, such as order processing, inventory management, and shipment tracking, improving efficiency and reducing human error.

AI also does a great job optimizing transportation routes, warehouse layouts, and inventory levels to minimize costs and maximize efficiency while simultaneously monitoring the supply chain for potential risks, suggesting mitigation strategies to manage disruptions and compliance issues.

As a subset of AI, a fully trained Gen-AI model can consume and interpret vast amounts of data and generate human-like text, realistic images, and predictive models. Within modern control towers, Gen-AI enhances visibility by generating detailed reports and visualizations based on real-time data, providing organizations with a comprehensive view of the supply chain. Gen-AI also creates predictive models and simulations to explore different scenarios and various contingencies.

Additionally, Gen-AI-powered chatbots and virtual assistants facilitate better communication by understanding and responding to natural language queries including, but not limited to, generating documentation, reports, and what-if scenarios significantly reducing the time and effort required for manual creation.

While AI and Gen-AI do serve different purposes, these tools are a key differentiator for organizations seeking to transform their ability to analyze data, make robust, data-driven decisions, and automate processes, enabling humans to move away from task-driven efforts to more strategic planning and execution.

Further, AI/Gen-AI has a high degree of reliability: it does not take vacations, show up late for work, mark off sick, goof off in the break room, or spend time gossiping with co-workers. 

Key functionalities of AI in control towers

Artificial intelligence (AI) is transforming supply chain management and control tower operations by enabling more predictive, agile, and coordinated decision-making. At its core, AI in supply chain systems is built on a layered “AI stack” that integrates data ingestion, advanced analytics, machine learning, and cognitive automation to deliver actionable intelligence across the network.

The data ingestion layer consolidates and harmonizes information from diverse sources—including ERP, WMS, TMS, supplier portals, IoT devices, GPS tracking, and external market data—providing the control tower with a unified, real-time view of the entire supply chain. The analytics layer applies descriptive, diagnostic, and predictive models to uncover patterns, identify root causes, and anticipate future trends, creating the foundation for strategic and proactive responses.

Machine learning (ML) plays a central role in this framework by continuously refining forecasts, optimization models, and risk detection capabilities. In demand planning, for example, ML algorithms can adjust to seasonal variations, promotional activities, and changing market conditions, producing forecasts that evolve over time without manual recalibration.

In transportation and inventory management, ML evaluates historical performance data and allocation patterns, while anomaly detection algorithms identify emerging issues—such as shipment delays or supplier quality concerns—before they escalate, enabling timely and targeted interventions.

Cognitive automation builds on these predictive insights by introducing intelligent process automation capable of reasoning, learning, and acting with minimal human intervention. Within a control tower environment, cognitive automation can triage and prioritize exceptions, simulate “what-if” scenarios, and recommend or execute the most cost-effective and service-aligned actions.

For instance, if a critical supplier shipment is delayed, the system can automatically locate alternative sources, adjust delivery schedules, and notify relevant stakeholders. By integrating natural language processing (NLP), cognitive systems can also interpret unstructured data—such as customer feedback, supplier communications, or social media sentiment—and convert these qualitative inputs into quantifiable, actionable intelligence.

This can effectively eliminate the “where’s my freight?” queries so prevalent in traditional supply chains, saving time, resources and ameliorating customer frustration. When fully implemented in a supply chain control tower, the AI stack enables four essential capabilities:

• First, end-to-end visibility, where unified, real-time data provides a single, authoritative source of truth for all stakeholders.
• Second, predictive and prescriptive analytics, which leverage advanced models to anticipate outcomes and recommend actions that balance cost, service, and risk.
• Third, autonomous exception management, where routine decisions are automated, allowing human managers to focus on strategic priorities.
• Finally, collaborative intelligence, in which AI supports synchronized decision-making across procurement, manufacturing, logistics, and customer service functions, ensuring alignment with the organization’s broader strategic objectives.

Generative AI supports continuous improvement by synthesizing post-event analyses that capture lessons learned from disruptions. These insights feed back into the AI stack, refining future decision-making processes. By integrating the expansive, creative capabilities of LLMs with the precise, context-driven strengths of NLAs, supply chain leaders can shift from reactive crisis management to a proactive, simulation-driven, and collaborative operational model.

In doing so, generative AI becomes more than a technological tool—it becomes a strategic enabler of resilience, adaptability, and sustained competitive advantage in an increasingly unpredictable global market.

The trajectory is clear: supply-chain control towers are evolving from dashboards of “what has happened” to intelligent platforms that shape “what will happen next”. Organizations that successfully embed AI and Gen AI into their control-tower architecture unlock four strategic advantages:

• Real-time, end-to-end visibility grounded in a single source of truth
• Predictive and prescriptive analytics that balance cost, service, and risk
• Autonomous exception management that frees human talent for strategic work
• Collaborative intelligence that aligns decisions across functional and geographic boundaries

Achieving these outcomes demands more than technology adoption alone. It requires robust data governance, thoughtfully curated training sets, vigilant ethical safeguards, and a change-management program that upskills the workforce to collaborate effectively with AI-driven systems.

Enterprises that invest in these foundations will gain the resilience, agility, and foresight needed to thrive in an era defined by perpetual disruption and accelerated innovation. In short, the next generation of control towers will not just report on the supply chain—they will actively shape its future

Future outlook

The digital universe is growing at an unprecedented pace—from 1.8 zettabytes in 2011 to an estimated 181 zettabytes in 2025—creating both opportunity and complexity for supply chain organizations tasked with turning this flood of data into actionable intelligence.

All of this presents both large opportunities and significant challenges in managing it all in a way to derive usable intelligence. Good sense would tell us that in order to drive supply chain benefits from this hyper-sized mountain of bits and bytes, AI will need to be enabled so that data analytics and be fast, timely and accurate. 

This is further complicated by the vested interests of each of the trading partners in the supply chain, not all of which are aligned in one collaborative system of execution from cradle to grave. One of the significant challenges faced by all who run, or purport to run, holistic Control Tower/Command Center operations is the fact that the light all this data, information and visibility shines on supply chain operations is not always welcome by all trading partners. 

This can readily lead to a continuation of incomplete pictures of what’s going on across the network, which—in turn—effects the efficacy of these efforts to manage effectively and continuously improve performance.

Control Tower Innovation Across Industries: Two case studies

Consumer Goods

A global consumer goods company was struggling with visibility gaps in its maritime logistics network. Vessel scheduling was inconsistent, container utilization was suboptimal, and demurrage fees were climbing due to non-standardized processes across geographies. These issues not only increased costs but also placed high-priority inventory at risk of late delivery.

By deploying a maritime logistics control tower, the company unified disparate IT systems into a cloud-based, fit-for-purpose platform. The solution enabled real-time vessel and container tracking, configurable user roles for internal and external stakeholders, and scenario analysis to optimize scheduling.

Importantly, the control tower provided prescriptive alerts and predictive analytics, allowing logistics teams to address at-risk inventory before disruptions escalated.

The benefits were immediate and measurable. The company reduced demurrage penalties, improved container utilization, and increased in-store supply availability. In parallel, the new scheduling approach contributed to lower environmental impact, with reduced port congestion, and associated CO2 emissions, aligning operations with global sustainability targets.

Retail & Distribution Industry

A leading retail and distribution enterprise needed greater agility in handling inbound shipments to meet fluctuating consumer demand. Its logistics network spanned global suppliers, carriers, and distribution centers, but data was fragmented across multiple systems, creating blind spots in supply planning.

Through the deployment of a control tower platform, the company established end-to-end visibility and real-time communication across its network. Marine traffic APIs were integrated for container monitoring, while advanced visualization tools allowed planners to evaluate daily loads, shipping capacity, and supplier performance at a glance. Scenario analysis and exception management capabilities empowered logistics teams to simulate outcomes and respond to disruptions with speed.

The impact was significant: inventory planners optimized movement, reduced wastage, and improved supplier collaboration. Executives benefitted from a unified view of the supply chain, enabling better alignment between operational execution and business priorities.

Over time, the control tower became a strategic asset, supporting predictive maintenance of inventory flow and enhancing decision-making at scale.

Summary: Across both consumer goods and retail industries, control towers are proving to be more than visibility tools; they are becoming the nerve center of modern supply chains. By combining layered data sourcing, predictive analytics, and role-based decision support, they enable companies to reduce costs. Mitigate risks and strengthen sustainability outcomes.

These industry examples demonstrate how control towers shift organizations from reactive exception handling to proactive orchestration, paving the way for self-driving and AI-enabled decision-making.

Where AI is delivering real value in Control Towers

While many organizations are investing in AI-enabled control towers, the greatest value today is being realized in a focused set of high-impact operational areas:

Inventory positioning and allocation: AI models continuously rebalance inventory across networks based on demand signals, reducing carrying costs while maintaining service levels.

Transportation planning and execution: Dynamic routing, load consolidation, and carrier selection are improving asset utilization, reducing empty miles, and lowering transportation spend.

Exception management: AI identifies disruptions early, prioritizes alerts based on business impact, and recommends actions—allowing teams to move from reactive firefighting to proactive response.

Risk sensing tied to execution: Advanced systems connect upstream and downstream signals to flag potential disruptions and trigger mitigation strategies before service is impacted.

What separates high-performing Control Towers

Organizations seeing the greatest return from AI-enabled control towers share several common characteristics:

Unified data foundation: A single, trusted source of data across systems and partners enables accurate, real-time decision-making.

Embedded decision-making workflows: AI is integrated directly into planning and execution systems—not layered on top as dashboards or reports.

Clear ownership and governance: Business leaders—not just IT—own outcomes, ensuring accountability and adoption.

Focus on high-value decisions: AI is applied where it can drive measurable impact, rather than across low-value or highly variable processes.

The bottom line

AI delivers the most value when it is embedded into day-to-day operations—enhancing decisions, accelerating response times, and enabling supply chain leaders to focus on the trade-offs that matter most.

The commercialization of artificial intelligence (AI) and related technologies—ML, IoT, LLMs and other buzzy acronyms—could also have something to do with it. At the center of it all is a customer who is squarely in the driver’s seat, wanting faster deliveries, more personalization and more accurate, real-time updates on where their orders stand.

It doesn’t matter which force exerts the most pressure at any point, the end result is the same: global supply chains are getting more digitized, more autonomous and more responsive to real-world conditions. Where just a decade ago the idea of a supply chain that “runs itself” sounded like something out of a sci-fi flick, it’s not at all far-fetched in 2026 as companies:

• Use AI to slot inventory, predict demand and direct warehouse picking and fulfillment activities in real time. The tech also helps reprioritize orders on the fly as demand shifts, labor fluctuates or inbound delays impact the dock.
• Rely on advanced software platforms to plan loads, route freight and adjust logistics plans as conditions change. A weather event, port delay or missed pickup can all trigger immediate rerouting decisions.
• Integrate end-to-end visibility tools and control tower technology that help them detect and respond to disruptions sooner, before those issues trickle downstream. Companies can quickly move inventory, expedite shipments or alert customers before a delay snowballs into a real problem.
• Combine telematics, IoT sensors and real-time data feeds to track shipments and manage transportation across networks. Fleets and shippers now keep tabs on location, temperature and dwell time as they happen, not hours or days later.

These are just some examples of how digital supply chains are maturing as companies manage more complex networks and more disruption. The last point is an especially big driver. According to McKinsey & Co., nearly 80% of U.S. companies faced some type of supply chain disruption in 2025 (versus just 33% in 2024). Tariffs were of course a top-of-mind issue for most product-centric companies, but rising costs, geopolitical events and customer demand shifts also played a role.

McKinsey says companies are moving forward with their existing digital supply chain investments, with about 19% of them currently deploying AI tools at scale; a large portion working on enterprise resource planning (ERP) and other major software projects; and roughly 40% deploying advanced planning and scheduling (APS) systems.

Companies are also investing in tools that improve supply chain transparency, including systems that go deeper than just their Tier 1 suppliers when assessing risk.

To learn more, Logistics Management called on some of its go-to subject matter experts in the supply chain digitization space and brought them into this mini think tank. Here’s how they see where things stand, what’s happening this year and what’s coming next.

Shifting from digital systems to AI-driven operations

After years of investment in digital supply chains, companies are starting to ask a different question: what comes next? For many, that answer lies in AI, but fully leveraging it requires more than just layering new tools on top of existing legacy systems.

“We’re seeing the shift from digital to AI,” says Balaji Abbabatulla, VP, analyst at Gartner. “It’s less about digital supply chain transformation and more about deploying AI at scale.”

That shift is underway, but most companies are still in the early stages of seeing results. Abbabatulla says the gains so far tend to be incremental and come in the form of faster throughput or more consistent execution. Bigger wins like autonomous decision making or true end-to-end coordination are still out of reach for many. 

Abbabatulla says that there’s still more work to be done in this area. “The real exponential benefits [of AI] are still to come,” he says. “To get there, the foundation needs to change, including data, processes, decisions and the workforce that’s using the technology day-to-day.”

Data is a real sticking point. Organizations have been slowly digitizing their processes, but that doesn’t guarantee that the underlying data is ready for AI. In many cases, Abbabatulla says that information is still highly fragmented, inconsistent or locked in silos that limit the new tools’ value propositions.

There’s also a growing recognition that investing in technology isn’t the end goal. In many cases, it’s just the starting point. Looking ahead, Abbabatulla expects the companies that keep pushing forward with their digital supply chain initiatives—even after early missteps—as a way to separate themselves from the pack.

“The organizations that continue to invest despite any initial fail-fast cycles are the ones that are going to pull ahead,” he concludes, noting that the gap between early adopters and those taking a wait-and-see approach will become more obvious over the next 12 months or so. “We’ll start to see that difference much more clearly now than we have.”

Putting the systems to work in the real world

The digital supply chain is no longer a work in progress. The systems are in place, with ERP, warehouse management systems (WMS), transportation management systems (TMS) and integrated planning platforms all pulling their weight. Application programming interfaces (APIs) help connect disparate systems and get them working from the same playbook, while AI supports better decision making and faster information processing.

Sandeep Saroha, GTM lead for the services industry sector at Capgemini, says most organizations have already digitized their core transactions, including orders, inventory and shipments. They’ve made real progress in connecting those systems, he adds, and many are moving away from batch-heavy processes and toward faster data exchange in order to get clearer views of network activity.

Now, the challenge will be turning that visibility into consistent execution. “Companies have the systems in place, but the question is, can they make good decisions and execute consistently?” Saroha asks. Again, the gap often comes down to the data and how it’s managed across the organization. Many companies still deal with inconsistent master data, process variations across sites and information that arrives late or can’t be trusted.

Those issues make it harder for systems to take action and slow down efforts to push more advanced capabilities like AI deeper into day-to-day operations. Saroha says that companies are also taking a measured approach to newer tools like generative AI (GenAI), which creates new content versus just analyzing existing data.

At least for now, most GenAI use cases are focused on helping people work faster, and not necessarily “handing over control” of logistics and supply chain operations to a computer. For example, employees are using GenAI to summarize exceptions, pull information out of documents and communicate more effectively across partners.

“It’s not running the supply chain on autopilot,” says Saroha, “but it is helping people work faster.”

Going forward, he expects GenAI to move beyond those assistive use cases and into more active roles where systems recommend actions and even carry them. Those use cases may be limited at first, at least until organizations are comfortable letting the systems do more than just assist. “The next phase is going to be about operationalizing trust,” he says. “Trust in data, trust in decisions and trust in control and automation.”

Digitization within the four walls

As the command center for the supply chain, the warehouse has been on the digitalization path for decades. Using WMS, APS, order management systems (OMS) and, more recently, a whole lot of automation and robotics, companies understand the basics of running a digital warehouse.

Now, the question is how to layer in newer capabilities like AI and GenAI without creating even more complexity.

Howard Turner, director of supply chain systems at St. Onge Co., says organizations are debating whether to commit to one vendor's full suite or mix and match best-of-breed applications. This isn't a new debate, but AI has raised the stakes.

“You get benefits from being on the same platform, it's a lot easier to train users when everything has the same look and feel,” says Turner, but you have to ask yourself, do you miss out on some capabilities by being trapped in that ecosystem?" 

Outside of the full suite versus best-of-breed argument, Turner says AI agents are where the warehouse conversation is headed next. Able to handle tasks like slotting, dock management and labor planning, these agents watch operations, learn from them and recommend actions. A warehouse lead reviews the recommendation, approves it and the system executes automatically.

“The system can provide a cost-benefit analysis of different approaches, and then a person approves it before it gets executed,” says Turner, who sees these advanced tools taking on a bigger role as companies get more comfortable using them to manage day-to-day operations. “This whole concept of adaptive process orchestration, where systems can adjust and direct operations as conditions change, is really intriguing.”

That shift is playing out across the technology stack. In this year’s Logistics Management Technology Roundtable, Nathanael Powrie of MainePoint explains how AI is moving from analytics to embedded decision support; Gartner’s Suzie Petrusic outlines why resilience depends on reducing complexity and aligning risk strategy to business priorities, and Howard Turner of St. Onge Co. makes the case for orchestration as the real differentiator in automation.

Inside the four walls, Norm Saenz examines why automation investment is becoming more disciplined, while Tom Bonkenburg, also of St. Onge, explains how robotics is moving beyond pilots and into a more practical phase defined by integration, scalability and workforce readiness.

Together, their perspectives point to a common conclusion: the next phase of supply chain technology will be defined less by what systems can promise and more by what organizations can operationalize.

Artificial Intelligence

AI: From dashboards to decision intelligence

As AI adoption accelerates, the focus is shifting from dashboards to decision intelligence embedded in daily operations. In this discussion, Nathanael Powrie, senior director, digital solutions, at global supply chain and operations consulting firm MainePoint, outlines where AI is delivering real ROI today, why many initiatives stall, and how leading organizations are turning AI into scalable, workflow-driven decision support.

LM: From your perspective, where is AI actually delivering measurable ROI in logistics and supply chain operations today and where is the hype still outpacing real operational value?

Nathanael Powrie: The most measurable ROI today comes from AI applied to high-frequency operational decision loops in inventory positioning, warehouse slotting, transportation planning, and supplier performance management. When AI models are embedded directly into these workflows, companies see real outcomes: lower inventory carrying costs, improved service levels, reduced transportation spending, and better DC labor productivity.

Slotting optimization models that continuously adapt to order patterns can reduce travel time in a warehouse by 10% to 20%. Predictive demand models are helping companies with right-sizing safety stock without sacrificing fill rates. In transportation, AI-driven routing and carrier selection are improving load consolidation and cutting empty miles.

Where hype still outpaces reality is in the promise of fully autonomous supply chains. Most organizations are still working through fragmented data and inconsistent processes. AI delivers when it enhances decision-making inside a well-run operation not when it’s expected to compensate for broken foundations.

LM: However, it feels like the conversation is shifting from AI for visibility to AI for prescriptive decision-making. Where do you see that transition happening first in real operations, and what’s holding broader adoption back?

Powrie: The shift is already underway in environments where decisions are high-frequency, repeatable, and data-rich like in transportation planning and warehouse operations. Systems are moving beyond ‘what happened’ dashboards to real-time recommendations: which carrier to select, how to consolidate loads, where to position inventory across a network, how to deploy DC labor during peak.

We’re building exactly this capability in next-generation control tower platforms where architectures that don’t just surface KPIs, but score initiative probability, model KPI trajectories, flag EBITDA risk early, and generate executive-ready narratives automatically. The intelligence is embedded in the workflow, not bolted on as a reporting layer.

What’s slowing broader adoption is the operating model, not the technology. Siloed data, disconnected systems, and weak governance around operational metrics remain the primary barriers. Without a unified data foundation and commitment to embedding analytics into daily execution, even strong models struggle to deliver consistent value.

LM: Many AI initiatives stall after promising pilots. What are the most common reasons projects fail to scale—and what do successful organizations do differently to move AI from experiment to embedded capability?

Powrie: The most common failure mode is treating AI as a technology experiment rather than an operational capability. A pilot may produce an interesting model, but if it isn’t integrated into planning tools, daily workflows, and accountability structures, it never becomes part of how the business runs.

Successful organizations start with a specific operational decision they want to improve. Some examples might be inventory allocation, supplier performance monitoring, or DC labor planning and then build the analytics directly around those decisions. The model gets embedded in the systems that the operations team already uses—not a standalone analytics environment that requires someone to remember to check it.

Equally important is ownership. High-performing companies assign clear business accountability for outcomes, not just technical ownership of the model. When a VP of operations owns the result, adoption accelerates and value compounds. When only the data team owns it, the model quietly collects dust.

LM: As shippers look to move from “human-in-the-loop” to more autonomous execution, where do you see the right balance today? Which decisions are truly ready for AI-driven automation—and which still demand human judgment?

Powrie: The right balance today is a human-guided model: AI automates the routine and generates recommendations on the complex, while people retain oversight of high-impact tradeoffs.

AI is well-suited for automating repetitive operational decisions on a scale like load building, dynamic routing adjustments, slotting updates and intra-network inventory rebalancing. These are high-volume, rule-bound, and benefit from optimization that no human team can replicate at speed.

Human judgment remains essential where decisions involve strategic tradeoffs or external uncertainty: supplier negotiations, network redesign, major capacity investments, and risk management in volatile conditions. These require contextual judgment and accountability that models alone can’t provide.

The most effective organizations treat AI as a decision accelerator it compresses the noise, surfaces the best options quickly, and frees leaders to focus on the calls that actually move the business.

LM: ‘Decision intelligence’ is getting a lot of attention. In practical terms, what does that look like inside a DC or transportation network—and how does it change day-to-day planning and execution for logistics managers?

Powrie: In practice, decision intelligence means moving from static reporting to systems that continuously monitor performance and surface prioritized actions not data for humans to interpret, but recommendations ready to act on.

Inside a DC, that looks like AI models analyzing order patterns and adjusting slotting automatically, identifying pick zone congestion before it impacts throughput, and recommending labor reallocation during peak shifts in real time. Managers stop reviewing yesterday’s reports and start managing today’s exceptions.

In transportation networks, it means dynamically evaluating carrier performance, consolidation opportunities, and route optimization as orders flow into the system. Planners can shift from building loads manually to managing the tradeoffs the system flags.

The operational impact is significant. In the control tower architecture we’re deploying, logistics leaders shift their time from data gathering and plan-building to supervising execution, managing exceptions, and continuously improving the network. That’s where their judgment creates the most value.

Software

Brains Behind the Bots: Why orchestration is now the real differentiator in warehouse automation

Howard Turner, director of supply chain execution systems for supply chain consultancy St. Onge Co., argues that orchestration—not hardware—is now the true differentiator in warehouse automation. He details how integration challenges, vendor ecosystems, and agentic AI are redefining performance on the warehouse floor.

LM: From your vantage point, why has the competitive advantage in warehouse automation shifted from hardware to the software layer that orchestrates robots, AS/RS, AMRs, WMS, and labor?

Howard Turner: I don’t want to minimize the key differentiators in warehouse automation hardware. There are advantages between systems, but that’s another discussion. Regarding the associated software, I agree that buyers are understanding the value of centralizing the coordination of various pieces of automation and other critical supply chain execution systems such as the warehouse management systems (WMS), labor management system (LMS), order/distributed order management (OM/DOM) and others. 

Buyers understand that it’s the software that ties all these components together. Vendors that offer a software platform that can integrate effectively with other “upstream” systems by reporting planned, current [real-time} and past activities do have a competitive advantage over those that only focus enabling their equipment.

LM: We hear a lot about warehouse execution system (WES) software and warehouse control system (WCS) software evolving into strategic platforms. How should shippers and warehouse leaders think about the role of these systems in 2026—and where do you see them creating the most operational leverage on the warehouse floor?

Turner: In some ways, the vision for WES applications from 10 to 15 years ago have not been realized. Specifically, I’m referring to a hardware agnostic software layer that connects the WMS to warehouse automation. In the last 10 to 15 years, because of mergers and acquisitions, various standalone WESs were consumed by warehouse automation vendors to improve their software offering. 

In other ways, WESs of today are very powerful tools, but they tend to be warehouse automation brand specific. For example, several WMS vendors now offer WES functionality that’s designed to work with their trusted warehouse automation partners. This somewhat limits the warehouse automation choices based on the WES selected—or vice versa. It’s important to note here that choices are not limited in terms of types of automation, but limited in terms of automation vendors. 

Realizing the benefits from using a WES often requires shippers to invest in a single warehouse automation ecosystem. This has the potential to shift based on capabilities we see from A.I. solutions, particularly those that utilize an agentic framework. 

LM: Many operations say integration—not the robots themselves—is now the biggest bottleneck to scaling automation. Where do you see integration breaking down most often, and what separates companies that get orchestration right from those that struggle?

Turner: I agree that integration can be the most significant bottleneck. The challenge is where you have multiple systems—along with multiple implementation teams—working to ensure that the correct information is provided at the correct times to allow automation to receive and execute tasks. 

We spend a lot of time trying to establish a clear delineation of responsibilities between systems—a defined span of control. It’s also critical to develop clear processes to resolve any conflicts in responsibilities or where functionality overlaps. This helps tremendously in defining the role of each system, and as a result, their respective information need. 

Reducing or eliminating that complexity is one of the biggest advantages of staying within a single vendor ecosystem for systems and automation. The tradeoff, however, is whether that simplicity comes at the expense of stronger functionality available elsewhere. That balance should be carefully evaluated before deciding it is the best long-term approach.

LM: As automation ecosystems get more complex, how can warehouse operators avoid getting locked into a single vendor’s technology stack—without sacrificing performance or reliability?

Turner: There are tradeoffs—both advantages and disadvantages—associated with committing to a single vendor’s technology stack. I don’t believe that approach should be either automatically favored or automatically avoided. My counsel is to weigh the tradeoffs carefully and make the decision based on what best supports the forward-looking vision of the shipper’s business.

Our core principle is that software is a tool to enable best practice design—process, layouts, automation selection, etc. The best practice design and the equipment required, regardless of vendor, should be the objective. Modern systems can leverage advancements in integration [API connections], data availability/access [data warehouses/lakes] and data visibility [control towers] to offset disadvantages associated with moving outside of a vendors technology stack.

LM: “Adaptive orchestration” is becoming a buzzword. In real operational terms, what does that actually look like on the floor—and how does it change day-to-day decision-making during peaks, disruptions, or labor shortages?

Turner: A few questions back, I used the term ‘agentic framework.’ I’m of the belief that adaptive orchestration is based on an agentic foundation. Software vendors are leaning into an agentic framework and developing highly customized AI agents that can be deployed as needed. 

It helps me to think of AI agents as digital co-workers that can orchestrate your operation.  You can develop specific agents for a multitude of tasks, including inventory optimization, slotting, dock management, exception handling, etc.

Take labor planning as an example. These agents can draw on data from warehouse systems such as the WMS and WES, while also collaborating with other agents to adapt to real-time conditions. A labor planning agent, for instance, could evaluate current staffing across operational areas and recommend shifting resources based on order volume, expected productivity rates from an LMS, or the time remaining in a shift.

This opens the door to more advanced intraday planning capabilities and improves agility, visibility, efficiency, and customer service. It’s important to note that these agents typically operate within a “human in the loop” framework, meaning actions are suggested and still require human approval before execution. Over time, as machine learning and reasoning capabilities improve, it’s likely that more of those decisions will be executed autonomously.

Automation

Short-Term Caution, Long-Term Commitment: Inside automation investment plans

According to Norm Saenz, managing director and partner at St. Onge Co., companies are still committed to automation, but many are approaching investment with more discipline and realism than in years past. His message: the strongest results come not from moving fastest, but from doing the upfront work on data, design, integration and change management.

LM: Our 2026 Outlook Survey points to a cautious near-term spending environment, but stronger long-term interest in automation, software, and robotics. How should supply chain and DC leaders interpret that dynamic—and what does it suggest about how companies are approaching risk, ROI, and investment timing?

Norm Saenz:  The journey to automation is different for every company. Some are ready now and others realize they need to clean up their existing operations and data integrity to prepare themselves for automation. 

As new automated systems are designed and installed, there are some cautionary stories about moving too fast, and not realizing the expected benefits. Those that have successful automated systems, spend the time to improve data integrity, develop clear requirements, evaluate multiple designs, determine the ROI, and define the necessary testing and integration requirements.

LM: We’re seeing higher budgets and growing interest in software, controls, and robotics—especially AMRs and WCS—driven by labor constraints, cost pressures, and performance goals. What’s really driving investment decisions right now, and where are companies being most deliberate with their spending?

Saenz: Those investigating and considering the use of automation are more knowledgeable about the capital cost requirements. That’s influencing some of the increased planned budgets, but also the continued motivation to reduce the reliance and cost of labor. 

AMR technology is one of the ‘easiest’ technologies to add into existing operations to reduce labor, increase throughput and reduce errors in order fulfillment. With order picking amounting to most of the labor in many operations, the use of AMRs is widely used for a fast ROI and ease of implementation.

The boost in WCS consideration is a result of the increased awareness of the importance of software controls and integration into existing systems—as these controls are increasingly the brains of a system.

LM: Beyond labor, which operational challenges are most shaping automation investment priorities in warehouses and DCs today—and which of these pressures are intensifying over the next two years?

Saenz: This is a great question, because ‘labor’ is the immediate response when most people are asked about why automation. The other operational challenges reduced or solved by automation depend on the application. But, in general, the other benefits to automation include increased inventory and order accuracy, reduced space requirements, increase pick location density, enhanced safety, and improved ergonomics.

LM: Across different warehouse and DC environments, which categories of automation or software are consistently delivering the strongest results? Where are you seeing the best balance of adaptability and ROI?

Saenz: There are an increasing number of automation categories and applications that benefit warehousing and distribution operations. No matter which category of automation is implemented, delivering strong results depends on the amount of planning and data integrity. 

With those in place, AMR assist applications are the easiest to integrate into existing operations and work alongside existing processes and equipment. This gives them an edge on delivering consistent results. The multitude of goods to person systems [AMR based, shuttles, cube-based designs] deliver more labor savings, with increased investments.

LM: As automation adoption accelerates, what misconceptions continue to trip up shippers and DC operators—and what practical guidance would you offer leaders to avoid common pitfalls and maximize ROI?

Saenz: The biggest roadblocks to a successful automated system are not having accurate item master data [data integrity], the wrong application and poor change management. I encourage those pursuing automation to spend the required time to update and maintain their item master data, define the future design requirements, and evaluate multiple applications to determine the right solution.

Risk

Risk management & resilient supply chains

As supply chains grow more complex, many organizations have added redundancy to protect against disruption—often increasing risk in the process. In this discussion, Gartner’s Suzie Petrusic explains why leaders must rethink risk strategy by reducing complexity, aligning investments to business priorities, and connecting resilience, visibility, and execution to drive meaningful outcomes.

LM: Many organizations responded to recent disruption by adding redundancy and network complexity. Your research suggests that can actually increase disruption frequency. How should logistics and supply chain leaders rethink risk management in 2026 to reduce both the likelihood and impact of disruption?

Suzie Petrusic: It's true—sometimes trying to protect everything with too much redundancy actually increases your risk exposure by expanding your supply chain's “surface area.”

When you add nodes, suppliers, or movements, you're creating a larger target for disruptions.

To reduce the likelihood of disruption, you shouldn't eliminate all backups, but you must ensure your redundancies aren't susceptible to the exact same risks as your primary operations.

And you must ensure that it aligns with the strategic choices your organizations is making about what revenue it prioritizes. If you’re adding redundancies to protect your lowest value revenue, you probably have opportunities to reduce the likelihood of risk.

When it comes to reducing the impact of disruptions, you have to start by ruthlessly prioritizing what your business actually values. I say this all the time to our clients. You can’t protect all products equally—so don't even try.

To get around that, you must use business-led prioritization of your revenue to map what of your supply chain delivers that revenue, and then protect that by investing in resilience (your fuel), visibility (your brains), and agility (your muscle power) where it matters most. By aligning these targeted mitigations directly with the risk appetite of your profit and loss (P&L) owners, you prevent overspending on protection you don't actually need

LM: You’ve written about “reducing the supply chain surface area” to lower risk exposure. For Logistics Management readers, what does that mean in practical terms—and how can leaders strike the right balance between simplification and diversification?

Petrusic: Striking that balance really comes down to navigating the trade-off between cost and risk through clear strategic alignment. As supply chain leaders, we shouldn't be deciding in a vacuum exactly how much redundancy is necessary. Instead, we must drive that decision through the business.

We do this by presenting P&L owners with a clear cost-benefit analysis: here is the risk to our strategic objectives, here is what it costs to mitigate it, and here is the value we are protecting. Part of that cost equation? It’s not just the financial costs. It’s the cost of additional risk exposure.

It’s the cost of employees who have to acquire and manage the new redundancies. It’s the opportunity costs. So, we need to give them the full set of information—benefit and cost of mitigation. Once the business leaders determine their risk appetite—essentially telling us how much resilience they are willing to pay for—we can build the appropriate, tailored level of backup without overspending and without overexposing the business.

To make sure those investments are actually effective in reducing surface area, we must maintain a portfolio that’s diversified in its risk exposure. That means making sure our carefully chosen redundancies aren't vulnerable to the exact same disruptions as our primary nodes. If your primary and backup suppliers share the same chokepoints, you've added costs without actually buying resilience.

LM: Your research shows resilience, visibility, and agility only deliver value when connected to frontline operations and clear risk ownership. Why do risk strategies often break down at execution—and what’s the first step leaders should take to fix that?

Petrusic: Risk strategies often look perfect in a boardroom but fall apart during a crisis because they simply aren't connected cross-functionally or to the people doing the work.

Our research shows a massive disconnect between expensive proactive mitigations—like visibility technology or added redundancy—and the operational and frontline staff who actually have to execute the response when a disruption hits, which is in practice cross-functional. Often, these employees are siloed away from the right data or receive risk alerts too late to take meaningful, proactive action. Furthermore, for complex risks spanning multiple functions, there's a dangerous assumption that ownership is straightforward. When ownership is unclear, critical mitigation decisions stall.

The first step leaders must take to fix this is establishing governance and roles, such as a cross-functional supply chain risk council and risk owners. The council translates the business’s risk appetite into action and assigns explicit risk owners for specific threats.

Those risk owners act as a conduit and a central point of contact and information for specific revenue sources the business chooses to protect. They grant access to your risk-sensing tools, ensure frontline staff have the real-time data, response playbooks, and decision-making authority they need to act swiftly. Ultimately, your tech platform won't save you unless you pair your technology investments directly with the institutional knowledge and agility of your people.

LM: Many organizations invest in supply chain risk and visibility tools, but struggle to see returns. At a high level, what role should risk software play in an effective strategy—and what should leaders expect technology to solve on its own?

Petrusic: Here’s the reality: risk software is incredibly powerful as an early warning system, but it doesn't know what your business actually cares about unless you tell it. The real insight here is that to get any return on visibility tools, you have to configure them with your specific risk appetite and set precise sensitivities for alerts.

If you haven't done the hard work first—pushing the business for strategic clarity, identifying your highest-value revenue drivers, and explicitly defining your risk appetite—you can't properly tune the software. What happens then? The technology simply becomes overwhelming.

It throws every global disruption alert at your team without context. Because most technology cannot automatically triage these alerts against your unique business priorities, your staff gets buried in noise and eventually just ignores the tool altogether. Technology is a brilliant enabler, but your strategy has to provide the filter.

LM: What do you want to see technology achieve in 2026?

Petrusic: I want technology to create and quantify links between the upstream and downstream, so our supply chain leaders don’t have such a burden in understanding the profitability impacts of risk management. That would enable the supply chain to become a strategic partner to the business.

Robotics

Robotics gets real in the warehouse

Warehouse robotics has moved beyond the curiosity stage and into a more operationally serious phase, where the focus is shifting from what robots can do to how well they can be integrated, managed and scaled inside live distribution environments. In this section, Tom Bonkenburg, director of European operations at St. Onge Co., breaks down where robotics is delivering practical value today, where expectations still outpace reality, and what DC leaders should be doing now to prepare for broader adoption.

LM: How would you characterize the current state of robotics adoption inside warehouses and DCs in 2026? What’s materially changed over the past year or two and do expectations still outpace reality?

Tom Bonkenburg: For me, the biggest change is that more of our clients are seriously looking at robotics and automation. In the past, people always had curiosity, but the conversations shut down as soon as the CFO came into the picture. Now, we see companies who are facing labor challenges viewing them as a strategic risk to the core business. Once the conversation changes from ‘tactical labor savings’ to ‘we might not ship,’ the CFO is willing to entertain the longer ROIs required for automation.

In one way, this shift of focus is good for automation, but it creates a new challenge when the C-Suite watches a YouTube video and thinks that robots will solve all their problems. We’re spending a lot of time on education—what is and what isn’t possible with current automation. We can reduce the labor challenge but not eliminate it, so expectations do outpace reality—but reality is catching up as the newer systems entering the market offer more flexibility than ever before.

LM: As more facilities deploy robots from multiple vendors, what separates operations that successfully manage heterogeneous fleets from those that struggle with complexity?

Bonkenburg: The problem of multiple systems from different vendors in one building is not new. Last week, I walked through a DC that had integrated conveyor systems from four different vendors over the last twenty years.

Multiple systems are always a challenge and a headache. When I see a company handling it well, I often see that they have a very strong IT team on staff local to the DC. There are very short connections between operations and IT development, often sitting in the same room.  The use of local IT and internal development staff has a high cost that may be difficult to justify directly, but the ability to see an issue, make a change, and test the change in a rapid development cycle is a key part of keeping a complex automated DC running smoothly.

Our supply chains and customer requirements are constantly changing, so the automation must be adapted on a regular basis. The quality and ease of IT support can often make the difference between success and failure.

LM: Robotics is now a core part of many warehouse/DC labor strategies. How is robotics adoption reshaping workforce models in practice—from job design and reskilling to how leaders think about labor?

Bonkenburg: Robots and people need to work side by side in the modern DC, and this requires the warehouse managers to increase their skills rather than reduce them.

All the things we’ve done with the workforce in the past become more critical to get right: job rotation schemes are required to avoid ergonomic issues and boredom; cross training is essential because the remaining workforce needs to focus on handling exceptions and flex across multiple departments; labor forecasting requires hyper focus because people are now constraints in the automated warehouse flow. A key person not showing up now has a larger effect on the DC output than ever before.

There is a myth that automation reduces the training budget because it simplifies work. For some parts of the operation, this is true. But overall, the DC can be more complicated. An automated DC runs more like a factory than a traditional warehouse.

Employees need to understand the system constraints and how a problem in one area can really affect the output in another. They need to be able to manage exceptions and become the flexibility in the operations that automation lacks. This requires the workforce to have more skills, better training, and greater operational understanding than ever before.

LM: AI-powered robotics is getting a lot of attention. Where are you seeing AI meaningfully improve robotic performance today—and where does the technology still have promise?

Bonkenburg: Since ‘AI’ is now the hype term of the day, we see a lot of vendors just rebranding what they have always done as AI for marketing purposes. This creates a lot of confusion and unrealistic expectations in the market.

People naturally think the jaw-dropping things ChatGPT does are also going on in the warehouse somehow; but in practice, this isn’t what we see in our day-to-day work. Good process design with best-in-class modern systems support is where the real gains continue to happen.

Having said that, there are some places where I believe AI will have a real impact in the future. Since you asked about AI-powered robotics, I think we will start seeing more capable and less expensive robot picking systems in our future.

The ability for a robot to see an item and pick it up is still a technical challenge. There are certainly examples out there, but often the systems don’t handle all products and require too many interventions. AI is going to improve this rapidly over the next few years, making these systems more universal and more reliable—and then hopefully more common

LM: What practical steps should warehouse and DC leaders take now to avoid painting themselves into a corner as their robotics ecosystems scale?

Bonkenburg: The two things that hold robotics back are capability and cost. AI promises to greatly improve capability and the many vendors now in the robotics game will help to drive down the cost through competition. One key to getting ready is making sure your company does not get stuck in sunk costs that make future investments unattractive.

Here is a quick example. Robotic forklifts typically need three things: better floors, wider aisles, higher quality pallet racking. The market may not be able to provide a working automation solution today at a cost your company will accept, but it will in the future.

If you are building a new DC, you should invest in making it physically ready for automation. I’ve seen too many robotic business cases killed because in addition to the cost of the robots, the project needs to also include cost for new racking, costs for floor modifications, and costs for better IT connections.

The choices of the past hold back future automation investments. My advice is to always design your processes, building, and IT infrastructure as if you had automation now so that it will be easy to add in the future.

The tough question is: Where do supply chain executives start this transformation and how do they pay for it?

Why does it matter now?

Many supply chains still rely on fragmented, manual processes. Accenture’s research shows that their average digital maturity is at only 36%, and the grade of autonomous supply chain processes is even lower, at 21%. The result: supply chains that are costly, slow to respond to the market, and hinder competitiveness. This flies in the face of what many supply chain leaders (33%) ranked as their top strategic priority in our recent survey: building resilience.

To move faster amid frequent disruptions, leading companies now rethink how transformation is funded. Accenture’s “Making Self-Funding Supply Chains Real” research shows organizations put the biggest supply chain cost drivers under the microscope, across planning, procurement, manufacturing and fulfillment.

They then address these cost drivers with targeted AI initiatives that deliver rapid cost savings early on and provide measurable performance gains. As a third step, they reinvest those savings to scale the next stages of reinvention.

Essentially, they turn AI adoption into a self-funding engine for supply chain transformation. This virtuous cycle generates outcomes, such as better service delivery and higher resilience and growth, that become tangible even before supply chains are fully AI-enabled.

A cost-optimization framework for self-funding supply chains

A self-funding model requires a clear strategy and clean execution. At the core is a cost-optimization framework, which helps identify these opportunities. It classifies cost categories into quadrants, based on their cost structure and the potential role AI can play in reducing costs by improving productivity.

The high cost/high quadrant represents the most lucrative opportunities for AI-driven automation. For example, in manufacturing, predictive maintenance is a high cost/high AI impact domain. AI helps analyze machine data and identify early signs of failure, reducing unplanned downtime, extending equipment life, and lowering maintenance costs.

Once companies have addressed high cost/high impact areas, they can move to low cost/high impact opportunities, such as spend analysis in procurement or demand forecasting in planning, where AI can create significant value with smaller investments. For high cost/low AI impact areas, companies may need to focus on process improvements or alternative strategies rather than automation.

Organizations can then reinvest saved costs to build fully connected, AI-enabled supply chain ecosystems. Capabilities enabling more adaptive and continuously self-optimizing supply chain operations include:

Agentic AI – which adapt supply chains to changing conditions and optimize processes with human oversight but minimal intervention. For example, AI agents can monitor supply chain disruptions, recommend alternative sourcing strategies, and automate replenishment decisions in real time. This level of autonomy increases efficiency while enabling supply chains to respond faster to market fluctuations and operational challenges.

Supply Chain Platform Orchestrators – to enable seamless integration of data, systems and partners across the supply chain. Using APIs and interoperable workflows, these orchestrators let businesses respond swiftly disruptions and improve their supply chain performance. An industrial equipment manufacturer, for example, was able to reduce meantime to recover from disruptions by almost 60%. 

Digital Twins and Control Towers – providing end-to-end visibility and simulation capabilities to supply chains teams and their leaders. Virtual replicas of the supply chain, allowing companies to simulate disruptions, test responses, and improve planning accuracy. Control towers provide the real-time monitoring and analytics capabilities that supply chain leaders need to be able to, for example, reduce delays and optimize inventory levels. Companies using these technologies have seen inventory reductions of up to 30%, a nearly 10% increase in manufacturing equipment utilization, and service level improvements of up to 8%.

These capabilities are deployed and scaled on a foundation of integrated data, cloud platforms, and AI‑driven decision frameworks.

Examples across domains

Targeted AI investments can generate value across planning, procurement, manufacturing and fulfillment.

Planning: Where organizations lose, on average, 3.9% of revenue during disruptions, intelligent end-to-end planning can push this loss to 1% or lower. Connecting sourcing, production, delivery and service planning turns demand into executable supply, production and replenishment plans.

For instance, AI-enabled planning systems, machine learning and real-time data integration link demand, supply and capacity in real time. Optimization engines factor in constraints such as materials, labor and production capacity to create balanced plans. Planning becomes faster and more adaptive with digital twins that simulate multiple scenarios to maintain stability even in volatile conditions.

Procurement: A mix of augmented and autonomous sourcing processes can increase procurement savings by 1% to 2% and drive productivity gains of 40% to 60%, based on deal complexity. In sourcing, contract management, spend visibility and supplier risk sensing, autonomous technologies have proven very effective to eliminate inefficiencies and prevent leakage, freeing funds for long-term largescale transformation across the supply chain.

Manufacturing: A manufacturer reduced scrap by up to 10% per ton of production using the following approach: AI-powered scheduling engines prioritize production orders dynamically across machines, lines and shifts based on real-world constraints. Layered on top, agentic AI analyzes production logs to detect deviations, identify root causes and recommend corrective actions, strengthening shift planning and resource allocation.

Digital twins extend these capabilities further, simulating production flows and testing optimization scenarios in case of a disruptive event before it actually hits the factory floor. Together, these technologies monitor production in real time, detect issues as they arise, and trigger rapid adjustments.

Fulfillment: Automated reordering can cut repetitive and manual work by nearly 60%. Extending these gains, customer-centric AI systems, designed to prioritize customer needs, preferences, and experiences, can lower fulfillment costs by up to 15% and lift inventory returns by up to 25%.

Organizations can enable these gains by adopting IoT-enabled inventory platforms that track performance of inventory movement and support dynamic rebalancing. Furthermore, AI-driven demand sensing and agentic AI anticipate fluctuations and optimize replenishment, reducing excess inventory while maintaining high service levels.

A leadership imperative

As supply chain leaders use the cost-optimization framework to identify where to focus their investments, they should tie every AI initiative to clear business objectives around productivity, service delivery, resilience and cost savings. With boards watching AI returns more closely, strong value tracking and simple reinvestment rules help scale what works.

A self-funding supply chain also needs a scalable operating model: focus on the biggest opportunities, build AI into daily decisions, and train teams to work with and supervise more autonomous processes.

Done well, this creates a flywheel: AI improves performance, performance frees up funds, and those funds pay for the next wave of transformation. The outcome is a human-led AI-enabled supply chain that handles disruption, serves customers better and keeps improving, without bigger budgets every year.

Tracey Countryman, global lead for supply chain and engineering at Accenture, and Patricia Riedl, Americas co-lead for supply chain and engineering at Accenture

The good news is that beneath all the buzzwords, something very real is happening. Supply chain technology is still evolving, no doubt, but it’s also starting to come of age.

In fact, tracking that new level of technology “maturity” is the theme driving our annual May Technology Issue. Once again, we’ve devoted these pages to examining where logistics and supply chain technology stands today, what’s delivering real value, and where the next phase of innovation is beginning to take shape.

Leading off on our cover, contributing editor Bridget McCrea explores what she aptly describes as a digital supply chain that is “growing up.” As she reports this month, the conversation is moving beyond visibility alone and toward something far more meaningful: connected systems that help organizations make better decisions and execute with greater confidence.

“That evolution is showing up across the supply chain,” says McCrea. “AI is moving from concept to practical application, and the long-standing effort to connect planning, execution, transportation, warehousing, and fulfillment is starting to feel less like digital ambition—and more like operational necessity.”

As McCrea’s reporting makes clear, many organizations are still somewhere in the middle of that journey. Yes, the tools are improving. The use cases are becoming more tangible, and we know the potential is there. But closing the gap between digital ambition and day-to-day operational reality remains a work in progress for many shippers.

Our Annual Technology Roundtable picks up on that same theme from a more practical angle. This year’s panel of experts explores some of the technologies and strategies shaping the next phase of supply chain execution—from AI and risk management to software orchestration, automation, and robotics.

Taken together, the message from this year’s panel is pretty clear: technology’s value is no longer defined simply by what it can show us. Increasingly, it’s about what it can help organizations actually do.

That same shift is also playing out well beyond the four walls. This month, contributing editor Karen Thuermer examines how freight forwarders are increasingly putting technology front and center in the services they offer shippers.

“In a market shaped by tariffs, geopolitical tension, shifting trade lanes, and persistent disruption, forwarders are being asked to do much more than simply move freight,” says Thuermer. “Today, they’re being called on to provide real visibility and agility for smarter decision support when conditions inevitably change—and these days they’re always changing.”

If there’s a common thread running through all of this month’s coverage, it’s that supply chain technology is no longer just about adding more tools to the toolbox. It’s about putting those tools to work in ways that actually improve performance.

Because while the buzzwords will continue to evolve—and multiply—the real challenge remains the same: building a supply chain that is more connected and better equipped to perform in the real world.

And if this year’s Technology Issue is any indication, that work is well underway.

In this roundtable webinar, industry experts will examine how the AMR market is maturing; where adoption is accelerating; and what’s changing in robot capabilities, navigation intelligence, and fleet orchestration as deployments scale.

Attendees will gain practical insight into where AMRs are delivering the most value today, common challenges teams face as fleets grow, and what warehouse and DC leaders should expect from the next phase of AMR evolution.

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

As previously reported by LM, in its January decision, the STB said the application was incomplete because it “does not contain certain information required by the Board’s regulations,” adding that its decision was “based solely on the incompleteness of the December 19 application and should not be read as an indication of how the Board might ultimately assess any future revised application.”

The STB explained in its January decision that, under its regulations governing merger applications, it requires full system impact analyses, including market share projections for the entity created by the transaction, as well as the complete merger agreement. This includes the submission of any contract or other written instrument related to the transaction. Applicants must provide “full system” impact analyses that include actual and projected market shares of certain revenues and traffic volumes, demonstrating, among other things, the transaction’s impact on competition.

UP and NS leadership said the amended application includes additional analysis that reinforces how the merger would drive growth, enable substantial cost savings for shippers, and strengthen the national supply chain.

“After completing the additional work requested by the STB, the facts remain clear: This merger enhances competition and delivers real public benefits that make America’s supply chain stronger,” said Union Pacific CEO Jim Vena. “Our analysis uses complete, systemwide traffic data provided by all Class I railroads to identify even more opportunities for our combined railroad to grow and compete.”

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

• Faster service, lower costs, and reliable rail access. Economic analysis using actual traffic data indicates the combined railroad’s faster, more reliable service will reduce inventory and equipment costs for shippers by eliminating interchange handoffs that can add 24–48 hours. The analysis also confirms that customers will not lose competitive alternatives post-merger;
• The combination will not reduce the number of Class I railroads from two to one, or from three to two, in any of the 172 U.S. Business Economic Areas;
• Shippers that currently have access to two Class I railroads will retain at least two competitive options after the merger, and no corridor will see a reduction from two to one;
• More robust traffic data confirms the merger will make rail significantly more competitive with long-haul trucking, removing approximately 2.1 million trucks from the road. The review also indicates the combined company will have sufficient equipment and infrastructure capacity to support projected growth;
• Annual shipper savings of $3.5 billion. Shifting freight from higher-cost trucking to lower-cost rail is projected to save shippers an estimated $3.5 billion annually—savings expected to flow through to consumer prices, making American goods more affordable;
• More high-paying union jobs. The additional growth identified in the amended application is expected to create 1,200 net new union jobs by the third year of the merger, up from 900 in the original application;
• The application increases the number of new premium intermodal lanes operating seven days a week from six to seven, including a new lane connecting Northern California and the Southeast. It also raises the number of county-to-county lanes to 88,000, up from 84,000—providing more shippers with access to single-line rail service for the first time;
• The combined railroad now estimates it will eliminate approximately 2,550 railcar and container handlings and 65,000 car-miles each day, up from 2,400 and 60,000, respectively; and
• New analysis using more precise traffic data indicates the merger will eliminate nearly 3.8 million metric tons of annual carbon dioxide emissions through reduced fuel use once fully implemented, an increase from 2.7 million metric tons.

The railroads also noted that the amended application responds to various STB requests. One request sought more detailed projected market share data related to expected growth as shippers shift from trucking and other railroads to what the companies describe as a faster, more reliable coast-to-coast service.

Other requests addressed in the amended application, according to UP and NS, include increased transparency by going “further than required” through the submission of additional documents related to the UP-NS merger agreement into the public record, as well as a commitment to divest or otherwise relinquish control of the Terminal Railroad Association of St. Louis as a condition for closing the merger.

At the Northeast Association of Rail Shippers (NEARS) conference in Newport, Rhode Island, earlier this month, Todd Rynaski, UP senior vice president of strategy, said the merger would provide various benefits for rail shippers. He highlighted the advantages of single-line service over interline service, including more reliable operations, transit times that are 24 to 30 hours faster, better pricing for a single move, and the conversion of 10,000 existing lanes to single-line service. He added that customers would benefit from improved asset utilization, easier onboarding and service experiences, and enhanced competition.

Rynaski also said a combined UP-NS network could convert 2 million truckloads to rail, focusing on key growth areas such as long-haul intermodal routes from Los Angeles to the Northeast, as well as mid-distance “watershed” markets. He noted that single-line service would reduce handling risk and transit variability.

“It is about making the customer experience as easy as possible, so you have one person to call, one contract, and one bill,” said Rynaski. “We are putting our money where our mouth is, with $2.1 billion in capital expenditures for integration, including $1 billion in infrastructure, $500 million in capacity upgrades, $500 million in facilities, and around $1.1 billion in IT integration. Ultimately, we believe a very strong case for this transaction is enhanced competition for all. As we get closer to April 30, the pace is going to increase a bit [regarding the application], just to make sure we are checking all the boxes and don’t run into any issues.”

In outlining the merger’s benefits, Rynaski noted that single-line pricing is historically lower than interline pricing, while market competition remains intact. He added that moving the same volume with fewer trains leads to improvements in car velocity, terminal dwell time, network fluidity, and overall productivity through process improvements, real-time data, and the sharing of best practices between UP and NS.

From NS’s perspective, Mike McClellan, NS senior vice president and chief strategy officer, said at NEARS that the revised application addresses the STB’s primary concerns. These include forward-looking data on how the merged railroad would affect competition—through multi-year market projections and route-specific analyses—as well as full disclosure of underlying data, methodologies, and affected shippers and routes. He also noted that the companies have refiled a complete, standalone application with all required materials, rather than referencing previous filings or omitting exhibits.

McClellan said the revised application is significantly stronger than the previous version, particularly in terms of the datasets required by the STB, which focus on service performance metrics such as train speed, terminal dwell time, and car orders.

Discussing the role of intermodal in the merger amid high fuel prices, McClellan said one of the most compelling ways to reduce costs across North America is to create more competitive rail products—something he described as foundational to the transaction.

“Let’s say 20% of moves today are intermodal and 80% are trucking for the shipper. By introducing new lanes and faster services, that 20% could increase to 30% or 40%—and that alone is significant,” he said. “To the extent that we can offer more lower-cost alternatives to trucking, everyone benefits. About two-thirds of the merger’s value proposition is growth, and we intend to launch new services and lanes as quickly as possible. That is one of the first major benefits. We are moving forward with a pro-competitive, pro-shipper action plan. What you will see right away is us taking steps in the first year to give shippers more opportunities to use rail.”

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

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

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

In a statement issued today, the STB said it has received the amended application and that comments on its completeness are due by Friday, May 8, at noon ET. Applicants may file replies to those comments by May 12 at 5 p.m. ET.

“Comments on the merits of the proposed transaction will be sought at a later stage of the proceeding, should the Board accept the revised application,” the STB said. “Following the comment and reply period, the Board will determine whether the revised application is complete, either accepting or rejecting it on that basis. This determination should not be interpreted as a judgment on the merits of the proposed transaction. If the Board accepts the application for consideration, it will issue a procedural schedule for further comments on the merits.”

This marks the fourth straight time the Fed has paused the rate, following three consecutive rate cuts through December, with the current rate at its lowest level since 2022. In December, the rate was cut to 3.5% to 3.75%, following the previous two FOMC meetings, in which the federal funds rate was lowered to 4.0% to 4.25% and 3.75% to 4.0%, respectively.

As previously reported by LM, Federal Reserve Chairman Jay Powell said in late August that the Fed was possibly open to reducing the rate, which came to fruition in September.

That represented a shift from previous Fed meetings. In late July, the Fed kept the rate at 4.25% to 4.5%, marking the fifth time in 2025 that rates remained unchanged. This followed three consecutive rate cuts in 2024, including a reduction to 4.75% to 4.5% in September, a reduction from 4.50% to 4.75% in November, and a reduction to 4.25% to 4.50% in December.

The FOMC said in a statement that available indicators suggest economic activity has been expanding at a solid pace, with job gains remaining low, the unemployment rate showing little sign of change in recent months, and inflation remaining elevated, partially reflecting the recent increase in global energy prices.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” said the FOMC. “Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. The Committee is attentive to risks on both sides of its dual mandate.”

Eight of the 12 Federal Reserve Board members voted to keep the rate at its current level, with one member preferring to lower the target range by 0.25%, and three members supporting maintaining the target range but opposing the inclusion of an easing bias in the statement at this time.

While concerns regarding the economy—driven in large part by ongoing tariffs and trade policy, as well as the ongoing Iran conflict, which many industry stakeholders view as increasing supply chain uncertainty on multiple levels—persist, bringing inflation down remains a key objective for the Federal Reserve at a time when much remains in flux.

In comments made at a press briefing yesterday, Powell said that while job gains have remained low, the unemployment rate has changed little in recent months.

“Inflation has moved up and is elevated, in part reflecting the recent increase in global energy prices,” he said. “Today, the FOMC decided to leave our policy rate unchanged. We see the current stance of monetary policy as appropriate to promote progress toward our maximum employment and 2 percent inflation goals. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook, and we will remain attentive to risks on both sides of our dual mandate.”

The Fed chair added that recent indicators suggest economic activity has been expanding at a solid pace, citing resilient consumer spending and business fixed investment continuing to expand at a brisk pace.

“In contrast, activity in the housing sector has remained weak. In the labor market, the unemployment rate was 4.3 percent in March and has changed little in recent months,” he said. “Job gains have remained low. A good part of the slowing in the pace of job growth over the past year reflects a decline in labor force growth due to lower immigration and labor-force participation, though labor demand has clearly softened as well. Other indicators, including job openings, layoffs, hiring, and nominal wage growth, generally show little change in recent months.”

As for inflation, Powell observed that it has moved up recently and remains elevated relative to the Fed’s 2 percent longer-run goal.

“Estimates based on the consumer price index and other data indicate that total PCE prices rose 3.5 percent over the 12 months ending in March, boosted by the significant rise in global oil prices resulting from the conflict in the Middle East,” he said. “Excluding the volatile food and energy categories, core PCE prices rose 3.2 percent over the same period. This relatively high rate largely reflects the effects of tariffs on prices in the goods sector. Near-term measures of inflation expectations have risen this year, likely due to the substantial increase in oil prices. Most measures of longer-term expectations remain consistent with our 2 percent inflation goal.”

Diane Swonk, KPMG LLC Chief Economist and Managing Director, wrote in a LinkedIn post that the Fed’s statement underscored the uncertainty surrounding the forecast, noting that Powell reiterated that discussions at the meeting included optionality on the next move in rates—which could be up or down.

“We are enduring more than an oil shock—it is a supply chain shock rippling across the world in ways that echo the pandemic,” Swonk noted. “The Fed is starting from a different place than it was in 2022, with policy modestly restrictive rather than at zero rates. Credit conditions have tightened; however, demand remains solid, buoyed by the surge in tax refunds and the relative buoyancy of equity markets. Wealthy consumers are still spending, while tax refunds are treated as windfall gains. They spurred vehicle sales and vacations this spring.”

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

Reasons cited by those in favor included improved access to cheaper capital, reduced interest payments and better cash flow, stronger housing sector growth, and improved consumer demand, among others. Reasons cited by those opposed included labor issues not being sensitive to interest rates and concerns about deflation, among others.

The retailer has opened a 1.2 million-square-foot Receive Center in Houston, a new type of facility designed to take in product directly from global vendors and hold it until it’s needed elsewhere in the network. From there, inventory is sent to six regional distribution centers and one flow center, eventually reaching stores and online orders.

The idea is simple: don’t push inventory downstream too early.

By adding capacity at an earlier stage, Target can wait to move goods until demand becomes clearer, helping avoid overcrowded distribution centers and store backrooms. It also gives the company more flexibility to respond to shifts in demand, especially for seasonal items, bulky products, and goods with long lead times.

Please click here to read the complete article. 

In a letter to Blanche, the group of 24 stakeholders—including the American Trucking Associations, Association of American Railroads, Intermodal Association of North America, National Retail Federation, DHL, and UPS—emphasized the “urgent need” for DOJ to fully implement funding provided by Congress in the FY2026 Commerce, Justice, Science, and Related Agencies (CJS) Appropriations Act. The funding would support the establishment of dedicated special prosecutors focused on combating supply chain fraud, organized retail crime, and related financial schemes such as gift card fraud.

“Cargo theft and ORC have escalated dramatically in recent years, affecting freight rail, trucking, retailers, and the broader U.S. economy,” the letter stated. “These crimes are not isolated or opportunistic, but are increasingly carried out by organized, sophisticated criminal networks operating across state and national borders. Through the resale of stolen goods and related monetization schemes, these criminal rings often engage in broader illicit activities, including drug trafficking, money laundering, and terrorism.

“As organized retail crime and supply chain theft grow in scope and complexity, their impacts extend well beyond financial loss, harming retailers, consumers, employees, and communities. These crimes increasingly involve violence, threats, and intimidation that endanger frontline workers and create unsafe conditions in stores, warehouses, transportation hubs, and communities across the country.”

The stakeholders outlined several ways the funding could help curb cargo theft and ORC activity:

• Develop specialized expertise in complex cargo theft, ORC, and related financial fraud cases;
• Strengthen coordination with federal partners such as Homeland Security Investigations (HSI), as well as state and local law enforcement and prosecutors;
• Establish a prosecutorial model that can be replicated nationwide; and
• Deter increasingly sophisticated criminal enterprises exploiting the supply chain

“We strongly urge the Department to move swiftly to implement the FY 2026 funding and to establish this critical enforcement capacity without delay,” the stakeholders wrote. “The continued rise in cargo theft, ORC, and gift card fraud presents a growing threat to workers, consumers, the movement of essential goods, and the broader American economy.”

In comments made before a House Judiciary Subcommittee late last year, ATA President and CEO Chris Spear said brazen thieves are costing the trucking industry approximately $18 million per day. He noted that motor carriers must not only replace stolen products but also absorb higher insurance premiums and invest in new security measures.

“These added expenses put jobs and businesses at risk, and those elevated costs for fleets are felt by consumers at the store,” Spear said. “There is a direct connection between rampant cargo theft and what Americans are paying at grocery stores across the supply chain. Cargo theft is estimated to cost up to $35 billion annually. This is money that belongs in consumers’ wallets, not criminals’ pockets.”

In January, the House Judiciary Committee advanced H.R. 2853, the Combating Organized Retail Crime Act of 2025 (CORCA), through markup.

The legislation was introduced in April 2025 by Sen. Chuck Grassley (R-Iowa), who also serves as Senate Judiciary Committee chairman, and Rep. David Joyce (R-Ohio). It has bipartisan support and aims to strengthen the nation’s response to organized retail crime involving the theft of goods for resale through physical and online marketplaces.

Key provisions of the legislation, as cited by the Arlington, Va.-based Transportation Intermediaries Association (TIA), include:

• Strengthening federal enforcement by expanding authority under Title 18 of the U.S. Code to more effectively prosecute organized retail and cargo theft;
• Establishing a Crime Coordination Center led by the Department of Homeland Security to facilitate data sharing, intelligence analysis, and joint enforcement efforts targeting retail theft and multimodal supply chain crimes;
• Increasing penalties for cargo theft, particularly for organized theft and fraudulent transport across state or international borders; and
• Enhancing public-private collaboration by improving coordination among federal agencies—including FMCSA—law enforcement, retailers, and transportation providers to prevent theft and disrupt the resale of stolen goods.
• TIA noted that cargo theft costs the U.S. economy up to $35 billion annually, with strategic theft increasing by 1,500% since the first quarter of 2021. As a recent example, it cited a shipment of lobsters valued at more than $400,000 that was stolen while en route to various Costco locations.

Spear said the legislation would equip law enforcement with the tools and legal framework needed to combat what he described as a complex national and international threat. He added that CORCA would centralize data and coordination among federal, state, and local agencies, as well as industry stakeholders, to proactively dismantle schemes orchestrated by transnational criminal groups.

“The theft of cargo is a nationwide problem, and it requires a national solution that brings the fight to organized theft groups,” he said. “CORCA would help safeguard Americans working in our supply chain and protect national security.”

National Retail Federation Vice President of Supply Chain and Customs Policy Jonathan Gold told LM that cargo theft has been around for a while and is part of a bigger trend in organized retail crime, in the form of more coordinated efforts to steal products, sell them for profit, and use those profits for more nefarious crimes, which have increased in stores and warehouses, while attacking the supply chain and financial networks.

Gold added that CORCA marks a good first step in addressing these issues, with 200 bipartisan co-sponsors in the House and close to 45 bipartisan co-sponsors in the Senate.

“[These crimes] don't just happen in one jurisdiction,” he said. “They're happening across city Lines, county lines, state lines and international boundaries. What we need is the center to help put it all together, show the big picture, and help provide resources for state and local law enforcement to go after these bigger fish and go after the bigger criminals. A lot of this is being directed by organizations outside the United States, like transnational criminal organizations, so hopefully this effort allows us to put more money and effort into going after those organized rings, because we're seeing not just a rise in theft of product, but a rise in violence tied to some of these activities as well, which puts our associates at risk, our customers at risk, and our partners at risk. And retailers, it's not only just working internally on some of these issues, it is also working closely with their transportation providers, especially on kind of the cargo theft side, and making sure they're using legitimate drivers and legitimate companies for transportation purposes. There's a lot of things like freight fraud and double brokering and things like that that need to be addressed.”

A new report from Avalara finds that cross-border trade has become harder to manage, with 83% of businesses saying operations are more complex than they were 12 months ago.

“Global expansion hasn't lost its appeal, but the rules of the game are changing faster than ever,” said Craig Reed, GM of Cross-Border at Avalara. “As trade becomes more fragmented and unpredictable, businesses are realizing they can't wait for certainty to return.”

Please click here to read the complete article.

The premise of increasing inflation, going back to the beginning of the Iran conflict has become more prominent, especially in recent weeks. For March, the U.S. Consumer Price Index (CPI) posted a 3.3% annual gain, coupled with a 0.9% sequential gain over February, largely paced by significant gains in energy prices. Which followed a 2.4% annual February CPI gain.

Those gains may both come up short, for all of calendar year 2026, based on a report issued in March from the Organization for Economic Cooperation and Development, which is calling for 2026 inflation to come in at 4.2%, outpacing its previous 2.8% estimate and also the Federal Reserve’s 2.7% estimate.

Feedback from supply chain economists contacted by Newsroom Notes made it clear that the OECD’s 4.2% projection is contingent, to a large degree, on how long the Iran conflict lasts.

Keith Prather, managing director, at Armada Corporate Intelligence, said he expects 2026 U.S. inflation to come in between 2.7%-to-3.0.

“If the Strait of Hormuz opens [soon], the duration of the impact is short, tariff impacts wane by August, and the U.S. is likely back on track for that lower range of 2.7%-to-2.8%, then hitting 2.4-to-2.5% next year or closer to the Fed’s 2.0% target rate,” said Prather earlier this month.

But should the Strait of Hormuz remain closed through April, which appears to be highly likely, Prather said that longer-term damage will ensue and could lead to what he called a very tough mix of conditions.

“Supply-related inflation is some of the toughest to fix—and it tends to be the most durable,” he explained. “Demand-side inflation is typically killed quickly (economic slowdowns tend to lead in a drop in demand and prices then cool quickly as a result). There's a $15-$20 geopolitical premium on oil today. Opening the Strait pretty quickly pulls that premium off. 

It's the other items in the supply chain (helium, neon, aluminum extrusion shapes, etc.) that may take longer to fix. There's no real speculation premium on those, price inflation (and I've heard suppliers already getting notices of 4-7% increases in construction materials, etc.) is already happening and it will take some time for those supply-side adjustments to take place. Just the international supply chain order process alone is a 4-to-6-week process (on the low side). It will take time for that pressure to unwind for stuff that has to originate somewhere upstream in the Persian Gulf.”

Paul Bingham, Director, Transportation Consulting, at S&P Global Market Intelligence, asked if the OECD’s 4.2% forecast could be upwardly revised, due to the growing global commodity price inflation coming from the Strait of Hormuz closure impacts, not just on crude oil but on petroleum products, LNG, fertilizer and helium.  

“Our own most recent S&P Global Market Intelligence US Macroeconomic forecast of US CPI inflation for 2026 was 3.4%, with core inflation excluding volatile food and energy inflation at 2.8% for 2026,” said Bingham. “To put that in perspective, that macroeconomic forecast had been prepared [in March] with an assumption of the average Brent crude oil spot price of $86.14/bbl for 2026.  To achieve that average crude oil price for the year, the Persian Gulf crude export shipments would have to rebound soon enough to bring market prices down below that $86 level to offset what the market has now at over $100/bbl.”  

As the global commodity market price spike impacts extend longer with the elongation of the effective closure of shipping through the Strait of Hormuz, Bingham noted that the risks on inflation are on the upside for higher inflation in the U.S. in 2026. 

“There are obviously other factors that contribute to US price levels in 2026 including the impacts of U.S. import tariffs substituting for the negated IEEPA tariffs and other global commodity market prices besides crude oil and petroleum products affected by the Iran war such as fertilizers,” he said.

Like many things impacting the global supply chain, especially going back to the pandemic, there is a high degree of uncertainty baked into key economic figures like inflation, for certain. Will the OECD’s forecast end up coming to fruition? It is possible but far from a certainty, given how quickly things can change.

Falling 5.2 cents, the national average, for the week of April 27, came in at $5.351, following a 20.5-cent decline, to $5.403, for the week of April 20, 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.

While the weekly average fell the last two weeks, the average price per gallon remains elevated, due to the launched joint strikes by the United States and Israel more than eight weeks ago, in an initiative geared towards halting Iran’s development of nuclear weapons.

For the week of April 6, the national average rose 3.5 cents to $5.643. Prior to that, the national average, for the week of March 30, came in at $5.401, with the week of March 23 at 5.375. The average price per gallon, for the week of March 16, was $5.071, topping the week ending March 9, at $4.859. What’s more, prior to the last five weeks, the last time the national diesel average topped the $5 per gallon mark was the week of November 28, 2022, when it was at $5.141 per gallon.

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

WTI crude is currently trading at $99.76, up from $90.49 a week ago at this time, on the New York Mercantile Exchange, and down from a high of $119.98 on March 9. This week’s national average is up $1.837 annually.

Total quarterly revenue, at $21.2 billion, was down 1.6% annually, and basic earnings per share at $1.07, beating Wall Street estimates of $1.03. Total operating profit, at $1.267 billion, was off 23.9% annually. 

Segment results for Q1 2026:

• U.S. Domestic Package revenue, at $14.125 billion, was off 2.3% annually, due to an expected volume decline, with revenue per piece up 6.5%, to $13.91;
• International Package revenue, at $4.540 billion, rose 3.8% annually, paced by a 10.7% increase in revenue per piece, to $22.49; and  
• Supply Chain Solutions revenue, at $2.537 billion, was down 6.5% annually, which UPS said was mostly due to a Mail Innovations business volume decline

UPS said that its first quarter GAAP results included after-tax transformation charges of $42 million, or $0.05 per diluted share.

“I want to thank UPSers around the world for their hard work and efforts, and for pushing our transformation forward,” said Carol Tomé, UPS chief executive officer. “The first quarter of 2026 marked a critical transition period for UPS in which we needed to flawlessly execute several major strategic actions and we delivered. With that behind us, we expect to return to consolidated revenue and operating profit growth, and adjusted operating margin expansion in the second quarter of this year.”

Tomé said on the company’s earnings call today that UPS faced significant external challenges in the first quarter, due to things like volatile global markets and rising fuel costs (due to the ongoing Iran conflict), while the UPS team remained focused and pushed its Transformation efforts (a multi-yearm company-wide overhaul of how UPS operates, designed to make the business leaner, more automated, and more profitable).

“The first quarter of 2026 marked a critical transition period for our company, one in which we needed to flawlessly execute several major strategic actions—and we delivered,” said Tomé.  “First, we further reduced non-nutritive Amazon volume by an average of 500,000 pieces per day, and closed 23 additional buildings. Second, under a new agreement, we shifted a portion of our Ground Saver volume back to the USPS for last mile delivery. Third, we launched a voluntary driver buyout program we called Driver Choice, through which we will reduce roughly 7,500 full-time driver positions. Interest in the program was extremely strong and ultimately exceeded our expectations. Based on these actions and more, we are firmly on track to achieve our $3 billion cost out target for the year. UPS also began scaling back leased aircraft, as it retired its MD 11 fleet and took delivery of new 767s. It's a dynamic environment. But even against that backdrop, underlying business performed exceptionally well in the first quarter.”

What’s more she observed that UPS continues to capitalize on trade lane shifts, resulting from 2025’s trade policy changes.

Addressing UPS’s Amazon glide down efforts, which was launched last year, calling it the most extensive U.S. network reconfiguration in the company’s history, through a 50% reduction in the volume UPS delivers for Amazon by June 2026, Tomé explained UPS is comfortably in the home stretch of this initiative.   

“Our actions are moving us toward a more profitable U.S. small package business with the back half of 2026 expected to be the inflection point,” she said. “Our number one priority is to move the right packages and the right mix of volume through our network. The market has changed, and we're adapting to it. We're overturning the old industry assumption that scale alone drives profitability. Instead, we're focused on premium segments like SMB, B2B and complex health care. Our strategy is working. We're seeing favorable mix improvements, with SMB and B2B volume representing a larger share of total U.S. volume. Premium customer wins are driving meaningful revenue-per-piece growth. How are we winning? We're winning through innovative and differentiated capabilities like RFID labeling at customer locations, end-to-end, cold chain Solutions, roadie for same day and big and bulky deliveries, happy returns for box less, label less returns and much more. We're also doing a better job of retaining and growing our existing customers in the US. We saw a meaningful reduction in churn through the first quarter.”

UPS CFO Brian Dykes said on the call that the company’s U.S. domestic segment remained focused on revenue quality in the first quarter, while executing its Amazon glide down initiative, with those strategic actions driving SMB average daily volume growth and strong year-over-year revenue-per-piece growth.

For the quarter, Dykes said that total U.S. average daily volume fell 8% annually, with nearly two-thirds of that volume related to the Amazon glide down, and also deliberate actions to remove lower-yielding e-commerce volume from its network. As for customer mix, Dykes noted that SMB average daily volume rose 1.6% annually, driven by high-tech, healthcare, and automotive customers.

“In the first quarter, SMBs made up 34.5% of total U.S. volume, marking the highest SMB penetration in our history,” said Dykes. “Looking at B2B, while average daily volume was down 5.1% year over year, it represented 45.2% of our total US volume, which was a 140-basis point improvement versus the first quarter of last year, and was our highest first quarter B2B penetration in six years. Our continued focus on revenue, quality and a more premium us volume mix has delivered several consecutive quarters of product and customer mix improvement, reinforcing that our strategy is working.”  

The Jones Act is a law that regulates shipping between United States ports and requires that any cargo shipped between U.S. ports must be transported on ships that are: built in the U.S.; owned by U.S. citizens; flagged, or registered, in the U.S.; and mainly comprised of crewmembers that are U.S. citizens or permanent residents.

“New data compiled since the initial waiver was issued revealed that significantly more supply was able to reach U.S. ports faster,” wrote White House spokesperson Tayor Rogers in a social media message. “This waiver extension provides both certainty and stability for the U.S. and global economies. The Trump Administration has taken several actions to mitigate short-term disruptions to the energy markets, and this extension will help ensure vital energy products, industrial materials, and agricultural necessities are maintained.”

What’s more, a CBS News report cited the White House as saying more than 40 tankers have used, or will be using, the Jones Act waiver, in turn, increasing the availability of transporting goods between U.S. ports by more than 70%, and also leading to more than 9 million barrels of U.S. oil to get to domestic ports.

When the extension to the Jones Act waiver was initially introduced in March—soon after energy prices saw sharp spikes, spurred on by the joint strikes launched by the United States and Israel on Iran, in an initiative geared halting Iran’s development of nuclear weapons—the Department of Energy Secretary Chris Wright said that by temporarily waiving the Jones Act, President Trump is ensuring that oil and other energy resources flow to Americans across the country even during times of disruption.

“This will help to ease short-term price impacts in the oil market as we work every day to lower prices,” noted Wright at the time.

Going back to the beginning of the Iran conflict, the average price per barrel of WTI crude is up around $30-to-$40 per barrel, with the average price per gallon of diesel gasoline up nearly 30%. 

Feedback to waiving the Jones Act for 60 days was not well received by a coalition of U.S.-based maritime labor unions in March—including: American Maritime Officers; American Radio Association; International Organization of Masters, Mates and Pilots; Marine Firemen’s Union; Marine Engineers’ Beneficial Association; Maritime Trades Department, AFL-CIO; Sailors’ Union of the Pacific; Seafarers International Union; and the Transportation Trades Department, AFL-CIO—in a joint statement issued yesterday.

“America’s maritime labor unions are deeply concerned about the Administration’s broad Jones Act waiver, which undermines our national security, weakens military readiness, and hands critical maritime work to foreign vessel operators,” it noted. “Jones Act waivers are intended to meet a strict legal standard and are traditionally granted only in narrow, clearly defined national security emergencies where U.S.-flag capacity is unavailable. Maritime labor has supported narrowly tailored Jones Act waivers in the past when they were obviously justified in the national interest, but this sweeping action does not meet that standard.

This decision will not provide meaningful relief at the gas pump. It has been plainly shown that the primary driver of gasoline prices remains the global cost of crude oil, and multiple analyses demonstrate that domestic shipping accounts for less than one cent per gallon. Any marginal savings will not reach consumers but will instead reward foreign shipping interests at the expense of American workers. Maritime labor calls on the Administration to reverse course and work with stakeholders on real solutions that address energy costs without sacrificing American jobs, national security, or the long-term strength of the U.S. maritime industrial base.”

The companies said that through the pairing of Roadie’s nationwide same-day delivery infrastructure, through its RoadieXD cross-dock offering, with Centiro’s delivery management platform, that retailers are now able to access Roadie’s speed and flexibility through its existing shipping workflows.

“The partnership was driven by growing demand from large retailers, particularly shared customers like a leading home improvement retailer for more seamless, scalable same-day delivery within their existing transportation workflows,” a Roadie spokesperson told LM. “Many of these retailers already rely on Centiro as their transportation management system, so integrating Roadie directly into that ecosystem removes friction and simplifies execution. Roadie and Centiro have been working together for over a year leading up to the announcement, collaborating on integration efforts to ensure a smooth, real-time connection between platforms. This partnership formalizes and expands that work, making it easier for mutual customers to access Roadie’s network.”

The spokesperson explained that the biggest benefit of this collaboration is simplicity, in that retailers are now able to access Roadie’s same-day delivery capabilities directly within Centiro’s platform, without needing separate systems or manual workarounds. Which enables various functions including:

• Faster activation. Customers already using Centiro can quickly turn on Roadie;
• End-to-end visibility. Shipments can be tracked seamlessly within a single system;
• Operational efficiency. Reduced complexity for logistics teams managing high-volume delivery; and
• Scalability. Easier expansion of same-day delivery across markets and use cases (allowing retailers to meet rising consumer expectations for speed and transparency without adding operational burden)

When asked to provide a basic example of the collaboration at work, the Roadie spokesperson used a big-box home improvement retailer routing same-day delivery orders through Centiro as part of their existing logistics workflow as an example.

“Instead of managing a separate last-mile provider, those orders are automatically dispatched to Roadie through the integration,” said the spokesperson. “For example, when a customer places an order for a large item, like a grill, the shipment is processed in Centiro, routed to Roadie, and delivered within hours via Roadie’s network of independent drivers. Throughout the process, the retailer maintains full visibility within Centiro, from dispatch to customers’ doorsteps. This streamlined approach is especially valuable for high-volume, time-sensitive deliveries, enabling retailers to move quickly while maintaining control and transparency.”

Roadie COO Dennis Moon said that, for retailers, adding speed shouldn't require complexity or compromise efficiency, observing that as an additional end-to-end solution for UPS customers and others, Roadie is able to reach 97% of U.S. households—connecting distribution centers to the doorstep with the scale, reliability and operational consistency today’s customers expect.

“Together with Centiro, we’re embedding same-day delivery directly into existing enterprise workflows, making it easier to scale without disruption,” said Moon.

And Matthew Gale, VP Operations at Centiro added that this project demonstrates the art of the possible in a high-volume environment, focusing on fluid warehouse operations and still retaining all the value in what the carrier can provide.

“By working closely with Roadie, we enabled a deferred transaction model that removes API bottlenecks, preserves warehouse velocity, and still delivers true same-day fulfillment at scale,” said Gale. “It’s a practical example of how flexibility and speed can coexist in high-volume distribution environments.”

Total March volume, at 1,606,602 units, saw a 2.3% annual gain, falling short of February’s 2.7% annual gain, and January’s 5.9% increase. September and August were up 2.4% and 1.6%, respectively, which were preceded by July’s 4.4% annual gain, which saw higher volumes due to the pulling-forward of goods being imported during the previous pause on the White House’s reciprocal tariffs.

ISO, or international trailers, were the lone segment to see an annual decline in March, falling 3.9%, to 782,657. Trailers, at 38,783, eked out a 0.8% annual gain, and domestic containers, at 785,252, were up 9.5% annually. And all domestic equipment, which is comprised of trailers and domestic containers, at 824,035, posted a 9.0% annual gain.

Through the first three months of 2026, IANA reported that total volume, at 4,538,078, was off 0.4% annually. Trailers, at 114,054, were down 3.4% annually, and domestic containers, at 2,189,760, rose 4.0%. All domestic equipment, at 2,303,814, headed up 3.6%. ISO containers were off 4.2%, to 2,234,264.

In a previous interview with LM, Andrew Sibold, IANA Director of Economics, said that, in regards to the potential trajectory of 2026 intermodal volumes, he estimated that total volumes could be up around 1.25% annually.

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

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

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

The reason for that, he said, is that trucking continues to face headwinds, with rates still low, as well as the U.S.-Iran situation significantly driving-up fuel prices.

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

As for the current impact of the Iran conflict in intermodal performance, he explained that the situation requires a watchful eye, as capacity and demand tighten in trucking, intermodal stands to increase its overall share. 

“The only potential hiccup would be if the shift to intermodal were to swamp capacity, but this is unlikely in the near term, since all of our efficiency metrics show the network operating very efficiently,” he said.

ATA reported that its March Seasonally Adjusted (SA) For-Hire Truck Tonnage Index reading, at 117.0 (2015=100) topped February’s 116.6 (which marked a 2.9% gain), while posting a 3% annual gain, marking its highest annual gain going back to October 2022. And, for the first quarter, SA for-hire tonnage posted a 2.1% annual gain. For calendar year 2025, the SA For-Hire Truck Tonnage Index came in flat when compared to the 2025 average.  

The ATA’s not seasonally adjusted (SA) For-Hire Truck Tonnage Index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment and the metric ATA says fleets should benchmark their levels with, came in at 120.1 in March, up 12% over February’s 107.3, with January and December coming in at 108.5 and 111.9, respectively.  

ATA officials said that both of these indices are dominated by contract freight, instead of spot market freight.

“While March wasn’t particularly strong sequentially, it was the largest year-over-year increase since October 2022,” said ATA Chief Economist Bob Costello. “The first quarter of 2026 was also the best performance since the third quarter of 2017 when considering both sequential and year-over-year results.”

With a 20.5-cent decline, the national average came in at $5.403, for the week of April 20, following a 3.5-decline decline to $5.608, for the week of April 13. This is the highest weekly decline, since the week of December 22, 2008, when it fell 24.5 cents.

While the weekly average fell the last two weeks, the average price per gallon remains elevated, due to the launched joint strikes by the United States and Israel more than seven weeks ago, in an initiative geared towards halting Iran’s development of nuclear weapons.

For the week of April 6, the national average rose 3.5 cents to $5.643. Prior to that, the national average, for the week of March 30, came in at $5.401, with the week of March 23 at 5.375. The average price per gallon, for the week of March 16, was $5.071, topping the week ending March 9, at $4.859. What’s more, prior to the last five weeks, the last time the national diesel average topped the $5 per gallon mark was the week of November 28, 2022, when it was at $5.141 per gallon.

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

WTI crude is currently trading at $90.49 on the New York Mercantile Exchange, down from $94.06 a week ago at this time and down from a high of $119.98 on March 9. This week’s national average is up $1.869 annually.

As oil and gas prices continue to see

March imports, at 2.46 million TEU (Twenty-Foot Equivalent Units), fell 0.5% annually, marking the seventh consecutive month of annual declines, while topping February’s 2.19 million TEU (which was down 5.2% annually), January’s 2.42 million TEU (which was down 5.4% annually), December’s 2.32 million TEU, and trailing November’s 2.63 million TEU, October’s 2.71 million TEU, below September’s 2.72 million TEU, August’s 2.9 million TEU, and July’s 3.01 million TEU (which topped the 3 million TEU mark for the first time and came on the heels of a June decline, coupled with importers looking to optimize sourcing following the White House’s reciprocal tariffs related to the International Emergency Economic Powers Act on most U.S. trading partners, which went into effect on August 7, 2025).

On a year-to-date basis, through March, total imports, at 7.35 million TEU, are down 3.8% annually.

The firm explained that the reduction in March’s annual decline was due, in large part, to what it called an acceleration in the growth of imports of automotive components, which were 10.8% higher in March compared to 6.8% in February) and furniture, which offset continued weakness in capital goods. It added that there was also an acceleration in imports of consumer durables, to a 16.4% growth compared to 6.2% in February).

Addressing the impact of tariffs on imports, the firm pointed out that the average tariff rate on U.S. imports fell to 9.0% in February, down from January’s 11.2%, while noting that, “the outlook remains volatile for supply chain decision-makers.” And it added that the current 10% Section 122 tariffs could be replaced with Section 301 tariffs at a later date, observing that recent actions on metal activity decrease the overall tariff level, with further front-loading activity, in order to get in front of potential tariff hikes, remaining a possibility.

In an interview with LM, Chris Rogers, S&P Global Market Intelligence, Head of Research, said that a larger decrease in imports was anticipated in March, noting that importers had expected the U.S. Supreme Court to rule against the legality of the IEEPA tariffs, with whatever followed was going to be lower.

“So, if you were shipping out of ASEAN or China, you're north of 20% and Section 122 [tariffs], only allows you 15% but because the USTR was clear that the tariff wall would be rebuilt, then at some point you'd be back to 20%,” he said. “So, at a minimum, you had kind of a window where rates were probably going to be lower. Therefore, I think what you might be seeing in March is some pull forward from Q2. Back in the day, we got excited if a tariff went from 2% to 3%, whereas now it's 10%, 20%, 40% but actually, saving that 10 percentage points is still a big deal.”

With tariff rates having already dipped a bit in February, Rogers explained there was already a degree of that front-loading going in, coupled with the mix of products that were growing versus the ones that weren't growing.

To that end, he noted that the auto sector, has pretty much returned to business as usual, but what is weighing on importers’ minds is what happens with USCMA, which is more of a third quarter issue.

Addressing imports for discretionary consumer goods, which were off in the first quarter 2025, and led to increased front loading, given the slim profit margins for many retailers, Rogers explained that when there is a window in time where they can pull cargo forward, they are going do it, calling it Front-loading 2.0.

Looking ahead, S&P Global Market Intelligence is calling for inbound import volumes to the U.S. to decline at a quicker rate, as volumes normalize back to historic levels, following five years of pandemic, tariff, and conflict disruptions—with a 12.9% annual decline expected in 2026, followed by a recovery in 2027.

CBP said it is launching a new electronic tool called CAPE, the Consolidated Administration and Processing of Entries, that lets importers submit claims directly through the ACE Secure Data Portal. It gives companies their first clear way to recover duties tied to the now-invalid tariffs.

CBP said more than 330,000 importers paid roughly $166 billion in IEEPA duties across more than 53 million entries, making this one of the largest duty recovery efforts in recent history.

The move follows the Supreme Court’s February 20 ruling that struck down the tariffs in a 6-3 decision. Chief Justice John Roberts wrote the majority opinion in the case, Learning Resources, Inc. v. Trump, holding that IEEPA does not authorize the president to impose tariffs.

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