.png)
Want these insights in your inbox each Monday? Subscribe here.
Macro: Demand, Pricing, Policy, Trade, & Legislation
- U.S. supply chain activity reached its strongest level since March 2022. The June Logistics Managers’ Index rose from 69.5 to 71.1 as retailers increased inventories for back-to-school and holiday demand and moved goods ahead of potential tariffs. Within the same index, transportation prices remained near a record high, transportation capacity contracted for a seventh consecutive month and utilization reached an eight-year high during the second half of June.
- More than 1,500 companies and trade groups are seeking exclusions from proposed Section 301 tariffs. Enterprises argue that many affected inputs cannot be sourced domestically in sufficient quantities, highlighting the limits of quickly reshoring complex supply chains.
- The Trump administration opted for trade negotiations instead of immediately imposing new tariffs on commercial aircraft, engines and parts. The decision temporarily reduces another potential cost pressure for airlines and aerospace manufacturers, although additional trade action remains possible.
- Crude oil prices are easing, but refining margins remain elevated. That split means lower crude prices may not flow directly into diesel and gasoline prices, limiting near-term relief for transportation budgets and fuel surcharges.
- A potentially powerful ‘Super’ El Niño could create new supply chain disruptions later this year. Drought and extreme weather could affect agricultural production, semiconductor and data-center operations, and water levels through the Panama Canal.
- The Montgomery negligent-hiring lawsuit against C.H. Robinson is likely returning to an Illinois federal court. The Supreme Court ruled that federal transportation law does not automatically shield brokers from state negligent-selection claims, potentially affecting carrier vetting, liability and insurance practices across the brokerage market.
Land: Trucking, LTL, Intermodal & Rail
- Truckload spot rates have surpassed their COVID-era highs. Dry van spot rates were up 49% year over year during the week ending July 3, and average spot pricing has moved above contract rates. Unlike the pandemic surge, the increase is primarily being driven by carrier exits, fleet reductions and driver enforcement rather than a major jump in freight demand.
- The EPA’s proposed changes to its 2027 heavy-duty engine rule could lower the cost of a new truck without materially increasing capacity. The proposal retains the required 80% reduction in nitrogen oxide emissions while easing several costly warranty and compliance provisions. Analysts say the revisions would help fleet economics, but driver availability and freight demand would still determine whether carriers add trucks.
- STG Logistics has emerged from Chapter 11 after eliminating approximately $1 billion in debt. The intermodal provider is returning with new capital just as higher truckload rates and tighter road capacity are pushing more shippers toward rail.
- Intermodal service has softened, but the network is not yet under serious strain. Current year-over-year growth figures are exaggerated by weak 2025 comparisons. Train speeds are only slightly below their five-year average, and trains held for insufficient power or crews remain well below historical norms.
- Union Pacific and Norfolk Southern say a merger could create a coast-to-coast rail network with fewer handoffs. The carriers argue that the combination would improve service and make rail more competitive with trucking, while shippers and regulators will scrutinize the potential effects on rates, competition and network access.
- FedEx Freight is rebuilding its technology around the specific needs of LTL shippers. The newly independent carrier hired nearly 900 IT employees and is replacing parcel-oriented systems with a cloud-based platform focused on routing, visibility, invoicing, dimensioning, pricing and customer-facing AI.
- Maersk launched a dedicated North American transportation service for new lithium-ion batteries. The hazmat-trained network includes truckload, LTL and specialized transportation as automotive, technology and energy supply chains generate more demand for compliant battery logistics.
What’s Going on With the Strait of Hormuz and Red Sea?
- The U.S. and Iran have resumed strikes as both sides dispute whether the Strait of Hormuz is open. Iran says the waterway is closed, while the U.S. maintains that vessels can transit. Commercial traffic has fallen sharply, and maritime authorities continue to describe the security threat as severe.
- A Cyprus-flagged container ship was significantly damaged in the Strait of Hormuz. The attack reinforces the risks to crews, cargo and energy flows through a corridor that historically handled roughly one-fifth of global oil and LNG movements.
- Carriers are cautiously expanding their use of the Red Sea and Suez Canal. Both Maersk and Hapag-Lloyd are rerouting a China-Mediterranean service through Suez, while Maersk has added a second service under U.S. naval escort. The shorter route could improve transit times by seven days westbound and 14 days eastbound, but carriers are prepared to return to the Cape of Good Hope if conditions deteriorate.
- A lasting peace agreement could release vessel capacity currently absorbed by longer routings around Africa. For now, renewed hostilities make a broad and permanent return to Suez difficult to predict.
Sea: Imports, Capacity & Project Cargo
- U.S. container imports are expected to set a record in July. Retailers are forecast to bring in 2.47 million TEUs as they move back-to-school and holiday inventory ahead of possible tariff increases and higher fuel-related surcharges. The early peak is expected to fade after July, with imports forecast to decline year over year from August through November.
- Today’s strong import volumes are helping carriers absorb a much larger wave of incoming vessel capacity. The container orderbook has reached 12.3 million TEUs, or 37% of the current fleet, with 2.3 million TEUs scheduled for delivery in 2027 and 3.8 million in 2028. A return to shorter Suez routings could intensify the imbalance by releasing capacity currently tied up on longer voyages.
- Multipurpose vessel and car-carrier operators are also ordering new ships, but primarily to replace aging fleets. The MPV orderbook has reached roughly 300 vessels, while 145 car carriers are on order through 2030. Industry leaders describe the ordering as disciplined fleet renewal rather than speculative expansion.
- Project cargo demand remains strong, but vessel, equipment and workforce constraints are delaying execution. Energy, infrastructure and data-center development are increasing demand for heavy-lift transportation, while shortages of specialized ships, cranes, trailers and experienced workers are forcing some projects to adjust their schedules.
Parcel & Air Cargo
- Data center construction has become one of the strongest growth drivers in global air cargo. Companies are flying semiconductors, server racks and other equipment from Asia to accelerate U.S. data-center construction. Asia-to-North America air cargo volumes rose nearly 20% year over year in May, while spot rates increased 36% in June.
- Semiconductor and AI-related shipments continued to drive air cargo growth in June. The shift is helping offset slower cross-border e-commerce demand following changes to de minimis trade rules, but bulky technology shipments require scarcer freighter capacity rather than passenger-aircraft belly space.
- Tight airfreight capacity helped DHL raise its full-year profit forecast. DHL Express earnings increased 63% year over year, with constrained air capacity contributing an additional $171 million in revenue.
- Amazon Shipping is targeting FedEx and UPS customers with lower rates, fewer surcharges and simpler pricing. Intelligent Audit CEO Hannah Testani noted that Amazon is undercutting USPS on some sub-one-pound shipments. For now, the network is best suited to high-volume retailers with lightweight residential packages, while FedEx and UPS retain broader express and specialized capabilities.
- USPS is reportedly moving roughly half of its long-distance mail by air to satisfy its transportation agreement with UPS. The arrangement adds cost and complexity as the Postal Service simultaneously works to reduce its dependence on air transportation.
- FedEx has consolidated its healthcare capabilities into a new Life Science unit. The unit combines temperature-controlled transportation, shipment monitoring, customs support and specialized handling for pharmaceuticals, medical products and clinical trials.
