Where cost pressure on shippers is heading this month, by mode.
Q3 GDP grew 3.4% and logistics activity is accelerating, but sentiment sits near record lows and inflation rose to 3.7%.
The U-Mich reading ticked down from 48.1 and remains near record lows.
Core inflation, excluding food and fuel, was 2.6%.
Annualized growth came in stronger than expected.
A slowdown from 1.3% growth in August.
Up from 66.6 in August and rising at a faster pace.
The economy in four parts
The U-Mich consumer sentiment reading slipped from 48.1 to 48.0, still near record lows. Meanwhile the Logistics Managers' Index climbed to 70.2 from 66.6 in August, driven by inventory levels, warehouse use and transportation prices.
The U.S. added only 29,000 jobs in September. Of those, 9,000 were in manufacturing, its fourth straight month of gains. Labor force participation fell nearly a point over the year, from 62.5% to 61.8%.
Headline inflation came in at 3.7% in September, with core inflation at 2.6%. The Fed held rates at its latest meeting, but a December hike is considered likely. Q3 GDP grew a stronger-than-expected 3.4% annualized.
The International Energy Agency forecasts a diesel shortage lasting into 2027. Retail sales rose 0.8% in September, slower than August's 1.3%, and the NRF projects 4.2% retail sales growth for November and December.
Sources: U-Mich, LMI, US BLS, Cass, Baltic indexes, ACT Research, Drewry, DAT, Transport Topics, National Retail Federation, IEA, US Commerce Dept
Middle East attacks are driving fuel risk, carriers are returning to Suez, and CBP is finalizing new requirements for foreign importers.
Keep fuel volatility in your plans while Middle East risk stays high. Expect Asia–Europe ocean rates to soften as carriers return to Suez, and if you use a foreign Importer of Record, review those arrangements before CBP's new requirements start January 5.
Regional developments from the November report
Quick digest
Attacks on vessels transiting the Strait of Hormuz pushed Brent crude above $113 a barrel, underscoring ongoing fuel cost and supply chain security risks.
New Foreign Importer of Record (FIOR) requirements and enhanced importer validation mark the latest phase of Executive Order 14411. Key deadlines begin January 5, 2027, with more requirements extending through May 2027.
63% of ocean capacity on Far East–Europe lanes has returned to the Suez route, and carriers are expected to complete the return by Q1 2027. Shorter voyages free up vessel capacity, adding downward pressure on Asia–Europe rates.
The U.S. and China extended their trade truce through January 10, 2027, giving transpacific supply chains near-term stability while broader negotiations continue.
First-half trade volume grew 3.5% while trade value grew 15%, one of the widest gaps in recent years, reflecting higher energy prices and strong demand for AI goods.
Ongoing security incidents on key shipping lanes keep fuel prices volatile, creating cost uncertainty for global transportation.
Continued attacks and heightened military activity are causing some carriers and shipowners to avoid or limit transits through the region.
Sources: WTO, Lloyd’s List, The Loadstar, C.H. Robinson, Maersk, China Customs, Verisk Maplecroft, China GAC, STAT Times, MSN, Transport Topics, International Trade Today, NCBFAA
Tonnage is rising while capacity keeps tightening, and shippers are paying more to move freight.
Expect tighter capacity and higher spend into year-end. Oil eased on hopes of Iran talks, but energy markets remain volatile, so keep fuel in your budget assumptions.
Q3 volume growth by railroad
Quick digest
Truck tonnage rose 0.8% in September while capacity continued to shrink, signaling a gradually tightening freight market.
The U.S. Bank Freight Payment Index rose 32.1% year over year in Q3, signaling sustained demand and elevated transportation spending across domestic freight markets.
September Class 8 orders fell 9.5% year over year but beat expectations, as fleets keep replacing aging equipment despite softer demand.
Brent crude fell 5.9% to $106.65 a barrel on reports that Iran may pursue talks that could reopen the Strait of Hormuz. Lower energy prices could ease transportation costs, but geopolitical risk keeps markets volatile.
States continue to scale back non-domiciled CDL programs as federal eligibility rules tighten, creating headwinds for trucking capacity and driver availability.
Production reached its highest level since 2021 as the ISM Manufacturing Index rose to 55.5, its 10th straight month of expansion, with growth in new orders and factory employment.
Data center buildouts have filled outdoor storage yards used for construction staging in Atlantic and Gulf Coast port cities, with rents up more than 100% since 2020.
Sources: BLS, American Trucking Assoc., JoC, DC Velocity, Alterra, U.S. Chamber of Commerce Institute for Legal Reform, WSJ, Transport Topics, Herbert Smith Freehills Kramer LLP, Trucking Dive
Manufacturing is lifting demand, freight is shifting in from truckload, and fuel surcharges are the main driver of rising rates.
Fuel surcharges are now the biggest driver of LTL cost increases. Review the surcharge tables in your contracts, and expect parcel costs to move with fuel too once USPS switches to a weekly surcharge in January.
Indexed, January 2025 = 100%. Hover for values.
Quick digest
Stronger manufacturing activity and rising new orders point to continued freight demand, supporting inventory replenishment, transportation volumes and supply chain activity through year-end.
Elevated diesel prices and fuel surcharges remain the primary drivers of rising LTL rates, and continued carrier pricing discipline is keeping upward pressure on costs despite only moderate demand.
DHL, Amazon and GXO plan to increase hiring for peak. UPS expects staffing to stay flat, and the U.S. Postal Service plans fewer seasonal hires.
Rising shipment weights suggest shippers are moving denser, industrial freight, a trend often tied to strengthening fundamentals and manufacturing activity.
As truckload capacity tightens and costs rise, freight is shifting back into LTL networks, supporting demand and tightening capacity through year-end.
USPS will add a weekly fuel surcharge in January 2027, in line with FedEx and UPS, increasing shipper exposure to diesel and jet fuel swings.
Sources: UBS, Transport Topics, Reuters, BLS, TD Cowen/AFS, ACT Research, WSJ, EIA, Supply Chain Dive
Demand grew 7.7% while capacity grew 2.7%, and jet fuel is climbing back toward its spring peak.
Book transpacific peak capacity early. AI and high-tech shipments are absorbing space, and jet fuel is back near its spring peak. If ocean congestion or tariffs push more freight to air in Q4, space will tighten further.
Year-over-year change, by airline region of registration
Quick digest
Demand is being driven by high-tech shipments, especially eastbound across the transpacific. The Global Manufacturing Output PMI rose 0.7 points and New Export Orders rose 0.5 points in October, their highest levels in more than five years.
Asia-Pacific and Middle East carriers posted the strongest capacity growth in September, as Middle East capacity continues to normalize and more capacity moves into Asia-Pacific markets.
Jet fuel spiked to $200 a barrel by April at the start of the Middle East conflict, fell to $115 in June, and has risen steadily since, topping $190 in October.
Asia-Pacific demand to the U.S. surged in October, driving week-over-week spot rate increases in weeks 42 and 43 as capacity tightened ahead of year-end.
AI-related shipments lifted U.S.-bound tonnage from Asia Pacific 14% above last year. Semiconductors, servers and data center equipment are driving volumes and rates, while carriers face rising aircraft, engine and operating costs.
Asia-Pacific volumes to Europe rose 10% week over week after Golden Week, and China–Europe volumes are stabilizing. Volumes remain below last year, with new EU import charges ahead.
Sources: IATA, Air Cargo News, STAT Times, The Loadstar
Benchmarks are mixed, LA/Long Beach labor talks add risk, and attacks near Hormuz hit wartime highs.
Plan for West Coast delays and keep alternate gateways ready. Asia–Europe rates may ease as carriers return to Suez, but congestion and blank sailings are holding prices up on other lanes.
USD per 40-foot container. Tap a lane in the legend to hide or show it.
Quick digest
Drewry’s World Container Index fell 3% week over week to $4,429 per FEU and the Freightos Baltic Index slipped 1%. The NYSHEX index rose on all five lanes it tracks, including 1.9% on Asia–U.S. West Coast and 5.4% on Asia–North Europe.
ILWU Local 26 labor negotiations have raised concerns about disruptions at key Los Angeles and Long Beach terminals, and shippers are already reporting loading delays and congestion at the nation’s largest container gateway.
The U.S. advised vessels to avoid nonessential transits through the Strait of Hormuz after nearly 30 attacks in October. Carriers face more routing uncertainty, longer planning cycles and higher operational risk.
The USTR extended its suspension of proposed port fees on Chinese vessels and certain maritime Section 301 tariffs through January 9, 2027, keeping ocean costs predictable for now.
Continued ocean service disruptions are pushing some shippers toward air freight for high-value and time-critical cargo.
Congestion, blank sailings, Red Sea network changes and operational disruptions are supporting container rates as carriers actively manage capacity.
Trade flows may improve through late 2026, but full normalization of vessel routing and capacity isn’t expected before mid-2027.
Sources: Container News, SupplyChainBrain, Journal of Commerce, FreightWaves, Air Cargo News, Transport Topics, C.H. Robinson, Supply Chain Dive
CBP’s bonding changes are expected by November 30, Foreign Importer of Record rules start January 5, and international mail filing moves to January 20.
Effective and compliance dates from this issue
Quick digest
CBP extended the compliance deadline for Entry Type 13 to January 20, 2027, giving importers and brokers more time to prepare for new ACE filing requirements for international mail subject to Section 201, 232, 301 and PGA rules.
The U.S. and China agreed to extend their economic truce through January 10, 2027. Under the proposed 30-for-30 framework, both countries are reviewing about $30 billion in annual imports for possible reciprocal tariff cuts, but no new tariff changes have been approved or implemented.
CBP’s rollout of Executive Order 14411 continues with expected bonding changes by November 30, ongoing Form 5106 validation reviews, and new Foreign Importer of Record requirements effective January 5, 2027. Importers should evaluate bond adequacy, validate registration data and review foreign IOR arrangements.
Regulatory and tariff updates
With de minimis changes, Entry Type 13 and proposed low-value filing and bonding rules, regulators are increasing oversight of e-commerce and postal imports.
U.S., EU and UK authorities continue to add customs, environmental and importer accountability requirements.
CBP is seeking feedback on proposed supply chain transparency, low-value filing and bonding rules, with comment deadlines in early December. These could significantly expand importer reporting obligations.
Sources: International Trade Today, KPMG, Journal of Commerce, Supply Chain Brain, Transport Topics, European Union, Customs & International Trade Law Blog, Flexport, JD Supra, Reuters, MSN, NCBFAA
Ownership-based screening is the theme: the BIS Affiliates Rule is due November 10, and regulators are looking past the 50% rule.
Screen for ownership and control, not just listed names. Map beneficial owners and affiliates before the BIS Affiliates Rule takes effect, and check suppliers against the updated UFLPA Entity List.
Companies should prepare for ownership-based export control screening ahead of the expected November 10 start. Some EAR99 and in-country activity may also be covered.
Effective October 29, CBP added a large China-based genomics company and related entities to the UFLPA Entity List, raising detention risk and due diligence expectations for affected imports.
Sanctions ownership assessments go beyond the 50% rule: board influence and de facto control can trigger restrictions below that threshold.
MOFCOM opened a consultation on about 40 technologies, including AI models, computing clusters, advanced biomedicine and solar PV.
China increased scrutiny of HS codes tied to dredging, tunneling and UAVs. Companies should validate end use and confirm goods aren't controlled dual-use items.
Recent DOJ and OFAC actions targeted aviation exports, procurement networks and evasion schemes, with a focus on diversion and transshipment.
Notable enforcement trends
China’s review of AI, advanced computing, biomedicine and solar technologies signals export controls moving into emerging, strategically important sectors.
Regulators are looking past legal ownership thresholds to beneficial ownership, board influence, affiliated entities and de facto control.
UFLPA enforcement and Entity List additions continue to expand compliance obligations, requiring deeper visibility into suppliers, ownership and sourcing.
Sources: OFAC, Department of Justice, MOFCOM (China), CBP, BIS, Reuters, McCarthy Tétrault LLP
Key deadlines and effective dates from this issue.
Selected articles from this month's sources.
Hormuz rerouting will raise consumer prices, logistics CEO says
Transport Topics TruckloadData centers and consumers are keeping trucking demand afloat
Trucking Dive TruckloadU.S. to tariff Chinese trailers to aid domestic producers
Transport Topics LTLUSPS to debut weekly fuel fee in 2027, matching FedEx and UPS
Supply Chain Dive AirAsia to North America: the lane that chips built
STAT Times AirOcean congestion and tariffs could bring more Q4 air cargo volumes
Air Cargo News CustomsImporters win class status in Trump tariff refund fight
Transport Topics SecurityCargo theft has entered a 'new normal,' executive says
Transport Topics
