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Supply Chain Report

THE LATEST JARRETT SUPPLY CHAIN REPORT FOR AUGUST 2026

MARKET

  •  The July Logistics Managers' Index came in at 68.9, down 2.2 points from June's 71.1. The slowdown was driven by a moderation in inventory level growth, which fell 5.5 points to 55.0. Transportation capacity remained in deep contraction at a level that has now persisted for four consecutive months. Respondents forecast the overall LMI will remain elevated at 70.5 over the next 12 months, with continued expectations of rising inventories, persistent capacity tightness in transportation and sustained high costs across inventory, warehousing and freight. (Logistics Management August 2026)
  •  The U.S. Producer Price Index was unchanged in July after falling a revised 0.1% in June, coming in below the 0.2% consensus estimate. On a Y/Y basis, producer prices rose 4.7%, down sharply from 5.5% in June and below the forecasted 4.9%. The decline in energy prices was the primary driver of monthly relief, with diesel fuel leading decreases in intermediate demand, a modest respite for freight shippers even as transportation and warehousing services fell 1.8% within the final demand services component. (WSJ August 2026)
  • This year's peak shipping season is winding down earlier than usual, with the National Retail Federation and Hackett Associates reporting a 13.2% Y/Y increase in TEUs at major U.S. ports in June, before projecting July volumes will fall 7.6% Y/Y. Retailers pulled merchandise forward ahead of Section 122 tariffs that expired July 23 and a new round of Section 301 tariffs covering 60 economies that took effect the following day, resulting in an early peak. NRF Vice President for Supply Chain Jonathan Gold noted that retailers placed more than half of holiday orders by the end of May, roughly two months earlier than in Deloitte's 2024 survey. (Trucking Dive August 2026)
  •  Shippers moved less freight in the second quarter of 2026 and paid sharply more to do it, with the U.S. Bank Freight Payment Index showing national shipment volumes fell 1.1% sequentially and 2.8% Y/Y, while spending jumped 6.4% from the prior quarter and 28.1% Y/Y. Tightening truck capacity, not fuel, drove most of the damage with the Southwest standing out as the starkest example. Shipments there fell 20.2% year over year while spending surged 39.9%, a divergence analysts attributed in large part to B-1 visa cancellations reducing cross-border capacity in the region. (FreightWaves August 2026)
  • The U.S. national average on-highway diesel price stood at $5.257 per gallon as of Aug. 10, 2026, down 9.1 cents from one week prior and up $1.503 per gallon Y/Y. Regional prices ranged from $5.044 per gallon in the Gulf Coast to $6.618 per gallon in California. (EIA August 2026)

LESS-THAN-TRUCKLOAD (LTL)

  •  July manufacturing data pointed to a stronger-than-expected recovery, with the ISM Manufacturing PMI rising to 55.6, its highest level since May 2022 and the seventh consecutive month of expansion. New orders also continued to strengthen. The manufacturing recovery is beginning to translate into stronger LTL demand, with four publicly traded LTL carriers reporting average second-quarter tonnage growth of 2.6% Y/Y and preliminary July growth of 5.1%. Weight per shipment increased 3% Y/Y, reflecting a shift of some freight from truckload back into LTL networks and a more industrial-heavy freight mix. (FreightWaves August 2026)
  •  XPO reported second-quarter North American LTL revenue rose 4.9% Y/Y to $1.23 billion as shipments per day grew 3% and tonnage per day increased 0.1%, while the carrier continued to outperform seasonal trends. Chief Strategy Officer Ali Faghri said roughly two-thirds of XPO's business is tied to industrial customers, positioning the carrier to benefit directly from the manufacturing recovery, and noted XPO's 30%-plus excess door capacity and investments in technology and terminal infrastructure allow it to move quickly as industrial demand accelerates. With approximately 38,000 employees and 586 locations across 17 countries, XPO said its AI-driven linehaul models continue to lower cost-to-serve and improve network efficiency even as market conditions improve. (Trucking Dive August 2026)

TRUCKLOAD (TL)

  •  National spot trucking rates for the week of Aug. 3-9 show van rates down 0.8% W/W but up 46.8% Y/Y, flatbed rates down 7.1% W/W and up 42.7% Y/Y, and reefer rates up 11.6% W/W and 41.9% Y/Y. The van load-to-truck ratio fell 6.3% W/W but remains 61.9% above year-ago levels, while flatbed load-to-truck is up 80.4% Y/Y and reefer load-to-truck up 62.7%, confirming that despite modest weekly softness across most equipment types, the market is dramatically tighter than one year ago. (DAT August 2026)
  •  The surging construction of data centers across the United States is creating a new, concentrated source of truck capacity demand that is compounding an already supply-constrained market. Each gigawatt of U.S. data center expansion requires approximately 100,000 truckloads of construction materials, equipment and infrastructure components, and experts question whether existing truck capacity is sufficient to absorb both the data center build-out and traditional freight demand simultaneously as AI infrastructure investment accelerates. The JOC reported that data center logistics requirements are drawing flatbed and specialized capacity away from traditional freight lanes, with hyperscalers and co-location developers front-loading material movements as construction timelines compress. (JOC August 2026)
  • The use of mini-bids is accelerating sharply as shippers scramble to secure truck capacity that their primary routing guides can no longer reliably provide. Carriers are accepting spot-like rates through mini-bids that are 15% to 25% above contracted lane pricing, and shippers who locked in early 2026 annual contract rates are discovering those agreements are increasingly unworkable as tender rejections surge and routing guide compliance falls. The JOC noted that the accelerating use of short-term, targeted contracts underscores widening capacity gaps in shipper distribution networks, with intermodal volumes also surging as shippers seek lower-cost alternatives to over-the-road moves amid high diesel prices and tight truck availability. (JOC August 2026)

PARCEL

  •  The 2028 UPS-Teamsters contract negotiation will trigger a market-reshaping event for the entire parcel industry, with ShipMatrix President Satish Jindel predicting at a Jarrett Logistics conference that UPS either dominates the parcel market or fades into irrelevance depending on how it handles its labor cost structure. Teamsters drivers cost approximately $65 per hour in total compensation compared to FedEx's $35 to $39 per hour and regional carriers' sub-$15 per hour for gig-worker last-mile delivery, a gap Jindel says is structurally unsustainable as Amazon Shipping, Walmart's in-house delivery and startup couriers continue capturing e-commerce volume at lower cost. Jindel argued UPS should demand lower pay scales and prepare to absorb a strike if necessary, using the disruption to replace Teamster drivers with gig workers and non-union hires from FedEx's and Amazon's contractor bases. (FreightWaves August 2026)
  • FedEx, UPS and DHL have begun returning tariff refunds to the customers that originally paid duties under the Trump administration's tariffs struck down by the Supreme Court in February, with about $100 billion in total tariffs having been refunded to companies so far. FedEx said it has begun issuing $800 million in tariff refunds and has set up a portal where customers can enter tracking numbers to check their eligibility, while UPS said customers should receive refunds one to three months after it receives reimbursement from Treasury following its first-phase application for $500 million in refunds. (Transport Topics August 2026)

INTERNATIONAL

  •  The Drewry World Container Index rose 1% W/W to $4,339 per 40-foot container, driven by higher rates on the Transpacific trade route. Compared to August 2025, the Index is up 84%. (Drewry August 2026)
  •  U.S. containerized imports rose 4.5% in July from June to 2.51 million TEUs as peak season momentum built, according to Descartes Systems Group's July Global Shipping Report, with China accounting for the largest share of the M/M gain as volumes rose 7.2% to their highest monthly level since July 2025. The July total was consistent with patterns seen in each of the past 10 years and broad-based across origin markets including Hong Kong, Germany, Japan, South Korea and India. Total U.S. imports remained 4.3% below year-ago levels as a result of the unusually strong frontloading that inflated the July 2025 comparison. Gulf Coast container imports continued rising in July, extending a shift in freight flows among U.S. gateways as shippers diversify port strategy in response to ongoing supply chain uncertainty. (FreightWaves August 2026)