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Supply Chain Report

THE LATEST JARRETT SUPPLY CHAIN REPORT FOR JULY 2026

MARKET

  •  The Cass Freight Index shipments component fell 4.1% year over year and 3.1% month over month in June, reversing most of the year-to-date gains in seasonally adjusted terms as higher fuel prices weighed on goods demand and capacity declines continued to suppress volumes. Freight expenditures accelerated sharply, rising 11.2% year over year to 3.64, the fastest pace since late 2022, driven primarily by rate increases rather than volume growth, with the expenditures index rising for eight consecutive months on a seasonally adjusted basis. The Cass Truckload Linehaul Index dipped 0.9% month over month to 149.4 but remained 5.5% above year-ago levels, with ACT Research characterizing the pullback as a temporary pause ahead of July 1 bid renewals rather than a reversal of the underlying rate upcycle. (Cass Information Systems July 2026)
  •  U.S. truckload and LTL rate indexes established fresh highs in the second quarter as the freight industry recovers from a nearly four-year downturn, and both are expected to continue climbing in the third quarter according to the report. The TL rate-per-mile component of the TD Cowen-AFS Freight Index reached a 14-quarter high in Q2, landing 16% above the January 2018 baseline as more than 48,000 non-compliant drivers have been forced out of the industry over the past year. The LTL rate-per-pound component hit an all-time high in Q2 at 76.5% above baseline, driven by fuel surcharges running more than 60% above year-ago levels, and is forecast to inch higher in Q3. (FreightWaves July 2026)
  •  Industrial real estate developers are returning to the market in force, with demand for warehouse and distribution space accelerating as supply chain realignment, e-commerce growth and reshoring push requirements beyond what existing inventory can support. Large-format leasing activity surged 32% year over year in the second half of 2025, with 3PLs and manufacturers accounting for nearly two-thirds of that activity, according to Cushman & Wakefield research. The nationwide vacancy rate is expected to return to post-COVID levels by late 2026 or early 2027, with net absorption forecast at 200 million square feet this year, well above the 180 million square feet of new supply scheduled for delivery. (WSJ July 2026)
  •  The U.S. national average on-highway diesel price stood at $4.796 per gallon as of July 13, 2026, up 21.8 cents from one week prior and up $1.038 per gallon year over year. Regional prices ranged from $4.546 per gallon in the Gulf Coast to $6.126 per gallon in California. (EIA July 2026)

LESS-THAN-TRUCKLOAD (LTL)

  •  Manufacturing activity expanded for a sixth consecutive month in June, with ISM's index registering 53.3%, the second-highest reading of the year and consistent with approximately 2% real GDP growth. The new orders subindex held positive for a sixth straight month at 56%, a level that historically signals growth in Census Bureau manufacturing orders data, while the supplier deliveries subindex at 57.4% signaled slower deliveries and supply chain constraints for a seventh straight month and customers' inventories remained in the "too low" band at 42.3%. The data is a direct tailwind for LTL demand as roughly two-thirds of LTL carrier revenue is tied to industrial output, and ISM inflections typically lead LTL tonnage by a few months. (FreightWaves July 2026)
  •  LTL carriers reported stronger demand and rising shipment weights in the second quarter as truckload capacity tightened, with CEO-level executives from Old Dominion, Estes Express, FedEx Freight and others expressing confidence that the trend will intensify in the back half of 2026. Old Dominion CEO Marty Freeman said demand improved sequentially as the quarter progressed, while Estes Express President and COO Webb Estes characterized the moment as a "double whammy" with fewer drivers from CDL enforcement crackdowns and visa revocations combining with fewer new drivers entering through driving schools, calling the developments structural rather than temporary. Saia implemented a 7.1% general rate increase on July 6, 120 basis points higher and three months earlier than last year, the latest in an industry pattern of GRIs being pulled forward from their traditional annual cadence as carriers capitalize on favorable pricing conditions. (JOC July 2026) 
  •  FedEx Freight reported its first earnings as a standalone public company following its June 1 spinoff from FedEx Corp., with Q4 revenue rising 4.8% to $2.4 billion even as average daily shipments fell 5.9% year over year, as revenue per shipment climbed 11.5% and revenue per hundredweight rose 8.2%. CEO John Smith told analysts the company is moving from a posture of "building" to "hunting," having assembled a 500-member sales force targeting small and midsize shippers, healthcare, grocery, data center infrastructure and energy verticals where FedEx Freight historically had low penetration but where margins are attractive. The company's dual-service model and 365-terminal national footprint are positioned as differentiators in a market where Amazon has entered LTL and other carriers are narrowing their commercial focus. (JOC July 2026)
  •  Mountain Valley Express, a small regional LTL carrier based in Manteca, California, confirmed it ceased operations effective July 7, 2026, becoming the latest casualty in an industry shakeout that has disproportionately affected regional players unable to scale through the prolonged freight recession. The carrier operated 13 terminals across California, Arizona and Nevada and had announced a restructuring involving approximately 105 layoffs in late 2024, framing the moves at the time as an integration of DC Logistics with GLS U.S. Freight and GLS U.S. Solutions. The closure adds to the broader capacity reduction occurring across trucking, as smaller operators unable to recover fuel costs through surcharge programs remain on the sidelines despite improving market conditions. (FreightWaves July 2026)

TRUCKLOAD (TL)

  •  National spot trucking rates for the week of July 6-12 show van rates down 5.0% week over week but up 29.4% year over year, flatbed rates down 1.6% week over week and up 35.8% year over year, and reefer rates up 17.4% week over week and 21.0% year over year. The van load-to-truck ratio rose 9.6% week over week and remains 64.0% above year-ago levels, while flatbed load-to-truck is up 152.1% year over year and reefer load-to-truck up 69.2%, underscoring how dramatically tighter carrier capacity is compared to a year ago even as weekly spot rate movements moderate from recent highs. (DAT July 2026)
  •  U.S. dry van spot rates hit $2.14 per mile in May, up 31.29% year over year and 9.74% month over month, while contract rates reached $2.18 per mile, up 9.00% year over year. The U.S. Bank Freight Payment Index, produced in collaboration with DAT Freight & Analytics from more than $46 billion in annual freight payments, showed spot volumes declining even as prices surged, from 1.36 million shipments in March to 1.11 million in May, confirming that the market is being repriced entirely from the supply side with demand playing little role. Veritiv Director of Transportation Alex Terry warned that as contract rates continue chasing spot pricing, shippers face growing exposure to higher transportation spend, with the index projecting continued upward pressure through the remainder of the year. (FreightWaves July 2026)
  •  The U.S. has revoked work visas for approximately 20,000 Mexican truck drivers between April 2025 and April 2026, according to Augusto Ramos Melo, president of Mexico's National Chamber of Freight Transportation, with the figure shared by the American Trucking Associations and tied to an executive order from President Trump targeting cabotage violations and commercial driver requirements. Transportation Secretary Sean Duffy publicly defended the crackdown, stating DOT is working with Customs and Border Protection to pull visas from foreign drivers who haul loads between domestic U.S. points illegally, while Canacar noted that roughly 30,000 total foreign drivers have been removed from U.S. operations, tightening cross-border capacity and contributing to upward freight rate pressure. Canadian carriers have reported no similar enforcement actions, and Canacar has launched an English-language training program for drivers to maintain cross-border eligibility as FMCSA's reinstated English-proficiency out-of-service standard continues to sideline non-compliant drivers. (FreightWaves July 2026)
  •  Truckload spot rates surpassed their COVID-era highs in late June and show little sign of easing post-July 4, with tight capacity keeping pricing elevated even as the market heads into what is traditionally a softer summer season. The Journal of Commerce noted there is little evidence that rate-hike momentum is slowing, as tender rejections remain high and routing guides continue to crumble across the shipper base. Public carrier management teams at recent investor conferences said contractual rates set early in the 2026 bid season proved too low and that mini-bid activity has spiked significantly as a result, with double-digit contractual rate increases expected through this year and into 2027. (JOC July 2026)

PARCEL

  •  Amazon Shipping is actively targeting FedEx and UPS customers with pricing proposals that are competitive with or lower than the incumbents, along with simplified fee structures that eliminate residential surcharges and weekend delivery fees, parcel pricing experts told Supply Chain Dive. Logistics data platform Loop reports clients saving up to $6 per package by shifting eligible residential volume to Amazon Shipping, and in one example involving a large retail client, Amazon was able to serve more than 90% of the distribution footprint while delivering annual savings exceeding 33% compared to FedEx. FedEx and UPS are responding by ceding lightweight e-commerce business and focusing on higher-margin healthcare, express and complex shipment categories, though pricing consultant Hannah Testani of Intelligent Audit cautioned that Amazon Shipping's current pricing may be a customer-acquisition posture that evolves once volume commitments are secured, advising shippers to negotiate contract terms with Amazon as rigorously as they would with the legacy carriers. (Supply Chain Dive July 2026)

INTERNATIONAL

  •  The Drewry World Container Index fell 2% to $4,547 per 40-foot container, with the decrease indicating that the strong upward momentum seen during peak season is beginning to subside. (Drewry July 2026)
  •  A.P. Moller-Maersk sharply revised its full-year 2026 financial guidance upward, now expecting underlying EBITDA of $8 to $10 billion, up from prior estimates of $4.5 to $7 billion, citing strong container demand particularly in the Far East and a sustained increase in spot market rates fueled in part by the ongoing U.S.-Iran conflict. The war, which began Feb. 28 with the closing of the Strait of Hormuz, trapped thousands of vessels in the Gulf region, prompted carriers to implement emergency surcharges, and helped send spot rates surging alongside tariff-driven frontloading by shippers anxious to avoid further price increases from Asian suppliers. Maersk updated its global container volume growth outlook to approximately 4%, up from its prior range of 2% to 4%. They will release second-quarter earnings on Aug. 13, with the FMC having rejected the carrier's requests three separate times to waive the 30-day advance notice requirement for emergency fuel surcharges. (FreightWaves July 2026)
  •  Retailers are frontloading imports to beat expected August tariff increases, pushing major U.S. container ports toward an all-time record in monthly volume, with the National Retail Federation projecting July volumes will surpass 2 million TEUs. Ocean carriers have responded by adding services and deploying extra loaders to capture the surge, while the Port of Long Beach's executive director noted that fall and holiday merchandise typically arriving in October through December began appearing at the port as early as spring, with intermodal activity surging to approximately 28% of outbound container volume by train. At least two carriers have announced additional peak season surcharges of $1,200 to $2,000 per FEU effective mid-month on top of June's initial round, as capacity on the eastbound trans-Pacific remains the tightest it has been in years. (FreightWaves July 2026)