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Global Ports
The Headlines: Even with the shaky MOU agreement in place, the impacts of the Strait of Hormuz closure are likely to take months to work through global ocean networks. But that is not the only ‘hotspot’ impacting ports. The Panama Canal terminal dispute remains an active geopolitical issue, with Panama’s takeover of the Balboa and Cristóbal ports contributing to regional tensions and the broader U.S.-China trade disagreements that have affected shipping operations around the world.
What’s Important: Two of the world’s most important trade arteries are both under pressure. In the Middle East, rerouted vessels, displaced containers, and disrupted schedules will take a long time to return to normal rotations, and, given the current political rhetoric, it’s hard to feel confident that many of the underlying issues have actually been resolved. Shippers should not look past the hard work to be done and maintain the flexibility and diversity they’ve built into their supply chains. Key to that is working with partners who can pivot quickly, both during the disruption and through whatever recovery period follows.
Even once opened, it would take up to six months to un-bunch the global fleet and reassemble predictable port schedules.
European Update
The Headlines: Effective July 1, the EU has removed the duty-free threshold for low-value goods, applying a flat €3 duty per item. Separately, the EU and U.S. have agreed to eliminate tariffs on a range of industrial goods, with preferential terms for some agricultural products, though safeguards remain. The European Commission is also weighing rules designed to push companies in sensitive sectors to diversify away from single-source suppliers (particularly in China), as part of a broader trade defense review.
What’s Important: Policies and geopolitics continue to impact EU supply chains in serious ways beyond the Strait of Hormuz disruption. There is a lot on the horizon for importers and exporters, with Brussels signaling a more active trade posture. Companies should monitor which goods qualify for the new U.S. tariff relief and begin evaluating supplier diversification ahead of any new mandatory sourcing rules. As always, be sure to factor in the impact on shipping costs and lead times that can result from such changes.
The EU has removed the de minimis threshold, now applying a flat €3 per item.
Ocean Freight
The Headlines: Ocean freight entered an unusually early peak season, driven by geopolitics, more trade policy changes, and aggressive capacity management by carriers. Shippers accelerated bookings to stay ahead of persistent uncertainty, while carriers tightened available capacity by blanking sailings on both Transpacific and Asia-Europe services. At the same time, concerns over the delicate situation in the Middle East continue to put pressure on fuel and insurance costs. The result has been a sharp increase in freight rates, with several carriers implementing peak season surcharges of up to $2,000 per FEU on key trade lanes.
What’s Important: This is shaping up to be one of the more difficult ocean freight markets in recent memory, and analysts expect the rate momentum to continue at least through July. Shippers should secure space early and build extra lead time into planning, given that even normal lanes are now running longer than usual. The impacts of the closure of the Strait of Hormuz will continue long after its reopening. And although it’s not getting the headlines, there’s still plenty changing with tariffs that will impact trade flows.
The Drewry World Container Index surged 23 percent in a single week in June.
Air Freight
The Headlines: Air cargo has held up better than many expected given everything happening in the Middle East, but there are some warning signs for the balance of 2026. The full-year outlook has been sharply downgraded by some analysts, with cost, not demand, as the driver. Unsurprisingly, the closure of the Strait of Hormuz disrupted jet fuel supplies and pushed air cargo fuel surcharges higher across the board. Cargo revenue is still expected to grow to $162 billion for the year, even as volume growth will be flat.
What’s Important: Air freight has become a sort of pressure-release valve for ocean freight delays, particularly for high-value or time-sensitive goods, though it comes at a significant premium. As geopolitical tensions, fuel costs, and route disruptions continue to influence supply chains, air freight rates may prove more resilient than in past cycles. Companies considering air freight as a contingency should consider adding the expense to their landed-cost models now rather than treating it as a one-time expedite expense. Doing so can help reduce the risk of margin surprises later.
N. America Inland Trends
The Headlines: The inland freight market has shifted noticeably away from the shipper-friendly conditions that dominated the past two years. DAT Trendlines data shows truckload spot rates climbing steadily throughout 2026. While capacity is not yet at the crisis levels seen during the pandemic-era freight boom, brokers and shippers are increasingly encountering a market where securing trucks is becoming more expensive and less predictable.
What’s Important: After years of domestic trucking being a reliable area of cost control for shippers, that advantage is shrinking quickly. Companies should revisit lane-level rate assumptions now rather than waiting for contract renewal cycles, and build in more lead time for time-sensitive freight. Shippers with flexibility are increasingly shifting freight from truckload to rail to manage costs on longer haul lanes where service requirements allow. Engagement with carriers sooner rather than later could have a big impact in the second half of 2026.
SONAR’s National Truckload Index hit an all-time high of $3.83 per mile in June, with diesel price 50 percent higher YoY.
U.S. Logistics Manager’s Index
The Headlines: The most recent Logistics Managers’ Index remains at elevated levels despite a slight pullback, with inventory conditions stabilizing while pricing pressure continues to intensify across the supply chain. Inventory Costs rose to its highest reading since May 2022, while transportation pricing is accelerating at one of the fastest rates in the index’s history. The report links persistent cost pressure to tariff uncertainty and geopolitical tensions in the Middle East, including energy market volatility, which may continue to fuel inflation into the summer.
What’s Important: The LMI is designed as a forward-looking indicator, and it is currently signaling sustained cost pressure working through transportation, warehousing, and inventory networks, with the potential to cause broader inflation in the months ahead. Companies are likely to see elevated costs that vary by sector. Supply chain planning will benefit from closer alignment between purchasing decisions, inventory positioning, and current transportation conditions rather than historical seasonal patterns (e.g., doing things the way they’ve always been done).
The latest LMI came in at 69.5, the second fastest rate of expansion in its history.
Tariffs & Iran Conflict Update
Here is an update on the same two major stories from last quarter: tariffs and the Iran conflict, both of which remain impactful on supply chains.
TARIFFS: The Trump administration is proposing new 10% or more tariffs on imports from major US trading partners, citing failures to enforce bans on forced labor. This is targeting goods from countries including the EU, Canada, Mexico, and China. The goal is clearly to replace lost tariff revenue, and not surprisingly, immediate pushback is expected. Brazil has become a key focus, with the U.S. proposing new tariffs tied to concerns over digital trade, intellectual property, market access, and other economic policies. Section 232 tariffs on steel, aluminum, and copper are being refined to encourage domestic and North American sourcing rather than simply increasing import costs. Trump issued a directive to the CBP to begin more stringent enforcement of rules related to Importer of Record. Lastly, the Department of Justice formally appealed the Court of International Trade’s order requiring CBP to refund $166 billion in IEEPA tariffs to all importers. That decision is still pending.
IRAN CONFLICT: The Strait of Hormuz is officially open again after the longest disruption of its kind in modern history, thanks to a signed MOU between the U.S. and Iran. However, the flow of ships is not what it was pre-conflict, and the strength of the agreement keeping the Strait open is questionable. But global supply chains should begin seeing some relief from the disruption of the past few months.
What’s Important: Both disruptions from last quarter continue to significantly impact supply chains and will likely do so for the rest of 2026. Tariff refunds are a significant amount of money, but the refund process has proven to be slow, and importers should be compiling their entry records now if they have not already. In regard to the Iran conflict, supply chains should continue planning around an extended disruption rather than a quick return to normal.
Supply chains are facing an average 40% surge in cost-to-serve due to current disruptions.
Compliments of Jaguar Freight – a member of the EACCNY