01 Oct
Member News, Trade & TTIP Related

Jaguar Freight | The Freight Outlook for Q4 2026

  • Higher Rates and Fuel Costs, while Congestion remains Elevated. And So Do the Geopolitical Tensions.

Global Ports

The Headlines: Global port congestion has reached a new record, surpassing even the worst levels of the pandemic era. In September, nearly 4 million TEU of container capacity sat idle outside ports for a variety of reasons. Ship waiting times this year have nearly doubled compared to the same period in 2019, and schedule reliability has plateaued in the 50 to 65 percent range, well below pre-Iran conflict norms.

What’s Important: While a normal seasonal dip in ocean demand should help in Q4, port congestion at this scale is no longer just about the delays. Available capacity will remain a problem, and shippers should plan accordingly. Look for carriers to use blank sailings aggressively, and schedules continuing to run five or more days late on average. Importers who build buffers into their timelines will be far better positioned than those chasing the market.

European Update

The Headlines: Europe is navigating a compounding set of cost pressures heading into Q4. Energy prices and trade policy continue to reshape the market more than many businesses planned for. On the trade side, the EU-China relationship has become significantly more complex. EU imports from China are up 12.5 percent year over year as of June according to the European Commission, leaving a monthly deficit of 35.1 billion euros. The European Commission has described the overall relationship as “critically unbalanced” and is actively widening its trade defense posture.

What’s Important: The cost pressures on EU supply chains are unlikely to resolve quickly. On energy, the ongoing Hormuz disruption and Ukraine conflict mean gas prices could remain elevated at least through Q1 2027. This will continue to directly affect manufacturing, warehousing, and transportation costs across the continent. On trade, the EU’s expanding use of anti-dumping and anti-subsidy tools means that sourcing cost assumptions for goods from China could become much more complicated and expensive. Companies importing from China should audit their duty exposure now and factor the EU’s Carbon Border Adjustment Mechanism into landed cost models, as it entered its definitive phase this year, covering a range of key inputs.

Ocean Freight

The Headlines: Ocean freight rates have remained elevated since the beginning of 2026, even as some pressure has eased from the peak highs. In September, the Drewry WCI was more than double its pre-Iran conflict level. Helping is that a partial, selective return to Suez Canal routing has begun on some Asia-Europe services, with Maersk indicating in August that about one-third of its normal traffic was once again moving through the canal. On the Transpacific, a strong US peak season and continued port congestion in Asia kept rates firm, with key US East Coast lanes reaching levels not seen since the 2021 to 2022 peak. Carriers have announced a large number of blank sailings to manage capacity.

What’s Important: The selective return to Suez routing is a positive development and a sign that conditions on Asia-Europe lanes may ease into Q4, but this is not the moment to assume the market has normalized. Rates remain structurally elevated, schedule reliability is still low, and congestion continues to lessen any meaningful amount or capacity. Shippers should build in lead time where possible, monitor the Suez return carefully for implications on their specific lanes, and resist the temptation to chase lower rates before confirming reliable allocations.

Air Freight

The Headlines: Air cargo demand has recovered meaningfully from the disruption that hit the first quarter, posting 3.9 percent year-over-year growth in July, according to IATA, with international operations up 4.7 percent. North American carriers led all regions with 4.8 percent growth, and Asia-Pacific and Europe followed closely. The challenge is cost, with jet fuel prices jumping 12.2 percent in July alone and now 56.9 percent higher than a year ago, driven by the Hormuz disruption and its ripple effects on global refined fuel supply.

What’s Important: Air cargo is in a two-sided market right now. Demand is genuinely healthy, supported by trade growth and e-commerce, but the cost structure has changed in a way that will not reverse quickly even if the geopolitical picture improves. Fuel costs at this level tend to be sticky because refining capacity and supply chains take time to rebalance. Shippers using air freight as a bridge for ocean delays should build current fuel surcharge levels into their Q4 cost models as a baseline rather than an exception, and companies evaluating changes to their sourcing locations or other changes that may increase the need for time-sensitive replenishment should factor the elevated rate environment into their mode decisions.

North America Inland Trends

The Headlines: The North American truckload market has shifted meaningfully in 2026 as capacity tightens and rates move higher. Dry van spot rates ran approximately 32 to 38 percent above year-ago levels through much of the first half of the year, with spot rates briefly exceeding contract rates for the first time since February 2022. An August pullback was the steepest July-to-August decline in DAT’s 16-year history, but the underlying supply picture has not changed. Analysts generally expect fuel to stay elevated and rates to firm again as holiday freight builds through October and November.

What’s Important: The mid-August rate pullback is helping, but shippers should not treat it as a market reversal. The capacity that left the market over the past several years is not returning at the pace needed to offset the tightening underway, and Q4 historically brings a predictable demand surge that tends to expose thin routing guides quickly. Companies heavily reliant on the spot market should begin building carrier relationships and securing capacity now rather than waiting for peak season to force the issue. Any shipper whose contracts do not include fuel escalator language should address that in the next renewal cycle.

U.S. Logistics Manager’s Index

The Headlines: The latest Logistics Managers’ Index slipped to 66.6, down from the recent four-year peak of 71.1 back in June, but still well above readings from recent years. The slowdown in the headline number is driven largely by cooling inventory levels, which eased to 52.8, just above the no-growth threshold. But the cost picture is moving in the opposite direction. Inventory Costs accelerated to 78.6, Transportation Prices jumped to 90.0, and Aggregate Logistics Costs averaged 241.9 across the six months from March through August, a level that LMI analysts note has historically preceded elevated supply-driven inflation. The LMI specifically notes directly that the conflict with Iran has had a clear and measurable impact on the index.

What’s Important: The LMI is confirming what most supply chain managers are already feeling: costs are elevated across the board and are not coming down quickly. The high aggregated cost reading is a signal worth taking seriously, as it has historically been a leading indicator for broader supply-side inflation working through the economy. Companies should factor this into their pricing conversations with both customers and suppliers heading into Q4, and should resist the temptation to assume that easing inventory levels mean cost relief is close behind.

Tariffs & Geopolitical Update

The tariff and geopolitical update this quarter is shaped by the ongoing Middle East conflicts that continue to directly affect global energy supply and shipping access, alongside the US-Canada trade standoff that is the dominant tariff story in North America.

STRAIT OF HORMUZ: The situation has gone through several phases since the conflict began in late February. The practical consequence for energy markets is that oil transits through the Strait of Hormuz are down roughly 33 percent from a year ago, according to the EIA, driving up diesel and natural gas prices globally and keeping energy costs structurally elevated with no clear resolution timeline.

HOUTHIS AND BAB EL-MANDEB: As if one blocked chokepoint were not enough, the Houthis have made territorial gains along the western coast of Yemen and seized positions near the Bab el-Mandeb Strait, the southern Red Sea chokepoint. Although some carriers have returned some traffic to the Strait, the situation is anything but secure and reliable. The Cape of Good Hope remains the most reliably safe routing option for most commercial vessels.

US-CANADA TRADE WAR: The US-Canada trade relationship deteriorated sharply this quarter. Following US Section 232 and Section 338 tariffs on Canadian goods, Canada imposed matching retaliatory tariffs of 15 to 50 percent on $27.6 billion in US imports effective September 8. Posturing from both sides signals this dispute is unlikely to resolve quickly. Companies with North American manufacturing or distribution networks should review their landed cost assumptions on both sides of the border.

What’s Important: It should be clear at this point that the Hormuz and Bab el-Mandeb situations together represent a sustained structural disruption to global energy flows, not a short-term spike. Diesel prices at record levels are a direct downstream consequence, and the refining and supply chain imbalances created by this disruption will take time to unwind even once the political situation stabilizes. Shippers should plan around elevated fuel and energy costs through at least the first half of 2027. On the tariff side, the US-Canada situation is worth watching closely as it is the most active bilateral trade dispute currently affecting North American supply chains.