Good morning,

Today, we're releasing the State of Small & Mid-Sized 3PLs Report 2026 to our CrossDock members.

This report began with a simple question: What is happening to small and mid-sized 3PLs? The answers weren't found in one place. They were scattered across earnings calls, interviews, survey responses, conversations with operators, and countless hours of research.

Over the past few months, we've brought those pieces together to create what we hope is the most comprehensive look yet at the challenges, opportunities, and realities facing this corner of the logistics industry.

If you'd like to read the full report, consider becoming a CrossDock member. Your membership includes exclusive access to this report and all other member-only benefits.

Let's dive into today's edition.

UPS raised its 2026 revenue forecast to $91.2 billion from $89.7 billion and increased its full-year profit outlook after completing its planned reduction in lower-margin Amazon deliveries. The parcel carrier also posted second-quarter revenue of $22.83 billion and adjusted earnings of $1.76 per share, beating Wall Street expectations.

What’s Happening: The company has been reshaping its business by replacing low-margin Amazon shipments with more profitable deliveries, including business-to-business freight and temperature-controlled healthcare products. Amazon now accounts for 9% of UPS revenue, down from a peak of more than 13%.

Power Points: UPS said stronger domestic demand, higher package yields, fuel surcharges, and improving international air shipments supported its performance. The company expects higher-margin international business and recovering China-to-U.S. trade volumes to drive growth during the critical holiday season.

Big Picture: Despite the stronger results, UPS shares fell nearly 6% as investors questioned whether the company can achieve its ambitious second-half targets amid tariff uncertainty, inflation, and intense competition from FedEx and Amazon's expanding delivery network.

A Dallas County jury ordered C.H. Robinson to pay $604 million in damages after finding the freight broker negligent in hiring a motor carrier involved in a 2021 Mississippi crash that killed three people and injured two others.

The ruling is the first major broker liability verdict since a recent U.S. Supreme Court decision cleared the way for negligent hiring lawsuits against freight brokers.

Key Details: Plaintiffs argued that carrier Lupus Superior had been flagged by federal safety alerts for more than a year before the crash and that the truck driver had informed both the carrier and C.H. Robinson that he was too sick to continue driving. Jurors found C.H. Robinson, the carrier, and the driver negligent, assigning the largest share of financial responsibility to the broker.

The Response: C.H. Robinson said it will immediately appeal the verdict, arguing the carrier held a "Satisfactory" FMCSA safety rating and had safely completed nearly 270 loads for the company. The broker also said it applies multiple safety checks beyond federal requirements and should not be held liable for an independent carrier's actions.

The U.S. Department of Transportation is investing more than $16 million in the TradePort Corridor System, a public-private initiative that aims to connect logistics hubs through a nationwide multimodal freight network. The project will begin by linking hubs near the Ports of Los Angeles and Long Beach along the Interstate 40 corridor.

Key Details: The TradePort network brings together governments, private investors, 3PLs, warehouse operators, and freight providers. More than $800 million has already been committed, with the full buildout expected to cost billions of dollars over the next decade.

The network will combine logistics, warehousing, manufacturing, and inland port operations while also introducing a shared cargo data platform. The system will provide shippers, carriers, and logistics providers with real-time shipment visibility, including arrival times, dock availability, and traffic conditions across participating hubs.

What’s Next? Construction on the first phase—spanning California, Arizona, New Mexico, and Oklahoma—is expected to begin within 18 months, with the broader network eventually extending to major inland freight centers including Dallas, Memphis, Chicago, Atlanta, and eastern Pennsylvania.

The 100 largest U.S. industrial leases totaled 93.6 million square feet in the first half of 2026, up 26% from a year earlier, while the number of mega leases of at least 1 million square feet more than doubled to 38, according to CBRE Research's latest industrial leasing analysis.

Demand Driver: 3PLs remained the largest source of leasing demand, signing 30 of the top 100 leases totaling 27.9 million square feet. However, leasing activity broadened across industries, with food and beverage companies more than tripling their leased space as they expanded regional distribution networks to improve supply chain resilience.

Key Stats: New leases accounted for 66 transactions covering 61.9 million square feet, while renewals represented 34 deals totaling 31.7 million square feet. The average lease term also increased to 89 months, reflecting stronger long-term commitments as high-quality warehouse space becomes scarcer.

Hot Spots: The Inland Empire remained the country's leading logistics market with 12.6 million square feet leased, followed by Dallas (10.5 million sq. ft.) and Chicago (9.4 million sq. ft.).

The U.S. 3PL industry is entering a defining phase.

Warehouse rents for smaller facilities have risen 40% since 2020, nearly 28,000 trucking companies exited the market in a single year, and 3 in 4 shippers now say a 3PL's use of AI influences who they choose. For small and mid-sized 3PLs, these changes are reshaping the industry faster than ever.

Our latest report takes a deep dive into what's driving this transformation, why some operators are growing while others are struggling, and what it means for the future of logistics.

To understand what's happening on the ground, we spoke extensively with small and mid-sized 3PL owners and industry leaders across the United States, combining their insights with market data and research to tell the story behind one of the biggest shifts the industry has seen in decades.

Upgrade to a CrossDock Paid membership to get access to the full report.

China has launched a five-year Smart Port Construction Project that will use artificial intelligence, big data, and intelligent equipment to modernize customs operations and freight movement across 43 key ports of entry. The initiative aims to speed up cargo clearance, expand logistics capacity, and strengthen the country's trade infrastructure.

What’s the Plan? AI-powered inspection robots, smart glasses, and advanced CT scanners will automate cargo screening, while AI models will analyze logistics data to identify high-risk shipments and connect customs systems with production, warehousing, and transportation networks.

China expects more than 90% of its ports to be equipped with intelligent inspection technology by 2030.

Integrated Network: The program also includes infrastructure upgrades at 57 ports, expansion of multimodal transport facilities, construction of new rail freight gateways, and improved interoperability between ships, railways, trucks, and inland waterways. Authorities expect most of the modernization work to be completed by 2035.

Escalating conflict in the Middle East is intensifying a global diesel shortage, pushing fuel prices higher ahead of the peak autumn shipping season. Supply constraints have been exacerbated by disruptions at Persian Gulf refineries, Ukrainian attacks on Russian refineries, and weaker refinery output in China.

Rising Prices: The squeeze is driving up transportation costs even as crude oil prices fluctuate. U.S. on-highway diesel prices averaged $5.31 per gallon this week, up from $3.53 a year earlier, as refinery margins—not crude oil prices—have become the primary driver of diesel costs.

Chain Reaction: Higher diesel prices are placing renewed pressure on trucking companies, particularly smaller carriers that struggle to absorb fuel price volatility before fuel surcharges catch up. Industry executives warned the surge could lift spot freight rates and increase costs across agriculture, construction, mining, and supply chains.

Big Picture: Even if crude oil prices retreat, refinery bottlenecks are likely to keep diesel prices elevated, sustaining inflationary pressure across freight and logistics.

XPO said demand from U.S. manufacturers is rising for the first time in more than three years, signaling that the freight market recovery is broadening beyond truckload capacity constraints. The carrier expects industrial demand to strengthen through the rest of 2026 and into 2027, supported by improving customer sentiment.

Key Numbers: The company's North American LTL business reported 15.2% year-over-year revenue growth to $1.43 billion in the second quarter, while total revenue increased 13.5% to $2.36 billion. Net profit jumped 52.8% to $162 million, and its adjusted operating ratio improved to 79.9 from 82.9 a year earlier.

Fixing Rates: XPO said shippers are accelerating contract renewals to lock in freight rates before pricing strengthens further. Daily shipments increased 2.8% year over year, while revenue per shipment, excluding fuel surcharges, rose 2.4%, reflecting healthier freight demand.

What’s Next: The carrier expects to benefit from the upcycle after expanding its terminal network and investing in additional capacity during the prolonged freight downturn. Executives said new facilities across the South, Southeast, Southwest, and Midwest have positioned the company to capture growing freight volumes as manufacturing activity recovers.

J.B. Hunt is rolling out agentic AI across its business units to automate freight coordination and improve operational efficiency. The AI platform, developed by startup Overroute, will help monitor loads, identify scheduling issues, coordinate appointments, and reduce manual administrative work.

What is Overroute: Overroute is the first company to emerge from the Logistics Venture Lab, a technology incubator launched by J.B. Hunt and UP. Labs in 2024.

Unlike traditional AI chatbots, Overroute's agentic AI can independently complete workflows by gathering operational data, making phone calls, rescheduling appointments, and filling information gaps that existing telematics systems cannot capture.

Big Picture: J.B. Hunt handled 1.85 million freight loads across its core transportation businesses, and nearly 862,000 final-mile stops in the second quarter of 2026. The carrier said AI will act as a force multiplier across its network, helping reduce friction and improve freight execution.

Temco Logistics, a Home Depot subsidiary, will discontinue its flatbed delivery business nationwide, closing six Flatbed Distribution Centers, including its Dallas facility, and laying off 71 employees there. The workforce reduction is scheduled to begin on September 26.

Key Details: The company said it is exiting flatbed delivery to focus on its core box truck delivery and installation operations, where it has greater operational expertise. The restructuring is designed to improve execution and better support customers in its primary business segments.

Affected Workforce: Employees affected by the Dallas closure include operations managers, routers, general managers, and technicians. Temco said all layoffs are permanent, with impacted workers receiving separation packages and transitional benefits.

Headquartered in Pomona, California, Temco Logistics specializes in the delivery of large and bulky products for major retailers. The move reflects a strategic shift in its delivery network rather than a broader reduction in its overall logistics operations