Good morning,

Truck freight rates are starting to split.

Contract dry-van rates climbed to $2.39 per mile in August, while spot rates fell to $2.17, according to the latest U.S. Bank Freight Payment Index, produced with DAT Freight & Analytics.

Fuel is widening the gap. The average fuel surcharge rose to $0.70 per mile, with fuel accounting for 24% of spot freight costs by August. The divergence suggests a changing freight market, even as spot pricing remains soft.

Let's dive into the top news.

California has enacted new regulations targeting large cold-storage warehouses following the eight-day fire at a nearly 500,000-square-foot Lineage facility in Los Angeles. The blaze triggered a state emergency and cleanup efforts that Lineage says will cost more than $100 million, including removing 89 million pounds of spoiled food.

Key Details: Under Assembly Bill 817, certain large cold-storage facilities will need contingency funds or insurance for community emergency needs as a condition of receiving building permits. Local governments could require contingency funds of up to $20 million, according to the Global Cold Chain Alliance.

Costly Cold-Chain: A second measure, Senate Bill 716, increases penalties for health and safety violations at qualifying industrial buildings of at least 20,000 square feet when violations contribute to a governor-declared emergency or federal disaster.

Fines can reach $50,000 per violation, initially in Los Angeles County before expanding to qualifying areas statewide in 2028. Industry groups warn the new requirements could increase costs across the cold chain.

U.S. manufacturing activity expanded for the ninth consecutive month in September, extending the sector’s recovery. The continued expansion points to sustained momentum across the country’s factory sector.

Key Details: However, the latest reading also showed a sharp increase in price pressures, creating a more complicated outlook for manufacturers.
Rising input costs could squeeze margins even as production activity continues to grow.

The increase in prices comes as manufacturers continue to deal with higher costs across their supply chains. That could make raw materials, components, and other industrial inputs more expensive for businesses.

Big Picture: For supply chains, the September data highlights the tension between stronger manufacturing activity and rising costs. Continued expansion could support demand for freight, industrial inputs, and warehouse capacity.

The Panama Canal is easing restrictions after improved rainfall strengthened the outlook for Gatun Lake, allowing the waterway to raise both vessel draft limits and daily transit capacity. From October 15, neopanamax transits will increase to 10 a day, bringing combined neopanamax and panamax capacity to 33 daily slots.

Key Details: The canal has also immediately raised the maximum authorized draft for neopanamax vessels to 14.94 meters (49 feet). The increase reverses some of the restrictions imposed during the summer, when weak rainfall and a strengthening El Niño renewed concerns over water availability.

Big Picture: Demand for canal passages has also remained unusually strong. Disruptions in the Middle East have pushed Asian buyers toward U.S. Gulf energy supplies, increasing demand for Panama Canal routes and intensifying competition for guaranteed transit slots. Wetter conditions over the next 10 days could provide further support for Gatun Lake levels.

The AI infrastructure boom is reshaping global air cargo, with about 33 freighter flights a day currently moving data center-related cargo from Asia to the U.S., according to aviation consultancy Aevean.

AI Boom: The surge is driven by shipments of GPUs, servers, and networking equipment, as hyperscalers including Amazon, Google, Meta, Microsoft, and Oracle accelerate data center construction.

Boom Routes: Asia-U.S. air trade was up 24% year over year, with hyperscaler-related shipments accounting for about 107,000 tons of air freight in July alone — equivalent to roughly 1,000 freighter flights during the month.

Load factors on Asia-U.S. routes have reportedly reached around 90%, as demand for equipment used to build and operate data centers absorbs available cargo capacity.

Big Picture: The boom is also tightening space for other shippers. AI-related shipments were up 65%, according to GRIT, while IATA found that more than two-thirds of the value of AI-related trade moved by air in 2025.

Six trucking companies have sued C.H. Robinson and TQL in federal court in Texas, accusing the two major freight brokers of violating the Racketeer Influenced and Corrupt Organizations Act (RICO) through alleged forced labor and wire fraud tied to their use of non-compliant carriers.

What’s Happening: The lawsuit alleges the brokers knowingly benefited financially by routing customer freight through what the plaintiffs describe as “Illegal Carriers.” The six plaintiffs are Stevens Trucking, Western Flyer Express, D&M Carriers/Freymiller Trucking, IWX Motor Freight, Christenson Transportation, and E.O.S.

Key Details: A key carrier mentioned in the lawsuit is Super Ego Trucking, which is not a defendant but is cited as an example of an alleged illegal carrier network.

The suit notes that C.H. Robinson had previously named Super Ego a “carrier of the year” for companies operating more than 1,000 trucks. C.H. Robinson rejected the allegations, saying the lawsuit contains false characterizations and inaccuracies, and said its carriers are federally authorized and subject to additional safety and insurance requirements.

The U.S. has yet to confirm whether it will extend the one-year suspension of port fees on Chinese-built, operated, or owned ships, with the current pause set to expire on Nov. 9. The uncertainty comes despite the U.S. and China extending their broader trade truce by another two months into January.

Key Details: The fees were suspended as part of the trade agreement reached by President Donald Trump and Chinese President Xi Jinping last October. But the U.S. Trade Representative has not issued a Federal Register notice extending the pause, while last week’s White House fact sheet on the leaders’ meeting made no mention of vessel fees.

High Landed Costs: More than 200 trade associations, including the National Retail Federation, American Apparel & Footwear Association and World Shipping Council, have urged both governments to extend the suspension. They warned that restarting the fees could add costs to an already expensive transportation system, affecting ocean freight, trucking, warehousing and insurance.

Container shippers face a volatile October as a sharp increase in vessel capacity collides with weaker demand around China’s Golden Week holiday. Sea-Intelligence warned that Asia-Europe and Mediterranean services could see rolled cargo, cancellations and abrupt delays in the second half of the month as carriers respond to an emerging capacity glut.

Key Details: Scheduled weekly capacity on Asia-North Europe services is set to reach 1.5 million TEUs during the four-week Golden Week period, up 27% from last year and 60% above the pre-pandemic average.

Capacity is expected to jump 63% year over year in the first week of October and 39% in the second week, partly because there are no planned blank sailings.

The disruption comes even as demand remains strong ahead of Golden Week. Asia-North Europe bookings reached 128,167 TEUs in the week of Sept. 14–20, up nearly 39% from 91,708 TEUs a year earlier.

Aurora Innovation is targeting more than 30,000 driverless trucks by 2030 as it scales autonomous freight operations. The company said it has already completed more than 500,000 driverless miles since its commercial launch and has nearly doubled its driverless customer base in 2026.

Utilization Rate: Aurora is scaling its autonomous freight network as it targets 200 driverless trucks by the end of 2026, while Hirschbach plans to add another 500 autonomous trucks from 2027.

The bigger signal is utilization: Aurora says its trucks serving customers including McLane and Werner are already averaging more than 225,000 miles a year, more than twice the utilization of a traditional truck.

What’s Next: The company is also preparing its hardware for higher-volume deployment. Its second-generation commercial hardware is designed for a one-million-mile operating life while cutting costs by more than 50%. Aurora says its 2030 fleet could generate billions of dollars in revenue through its Driver as a Service model.

At least 16 American trucking companies have filed for bankruptcy in the past month, according to reports, putting more than 250 jobs at risk as soaring diesel prices compound mounting industry costs.

Rising Bankruptcies: The filings highlight the pressure facing trucking operators beyond fuel. Eight of the 16 companies filed for Chapter 11, allowing them to continue operating while restructuring their debts, while seven are liquidating under Chapter 7.

Xoco Transport and Globemaster, among the larger companies named in the filings, are both seeking Chapter 11 protection. The companies did not specify the reasons behind their filings in court documents.

Key Details: Higher fuel costs are adding to rising labor, insurance, maintenance, and regulatory compliance expenses, according to Deloitte. Trucking companies can respond by raising freight rates, but that can weaken demand, while layoffs and equipment sales reduce their capacity to haul freight.