Good morning,

The Trump administration is rolling out a new round of tariffs just as its temporary 10% global duties expire. The new 10% to 12.5% tariffs, which take effect today, cover imports from 60 trading partners and replace the earlier emergency tariffs that were struck down by the U.S. Supreme Court.

The new tariffs target countries representing 99% of U.S. imports, including China, the European Union, India, Japan, Canada, and the UK. Rather than citing trade deficits, the White House is using forced labor enforcement as the basis for the tariffs.

Let's dive into today's edition.

For the past few months, we've been speaking directly with small and mid-sized 3PL operators across the United States to understand what it's really like to run a logistics business in today's market.

Through first-hand accounts, conversations with logistics leaders, and extensive research, we've uncovered what's happening to small and mid-sized 3PLs, why some are struggling while others continue to grow, and the strategies helping operators navigate one of the toughest markets in years.

The result is The State of Small & Mid-Sized 3PLs Report 2026.

The report will be released on July 30 and will be available to all CrossDock paid members as part of their subscription.

If you value original reporting, exclusive research, and deeper insights into the supply chain and logistics industry, consider becoming a CrossDock paid member.

The Panama Canal is preparing for another potentially severe El Niño event that could lower water levels and disrupt vessel traffic, raising concerns of a repeat of the 2023–24 drought that constrained global shipping.

The reported measures include suspending some last-minute booking slots for Panamax vessels, reducing daily booking capacity from 36 to 34 ships.

Rising Prices: Major ocean carriers are already passing the expected disruption on to shippers. MSC will impose a $100 per TEU surcharge on Asia–U.S. East and Gulf Coast shipments from August 19, while CMA CGM will introduce a $320 per TEU surcharge on the same trade lane beginning July 25. Hapag-Lloyd has also announced canal-related fees.

Warning Sign: The preparations come as NOAA warns there is an 81% chance of a very strong El Niño developing later this year, potentially ranking among the strongest events since 1950. If water levels fall significantly, reduced canal capacity could tighten shipping supply, extend transit times, and increase freight costs on key Asia–U.S. trade routes.

Ocean freight rates on the trans-Pacific trade lane are falling as importers delay shipments amid continued uncertainty over U.S. trade policy.

Key Details: According to Freight Right's TrueFreight Index, spot rates from China to the U.S. West Coast dropped by roughly $1,000 per container over the past week, falling from the mid-$7,000 range to the mid-$6,000s as carriers reintroduced fixed-rate contracts and discounted space.

Freight Right said lower transportation costs have failed to stimulate new bookings, with importers prioritizing trade policy certainty over freight savings. Spot rates have fallen to as low as $4,680 per FEU to the U.S. West Coast and $6,700 to the East Coast.

Free Fall: The decline in freight rates reflects weakening demand rather than an increase in shipping capacity. Many importers are postponing bookings and customs clearance while awaiting clarity on the Trump administration's evolving tariff policies, including proposed forced-labor tariffs affecting imports from 60 countries.

The U.S. truckload market is entering a new pricing cycle as tightening capacity gives carriers greater leverage in contract negotiations after nearly three years of weak freight conditions.

Pricing Power: According to DAT Freight & Analytics, newly negotiated truckload contracts are averaging about 10% higher than bids awarded a year ago. At the same time, spot freight rates have climbed above many existing contract rates.

What’s the reason? The pricing recovery is being driven primarily by shrinking truck capacity rather than a surge in freight demand. The U.S. long-distance truckload Producer Price Index (PPI) rose 21.4% year over year in June, reversing declines seen earlier this year, while the average shipper-paid dry van contract rate reached $2.48 per mile. However, average spot rates remained 74 cents per mile higher than contract pricing.

Big Picture: Despite improving pricing, freight demand remains uneven. The American Trucking Associations' For-Hire Truck Tonnage Index increased just 0.1% in June following a sharp decline in May, indicating shipment volumes remain relatively soft.

Union Pacific reported record second-quarter financial results as stronger freight volumes, pricing gains, and improved operational efficiency offset higher fuel costs.

Key Stats: The railroad posted $6.9 billion in operating revenue, up 12% year over year, while net income rose 6% to $2.0 billion. Freight revenue excluding fuel surcharges increased 4%, reflecting core pricing gains and growing customer demand across much of its network.

Growth was broad-based across several freight segments. Intermodal revenue jumped 26%, while automotive, grain, and metals & minerals revenues increased 11%, 15%, and 11%, respectively. Overall freight revenue climbed 12%, supported by a 2% increase in freight volumes and a 9% rise in average revenue per car.

What’s Next: The company reaffirmed plans to invest $3.3 billion in capital projects while maintaining annual dividend increases. CEO Jim Vena also said the railroad is preparing for the regulatory review of its proposed combination with Norfolk Southern.

Trade intelligence platform Altana is acquiring AI startup Cervo in a deal that could exceed $100 million, reflecting growing demand for technology that helps companies navigate increasingly complex customs and trade regulations.

Key Details: Altana, whose customers include U.S. Customs and Border Protection (CBP), Maersk, Boston Scientific, and L.L.Bean, plans to integrate Cervo's agentic AI platform to automate customs brokerage workflows from product classification to customs clearance.

Why does this matter? The acquisition underscores a broader shift toward AI-driven trade compliance across the logistics industry. Companies including UPS, FedEx, DHL Group, and Flexport are expanding AI-powered customs brokerage capabilities to handle growing regulatory complexity and accelerate import processing.

Canadian National Railway (CN) has agreed to withdraw its opposition to Union Pacific's proposed US$85 billion acquisition of Norfolk Southern, removing a key obstacle to what would create the first transcontinental railroad in the United States.

Exchange Plan: In exchange, CN will gain expanded operating rights across the U.S. Midwest and improved access to Mexico under agreements with Union Pacific. However, the arrangements remain contingent on regulatory approval of the merger.

Under the memorandum of understanding, CN will be allowed to operate trains over more than 200 kilometers of Union Pacific track between Tuscola and East St. Louis, Illinois, while also serving customers between St. Louis and Kansas City.

Pros and Cons: Supporters argue the merger will improve service, lower costs, and strengthen the North American supply chain, while opponents warn it could concentrate excessive market power in a single railroad controlling roughly 40% of U.S. freight traffic.

U.S. fashion companies are moving beyond short-term tariff responses and fundamentally reshaping their sourcing strategies as higher costs, geopolitical tensions, and trade uncertainty become long-term realities, according to the 2026 USFIA Fashion Industry Benchmarking Study.

Change of Source: The study found little evidence that higher tariffs are driving a large-scale return of apparel manufacturing to the United States. Instead, companies are expanding and diversifying their global supplier networks, sourcing from 49 countries in 2026 compared with 46 a year earlier, while continuing to reduce their dependence on China.

Only 12% of respondents now source more than 30% of their apparel from China, and most source less than 10%, as sourcing shifts toward countries including Guatemala, Egypt, Jordan, and other Western Hemisphere suppliers.

Tariff Attack: For the second consecutive year, companies ranked U.S. protectionist trade policies and tariff uncertainty as their biggest business challenge, while rising sourcing costs and forced-labor compliance also climbed sharply among top concerns.

The U.S. industrial real estate market strengthened in the second quarter as leasing activity reached its highest level since mid-2022 and the national industrial vacancy rate fell below 7% for the first time in nearly two years, according to Cushman & Wakefield.

Key Details: Net absorption totaled 62.1 million square feet (msf) during the quarter, bringing first-half demand to 113.6 msf—the strongest first-half performance since 2023—while new deliveries slowed to 119 msf, nearly 20% lower than a year earlier.

Demand continued to concentrate in newer logistics facilities as occupiers prioritized warehouses with higher clear heights, automation capabilities, and greater power capacity. Buildings completed since 2020 accounted for 137 msf of net absorption during the first half of the year, with facilities larger than 500,000 square feet representing nearly half of that demand.

Big Picture: Cushman & Wakefield expects industrial fundamentals to continue improving through the second half of the year as disciplined new supply combines with demand driven by e-commerce, onshoring, nearshoring, and supply chain optimization, putting further downward pressure on vacancy rates.

President Donald Trump has signed an executive order making it significantly harder for U.S. defense contractors to obtain waivers allowing them to source critical minerals and other materials from China and other prohibited foreign suppliers.

Companies seeking exemptions must now prove they searched for alternative suppliers, disclose the origin of their materials, and submit plans to reduce reliance on foreign sources.

Key Details: The order also requires defense companies to map their supply chains far beyond direct suppliers, identifying the origins of critical minerals, magnets, microchips, specialty metals, and software across lower-tier vendors. The move aims to uncover hidden dependencies and reduce risks from foreign-controlled supply chains.

Big Picture: The move is part of a broader effort to strengthen domestic defense manufacturing and reduce supply chain vulnerabilities as geopolitical tensions rise. It could accelerate demand for U.S.-based suppliers of critical minerals and advanced materials while forcing major defense contractors such as Lockheed Martin and Boeing to reassess deeply embedded global supply chains.