Good morning readers,

The global fashion industry optimized its supply chains for cost, speed, and efficiency. But a new production challenge isn't coming from tariffs, labor shortages, or shipping delays; it's coming from the weather.

Across major manufacturing hubs like India and Bangladesh, extreme heat is making factories harder to operate, reducing worker productivity, increasing absenteeism, and forcing apparel manufacturers to rethink how their facilities are built. What was once considered an environmental issue is rapidly becoming an operational and supply chain risk.

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.

It will be released in July 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.

U.S. truckload spot rates have surged to record highs, surpassing the peaks reached during the COVID-19 pandemic.

What’s Happening? According to DAT Freight & Analytics, dry-van spot rates rose to $2.49 per mile in the week ending July 3—up 49% year over year—despite overall freight volumes remaining relatively soft. Analysts say the rally is being driven by shrinking trucking capacity rather than stronger demand.

Less is More: The supply crunch stems from the exit of many small carriers and fleet reductions by larger trucking companies, leaving fewer trucks available to move freight. Spot rates are now exceeding contract rates, with experts expecting contract trucking prices to rise by 20% or more in 2026 as higher spot market prices filter through to long-term agreements.

What’s Next: Rates have climbed particularly sharply on freight moving from major U.S. ports, fueled by importers rushing to bring in goods ahead of potential tariff increases. Industry analysts expect tight capacity and elevated trucking costs to persist through the remainder of the year, creating higher transportation costs for shippers as they head into the peak holiday shipping season.

The U.S. logistics industry is accelerating at its fastest pace since 2022. The June Logistics Managers' Index (LMI) jumped to 71.1, marking the strongest expansion in more than four years as retailers dramatically increased inventory purchases ahead of potential tariff hikes later this month.

New Record: It's the first time the index has crossed the 70-point mark since March 2022, signaling broad-based growth across warehousing, transportation, and inventory activity

Key Details: Inventory Levels climbed to 60.5, while Warehousing Utilization surged to 69.4, forcing Warehousing Capacity back into contraction at 47.5 as storage space tightened. Transportation activity also remained exceptionally strong, with Transportation Utilization reaching 74.7 and Transportation Prices staying near record highs at 92.4.

Future Outlook: Respondents expect logistics activity to remain elevated over the next 12 months, forecasting another robust LMI reading of 70.6. Transportation Capacity remains deeply constrained at 30.8, while firms expect inventories, warehousing demand, and freight activity to continue growing.

The global race to build AI data centers is creating an unexpected winner: the air cargo industry. Companies are increasingly flying high-value server racks, semiconductors, and other computing equipment from Asia to North America rather than waiting for slower ocean freight, as hyperscalers race to bring new computing capacity online.

Flying Demand: The surge has driven up airfreight demand and rates despite a typically seasonal slowdown. Air cargo volumes from Asia to North America climbed nearly 20% year over year in May, while average spot rates on the route rose 36% in June, according to industry data.

Logistics providers, including DHL and Kuehne+Nagel, said AI-related shipments have become one of the strongest drivers of global freight demand, with higher jet fuel costs adding further upward pressure on rates.

Big Picture: The shift is also reshaping supply chains beyond aviation. Warehousing providers, freight forwarders, and trucking companies are seeing increased demand as cloud providers accelerate data center construction.

A U.S. federal appeals court has upheld a Federal Maritime Commission (FMC) ruling that ocean carriers cannot charge detention fees unless those charges help improve the movement of freight.

What’s Happening? The case stemmed from a dispute in which Evergreen Shipping Agency (America) Corp. charged a trucking company with detention fees after the trucking company was unable to return a shipping container and chassis during a three-day holiday port closure.

The FMC ruled the charges were unreasonable because the trucker had no practical way to return the equipment while the port was closed. The court agreed, stating that carriers must demonstrate how such fees encourage the efficient movement of cargo or compensate for actual costs.

Big Picture: The ruling strengthens regulatory oversight of container detention and demurrage practices, placing a greater burden on ocean carriers to justify their charges. It also reinforces protections for shippers and trucking companies, particularly in situations where port closures or operational disruptions make equipment returns impossible.

Freight forwarders are warning that new International Air Transport Association (IATA) air cargo rules, which took effect on July 1, significantly increase their legal liability for shipment errors.

Added Responsibility: Under the revised direct air waybill framework, forwarders can now be held responsible for issues such as misdeclared cargo, concealed dangerous goods, unsafe packaging, and other shipping violations—even when those errors originate with the shipper.

Necessary Action: IATA says the changes were necessary to address the rapid growth of e-commerce shipments, particularly those involving hazardous goods like lithium batteries. However, logistics providers argue that the new rules were introduced with limited industry consultation and create inconsistent liability standards because individual airlines may apply them differently.

Big Picture: Industry groups and cargo insurers warn that the new framework shifts a significant amount of risk onto freight intermediaries, potentially increasing insurance costs and operational complexity. Forwarders are now being urged to strengthen shipment-verification processes and reassess contractual and insurance protections to manage the increased exposure.

DHL Group has raised its full-year 2026 earnings guidance after reporting stronger-than-expected second-quarter results, driven by a rebound in shipping demand and improved profitability across its logistics business.

Key Numbers: Second-quarter revenue increased by more than 10% year over year, while Group EBIT climbed 29% to around €1.85 billion. The biggest contributor was DHL Express, where EBIT surged to approximately €1.2 billion, supported by a return in shipment volumes and around €150 million in additional earnings from tight global air freight capacity.

DHL Global Forwarding also benefited from managing market disruptions, while ongoing cost-cutting initiatives under its Fit for Growth program further boosted profitability.

Future Outlook: The company now expects Group EBIT to exceed €6.5 billion, up from its previous forecast of more than €6.2 billion. The upgraded outlook signals improving conditions for global logistics providers after a challenging 2025 marked by trade disruptions and softer freight demand.

STG Logistics, the fourth-largest asset-based intermodal marketing company in the U.S., has emerged from Chapter 11 bankruptcy after completing a nearly six-month restructuring.

Current Status: The company eliminated $1 billion of its $1.2 billion debt and secured fresh capital from a new ownership group that includes Fortress Investment Group, Fidelity Management & Research, and Invesco, giving it a significantly stronger financial position.

STG, which operates across drayage, transloading, and warehousing, owns a fleet of approximately 15,000 domestic containers serving shippers across the United States.

Big Picture: The timing coincides with a sharp turnaround in the freight market. Higher truckload rates, tighter trucking capacity, stricter enforcement of commercial driver regulations, and rising fuel costs have pushed more freight onto rail. Domestic intermodal volumes increased 8.9% year over year between March and May, while Union Pacific's Southern California intermodal traffic has climbed more than 20% so far this year.

U.S. container imports rose 8.2% year over year in June to 2.4 million TEUs, as importers accelerated shipments ahead of expected tariff increases and rising transportation costs linked to the Middle East conflict.

What’s Causing the Surge? According to Descartes Systems Group, the surge followed a rush by businesses to move cargo before July 1, when ocean carriers began passing higher fuel costs into freight contracts after oil prices spiked during the Iran conflict.

Chinese Factor: China accounted for the bulk of the increase, with imports from the country climbing 27.4% year over year to 814,474 TEUs. Importers also moved cargo early to get ahead of proposed U.S. tariffs on goods linked to forced labor, which are expected to take effect later this month.

Despite the strong June rebound, U.S. container imports for the first half of 2026 remained 0.3% below the same period last year, underscoring how tariff uncertainty and geopolitical disruptions continue to reshape global shipping patterns.

After nearly three years of avoiding the Red Sea due to Houthi attacks, Maersk and Hapag-Lloyd will resume some Asia-Europe sailings through the Suez Canal under their Gemini network.

First Steps: The first service to return is the AE15 route, connecting Asia, the Mediterranean, and Europe. Using the Suez Canal instead of sailing around Africa's Cape of Good Hope is expected to cut voyage times by around four weeks, improving transit times and reducing shipping costs. However, both carriers said broader network changes will depend on continued stability in the Red Sea.

Big Picture: Investors reacted cautiously, with Maersk shares falling 5.8% and Hapag-Lloyd down 2.7% on expectations that a full reopening of the route could increase shipping capacity and put downward pressure on freight rates.

Analysts believe the gradual return to the Suez Canal, combined with a wave of new vessels due in 2027 and 2028, could further weigh on container shipping earnings in the coming years.