Good morning,

COSCO, one of the world’s largest shipping companies, is facing fresh scrutiny in the U.S. after American officials alleged that the Chinese state-owned carrier uses concealed equipment aboard its ships to collect intelligence for Beijing.

The officials said the equipment can intercept military communications, monitor shipping lanes and track vessels and aircraft across Europe, North America and Asia.

The allegations come as U.S.-China trade and security tensions remain high, with COSCO deeply embedded in American supply chains and operating terminal joint ventures at U.S. ports.

Let's dive into the top news.

U.S. Customs and Border Protection is seeking input from importers on new requirements that would give the agency greater visibility into foreign customs records and the origins of goods entering the country.

Key Details: Among the measures under consideration is a requirement that importers provide or retain documents filed with foreign customs authorities, including customs entries, invoices, packing lists, and bills of lading.

CBP is also seeking more detailed information about the companies and inputs involved in the production of imported goods. The proposals would extend customs scrutiny deeper into importers’ supply chains and could require closer coordination among sourcing, logistics, and compliance teams.

Strengthening Enforcement: The initiative follows President Donald Trump’s June executive order on strengthening customs enforcement, which aims to curb undervaluation, false customs filings, and tariff evasion. Importers can submit comments on the proposed rules through Dec. 1.

Trans-Pacific container freight rates have climbed to new highs as unexpectedly resilient peak-season demand collides with persistent congestion at major Asian ports. Asia-U.S. West Coast rates rose 2% last week to $7,621 per FEU, while Asia-East Coast rates increased 2% to $9,791, according to Freightos data.

Key Details: A succession of typhoons since mid-July has disrupted Chinese and other Asian ports, with recent closures at Shanghai and Ningbo worsening backlogs. Some carriers are skipping port calls, rerouting cargo through transshipment hubs and changing vessel rotations, reducing effective capacity and helping support rates.

Ocean carriers are adding some trans-Pacific capacity in September, but scheduled blank sailings around China’s Golden Week holiday could limit space again later this month.

European Rates: The pressure is extending beyond the trans-Pacific trade. Asia-Europe rates have retreated by more than $1,000 per FEU from July peaks on the North Europe route and by more than $2,000 per FEU to the Mediterranean, but both remain roughly 40% to 70% above May levels. Trans-Atlantic rates have also risen about $400 per FEU over the past two weeks as carriers cut capacity.

UPS is reshaping its operating model to put greater emphasis on its global logistics network as it moves away from low-margin parcel delivery.

What’s Happening? The new structure, announced Monday, follows the major phase-out of UPS’s Amazon volume and the downsizing of its U.S. domestic parcel network, positioning the company more explicitly as an integrated logistics provider.

Change in Leadership: UPS is changing its leadership structure, naming former U.S. operations chief Nando Cesarone as chief global operations officer. Matt Guffey will lead U.S. domestic operations, while Wilfredo Ramos will succeed Kate Gutmann as head of international, healthcare and supply chain solutions. UPS is also creating a new chief global commercial strategy officer role.

Big Picture: The reorganization comes after UPS eliminated half of its Amazon volume over 18 months, cutting about 2 million packages a day, while closing 150 parcel sort centers and laying off 30,000 workers. The company has increasingly targeted higher-value segments such as healthcare, industrial and automotive logistics, along with small and midsize businesses.

Cargo theft in the U.S. fell 5% year over year in the second quarter of 2026, but the threat remains high for the rest of the year, according to supply-chain risk management company Overhaul.

Key Numbers: The company recorded 605 theft incidents in Q2, a 5% increase from the first quarter, with April, May, and June accounting for 34%, 35%, and 31% of incidents, respectively. Overhaul expects 230 to 260 cargo theft incidents per month during the second half of 2026, with Labor Day and the November-December period identified as particularly vulnerable windows.

Sophisticated Theft: The threat is also becoming more sophisticated, with organized groups impersonating legitimate carriers, hacking freight brokerage systems, and using fake bills of lading to steal loads. Pilferage, however, remained the most common theft type, accounting for 46% of Q2 incidents, compared with 11% for deceptive pickups.

The risk is concentrated in certain freight corridors and products. Overhaul said the first 200 miles of shipments leaving Southern California now account for 37% of U.S. cargo thefts, while electronics accounted for 23% of targeted products.

Multiple federal agencies are stepping up enforcement against unqualified commercial driver training schools, tightening the flow of new drivers into an already-constrained U.S. truckload market.

What’s Happening: DOT has ordered the emergency removal of more than 110 entry-level driver training providers linked to over 5,000 drivers who failed English-language proficiency tests, while more than 160 additional schools face proposed removal following nearly 400 investigations across 40 states.

The Department of Homeland Security is separately targeting more than 200 training schools in 23 states over alleged CDL fraud and other illegal activity.

Driver Shortage: Analysts say the latest actions alone are unlikely to cause a major capacity shock, but they add to a broader enforcement push involving English proficiency, electronic logging devices and CDL training requirements.

U.S. manufacturing expanded for an eighth consecutive month in August, but growth slowed across several key measures, according to the Institute for Supply Management.

Key Details: The Manufacturing PMI fell 1 percentage point from July to 54.6, while new orders and backlogs also weakened, signaling a slower pace of expansion even as production continued to grow.

The New Orders Index fell 3 points to 53.7, the Backlog of Orders Index dropped 3.2 points to 51.8, and the Employment Index declined 1.6 points to 51.2. Production remained stronger at 58.3, marking its 10th consecutive month of expansion.

Big Picture: The report points to persistent cost and supply-chain pressures despite continued manufacturing growth. ISM respondents cited pricing volatility, longer lead times, tariffs, and the Iran conflict among key concerns, while steel, aluminum, copper, fuel, and other inputs continued to rise in price.

U.S. rail freight and intermodal volumes increased year over year in the week ending Aug. 29, according to the Association of American Railroads (AAR), extending gains seen earlier in the month.

Key Numbers: Rail carloads rose 2.2% to 240,021, while intermodal containers and trailers climbed 5.7% to 303,191 units.

Seven of the 10 major carload commodity groups recorded annual gains, led by metallic ores and metals, grain, and nonmetallic minerals. Chemicals, motor vehicles and parts, and miscellaneous carloads declined.

Weekly rail and intermodal volumes also exceeded the levels recorded in both the previous two weeks, indicating continued strength across the freight network.

What’s Next: Through the first 34 weeks of 2026, U.S. rail carloads totaled 7.75 million, up 2.7% from the same period last year, while intermodal volume reached 9.61 million units, a 3.9% annual increase. The figures point to sustained growth in both traditional rail freight and intermodal activity as the year progresses.

Descartes Systems Group has acquired warehouse management and fulfillment technology provider Extensiv for $120 million, expanding its reach into the third-party logistics market.

Key Details: The deal, announced Tuesday and funded with cash on hand, comes just a week after Descartes agreed to acquire freight broker technology provider Tai for $100 million.

Win-Win: California-based Extensiv provides 3PLs with inventory management and order fulfillment software, using AI and omnichannel data to support warehouse decision-making. The acquisition adds those capabilities to Descartes’ existing portfolio of transportation, connectivity, visibility, trade intelligence, customs compliance, and last-mile delivery solutions.

Shopping Time: The Extensiv deal is the latest in a string of acquisitions as Descartes builds out an end-to-end supply-chain technology network. It follows the company’s $100 million acquisition of freight broker technology provider Tai last week, as well as its purchases of Latin American last-mile logistics provider Drivin for $30 million in July and fleet-safety technology provider Idelic for $28 million in April.

The U.S.-Canada trade fight is threatening to disrupt cross-border freight, with logistics groups warning that weaker Canadian exports could leave trucks without return loads and push up transportation costs.

Key Details: The latest escalation is set to take effect Sept. 8, when Canada’s retaliatory tariffs on $27.6 billion of U.S. exports come into force. The duties cover more than 700 products, including apparel, electronics, appliances, steel, dairy, furniture and aluminum, with rates ranging from 15% to 50%.

They follow President Donald Trump’s 50% tariffs on $20 billion of Canadian goods, which took effect Aug. 22 after trade talks collapsed.

Change of Plans: The Canadian Trucking Alliance warned that fewer Canadian exports to the U.S. could leave Canadian trucks without enough loads for the return journey, creating a structural equipment imbalance.

A Purolator survey of 348 logistics decision-makers found that 51% of North American businesses had already changed shipping routes due to tariff disruptions, while 53% had changed suppliers.