Supply Chain Market Update: Cautious Trade Sentiment Amid a Temporary Tariff Truce

Trade sentiment remains cautious as markets adjust to the temporary U.S.–China tariff and port-fee truce. Ocean rates have firmed, air cargo is softening, and domestic freight conditions continue to shift across modes.

Key themes highlighted in this month’s update include:

Transportation and warehousing:

• Ocean spot rates slipped again after a short-lived rebound, as persistent structural overcapacity continues to limit any sustained pricing power

• Air freight markets are softening, with rates easing as capacity expands faster than volumes, despite strong Asia–EU e-commerce flows

• Trucking conditions remain soft, with flat contract rates, tightening capacity, and carriers accelerating cost reduction, automation, and consolidation initiatives

• Rail markets remain pressured, with elevated railcar storage and increased competition from new premium intermodal services amid continued regulatory scrutiny

• Parcel carriers continue restructuring, driven by network consolidation, workforce reductions, and cost-transformation efforts that supported stronger-than-expected earnings

• Warehousing remains resilient, with rents edging higher, vacancy tightening, and continued investment in automation and Free Trade Zones amid tariff uncertainty

Tariffs and trade policy:

• The U.S. and China agreed to a one-year pause on tariff escalation, delaying new measures until at least November 2026

• Both countries suspended their respective port fees beginning November 10, creating near-term stability while broader structural tensions remain unresolved

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