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The global supply chain faces persistent overcapacity, tariff uncertainty, and demand softness across most freight modes, with trade shifting away from China toward Vietnam, Mexico, and India.

 

Key themes highlighted in this month’s update include:

Transportation and warehousing:

  • Transpacific spot rates spiked 26% into early January ahead of Lunar New Year driven by carrier-led general rate increases (GRI) and freight all kinds (FAK) resets, but underlying structural overcapacity and soft demand limit durability of rate gains despite tactical short-term strength.

  • Global air freight volumes rose 5-6% year-over-year into late 2025, yet average spot rates remain below prior-year levels, driven largely by seasonal and e-commerce dynamics rather than broad demand recovery, with modest rate increases continuing.

  • U.S. truckload spot rates experienced a notable December uptick as load-to-truck ratios rose and capacity exited the market due to weather and holiday constraints, but contract rates and overall demand remain subdued with 2-4% rate increases expected in 2026 insufficient to offset rising operational costs.

  • U.S. rail intermodal volume declined 3.4% in December (fourth consecutive month) and non-coal carloads fell 3%, with regulatory rejection of the UP-NS merger adding uncertainty and reduced interline cooperation limiting near-term intermodal recovery despite investments planned for 2026.

  • Regional and alternative carriers like Veho and UniUni surged during the 2025 holiday season, capturing significant share from national carriers as total U.S. package volume reached 2.3B parcels (+5% YoY), signaling a structural market shift toward multi-carrier strategies and delivery experience differentiation.

  • Inventory levels fell to historic lows with the Logistics Managers' Index reading at 35.1 (extreme contraction), driving warehousing utilization to 42.9 (all-time low) while available capacity surged to 61.1, reflecting very lean inventory operations amid near-term uncertainty.

 

Tariffs and trade policy:

  • De Minimis Tightening for Small Parcels; New 232 Duties on Trucks/Buses; China Deal Extensions + 301 Actions; India/Brazil Rate Volatility Driving Repricing & Sourcing Shifts

  • China had been a go-to hub for U.S. manufacturers, but US/China relations and tariffs have been pushing trade towards other countries (Vietnam, India, Mexico, Canada gained most)

 

Read the full report below to learn more. 

 

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