In this issue6 sections
Growth came back this week, and the carriers have already priced it in. Last edition asked whether teams had separated what tariff refunds gave back from what energy and materials will cost next year. Freight is where both now show up. Real GDP grew at a 3.4% annual rate in the third quarter, up from 2.2%. The Federal Reserve held rates at 3.75%–4.00% on Wednesday, but two officials dissented in favor of a hike, and CME FedWatch put the odds of a December increase at 82.6% after the decision. C.H. Robinson said its truckload linehaul price per mile rose about 31.5% from a year earlier while its cost per mile rose 33.5%, in a market it described as “a period of significant supply-driven tightening.” Werner said it is positioned to “capitalize on the early stages of this freight upcycle.” Diesel rose for a second week, to $6.352 a gallon, as Gulf attacks on shipping hit a wartime high. Asia–U.S. East Coast container rates jumped 9% to a high for the year. Tariff refunds come once; freight costs rising with demand will stay in 2027 budgets. Shippers who wait for the cycle to cool before they bid will be bidding against it.
Retail & Consumer Spotlight: Demand Held Up. Refunds Are Still Doing the Margin Work.
Last Edition’s Question: Separate the Refund From the Run-Rate
Last edition asked whether your 2027 plan separates tariff refunds from rising commodity costs. Hershey did it in its own guidance. The company raised its 2026 adjusted EPS growth outlook to 36% to 38.5%, and in a footnote said the figure “Includes approximately $0.22 from tariff refunds received in Q3 2026.” It added: “This outlook does not include potential future tariff refunds.” Its gross margin improved on price, refunds and “lower net commodity costs, which more than offset lower volume and higher freight and logistics expenses.” Caterpillar did the same in its disclosures. Its third-quarter operating profit “included $128 million of International Emergency Economic Power Act (IEEPA) tariff recoveries,” even as “Unfavorable manufacturing costs primarily reflected higher material costs, including tariffs.”
Other companies reported the same mix. Chipotle’s restaurant margin improved on “menu price increases, tariff relief, and favorable limited-time offer mix,” which were partly offset by “inflation, primarily in beef and freight.” Tariffs are falling out of cost of goods while freight, fuel and materials rise. Do what Hershey did: report the refund on its own line, and keep it out of the outlook.
The Consumer Is Spending, and Still Feels the Prices
The consumer data gave carriers no reason to slow down. BEA’s September report showed spending up 0.5% while income rose 0.2%, and the saving rate was 3.8%. The PCE price index rose 0.5% in the month and 3.6% from a year earlier; core rose 3.1%. The Conference Board’s confidence index jumped 7.5 points to 91.7. Its senior economist, Fergus McCormick, said that “consumers continued to express frustration with rising costs.” Twelve-month inflation expectations eased but “remained elevated at 5.8%.” The University of Michigan’s final October sentiment reading was 48.0, nearly unchanged from September’s 48.1, with year-ahead inflation expectations at 4.7%. “Purchasing power continues to dominate consumer views of the economy,” said survey director Joanne Hsu.
The Fed read the same data. The FOMC statement said “Inflation remains elevated,” and Lisa Cook and Beth Hammack voted for a quarter-point hike. “They go to the gas station too, and they see the prices are up,” Chair Kevin Warsh said of consumers at his press conference. Sherwin-Williams shows where that leaves suppliers of household goods: gross margin was hit by “higher raw material and supply chain related costs,” and the company said “Customer sentiment and the leading indicators we track point to muted demand.”
Build your 2027 working-capital plan on a December hike, not a cut: at 82.6% odds, carrying costs on inventory are more likely to rise than fall. If a retailer uses this quarter’s tariff refunds to ask you for a lower price, show them Hershey’s footnote and your freight line.
Global Logistics Pulse: Carriers Are Calling the Upcycle
Truckload: Contract Rates Are Catching Up
The third-quarter carrier and broker results this week say the same thing about truckload capacity. C.H. Robinson’s revenue rose 29.5% to $5.4 billion. Its truckload linehaul rate per mile charged to customers, excluding fuel, rose about 31.5%, while its cost per mile rose 33.5%. It said it was “successfully repricing a large portion of our contractual truckload portfolio.” Werner’s revenue rose 23% to $950.5 million, revenue per truck per week rose 11.0% to $5,144, and its Truckload Transportation Services operating ratio improved to 96.7% from 102.7%. CEO Derek Leathers said Werner is expanding its fleet “as industry capacity tightens.” Landstar’s revenue rose 25% to $1.512 billion on what CEO Frank Lonegro called “a freight transportation backdrop that continues to improve,” though he warned that “we are not immune to the challenges of the insurance and claims inflation prevalent in our industry.”
The spot market is no longer rising, but the shortage of trucks hasn’t eased. DAT’s report for October 17 to 23 had van spot at $3.07 a mile (down 2 cents), reefer at $3.63 and flatbed at $3.61. Van linehaul at $2.24 is still 33% above a year ago, and truck posts are 20% to 26% below last year. “Trucks remain scarce year over year,” said DAT’s Dean Croke.
Last edition told you to lock in temperature-controlled capacity for peak. This week’s results show the repricing has reached contract freight. If your 2027 truckload bid assumes this quarter’s softer spot rates will pull contract rates down, rebuild it. Run the bid early, award to carriers that are adding trucks, as Werner is, and expect accessorial and insurance-driven increases on top of linehaul.
LTL and Parcel: Yield Holds, Volume Is Mixed
Less-than-truckload pricing held up while volumes split. XPO’s North American LTL tonnage per day rose 5.0%, yield excluding fuel rose 3.6%, and its adjusted operating ratio improved 260 basis points to 80.1%; CEO Mario Harik expects “further upside as freight demand recovers.” Old Dominion’s tons per day were down 0.1%, but revenue per hundredweight excluding fuel rose 5.1% and its operating ratio improved to 71.5%, and tons per day turned positive year over year in September. UPS raised its full-year guidance to about $7.28 in adjusted EPS. Its U.S. revenue per piece rose 6.1% while average daily volume fell 3.3%, and Supply Chain Dive reported that about half of the per-piece gain came from higher fuel rates. LTL carriers are getting price on flat-to-rising volume, so ask for rate holds in exchange for volume commitments, not discounts. For parcel, separate the fuel-surcharge share of your 2026 increase from base rates; only that share falls if diesel does.
Diesel: Two Weeks Up, and the Gulf Is Getting Worse
DOE’s October 26 average was $6.352 a gallon, up 7.6 cents, after a 9.7-cent rise the week before. Diesel is $2.634, or about 71%, above a year ago. Regional prices moved in different directions: the Midwest reached $6.480 and the Rocky Mountain region $6.521, while the West Coast eased to $7.329 from $7.394 and California to $8.155 from $8.242. A surcharge table with a $3.50 base at 6 miles per gallon now adds about 47.5 cents a mile, up from 46.3 cents. Brent was trading at $114.14 early Thursday, according to OilPrice.com, down after Vice President JD Vance contacted Iran’s Supreme National Security Council to restart peace talks, but “still significantly higher” than at the start of October.
Shipping in the Gulf got more dangerous. gCaptain reported that Iranian attacks on ships reached “a wartime high of almost 30 in October,” and on Wednesday U.S. Naval Forces Central Command advised that “vessels which do not need to transit the area are advised to remain well clear.” Keep fuel surcharges floating, and don’t sign fixed all-in rates through the first quarter. If peace talks lower Brent, an indexed surcharge passes the savings to you within weeks; a fixed rate won’t.
Ocean: The East Coast Is Rising While Forecasters Call a Peak
Freightos’s October 28 update had Asia–U.S. East Coast up 9% to $10,565 per FEU, a high for the year, and Asia–U.S. West Coast up 3% to $8,368. Asia–North Europe rose 3% to $3,551 and Asia–Mediterranean 8% to $4,252. Xeneta’s October 23 update read the transpacific differently: Far East–U.S. West Coast spot rose 0.2% to $8,311, and chief analyst Peter Sand said “This confirms the US trades have peaked and we expect them to soften through the remainder of 2026.” Drewry had not published its October 29 World Container Index at our deadline. Its October 22 reading was $4,585 per 40-foot container, up 2%.
Freightos also flagged two risks. A local watchmen’s union at Los Angeles and Long Beach voted to authorize a strike that “could be called as soon as November 1st.” Separately, Alphaliner estimates nearly two-thirds of Asia–Europe capacity is back on the Red Sea route, and ZIM has resumed Red Sea routing on its joint Asia–U.S. East Coast service with MSC. Last edition told you to hold transpacific awards until early November. Keep holding, but move any urgent December cargo off the San Pedro Bay gateways if a strike is called. For East Coast 2027 contracts, ask for an index-linked rate with a Suez trigger, because Red Sea routing would shorten the voyage and add capacity.
Rail and Air: Intermodal Keeps Growing
AAR counted 303,677 U.S. intermodal units in the week ending October 24, up 11.3% and the third straight week of double-digit growth. Carloads rose 3.6% to 234,826. Freightos’s air index had China–North America up 4% to $7.13 a kilogram and China–North Europe up 12% to $4.35. Put long-haul intermodal into your 2027 truckload bid as a priced alternative. The railroads will raise prices as volume grows.
Manufacturing Renaissance: Factories Are Building at the Top of the Cost Curve
Orders Are Strong, and So Are Input Costs
Manufacturers’ order books are strong, and they are paying more for inputs to fill them. Census reported September durable goods orders up 1.8% to $345.4 billion, up in six of the last seven months, with unfilled orders up 0.8% to $1.62 trillion. S&P Global’s flash October manufacturing PMI was 56.0, down from 57.0 but still well into expansion territory. Supplier delivery times lengthened the most since July 2022 “amid material shortages, low stock levels, overloaded suppliers, labour shortages, rising back orders and shipping or import delays,” and selling prices rose at the sharpest rate since August 2022. “Supply chain bottlenecks have meanwhile intensified, and order book backlogs are growing,” said S&P’s Chris Williamson, adding that “the renewed surge in oil prices reverberates through to impact a wide variety of goods and services.”
Regional surveys show the same strain. The Dallas Fed’s raw materials price index rose to 55.3 from 52.2. One respondent wrote: “The increase in diesel costs is the justification we are being told from our suppliers.” Caterpillar reported sales up 17% to $20.7 billion, “strong order rates and a record backlog,” and $663 million of price realization. Nucor earned $5.80 a share and expects the fourth quarter to be “generally in-line with or modestly higher than the third quarter.” Don’t expect relief on steel-indexed agreements resetting in January.
The Plants Are Still Coming
Companies are still committing capital to U.S. plants despite those costs. This week Audi announced a $4 billion plant at the Middle Georgia Mega Site in Peach County, with about 4,500 jobs. Manufacturing Dive reports that the plant “will reduce its exposure to trade and currency risks, such as the 15% tariff on European auto imports.” Carrier announced a Fort Worth chiller campus of more than $600 million with about 1,500 jobs, scheduled to open next year. They will compete for the same trucks, steel and skilled labor that running factories already pay more for. Suppliers in automotive or HVAC should get on qualification lists now; buyers in Georgia and Texas should expect tighter local capacity before the plants open.
The Policy Calendar Hits the Bill of Materials
Several trade changes take effect over the next three weeks. On Friday, October 30, revised Section 338 duties on Canadian goods take effect. The October 23 proclamation removes 22 tariff lines, including plywood, paper products and machinery, and adds 100, including shampoo, vinyl flooring, window air conditioners, chest freezers and handheld electrical tools. A trade-law analysis posted October 26 by Nithya Nagarajan, Cortney Morgan and Emily Mikes notes that “The Proclamation does not contain any language allowing for an in-transit exemption.” NBC News tied the exemptions to Sen. Susan Collins, who is in a tough re-election race and said “I am pleased to have secured additional tariff exemptions,” ahead of the November 3 midterms.
Last edition told you to treat November 9–10 as a hard date. One of those deadlines may now move. On October 26 USTR proposed extending the suspension of its Section 301 port fees on China-linked vessels by two months, to January 9, 2027, “To allow for further negotiation with China,” with comments due October 30. Nothing comparable has been published for the rest. USTR’s 178 remaining Section 301 product exclusions on Chinese goods still expire at 11:59 p.m. on November 9 under its December 2025 notice, and the Federal Register shows no new USTR exclusion notice. BIS has not published an extension of its Affiliates Rule suspension; Crowell & Moring noted in September that the agency “has not yet published a Federal Register notice formally extending the suspension.” We found no official notice extending China’s rare-earth suspension past November 10. The APEC leaders’ meeting in Shenzhen is November 18–19.
Re-run your Canada landed-cost model against the new HTS lists before Friday’s entries, especially if you import appliances, flooring or personal care products, since goods already in transit get no exemption. Then list every entry that depends on one of the 178 China exclusions, and price it at the full Section 301 rate from November 10 unless USTR extends them. Extensions may still come, but plan for the ones that don’t arrive.
📊 Numbers That Matter
Weekly Dashboard: Week of October 26–30, 2026
| Metric | Reading | Source |
|---|---|---|
| Real GDP (Q3 advance) | +3.4% annualized (Q2: +2.2%); led by inventories, equipment and consumer spending | BEA |
| PCE prices (Sept) | +0.5% m/m, +3.6% YoY; core +3.1% YoY; saving rate 3.8% | BEA |
| Fed funds | Held at 3.75%–4.00%, 10–2 (Cook, Hammack for a hike); Dec hike odds 82.6% | Federal Reserve; CME FedWatch via Fox Business |
| Consumer sentiment | Conference Board 91.7 (+7.5), 12-mo inflation expectations 5.8%; UMich final Oct 48.0, year-ahead 4.7% | Conference Board; University of Michigan |
| Retail diesel (DOE weekly, Oct 26) | $6.352/gal, +7.6¢ WoW; +$2.634 (~71%) YoY; Midwest $6.480; California $8.155 | EIA |
| Brent crude | $114.14 early Oct 29; Gulf attacks at “almost 30” in October | OilPrice.com; gCaptain |
| Drewry WCI (Oct 22, latest published) | $4,585/40ft (+2%); Shanghai–LA $8,007; Shanghai–NY $10,166 | Drewry |
| Freightos FBX (Oct 28 update) | Asia–USWC $8,368 (+3%); Asia–USEC $10,565 (+9%); Asia–N. Europe $3,551 (+3%); Asia–Med $4,252 (+8%) | Freightos |
| Xeneta spot (Oct 23) | Far East–USWC $8,311 (+0.2%); Far East–USEC $11,525 (+0.2%); Far East–N. Europe $3,698 (+6.8%) | Xeneta |
| Freightos Air (Oct 28 update) | China–N. America $7.13/kg (+4%); China–N. Europe $4.35/kg (+12%) | Freightos |
| DAT spot (Oct 17–23) | Van $3.07/mi (−2¢), linehaul $2.24 (+33% YoY); reefer $3.63; flatbed $3.61; van L/T 9.5 | DAT via AJOT |
| C.H. Robinson (Q3) | Revenue $5.4B (+29.5%); TL price/mile ex-fuel ~+31.5%, cost/mile +33.5% | C.H. Robinson |
| Rail (week ending Oct 24) | U.S. intermodal 303,677 (+11.3% YoY); carloads 234,826 (+3.6%); total 538,503 (+7.8%) | AAR via AJOT |
| Durable goods (Sept) | Orders +1.8% to $345.4B; unfilled orders +0.8%; wholesale inventories +7.4% YoY | Census |
| S&P Global flash PMI (Oct) | Manufacturing 56.0 (prior 57.0); delivery times longest since July 2022; selling prices fastest since Aug 2022 | S&P Global via investingLive, TheStreet |
| Tariff refunds in earnings | Caterpillar $128M in Q3 operating profit; Hershey ~$0.22 in FY EPS outlook | Caterpillar; Hershey |
Looking Ahead
- October 30: Revised Section 338 duties on Canadian goods take effect at 12:01 a.m. ET, with no in-transit exemption; USTR comments on the port-fee extension are due at 5:00 p.m. ET
- November 1: Earliest date the LA/Long Beach watchmen’s union could strike; move urgent December cargo to alternatives if it is called
- November 2: DOE diesel update; a third weekly rise would confirm diesel is climbing again, and a fall would test whether Vance’s outreach to Iran is reaching fuel prices
- November 3: U.S. midterm elections; tariff scope is being adjusted with the vote in mind
- November 4: ArcBest reports Q3 before the open; another read on LTL pricing for 2027 bids
- November 9: USTR’s 178 Section 301 exclusions on Chinese goods expire at 11:59 p.m., along with the current port-fee suspension and the BIS Affiliates Rule suspension, unless extended
- November 10: China’s suspension of its October 2025 rare-earth export controls lapses unless renewed
- November 18–19: APEC leaders’ meeting in Shenzhen
- December 8–9: FOMC meeting; markets price an 82.6% chance of a quarter-point hike
- January 9–10, 2027: Proposed end of the port-fee suspension, and the current end date of the U.S.–China trade truce
The Bottom Line
The economy grew 3.4%, carriers are repricing contracts on it, and the Fed may raise rates again because of it.
Bid truckload now, while the upcycle is early. C.H. Robinson repriced its contract book with cost per mile up 33.5%, and Werner and Landstar are describing an improving cycle. Spot softness won’t lower your 2027 contract rates. Run the bid early, commit volume to carriers that are adding trucks, and keep surcharges indexed to DOE.
Keep refunds out of the baseline, and plan for higher rates. Hershey’s guidance shows how: report the $0.22 once and leave future refunds out. Build working capital on an 82.6% chance of a December hike, and answer customer requests for price cuts with your freight and fuel lines, not your tariff line.
Treat November 9 as a deadline until an extension is published. USTR has proposed moving the port fees to January 9, but the 178 China exclusions, the Affiliates Rule and the rare-earth pause have no extension yet. Re-run your Canada landed costs against Friday’s new HTS lists, price exclusion-dependent entries at the full Section 301 rate, and confirm your suppliers’ rare-earth inventory past November 10.
Strategic question for supply chain leaders: Carriers are saying the freight upcycle has started, and the Fed may raise rates in December. Is your 2027 transportation budget built on this quarter’s spot rates, or on the contract rates your carriers will bring to the bid?
