In this issue6 sections
The midterms gave shippers a fuel break, not a tariff break, and neither has reached the invoice yet. Last edition asked whether your 2027 transportation budget was built on spot rates or on the contract rates carriers are about to bring. This week the answer came from both ends of the market. Democrats won control of both the House and the Senate on Tuesday, and on Wednesday Brent fell 8.6% to $94.66 a barrel by the afternoon, its lowest since early September, “with traders pricing an end to the Iran war after the White House tied Tuesday’s midterm losses to the conflict,” OilPrice.com reported. Tariffs did not move. Baker McKenzie’s post-election analysis says “Section 301 and Section 232 remain the most legally durable tariff authorities,” and the 178 Section 301 exclusions on Chinese goods still expire at 11:59 p.m. on November 9 with no extension published. Factories are running harder into that: ISM’s October manufacturing PMI rose to 55.5, production hit its highest reading since November 2021, and the prices index was still 75.2. Contract truckload rates are up nearly 20% and sit at a 52-week high, according to FreightWaves. Monday’s diesel average, $6.292, was set before the oil drop. The vote changed what fuel will cost next quarter. It didn’t change what freight capacity or duties will cost, and those are the lines your 2027 budget can’t index away.
Retail & Consumer Spotlight: Refunds Are Turning Into a Pricing Decision
Rockwell Gave Most of Its Refund Back
For weeks we have tracked tariff refunds landing in margins. This week one manufacturer gave most of its refund away. Rockwell Automation said that in its fiscal fourth quarter it “received $103 million of International Emergency Economic Powers Act tariff refunds,” and that it “approved and communicated a refund program for customers” who paid price increases tied to those tariffs, booking “an accrual of $85 million for estimated refunds to be issued to customers as a reduction of sales.” The program cut about four points off fourth-quarter sales growth.
Most consumer companies kept theirs. Ralph Lauren’s reconciliation shows $82.3 million of tariff refund recoveries, and it said “Gross margin expansion on a reported basis was primarily driven by tariff refunds received in the quarter.” Tapestry’s gross margin rose 220 basis points, including “a 70-basis point net benefit from tariffs and duties.” Apple’s gross margin of 47.9% included “a favorable impact of approximately 1 percentage point from tariff refunds,” worth $0.05 a share.
That choice now has a political cost attached. Baker McKenzie says the new Congress should be expected to bring “subpoenas and hearings on the IEEPA tariff refund administration.” The pool is large: CBP’s CAPE process had $137.9 billion in potential and certified refunds as of October 23, according to Foley & Lardner’s weekly trade update. If you sell to manufacturers or retailers that passed IEEPA tariffs through to you, ask them this month whether they will follow Rockwell’s model. If you passed tariffs to your own customers, decide your refund policy before a customer, or a committee, asks.
Costs Are Still Rising Under the Refunds
Underneath the one-time refunds, the run-rate costs from last edition kept climbing. Clorox’s gross margin fell 130 basis points to 40.4%, “primarily driven by higher commodity costs and higher manufacturing and logistics costs,” and it now expects full-year adjusted EPS “closer to the low end” of its range. “The cost environment has become more challenging,” said CEO Linda Rendle. Kraft Heinz’s adjusted operating income fell 15.2% to $0.9 billion, “primarily due to inflationary pressures in procurement and logistics costs.”
Holiday logistics are getting more expensive too. Amazon’s shipping costs rose 11% in the third quarter, according to FreightWaves, and ShipMatrix estimates parcel carriers will deliver about 2.4 billion packages this peak, up 4%, while “Retailers have also experienced a 16% jump in parcel shipping rates compared to last year.” Employers are covering the peak with temporary labor: Challenger counted 300,000 seasonal hires planned at Amazon and 100,000 at UPS, and Andy Challenger said “Companies want the flexibility to meet holiday demand without adding permanent headcount.” Report refunds on their own line, as Hershey did last week, and budget 2027 on the Clorox and Kraft Heinz cost lines, not on this quarter’s refund-inflated margin.
Global Logistics Pulse: Oil Broke Lower. Capacity Didn’t.
Diesel: The Drop Isn’t in the Number Yet
DOE’s November 2 average was $6.292 a gallon, down 6.0 cents after two weekly increases, and still $2.539 above a year ago. California was $8.076, the West Coast $7.272 and the Midwest $6.402. A surcharge table with a $3.50 base at 6 miles per gallon now adds about 46.5 cents a mile, down from 47.5 cents. That reading was taken before the oil market broke. FreightWaves reported that December ULSD futures settled Monday at $4.4216 a gallon, the lowest settlement since October 6, and Brent fell another 8.6% on Wednesday. President Trump had told Fox News on Tuesday night, explaining the Republican defeat, “I think it’s the gasoline price.”
The Gulf has not calmed down. Al Jazeera reported that UKMTO confirmed two projectiles hit a tanker’s engine room off Oman on Tuesday, and that Iranian official Mohsen Rezaei said “America’s response to Iran’s rights and demands was not convincing.” Drewry’s October 29 report counted only two vessels through the Strait of Hormuz the week before. Parcel carriers are moving the other way: FedEx raises its U.S. domestic fuel surcharges by 1.5 percentage points on November 9, according to TransImpact. Last edition told you to keep fuel surcharges floating, and this is why. An indexed surcharge should pass a lower diesel price through within weeks. Check whether your parcel contract’s fuel table change takes that benefit back.
Truckload: Contract Rates Are at a 52-Week High
Last edition’s question has an answer, and it is contract, not spot. FreightWaves reported the SONAR tender rejection index at 12.86% on November 3, with October averaging about 13.5% against 5.73% a year earlier, and wrote that “contract rates are up nearly 20% and sitting at a 52-week high.” The Logistics Managers’ Index transportation capacity reading was 38 in October, an 11th straight month of contraction, while inventory levels grew at the fastest pace since September 2022. FreightWaves reported that Knight-Swift is targeting “at least double-digit” increases in its bids. In LTL, ArcBest said contracts renewed in the third quarter “averaged a 5.1 percent increase, and LTL industry pricing remains rational.”
Spot readings were mixed. DAT’s October 24–30 report had van spot up 5 cents to $3.07 a mile, reefer at $3.63 and flatbed at $3.62, with van load-to-truck ratios rising to 10.9 from 9.5. Truckstop and FTR, using different data, said dry van, reefer and flatbed rates “all declined in the same week for the first time since mid-August,” but remained “approximately 40% to 47% higher year over year.” New capacity isn’t coming quickly: FTR’s preliminary October Class 8 orders were 15,600 units, down 36% from a year earlier and “nearly 50% below the 10-year October average.” If your 2027 bid assumed double-digit increases, it’s in line with the market. If it assumed mid-single digits, rebuild it now, and split fuel from linehaul so the oil drop shows up where it belongs.
Ocean: Carriers Want Increases the Market Isn’t Paying
Drewry’s World Container Index fell 1% on Thursday to $4,389 per 40-foot container, its second weekly decline. Shanghai–New York fell 3% to $9,303 and Shanghai–Rotterdam 2% to $3,615, while Shanghai–Los Angeles held at $7,539. “With the increase in effective capacity, rates are expected to remain under downwards pressure,” Drewry said, and it “projects a decline in rates next week” on the transpacific, even with blank sailings there falling to three next week from five. Freightos’s November 3 update had Asia–U.S. East Coast down 6% to about $9,900 per FEU and the West Coast level in the $8,300 range. Carriers filed GRIs of $2,000 to $3,000 per FEU for November, “though here too rates so far this week have not climbed.”
Xeneta’s 2027 outlook, released Thursday, forecast global average spot rates falling 30% in 2027 and long-term rates 5%, with fleet growth of 6.8% against demand growth of 2.5% to 4%. Chief analyst Peter Sand said the transpacific to the West Coast “spiked 343% between 28 February and 31 October this year,” but warned that “The Red Sea is pivotal to ocean container shipping in 2027 because it offers both sides of the coin. If there is a full return, freight rates could plummet.” Drewry says 60% of Asia–Europe capacity now uses the Suez Canal route.
The LA/Long Beach watchmen’s deadline moved again: FreightWaves reported Thursday that “The Pacific Maritime Association and ILWU Local 26 agreed to extend their contract through midnight Pacific Time on Friday.” Last edition told you to hold transpacific awards until early November. Hold a few weeks more: carriers’ GRIs aren’t sticking, and the leading 2027 forecast calls for falling spot rates. Sign 2027 transpacific contracts with index-linked pricing and a Red Sea trigger, not fixed at today’s levels. Keep urgent December cargo on a backup plan until the watchmen dispute is settled.
Rail and Air: A Flood Broke the Intermodal Streak, Not the Demand
AAR counted 280,264 U.S. intermodal units in the week ending October 31, up 3.9%, after three straight double-digit weeks. FreightWaves reported that BNSF’s Southern Transcon “was shut down for roughly 60 hours after record flooding in New Mexico,” and that Union Pacific, which was not affected, posted a 17% intermodal gain. Air cargo is reaching peak-season highs: Freightos had China–North America up 9% to $7.76 a kilogram, up 40% from a year ago and approaching the 2025 peak of $8.00. Keep pricing intermodal as an alternative in your truckload bid, and book December air early rather than on the spot market.
Trade Policy Watch: Congress Changed Hands. The Tariff Authorities Didn’t.
What the Election Changes, and What It Doesn’t
Democrats will control both chambers in January. That gives them hearings and subpoenas, not the power to repeal tariffs. The Council on Foreign Relations notes that “Repealing or constraining those authorities over a presidential veto requires a two-thirds majority in both chambers, and such a majority does not seem to have emerged from this midterm election.” Atlantic Council experts expect “a hundred-hour legislative blitz in January” that includes “rolling back tariffs,” but add that “Tariffs, meanwhile, are not likely to change.”
The administration isn’t signaling a retreat either. Foley & Lardner reported that U.S. Trade Representative Jamieson Greer said recommendations from the Section 301 investigation into structural overcapacity will come by the end of 2026, and that he doubts current tariffs are “as high as they will go.” On November 2, the Federal Register published a Section 232 proclamation finding that imports of robotics and industrial machinery “threaten to impair the national security of the United States.” It imposes no tariffs yet and orders negotiations, with an update due within 180 days. The president “may consider alternative remedies in the future, including imposing or modifying tariffs.” Baker McKenzie’s advice is to “Continue to plan for persistent elevated tariff levels, preserve rights to later tariff refunds, and assess tariff-risk allocation clauses.” Do that, and if you import automation equipment, put the robotics finding on your 2027 risk register.
November 9 Is Three Days Away, and Nothing Has Been Extended
Last edition told you to treat November 9 as a deadline until an extension was published. None has been. A November 2 alert from Lighthill says the 178 remaining Section 301 product exclusions “are scheduled to expire at 11:59 p.m. eastern daylight time on November 9, 2026,” and that USTR “has not announced a further extension.” Our check of the Federal Register through the documents scheduled for November 6 found no USTR exclusion notice, and no final action on the proposal to extend the port-fee suspension on China-linked vessels to January 9, 2027. Pillsbury notes that Treasury Secretary Scott Bessent said in September that the BIS Affiliates Rule suspension would be extended to January 10, 2027, “though BIS has not yet published a notice implementing the extension.” The Federal Register shows no BIS action since October 28.
China’s side is in the same position. China’s Commerce Ministry said in its September 28 readout that the two sides would extend the Kuala Lumpur arrangement, which suspended some tariff and non-tariff measures until November 10, to January 10, 2027. No new numbered notice amends the rare-earth suspension. On Thursday it set a condition, according to Xinhua: more U.S. farm purchases require that “the two sides’ arrangement for a 30-billion-U.S. dollar reciprocal tariff reduction is implemented.” Last-minute notices are possible before the APEC leaders’ meeting in Shenzhen on November 18–19. Plan for the deadlines anyway. Price every entry that depends on one of the 178 exclusions at the full Section 301 rate from November 10, and confirm your suppliers’ rare-earth magnet stock covers December.
CBP Is Tightening Who Can Import
CBP’s interim final rule on foreign importers of record, published Friday, says foreign IORs “are prohibited from making informal entry” for entries that need a CBP Form 3461 or 7501 “unless the foreign IOR is either a CTPAT validated participant or uses a CTPAT validated and licensed customs broker.” The rule takes effect 60 days after publication, and brokers must be in full compliance “no later than May 6, 2027.” If an overseas supplier ships to you as a non-resident importer, or you rely on delivered-duty-paid terms, check this month whether that supplier or its broker is CTPAT validated. If not, plan to take over as importer of record before the rule takes effect.
North America: Still Talking, No Deals
The USMCA was not renewed at its July 1 review, which triggered annual reviews but left the agreement in force, Latin Times reported, and Mexico’s push for a deal before November 3 ended without one. In Canada, Prime Minister Mark Carney said of the U.S. side, “They’re asking less and they’re offering more but we’re not quite there,” according to the Canadian Press. USTR’s comments for the 2027 joint review are due January 12, 2027. Imports are still strong: September imports rose $5.2 billion to $426.6 billion, led by capital goods. Keep USMCA certificates of origin current. Goods that qualify still enter duty-free, and a Canada deal would most likely reward compliant supply chains first.
📊 Numbers That Matter
Weekly Dashboard: Week of November 2–6, 2026
| Metric | Reading | Source |
|---|---|---|
| ISM manufacturing PMI (Oct) | 55.5 (Sept 54.5); production 59.0, highest since Nov 2021; prices 75.2 (Sept 77.9); supplier deliveries 59.1; imports 52.9 | ISM via PR Newswire |
| ISM services PMI (Oct) | 54.5 (Sept 54.9); prices 73.0; all 10 indexes in expansion | ISM via PR Newswire |
| Retail diesel (DOE weekly, Nov 2) | $6.292/gal, −6.0¢ WoW; +$2.539 YoY; California $8.076; Midwest $6.402 | EIA |
| Brent crude / ULSD futures | Brent $94.66 at 1:06 p.m. ET Nov 4 (−8.6%); Dec ULSD settled $4.4216/gal Nov 2, lowest since Oct 6 | OilPrice.com; FreightWaves |
| Drewry WCI (Nov 5) | $4,389/40ft (−1%); Shanghai–LA $7,539 (flat); Shanghai–NY $9,303 (−3%); Shanghai–Rotterdam $3,615 (−2%) | Drewry |
| Freightos FBX (Nov 3 update) | Asia–USWC ~$8,300 (level); Asia–USEC ~$9,900 (−6%); Asia–N. Europe $3,595; Asia–Med $4,375 (+3%) | Freightos |
| Xeneta 2027 outlook | Global spot −30% and long-term −5% in 2027; fleet growth 6.8%; demand growth 2.5%–4% | Xeneta |
| Freightos Air (Nov 3 update) | China–N. America $7.76/kg (+9%, +40% YoY); China–N. Europe $4.39/kg | Freightos |
| DAT spot (Oct 24–30) | Van $3.07/mi (+5¢); reefer $3.63; flatbed $3.62; van L/T 10.9 | DAT via AJOT |
| Truckload capacity | SONAR tender rejections 12.86% (Nov 3); LMI capacity 38, 11th month contracting; contract rates up nearly 20% | FreightWaves; LMI |
| Class 8 orders (Oct, prelim) | 15,600 units, −24% m/m, −36% YoY | FTR via AJOT |
| Rail (week ending Oct 31) | U.S. intermodal 280,264 (+3.9% YoY); carloads 233,816 (+3.0%); total 514,080 (+3.5%) | AAR |
| Trade balance (Sept) | Deficit $105.0B (−$0.7B); imports $426.6B (+$5.2B); YTD deficit −12.2% | BEA/Census |
| Labor | ADP Oct +86,000; JOLTS Sept openings 7.5M; Challenger Oct cuts 43,994, transportation cuts +188% YTD | ADP via IBTimes; BLS; Challenger |
| Tariff refunds in earnings | Rockwell $103M received, $85M accrued for customer refunds; Ralph Lauren $82.3M; Apple ~1 pt of gross margin | Company releases (SEC) |
| Fed funds outlook | 77% odds of a December hike (Nov 3) | CME FedWatch via HousingWire |
Looking Ahead
- November 6: BLS October jobs report at 8:30 a.m. ET; CBP’s foreign importer-of-record rule publishes, starting its 60-day clock
- November 6: LA/Long Beach watchmen’s contract extension expires at midnight PT; a strike would hit terminals handling most Long Beach cargo
- November 9: DOE diesel update, the first to reflect the post-election oil drop; FedEx’s 1.5-point fuel surcharge increase takes effect
- November 9: USTR’s 178 Section 301 exclusions on Chinese goods expire at 11:59 p.m. EDT, 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 MOFCOM publishes a renewal
- November 12: Government reply brief due in the Section 122 tariff appeal at the Federal Circuit
- November 18: Comments due at the STB on the Union Pacific–Norfolk Southern merger
- November 18–19: APEC leaders’ meeting in Shenzhen; the likeliest venue for U.S.–China deadline announcements
- December 8–9: FOMC meeting; futures priced a 77% chance of a hike as of November 3
- January 5, 2027: CBP’s foreign importer-of-record rule takes effect, 60 days after publication
- January 12, 2027: Comments due to USTR for the 2027 USMCA joint review
The Bottom Line
The election lowered the oil price. It didn’t lower freight capacity costs or tariffs, and those are what your 2027 budget depends on.
Take the fuel savings through the index, not in a renegotiation. Brent fell 8.6% in a day, but Monday’s diesel reading of $6.292 doesn’t show it yet. Indexed surcharges will pass the drop through on their own. Spend your negotiating effort on linehaul, where contract rates are up nearly 20%, and check that parcel fuel table changes like FedEx’s 1.5 points don’t take the savings back.
Bid truckload for double-digit increases and ocean for a falling market. Tender rejections near 13%, a capacity index of 38 and Class 8 orders down 36% all point to a tight 2027 truckload market. On the ocean side, carriers’ November GRIs aren’t sticking and Xeneta forecasts 2027 spot rates down 30%. Lock in truckload capacity early, and keep ocean contracts index-linked.
Plan for tariffs to stay, and decide what to do with your refunds. The new Congress can hold hearings but can’t override a veto. Price the 178 China exclusions at full duty from November 10, check your non-resident importers against CBP’s CTPAT rule, and settle your refund policy before customers or Congress ask about it.
Strategic question for supply chain leaders: Rockwell is returning $85 million of its $103 million tariff refund to customers, and Congress plans hearings on how refunds are handled. Have you decided whether your refunds stay in margin or go back to the customers who paid the tariff, and are you ready to explain that choice?
