As noted in last week’s Two Minute Warning, there are a bunch of logistics and supply chain issues on the table right now. Make no mistake about it, these challenges can and most likely will have an impact in 2026. While there are many, in the interest of time, we are focused on three “biggies” that should be considered.
First, let’s look at the LTL market. Two weeks ago, I was part of a panel that addressed LTL issues at the Journal of Commerce’s outstanding Inland Distribution Conference. Bill Cassidy from the Journal of Commerce wrote a great article about our panel discussion: Inland ‘25: Low demand putting pricing pressure on US LTL carriers.
In this article I noted that "We are seeing some irrational pricing as LTL carriers are doing what I call defending their turf in a sea of uncertainty.” Pricing trends from the carriers today are different than they have been in the past. As LTL carriers move to protect their high-density lanes, shippers who are using archaic and outdated LTL procurement or sourcing models are leaving a bunch of money on the table.
Most shippers want to believe they are getting the best possible rates. But approximately 85% of the benchmark studies we conduct on behalf of shippers highlight that there are opportunities to get better rates and lower their costs. In closing I stated that shippers who think strategically and work collaboratively with their carriers are going to do better than shippers who are thinking tactically and just want the lowest rates.
After this panel, several LTL carriers encouraged me to keep spreading this message because it will allow them to give shippers what they want: the best possible service at the lowest possible costs. I’d be happy to share more about this just send me an email or give us a call.
Second, on the truckload front challenges continue. At the NITL Summit last week, our friend and the ATA’s Chief Economist Bob Costello gave an outstanding but sobering presentation about what is happening in the truckload market. This historic freight recession, which is now over 40 months old, will likely continue well into 2026. That said, if rates are going to recover, it will happen because of a reduction in capacity and not an increase in demand.
Two critical issues to watch are how the states enforce the English Language Proficiency Act and the federal mandates regarding the issue of CDLs for nonresidents. Coupled with the restrictions on visas, the trucking industry could see an 8% to 10% reduction in drivers. If that occurs, capacity will shrink and rates will go up. But that is dependent on how rigorously the states enforce these policies. If you want to lock in your TL rates, now is the time to act. TranzAct can help get the best possible results on your TL sourcing event. If you are interested in Bob’s PowerPoint presentation, let me know.
Third and finally, no issues list would be complete unless we highlighted that tariffs are likely going to the biggest challenge when looking back on 2025. At CSCMP’s outstanding Edge 2025 conference, we heard updates from shippers about how they are managing the tariff situation. One day later, at the NITL Summit, Jon Gold, the VP of Supply Chain at the National Retail Federation, had a great PowerPoint that had data on where we stand today with tariffs. Of course, two days later news broke about the tariffs between China and United States.
Jon reiterated that shippers must be proactive in measuring and managing the impact of tariffs. Some of the issues to address include measuring the amount of “derivative content” and also determining how much of the tariffs can be passed along to customers. Jon and NITL have graciously agreed to allow us to share this PowerPoint. Reach out if you’re interested in getting this presentation. And while you are at it, let me know if you’d like more information about TranzAct’s Tariff Management program. It is a great tool that can enable you to follow Jon’s advice and be proactive.
To learn more, give me a call at 630-833-0890 Ext 190, send me an email or schedule a meeting.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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