Lead Coverage Market Intelligence | What's Happening in Supply Chain

Crude-by-Rail Drives Gains

Intermodal Growth Lifts Rail Volumes: U.S. rail traffic rose 2.5% for the week, with intermodal volumes up 2.2%, signaling a modest rebound and helping push year-to-date totals slightly above 2025 levels
Energy Volatility Drives Crude-by-Rail Surge: Petroleum shipments jumped 15.5% as the Iran war disrupts global oil markets, increasing reliance on rail to move energy products
Commodity Mix Shows Uneven Recovery: Gains across most carload categories, led by grain up 22.9%, were partially offset by declines in coal and miscellaneous freight, highlighting a mixed freight environment

Opening Is Procedural, Not Functional: Physically reopening the Strait is relatively straightforward, but restoring actual oil flows is far harder due to disrupted shipping patterns, safety checks, and operational coordination
Tanker Dislocation Slows Restart: Dozens of vessels, crews, and cargoes are out of position after the shutdown, meaning it will take weeks to rebalance global tanker logistics before flows normalize
Damage & Risk Delay Full Recovery: Infrastructure hits, security threats, and insurance constraints will keep capacity constrained, preventing a quick return to pre-crisis export volumes

Tariffs Lead Import Slowdown: Some trucking networks repeatedly rebrand under new identities to erase safety violations, allowing the same unsafe operators to stay on the road with clean records
Fuel Costs Create Indirect Pressure: These carriers are linked to thousands of violations and are significantly more likely to be involved in crashes, contributing to growing highway safety concerns
Stable Flows, Fragile Outlook: Limited enforcement resources and outdated systems make it easy to launch new carriers and avoid scrutiny, allowing unsafe practices and driver exploitation to persist

Simplified Tariff Structure Expands Coverage: The overhaul introduces clearer, tiered tariffs based on metal content, replacing complex calculations and bringing more imported goods under the tariff umbrella
Full-Value Duties Raise Real Costs: Even where rates appear lower, applying tariffs to the entire product value is expected to increase overall import costs for manufacturers and supply chains
Legal and Industry Pressure Driving Changes: The policy shift aims to fix enforcement challenges and respond to lawsuits and industry complaints that the previous tariff system was too complex and inconsistent

Weekly Costs Surge: Hapag-Lloyd is absorbing $40M–$50M in added weekly costs due to Middle East conflict disruptions, creating financial pressure the CEO says is unsustainable long term
Strait Closure Strands Capacity: Six vessels and 150 crew remain stuck in the Persian Gulf as the Strait of Hormuz stays closed, tightening global shipping capacity and prolonging operational uncertainty
Outlook Holds Despite Risk: The carrier reaffirmed its 2026 forecast while cutting costs and leaning on Maersk partnership synergies, though leadership warned prolonged conflict could weaken demand and impact long-term performance

Bulk Fleet Bottleneck Builds in the Gulf: Roughly 250 internationally trading bulk carriers are now idling across the Middle East Gulf as the Strait of Hormuz shutdown stalls transits, leaving more than half of the region’s dry bulk fleet waiting at anchor and slowing cargo flows
Strait Disruption Freezes Regional Ship Movements: With uncertainty over when safe passage will resume, shipowners are delaying departures or holding vessels offshore, creating a growing backlog of ships and tightening available bulk capacity

Tariffs Become a Geopolitical Bargaining Chip: The administration is leveraging tariff relief to secure alignment on export controls, supply chain screening and rules-of-origin enforcement, embedding national security priorities into trade policy
Unexpected Allies Shift Toward Washington: Countries including Vietnam, Cambodia and Thailand are adjusting trade and compliance policies to maintain U.S. market access, reshaping competitive dynamics across Asia
Global Trade Order Remains in Flux: With partial deals, unresolved fine print and “poison pill” provisions limiting outside agreements, the emerging trade bloc structure remains unstable and politically sensitive

High Court limits presidential tariff authority: The U.S. Supreme Court ruled that President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping import tariffs was unlawful, holding that only Congress has clear authority to authorize tariffs.
Major setback for Trump’s trade agenda: In a 6–3 decision, the justices struck down the broad tariffs imposed under Trump’s second-term policies, potentially affecting over $200 billion in revenue and raising questions about refunds for importers.
Trump vows alternative actions: After the ruling, Trump responded defiantly, attacking the court’s decision and indicating plans to pursue new tariffs under different statutory authorities.