Trucking and freightliner costs are surging internationally and in the US.
May 2026 Logistics Management
Please consider the May 2026 Logistics Management Report
The May Logistics Manager’s Index reads in at 69.5, down (-0.4) from April’s reading of 69.9. While the rate of expansion is down from last month, this is still the second fastest level of expansion since March 2022’s reading of 76.2.
Transportation continues to move at a significant pace. Transportation Prices are up (+1.0) to 96.0, which is the fastest rate of expansion ever recorded for any metric in the nearly ten-year history of the index. Transportation Capacity continues to contract quickly at 31.7, and Transportation Utilization expansion remains elevated at 69.5. The transportation market has been tight, with prices growing at an unprecedented rate since the closure of the Strait of Hormuz.
The spike in fuel has led to increases for all three of our price and cost metrics, with aggregate logistics costs reading in at 250.9, which is the highest reading since March of 2022.
U.S. supply chains have largely continued operating despite the disruption of 20% of the globe’s oil exports. Upstream firms have pulled inventories forward to curtail future shortages and consolidate shipments, while Downstream firms have kept things leaner in an attempt to mitigate tariffs.
Supply chains have been resilient despite these ongoing disruptions. However, in the past this level of elevate cost has eventually led to significant levels of supply-driven inflation. It will be important to continue monitoring these costs through the summer to observe if they begin to significantly impact both Upstream and Downstream demand.
The impact of inflation is impacting both business and consumer sentiment. The University of Michigan’s Survey of Consumers read in at 44.8 in May, which is the lowest reading in the history of that index. The drop in sentiment largely due to concerns over prices, with 57% of consumers reporting that high prices are eroding their personal finances.
Inventory Costs
Inventory Levels are inextricably linked to Inventory Costs. Inventory Costs were up dramatically (+9.4) to 84.1, which is their fastest rate of expansion since May of 2022. As displayed in the figure above, these readings mean that Inventory Costs are 29.2 points higher than Inventory Levels, which is the largest gap between these two metrics in the history of the index. This suggests that the cost of inventories, relative to their absolute level, is increasing at the fastest pace in the decade we have been tracking this. The previous high was in November of 2021, which was the height of the rush of emergency shipments in the post-Covid year at the peak of the previous freight cycle.
Transportation Prices
Aggregate Logistics Costs
While Warehousing Prices and Inventory Costs are both high in May, they both pale in comparison to Transportation Prices, which are up (+1.0) to 96.0, which is the highest ever reading for any metric in the history of the LMI. As would be expected given the continued shortage in fuel and subsequent spikes in cost, Transportation Prices are up across all respondents. However, they are highest for smaller respondents, which reported Transportation Price expansion of 98.2, the highest sub-reading we’ve ever seen and very close to the index maximum of 100.0.
This is the hottest that the transportation market has been in over four years. It will be interesting to see whether or not that persists, or whether the disruptions that have acted as tailwinds to the freight market could eventually become headwinds. Both the University of Michigan and Conference Board consumer surveys showed a downward shift in spending habits, and a move away from durable goods as more money is spent on food and energy. If this trend continues it could have an impact on freight volumes. Take for instance, the recent estimate that sales of new cars in 2026 are expected to be down by a million units from the pre-Covid norm as more and more consumers hold onto older vehicles in the face of high costs and less disposable income. Inflation has crept into mortgage rates as well, with the average 30-year fixed rate mortgage in the U.S. up to 6.51 percent.
It is notable all of the cost/price metrics continue to increase in May. Aggregate logistics costs combining all three metrics are up (+8.4) to 250.9 this month. This is the highest level since March 2022.
Supply Shocks Hound the Fed
Bloomberg reports Logistics Costs in US Surge to a Four-Year High
“Supply chains have been resilient despite these ongoing disruptions,” the LMI report stated. “However, in the past this level of elevated costs has eventually led to significant levels of supply-driven inflation.”
Overall logistics costs, which include transportation, warehousing and inventories, rose to the highest level since March 2022, a peak that “was part of a run of high logistics inflation that led to the highest US inflation in 40 years,” the report continued.
That’s been a welcome development for freight companies. In the latest episode of Bloomberg’s Talking Transports podcast, Chris Ceausu, CEO of trucking company White Arrow, said the carrier is seeing “significant improvements across the board” in the second quarter and looks like “the start of long cycle upwards.”
Flatbed Truck Rates
Freight Data Bullish
Tender Rejection Rates
Pressure on the Fed and Trump
Add it all up and it’s very difficult to conclude anything but more inflation is on the way.
This puts extreme pressure on Trump to make a deal.
The Strait is a huge logistics nightmare and the war is extremely unpopular except for MAGA who was against the war until Trump started it.
Given Iran’s ability to escalate, it would be very foolish for Trump to further risk disruptions.
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It just goes to show – it’s always something.
Trucking firms try to keep their prices until they can’t
More of the same that was expected with trumpnomics.