Ryan: Welcome to the July edition of the CH Robinson Edge video. I'm Ryan Hammett, joined as always by my colleague Mat Leo to discuss some of the developments impacting freight markets and shipper strategies. This month,

We're going to focus on three topics that might look very different on the surface, but actually they do have a common theme. The first is our updated truckload spot rate forecast. The second is the start of the USMCA annual review process. And the third is increasing variability in the ocean freight market. So Mat, when I look across all three, what stands out to me is that planning seems to be getting more complicated somehow.

Even when you think you understand what's happening, there are more moving pieces underneath the surface.

Mat: Yeah, I would agree with that. And the freight market isn't necessarily becoming harder to read because the trends are unclear. Because in many cases, the trends are actually fairly obvious. The challenge is understanding how durable those trends are and what's driving them. So

Take truckload, for example. All year long, we've been talking about tightening carrier supply and increasing sensitivity disruption. Ultimately, a market that has less elasticity than it did over the last several years. And right now, we're seeing those conditions reflected in the rates.

Ryan: Alright, you opened that door. So let's start there because one of the bigger updates in this month's edge report is the revision to our truckload spot market forecast. So walk us through what changed and why.

Mat: What happened in the market is that it tightened more than previously projected. So tightening was seasonally anticipated. And we actually expected that to be exacerbated due to the previously mentioned lack of capacity. But in reality, rates escalated even higher. And after a very impactful roadcheck week and then a continued rise through produce season we now leave us with, here I'll just go ahead and share this. You can see the forecast that we put on our edge report.

And because of all those factors, we've increased the 2026 dry van spot market forecast to be now at plus 34% year over year, which it does include the increased actuals recently experienced that I mentioned, but it also includes an increased baseline moving forward.

Ryan: Regarding that increased baseline you just mentioned, I think it's important to point out that there are actually two things really driving the change. The first is, well, we entered into July at a higher point than previously expected. So naturally, maths, the starting point of the forecast now is just simply higher. Second, the steepness of declining rates expected in July is now more shallow than previously expected.

And this is indicative of how this tightened capacity is resulting in rates being sticky on the high side. Or said another way, you already mentioned that rates increased sharper than historical precedent. Well, now similarly, we're expecting them to decrease less than historical averages.

Mat: Exactly. And to be clear, the expected decrease that you see on the screen here in July, it stems from the sequential decrease of seasonal demand that lessens the stress on carrier capacity, but it doesn't completely eliminate that stress, nor does it change the structural environment of carrier pressures.

Ryan: Yeah, that's a good point because those structural carrier pressures that you just mentioned are things like increased operating costs, but it's also increased barriers to enter for drivers. It's due to the factors we've talked about before, English language proficiency requirements, CDL eligibility changes, immigration enforcement, and most recently, B1 visa revocations.

So for shippers, I think the takeaway here is pretty straightforward. Don't confuse seasonal softening with a market reset. Just yesterday, I had a shipper ask me, okay, when are costs going back down to normal? And what I'm saying is we have to change our expectations for what normal is. The underlying supply picture remains much tighter than what we've been accustomed to for the last several years. And that's going to keep that upward pressure on rates for a while.

And Mat, I think probably what I'm about to say, we could do just a whole video where you and I just debate it. Maybe that's something we consider, but I think that those structural pressures are also going to prevent supply from entering as fast as it may have historically. So I'd encourage everyone to hold off just yet on thinking a flood of supply is just coming soon to bring these rates down. There are a lot of factors at play that have not necessarily been the case in the past.

But okay, so back to off that soapbox, back to planned topics. I'm going to switch gears and we can talk about USMCA. There were quite a few headlines leading into July 1st and then when the announcement happened around it. And some of those kind of made it sound like this critical agreement might be disappearing altogether, but that's not actually what happened.

Mat: No, it is not. The agreement remains in place, for now at least. So what happened is that the United States did not renew the agreement ahead of that July 1st deadline, which means that the three member countries of U.S., Canada, and Mexico now have entered into the annual review period that was actually built into the original framework way back when. So the thing to know is, don't panic. Trade will continue to move. It doesn't suddenly stop and rules don't immediately change. But it does mean that long-term uncertainty now increases.

Ryan: And that's probably the key distinction there, that the agreement survives, but the predictability declines.

Mat: Yeah. And if you think about it broadly, USMCA, it supports more than $1.6 trillion in commerce annually. And it really serves as the backbone for the highly integrated North American supply chains that utilize it. And this review process, it keeps those rules in place to keep that freight moving. But it does also create opportunities for future changes and even site agreements among the participating countries. And when you think about goals, the U.S. is expected to use this review as leverage to push for changes on issues like Chinese content and goods or labor or automotive manufacturing, while Canada and Mexico, they're going to focus on preserving stability and market access throughout North America.

Ryan: So what do you think that means practically for shippers? I mean, most companies aren't out there negotiating trade agreements. They're just trying to move their freight.

Mat: Yeah, okay, fair enough. I'd summarize it this way. There's less risk for immediate disruption, but shippers will still need to plan for ongoing friction and volatility moving forward. And this is where things like supplier visibility or rules of origin compliance and even just plain old sourcing flexibility become increasingly important. So no immediate operational shocks, but there's absolutely a strategic planning implication here.

Ryan: So in other words, don't panic, but don't ignore it either. Things are likely going to look meaningfully different in the future. So near-term scenario planning is advised.

Alright, our third topic this month is the variability in ocean freight. And what stood out to me in our edge report this last month was the phrase, uneven peak season. That's not how most people tend to think about peak season.

Mat: No, I think traditionally it's viewed as one full broad market peak season, but that's not really what's happening right now. And some lanes are tight because demand has been pulled forward, and some are tight because of blank sailings, and others are just dealing with service withdrawals or equipment shortages or routing disruptions. So there isn't one ocean market right now. There's multiple markets behaving differently and for various reasons.

Ryan: Yeah, and that's why we've been emphasizing variability rather than simply just saying, capacity's tight. The issue isn't just whether capacity is available. It's understanding why and where capacity is tight, because the solution depends on the cost. For example, a lane affected by temporary cargo pull forward, well, that may normalize relatively quickly, while a lane affected by an equipment shortage or long-term service reductions, that might stay constrained longer.

So the booking strategy needs to match the source of the pressure. And one area we're seeing this very clearly right now is on trans-Pacific trade.

Mat: Yeah, and just last week, the National Retail Federation stated that they're projecting a record for container imports in July. But that, from their perspective, is an early peak season surge responding to potential tariff announcements and concentrating that volume into a shorter window.

So import volumes have rebounded, retailers are pulling freight forward, and spot rates continue to increase. And at the same time, booking flexibility has narrowed across several trade lanes. So I'd say the consequence is that ultimate planning windows are shrinking. Historically, some shippers could wait and still find options, but today those options can disappear quickly.

Ryan: So the takeaway isn't necessarily that every lane is in crisis mode. It’s that the market has become increasingly lane specific. And for those that ship mostly with space allocations, if you exceed that planned allocation amount, knowing the current lane dynamics is important.

Mat: Yeah, that's it. And I think that's probably the biggest lesson from the ocean market this month is and the question with it isn't simply whether capacity is tight. It's understanding what's causing it to be tight and then thinking about whether those conditions are likely to persist or not. I think the level of visibility within that question is becoming a competitive advantage for shippers.

Ryan: So when we look across all three of these topics we've covered, the common theme is the uncertainty. Not uncertainty about is the freight going to move, but uncertainty around how costs and trade frameworks and capacity conditions, well, how do they evolve from this point forward?

Mat: And that's why flexibility remains so important, especially in moments like now. And it's different across those three that we've discussed. And say in truckload, flexibility means securing capacity before you need it. Because shippers that wait too long, they find themselves competing for a smaller pool of available trucks and ultimately driving those rates up even further.

And in cross-border trade, flexibility means utilizing your understanding of how policy discussions could shape future decisions and then create mitigation scenarios against those. So do this planning now while there's time and not in the 11th hour.

And then finally, in ocean freight, flexibility means having backup plans, whether that's alternate routings or alternate ports or just simply building in more lead time in your booking decisions. The ability to pivot has become increasingly valuable as conditions vary from lane to lane.

Ryan: Ultimately, flexibility is what turns uncertainty from a disruption into a manageable business problem. And the companies that perform best in environments like this are usually the ones that understand their options before they need them.

Well thanks for watching, and remember, C.H. Robinson brings you the edge you need to successfully manage your transportation strategy. We will see you next month.