Customer Alert: Freight Cost Increases & Supply Chain Risks in 2026

Since January 2026, freight costs have risen sharply across multiple modes of transportation. This is due to a combination of weather, geopolitical conflict, supply disruptions, fuel price pressures, and regulatory uncertainty affecting capacity and pricing worldwide. Capacity is tightening, fewer idle trucks and carriers exiting the market. Operational costs - fuel, insurance, driver wages - continue to influence rate increases. Winter weather and seasonal shocks are keeping spot rates more reactive in the short term.

What’s Driving Freight Cost Increases in 2026

1. Geopolitical Tensions in the Middle East - Iran & the Strait of Hormuz

Global energy and shipping markets have been disrupted by the escalating conflict involving Iran, the United States, and Israel:

• In late February 2026, military strikes and retaliation around **Iran triggered a de facto closure of the Strait of Hormuz, a critical chokepoint through which a large portion of the world’s oil and LNG exports transit.
• Oil prices surged sharply - with Brent crude rising more than 8-13% in early March 2026 - as shipping insurance premiums climbed and vessels rerouted around Africa.
• Marine insurers have canceled war-risk coverage for Gulf waters, further raising the cost and risk of shipping crude and bulk goods.
• Tanker freight rates on key routes such as Middle East-Asia are at multi-year highs and reroutes add days to transit times and significant fuel costs.

Impact on freight:
Higher fuel costs, and elevated insurance and shipping premiums are being passed through as higher logistic rates.  

2. Trucking Capacity Tightening - The Dalilah Law & Regulatory Shifts

Domestic freight pricing has also surged due to evolving trucking regulations:

• A new legislative proposal known as the Dalilah Law would restrict commercial driver’s licenses (CDLs) to citizens, lawful permanent residents, and limited visa holders, and require CDL testing only in English.
• If enacted, this could remove a significant portion of the current driving workforce, reducing available capacity and tightening truckload supply sharply.
• Industry analysts warn that such capacity loss - potentially around 20% of drivers - could trigger a trucking rate “super cycle”, with spot rates spiking and carriers gaining pricing leverage.

Impact on freight:
With fewer drivers able to haul freight, carriers may face upward pressure on wages and rates. Currently we are seeing costs increase across the US and we do expect this to continue and increase. Some of the issues include:

Driver Availability

• Labor market pressures (driver shortages, higher wages) are intensifying in some segments - especially reefer and long-haul.
• Regulatory changes affecting the driver pool could further constrain capacity.

Implications for availability:

• Carriers are more selective about which shippers they serve, so smaller or lower-priority freight may face harder access and higher prices.
• Regional tightness will vary - some markets (e.g., Southeast, parts of Midwest) may see tighter trucks than others.

We will continue to monitor how these developments evolve and share updates as we see them.