ITS Logistics June Supply Chain Report: Energy Prices, Capacity Challenges Drive Record Transportation Costs

ITS Logistics has released its June Supply Chain Report, highlighting record-high transportation costs driven by energy-led inflation and tightening capacity. While consumer demand remains subdued and spending shifts toward essentials like fuel, the Logistics Managers' Index for transportation prices reached an all-time high of 96.0 in May. These conditions are forcing shippers to move away from single-carrier strategies toward more complex multi-carrier and inventory positioning models to maintain cost control.

The U.S. supply chain is currently grappling with energy-driven inflation, which pushed the year-over-year inflation rate to 4.2% in May, the highest level in over two years. While Core CPI remained lower at 2.9%, the significant gap underscores how fuel prices are disproportionately impacting the market. This inflationary pressure has caused the Conference Board’s Consumer Confidence Index to fall, leading consumers to prioritize essentials; notably, retail gasoline station sales have surged 26.5% year-over-year. For the logistics sector, this shift means discretionary goods that typically drive freight volumes are now competing for a smaller share of household budgets as peak season approaches.

Transportation costs have reached unprecedented levels, with the Logistics Managers' Index (LMI) recording a peak of 96.0 in May. Despite a period of low demand, capacity remains tight due to ongoing regulatory and enforcement activities at both state and federal levels, which continue to push supply-side prices higher. Rates for dry van and refrigerated capacity are currently holding well above the five-year historical average. Josh Allen, Chief Commercial Officer at ITS Logistics, noted that shippers are paying materially more to move freight and warned that this trend is unlikely to reverse in the near term, even as equipment posts and load-to-truck ratios remain constrained.

The cost crisis is extending into the parcel and final-mile sectors, where major carriers like UPS and FedEx are restructuring. UPS has closed 23 facilities so far in 2026 with 27 more closures planned, while FedEx is consolidating through its Network 2.0 initiative to increase revenue per package. Simultaneously, warehousing costs are soaring; May inventory costs jumped 9.4 points to 84.1, the highest reading since 2022, even though inventory levels have remained flat. Jeff Lolli, VP of Solutions Engineering & Small Parcel at ITS Logistics, suggests that baseline cost control now requires advanced strategies such as zone skipping and multi-carrier networks rather than traditional static designs.

On the maritime front, containerized import volumes are returning to seasonal patterns, totaling 2,428,758 TEUs in May, a 6.6% increase from April according to Descartes Systems Group. Imports from China saw a sharp rebound, climbing 19.9% month-over-month and 28.1% compared to the previous year, though potential trade tensions remain a looming threat. While the Gulf Coast is seeing import levels near record highs, the broader logistics landscape remains volatile. Shippers are being urged to position inventory closer to demand to mitigate the impact of rising holding costs and carrier network contractions.