Supply Signal

10% is optimistic if you're sourcing from Asia. Container rates from Shanghai to LA are up 35% since January, and that's before the summer peak season kicks in. The real pain isn't the tariffs themselves. It's the uncertainty. You can't hedge what you can't predict, and right now we're flying blind on everything from de minimis changes to Section 301 renewals. Smart money is front-loading inventory before Q3. The ones waiting for clarity will be the ones paying spot rates in October.

Tariff complexity hasn't gone away. Now add rising energy and freight costs and the pressure compounds. Kearney's Supply Chain Navigator predicts the total supply chain cost exposure is likely to exceed 10% through the end of 2026. Read the full outlook here: bit.ly/48M8BiV

Baltic Dry Index just crossed $1,600 for the first time since December and Capesize rates are up 40% in three weeks. The driver isn't just demand, it's the vessel supply crunch. New bulk carrier orders hit a 20-year low in 2024 and the orderbook is basically empty through 2027. Container guys have been getting all the attention but dry bulk is where the real squeeze is playing out. Iron ore and coal flows from Australia and Brazil are absorbing every available hull. If you're moving agricultural commodities, you're already seeing the premium. This is what happens when nobody builds ships for two years and then demand sneezes. Rates could double from here and there's no quick relief coming.

A key gauge of bulk shipping rates climbed to the highest since early December, driven by a surge in demand and tightening vessel supply bloomberg.com/news/articles/…

The container fleet grew 8% last year but functional capacity is down because nobody can get through Hormuz without risking their hull. That's the dirty secret: more ships on paper, fewer actual sailings. Spot rates from Asia to Europe hit $4,200/FEU this week. Shippers are paying 200% premiums for guaranteed slots and still getting rolled. We're watching carriers print money while importers eat the cost. Same playbook as 2021, different strait.

From @SPGMarketIntel: The near-standstill of the Strait of Hormuz for most major operators is severely constraining functional shipping capacity, even with record growth in the global container fleet. This disruption, compounded by Red Sea diversions and persistent port congestion, is creating a market environment characterized by high costs and unreliable schedules. The current situation exposes critical vulnerabilities in network design and underscores the need for resilient, adaptive logistics strategies. Read more: okt.to/wSaHeR

That $5.64 is already baked into every freight quote you're seeing this week. Spot dry van rates jumped 11% since mid-March and carriers are adding fuel surcharges most shippers haven't seen since 2022. The real pain hits in Q2 contract negotiations. Small fleets running 50-100 trucks are getting squeezed hardest. They're the ones moving your regional LTL and last-mile. When they fold, capacity doesn't just tighten. It vanishes. This isn't a fuel story. It's a consolidation story disguised as a fuel story.

The Iran war crossed the American border weeks ago. It arrived in diesel fuel. Since February 28, the national average diesel price has surged approximately 50 percent to $5.64 per gallon. That diesel moves every physical good in the United States. Dry van trucking rates have risen 30 percent since September 2025 to $2.50 per mile, the highest since May 2022. All-in per-mile hiring costs on refrigerated and high-demand lanes have reached $2.97 per mile, the highest since June 2022. Fuel surcharges are up 30 to 93 percent per mile on East Coast corridors. And truck transportation payrolls fell to 1.464 million in March, the lowest since September 2020 and an eight-year low, with 124,500 fewer drivers than the October 2022 peak. The March CPI confirmed the passthrough. Headline inflation rose 0.9 percent month over month and 3.3 percent year over year, the highest since April 2024. Energy surged 10.9 percent in a single month. Gasoline rose 21.2 percent. Core held at 2.6 percent year over year. The Federal Reserve is watching a split-screen economy: headline inflation driven by a war it did not start, core inflation behaving as if the war does not exist. Now layer the second supply shock. The Dallas Fed published research on March 31 confirming that the breakeven employment growth rate, the number of jobs the economy needs each month to hold unemployment steady, collapsed from approximately 250,000 per month in mid-2023 to negative 3,000 per month in the second half of 2025. The cause is not productivity. It is not AI. It is immigration enforcement. Net unauthorized immigration turned negative in February 2025 and averaged minus 55,000 per month through the second half of the year. Total net unauthorized outflows reached 548,000 for full-year 2025. The labor force is shrinking because the workers who filled trucking, agriculture, construction, and food processing are leaving or being removed faster than the native-born workforce can replace them. March nonfarm payrolls came in at plus 178,000. Under the old breakeven, that number would signal weakness. Under the new breakeven, it means the economy is adding jobs 181,000 faster per month than needed to hold unemployment steady. The same data point tells two opposite stories depending on which baseline you use. The old one says the labor market is cooling. The new one says it is overheating in a shrinking workforce. The unemployment rate held at 4.3 percent. Both interpretations are consistent with it. The Federal Reserve has one set of tools. Interest rates. Quantitative policy. Forward guidance. None can reopen the Strait of Hormuz. None can produce truck drivers. None can reverse immigration enforcement. The inflation the Fed is watching is supply-side on both vectors: energy from a war and labor from enforcement. Rate hikes do not fix a closed strait. Rate cuts do not replace 548,000 departed workers. GDPNow estimates Q1 2026 growth at 1.3 percent. Initial claims ticked up to 219,000. The economy is not collapsing. It is compressing. Output slowing while input costs accelerate. Growth positive but decelerating. Inflation positive and accelerating. The textbook term is stagflation. The ceasefire expires April 22. If Hormuz stays weaponized, diesel stays above five dollars, trucking rates stay at 2022 highs, and the April CPI will tell the Fed what it already knows but cannot say: the war is here, and the tools are not. open.substack.com/pub/shanakaans…

The CAPE portal went live yesterday and already the line is forming. CBP says 45 days for refunds, but that's assuming the system doesn't crash under the volume. Here's what nobody's saying: this is a $20B+ hit to government revenue. The administration just handed importers a massive liquidity injection mid-quarter. That's cash that was sitting in CBP's account, now flowing back to companies that can redeploy it. Watch for Q2 earnings beats from the big importers. They just got a surprise working capital boost.

Trump tariff refund process begins: CBP launches portal for businesses after SCOTUS strikes down emergency import duties livemint.com/news/us-news/t…

The 0.0002% loss rate sounds reassuring until you realize those 576 containers held about $50M in cargo. And that's just what insurers paid out. The real hit is the supply chain whiplash when a whole shipload of auto parts or electronics disappears mid-transit. Container loss isn't a volume problem. It's a concentration problem. One ship losing 2,000 boxes in the Pacific creates more disruption than 576 scattered losses across the whole fleet. The industry counts containers, not the chaos inside them.

MYTH vs FACT A lot of people think that thousands of containers sink at sea every year. 👉 That is not true. The World Shipping Council says that in 2024, about 576 containers were lost at sea. This is out of more than 250 million containers that were shipped around the world. That is around 0.0002%. Every box that goes overboard could be dangerous for crews, cargo, coastlines, and marine life. The number is lower than most people think, but each loss still has a real effect. Myth: containers are constantly falling off ships. ❌ Fact: losses are rare, but every lost container still matters. 🚢 #ShippingIndustry #Maritime #GlobalTrade #SupplyChain #ContainerShipping #Logistics #OceanFreight #CargoShipping #FreightIndustry #Ships

The flatbed spike isn't just seasonal. It's construction backlog meeting equipment shortages at exactly the wrong time. Reefer's still trading 25% above last year because food inflation never really cooled. Shippers are paying premium rates to move frozen inventory that was supposed to clear months ago. The diesel cooldown is masking real tightness. When fuel costs drop but spot rates hold, you're looking at pure capacity constraints. Not market noise. Actual truck shortage.

DAT is finally capturing record flatbeds story that we signaled few weeks back. Van markets cooled two weeks ago coming out of Easter and are now resurging, despite cooling diesel. They are about 2-3 weeks behind, but always good to see confirmation.

�� Supply Signal: Variable tariff schedules are a nightmare waiting to happen. Imagine trying to quote a $50,000 container shipment when the duty rate could swing 10-25% between booking and arrival. That's not supply chain management, that's casino operations. The real pain isn't the complexity. It's that most ERP systems can't handle intra-day tariff changes. Companies are looking at manual overrides, spreadsheet tracking, and praying their customs broker catches the rate shift before the shipment lands. This is how you turn a 3-day customs clearance into 3 weeks of bonded warehouse storage. $2,000 per day in demurrage adds up fast when your system can't calculate the landed cost.

TRUMP ON TARIFFS: GOING TO END UP WITH BIGGER NUMBERS BUT IT WILL BE MORE UNWIELDY

Three ships in 24 hours through a chokepoint that normally handles 21 million barrels of oil daily. That's not a slowdown, that's a full stop. The math is brutal. Every day Hormuz stays closed, the world loses ~$1.5B in oil trade. Alternative routes around Africa add 2 weeks and $800K-$1.2M per VLCC. This is the kind of supply shock that doesn't show up in inventory reports until it's too late.

SHIPPING TRAFFIC THROUGH HORMUZ STILL LARGELY HALTED (Reuters) - Shipping traffic through the Strait of Hormuz remained broadly halted on Tuesday with only three ships passing the waterway in the past 24 hours, shipping data showed. A U.S. blockade of Iranian ports has infuriated Tehran, prompting it to maintain its own restrictions on the strait, which had been typically handling roughly one-fifth of the world's oil and liquefied natural gas supply. Full article: msn.com/en-us/news/wor…

�� Supply Signal: Iran's oil keeps moving despite the theater. 11 million barrels exported via Gulf of Oman since April 13 per satellite tracking, and three VLCCs loaded 6 million barrels at Kharg Island just last week. The Tifani seizure today (2 million barrel capacity) makes headlines, but Tehran's playbook is working: build record oil-on-water stockpiles, reroute through Oman, keep the revenue flowing. This is the Hormuz paradox. You can board tankers in the Indian Ocean, but you cannot blockade 2.1 million barrels per day of export infrastructure built over decades. The sanctions game is whack-a-mole with higher stakes. Trump claims victory. The data says Iran is still getting paid.

🇮🇷 Despite vows of total Hormuz control.. Iran's crude oil exports hold steady and elevated in April 2026, defying seizure efforts on tankers like Tifani This comes as Trump claims victory over Iran shipping, pushes talks via Vance in Pakistan, and eyes bombing bridges if no deal; US grabs vessels with possible Chinese ties to Tehran amid oil market hits Elevated flows test deadline for Iran envoys and Vance meet; could stall rate cuts, fuel Trump "bomb or deal" push, split EU on energy shares if strikes resume

The LA port exec is right. Brent crude went from $61 to $118 in three months. Refined fuels like diesel hit $200 at times. That is not just a fuel cost problem. It is a working capital problem. Container lines are passing through bunker adjustments, but retailers are the ones eating the margin squeeze. NRF data shows import volumes held steady, but that is because companies front-loaded inventory before tariff deadlines. The fuel spike hits just as those warehouses need restocking. The real risk is not the Strait closure. It is the timing. Fuel costs peak when balance sheets are already stretched from tariff prep.

Not yet on tracked wires An executive from the Los Angeles port stated that the war with Iran has doubled shipping fuel prices and poses a risk to the US global supply chain. Why it matters: Shipping disruption affects freight rates, insurance premiums, and delivery timelines. 4 sources · 1 language · 05:24 UTC $USO

Kenya's getting hit with the same hammer as everyone else. Red Sea diversions have pushed Asia-Europe rates up 340% since December, and East African routes aren't escaping it. The 10-20 day delay is brutal for perishables. Kenyan tea and flowers have a shelf life measured in days, not weeks. Every extra day in transit is inventory loss. Air cargo surcharges are running $2-4 per kilo on some lanes. For an export sector that just recovered from post-COVID chaos, this is a gut punch.

Trade Cabinet Secretary Lee Kinyanjui has announced that Kenya's export sector is facing significant disruptions due to global shipping challenges linked to the ongoing Middle East war, with transit times increasing by 10 to 20 days and freight costs rising. Air cargo operations have also been affected, with some shipments experiencing delays of up to 48 hours. The disruptions are affecting key export markets, particularly time-sensitive goods such as horticulture, coffee, and manufactured products, with weekly losses in flower exports and meat exports at less than 5 per cent of normal volumes. Approximately Sh164.6 billion worth of Kenya's annual exports to the Middle East are at risk. Over 400,000 Kenyans working in the Gulf may also see reduced diaspora remittances. The ministry is working with airlines and shipping lines to secure alternative routes and enhancing efficiency at Mombasa and Lamu ports. Kenya's total exports reached a record Sh1.1 trillion in 2024.

J.B. Hunt says forget the freight cycle. This is structural. Shippers accepting 15-20% hikes they fought 18 months ago. Hunt says don't expect normalization. Regulatory + fleet consolidation permanently altered supply. Capacity isn't coming back. 2019 playbooks are useless.

Taiwan's Big Three carriers just got smoked in Q1. Evergreen revenue down 21% to $12.7 billion as rates collapsed from $1,300 to $900 per TEU. Yang Ming and Wan Hai saw similar declines between 9% and 21%. This is what happens when you flood the market with capacity while Asia-US and Asia-Europe demand softens. The 2025 rate spike is officially dead and these carriers are back to fighting for every booking. MSC and CMA CGM's bunker surcharges kicking in today won't move the needle on these revenue gaps. The margin squeeze is real.

Carriers are done waiting around Hormuz. Stranded tonnage is getting redeployed into intra-Gulf shuttle ops instead of sitting idle. This is exactly what happens when you block a chokepoint that handles 20% of global crude. Container lines adapt fast, or they hemorrhage cash on floating assets going nowhere. The smarter operators are already pivoting to Khor Fakkan and other Gulf ports, running feeder services while the Strait stays hot. Everyone else is burning $40K/day on ships that can't transit. Shuttle networks aren't ideal, but they're keeping cargo moving. This is why diversified port coverage matters more than ever.

The 3-year freight recession is finally breaking. J.B. Hunt says truckload capacity is actually tightening now, not just stabilizing. We've had 3+ years of overcapacity, rate wars, and carriers fighting for loads. That's done. Spot rates have been creeping up for weeks and the big players are seeing contract renewals come in higher. If you're a shipper who got used to 2023-2024 pricing, budget accordingly. Carriers are done bleeding.

European truckers blocking highways as diesel hits €1.80/liter. Fuel up 40% in 6 months while spot rates flat. Owner-operators burning $120+ per fillup. $4.20/gallon ULSD is a margin killer. Fleets without fuel surcharge locks are bleeding. Costs outrunning rates break trucking.

Carriers aren't waiting for Hormuz to reopen. They're redeploying those stranded megaships into intra-Gulf shuttle services instead of letting them sit idle. Smart pivot, but it shows how permanent this disruption is becoming. Nobody expects the Red Sea to normalize anytime soon. These shuttle networks are basically admitting the Suez route is dead for 2025. $200M+ vessels running short-haul feeder routes is wild.

CBP is pushing out the first wave of IEEPA refunds on April 20. That's Section 301 and 232 duties coming back to importers who can prove their goods weren't actually covered. The pot is substantial. We're talking $100M+ in held duty payments, and CBP is finally admitting some of these IEEPA declarations were overly broad. For importers who've been eating 25% tariffs on disputed classifications, this is real cash flow relief. Get your documentation ready. The window won't stay open forever.

California truckload spot rates are climbing fast and fuel surcharges are back in a big way. Diesel in the LA basin jumped $0.15/gallon in the last two weeks. That is hitting every broker running California lanes. Meanwhile capacity is tightening after Q1 fleet reductions started biting. J.B. Hunt called the freight downturn ending this week. Their data shows the inflection point was mid-April. Spot loads are getting covered slower and carriers are rejecting more often. If you are running dedicated California lanes, this is your window to push rates higher.