Record Transportation Costs Hit Supply Chains as Energy Prices and Capacity Crunch Persist
Event summary
- U.S. inflation rose to 4.2% year-over-year in May 2026, driven by energy prices.
- The Logistics Managers' Index (LMI) Transportation Prices reading reached a record high of 96.0 in May 2026.
- UPS and FedEx are shrinking their networks while increasing revenue per package.
- May Inventory Costs jumped 9.4 points to 84.1, the highest since May 2022.
The big picture
ITS Logistics' June Supply Chain Report highlights the persistent impact of energy-driven inflation on supply chains, with record-high transportation costs and tightening capacity. The report underscores how regulatory efforts and network consolidations by major carriers like UPS and FedEx are reshaping freight dynamics. These trends are pushing shippers to rethink their strategies as peak season approaches.
What we're watching
- Cost Inflation Dynamics
- How sustained energy-driven inflation will affect consumer spending patterns and freight mix heading into peak season.
- Regulatory Headwinds
- Whether ongoing legislative and enforcement activity will continue to drive out capacity, maintaining upward pressure on transportation prices.
- Network Optimization
- The pace at which shippers adopt multi-carrier strategies and inventory positioning closer to demand to mitigate cost challenges.