Transmodal's Logistics and Trade Update August 2026

IN THIS ISSUE

The most operationally dangerous thing importers can do right now is treat the Hormuz situation as resolved because a ceasefire was announced in June. As of August 6, only 9 vessels transited the Strait in a single 24-hour period, against a pre-disruption baseline of roughly 140. That is not a recovering waterway. It is an effectively closed one. Meanwhile, Iran and Oman are reported to be nearing a deal that would give Iran authority to manage and charge tolls on Strait transits, a proposal that eight of the world's largest shipping associations have formally asked the UN to oppose this week.  

What changed on the Hormuz front: The July 7 ceasefire collapse set the Strait back to near-closure conditions. Preliminary figures from Lloyd's List Intelligence show 52 transits during the week of July 27 to August 2, up from 28 the prior week, but still a fraction of the 140-vessel pre-disruption daily baseline. Non-Iranian gas carrier and containership transits have partially resumed after multi-week pauses. Shadow fleet tankers are providing marginal lift to product trade flows. Crude shuttling continues via ship-to-ship transfers in the Gulf of Oman, with VLCCs loading west of Hormuz and offloading outside the Strait. 

The toll proposal is the development that most operators have not yet fully absorbed. An Iran-Oman framework under discussion would allow Iran to oversee inbound Strait traffic and charge transit fees once a toll-free period ends in mid-August. In a joint letter to the UN Secretary-General and the IMO Secretary-General dated August 6, eight major international shipping associations stated that allowing any authority to charge vessels for transit would violate international law and harm the global economy. The US has signaled opposition under sanctions grounds. But the proposal itself reflects a new dynamic: Iran is seeking to convert Hormuz from a crisis flashpoint into a managed revenue mechanism, and the negotiations around that conversion introduce a new layer of uncertainty that is separate from the conflict itself.

On the USMCA front, the agreement has formally entered its new annual review cycle following the US decision not to renew on July 1. The USMCA remains in force through 2036, but each annual review is now a potential renegotiation event. Chatham House's analysis, published July 2026, identifies the key practical risk for importers: the Trump administration's approach of intertwining trade and non-trade issues, including migration and defense, with tariff negotiations means that rules of origin, content thresholds, and sector-specific tariff preferences can be placed on the table at any review cycle with limited advance notice. Automotive, agricultural, and manufacturing importers with cross-border supply chains should not be modeling the current tariff framework as stable. A 25-state legal challenge to new Section 301 tariffs, reported by Logistics Viewpoints this week, adds further volatility to the domestic trade compliance environment. 

ADDITIONAL READING

Three consecutive weeks of modest rate declines in late July led some operators to conclude that the ocean freight market was finally correcting. It was not. Drewry's World Container Index rebounded 1% on August 6, with Shanghai to New York up 4% and Shanghai to Los Angeles up 3% on the week. Carriers successfully implemented August GRIs as volumes held firm. Eight blank sailings are scheduled for next week, unchanged from this week, signaling that carriers have no intention of letting capacity loosen. The market is consolidating at elevated levels, not retreating from them.   

What changed in August: The brief rate softening recorded by the Drewry WCI in late July, which saw the index fall 4% on July 23 and a further 3% the following week, reflected easing demand and some incremental capacity additions on Asia-Europe lanes. The week of July 23 was the second consecutive weekly decline, having retreated steadily from its July 9 high. But the drivers behind that softening did not change the underlying structure of the market. Port congestion across central and south China continued to constrain effective capacity. Shanghai to Los Angeles had reached a near-tripling from February the previous week, nearly tripling from February and hitting its third-highest level since Drewry began tracking the market in 2011. The August 6 rebound confirms what the SINO Shipping August market update described as the year's broadest rate correction followed immediately by renewed upward pressure on key lanes.

We're seeing a market that is now bifurcating clearly by trade lane. Asia-Europe gave back some of the July peak-season surcharge as the 1 July surcharge round lapsed, with Europe down 14% month-on-month and France and Germany down as much as 21%. The Americas lane is a different story: US East Coast and Gulf Coast services from China and Vietnam remain extremely tight, and carriers are maintaining surcharge structures on those lanes independently of what is happening on Asia-Europe. Shippers using East Coast and Gulf Coast services should plan well in advance due to tight space, Panama Canal water restrictions, and ongoing rollover risk. Several ocean carriers have also announced Emergency Fuel Surcharges for August, effective immediately, citing renewed Middle East tensions and higher bunker fuel prices following the July 7 Hormuz ceasefire collapse.

The contrast in outcomes by shipper type remains stark. Importers with forward allocations and confirmed space on US-bound lanes are managing elevated but predictable costs. Spot shippers without allocation on USEC and USGC services are absorbing both the base rate increase and the new EFS stack simultaneously with limited recourse. For importers sourcing from Southeast Asia, conditions at major Vietnamese, Thai, and Indonesian loading ports are also tightening as China congestion pushes overflow cargo to alternative origins. The practical advice is unchanged from July: confirm sailing integrity, push back on rollover attempts before the vessel closes, and do not treat a two-week rate softening on Asia-Europe as a signal that the broader market is normalizing.  

ADDITIONAL READING

The air freight market is not softening in any meaningful sense. Xeneta, which had forecast long-term air freight rates would fall 5-10% in 2026, has reversed that outlook entirely and now projects rates rising 5-15%, citing the supply shock from the Middle East conflict. Global air cargo demand continues to outpace capacity growth, keeping load factors elevated despite the gradual and incomplete recovery from Hormuz-linked disruptions. Spot rates are plateauing, not falling. There is a meaningful difference between those two conditions for planning purposes. 

What changed in August: The Loadstar reported on July 17 that global air freight rates in June were 33% higher year-on-year, while volumes increased 9%, driven by AI infrastructure and semiconductor demand alongside Middle Eastern carriers still operating at around 70% of pre-conflict capacity. Xeneta estimates the conflict removed 12% of global air cargo capacity overnight in late February, restricting first-half supply growth to just 1% while demand increased 4%. The resulting imbalance pushed combined spot and contract rates up 17% year-on-year overall in the first half, with spot rates climbing sharply in May before stabilizing in June and July. One industry insider said, "Demand keeps defying gravity. Spot rates are now plateauing, but they are not falling."

We're seeing the market fracture clearly by cargo type and origin. Global semiconductor sales surged 106% year-on-year in April per Xeneta data, with AI shipments making the transpacific the strongest air cargo corridor. Taiwan and South-east Asia origins are experiencing the tightest conditions, driven entirely by AI hardware and server exports. Hong Kong tonnage fell 12% in the first week of July as the EU removed de minimis treatment for low-value imports on July 1, removing a key e-commerce volume driver on China-Europe lanes. Cargolux and Cathay Pacific have both postponed resumption of services to the Middle East, keeping Gulf-hub routing constrained. The Loadstar notes that renewed Middle East disruption or further ocean-to-air modal shift could bring the traditional peak season forward to September, earlier than any previous year. Importers moving time-sensitive cargo from Taiwan, South-east Asia, or Korea should be booking two to three weeks ahead minimum.

The EASA August 31 airspace advisory covering Iran, Iraq, and Lebanon continues to force longer routing on Gulf-connected lanes, increasing block times, reducing aircraft utilization, and limiting available cargo payload on affected services. Airlines are actively reviewing cargo fuel surcharges in response to renewed upward jet fuel price pressure following the July 7 Hormuz attack. For importers of pharmaceuticals, medical devices, and precision industrial components moving from Asia to North America or Europe: Xeneta's revised outlook is the most important data point of the month. The long-term contract rates that looked high when negotiated in Q2 are now below where the market is heading. Securing capacity now, at current contract levels, is a better financial outcome than rolling to spot in Q4.  

ADDITIONAL READING

The expiration of the temporary 10% Section 122 global tariff on July 24 was not a relief event. It was a substitution. The administration replaced it the same day with new Section 301 forced-labor tariffs covering 10-12.5% on imports from 60 trading partners representing 99.4% of all US imports. For most importers the effective rate changed very little. But the legal basis changed significantly, and that matters for duty refund eligibility, classification strategy, and how future legal challenges will proceed. Meanwhile, a 25% tariff on Brazilian goods took effect July 22, and a 50% tariff on certain Canadian goods is scheduled for August 19.  

What happened on July 24: The Section 122 tariffs expired as scheduled, and USTR implemented new Section 301 duties effective immediately for goods entered on or after 12:01 am ET that day. The duties apply 10% on countries found to have partially failed to enforce forced-labor import prohibitions, and 12.5% on the 54 countries found to have more significantly failed. The Council on Foreign Relations noted in its July 17 analysis that these tariffs were effectively designed to preserve the economic structure of the IEEPA program the Supreme Court struck down earlier this year, while moving it onto firmer statutory ground. Unlike IEEPA duties, which are now being refunded through CBP's CAPE portal, these Section 301 duties are cumulative with antidumping and countervailing duties and do not carry the same legal uncertainty. Importers should not assume the refund process that applied to IEEPA duties will apply here.

We're seeing three developments that require immediate compliance attention. First, Brazil at 25%: A 25% Section 301 tariff on most Brazilian-origin goods took effect July 22. Goods must be reviewed at the HTS level — exemptions exist for products already subject to Section 232 measures, and it is not yet clear whether this tariff stacks with the 12.5% forced-labor rate also proposed for Brazil. Classification reviews for Brazilian-origin goods are not optional right now. Second, Canada at 50%: Per Maersk's July 28 tariff advisory, an additional 50% tariff on certain Canadian-origin goods is scheduled for August 19. Covered products may be subject to this duty regardless of USMCA qualification status. Energy products, potash, fish, and critical minerals are among the listed exclusions. Third, Vietnam Section 301: USTR's IP investigation of Vietnam, initiated May 29, is now in its active comment phase. A tariff finding here would significantly affect importers who diversified sourcing from China into Vietnam for tariff-avoidance reasons.

The picture for importers managing open IEEPA refund claims: CBP's CAPE portal remains the mechanism for reclaiming duties paid under the now-invalidated IEEPA framework, and that process is proceeding. However, the replacement Section 301 program means that refunds recovered on IEEPA entries may be partially or fully offset by new Section 301 liability on the same goods, depending on HTS classification and country of origin. Companies with active IEEPA refund claims should not treat those recoveries as net gains until they have modeled the Section 301 exposure on the same product-origin combinations. The tariff landscape as of August 2026 is more complex than at any point in the prior 18 months, and the cost of misclassification or missed exemptions is higher than it has ever been.  

ADDITIONAL READING

For ten straight weeks after May's peak, diesel gave domestic carriers real relief. The national average fell from $5.64 per gallon in May to $4.58 by July 6, a decline of more than a dollar. Then it reversed. Diesel rose for four consecutive weekly readings in July, just as the EIA's July 7 STEO was projecting gasoline prices falling to $3.80/gallon in Q3 2026. The gap between what the forecast said and what the pump showed is exactly the kind of lag that makes fuel surcharge programs unreliable as cost protection tools in this environment. Carriers whose FSC schedules are built on June averages are already behind the market.  

What changed in August: Brent crude, which had briefly fallen below $70 per barrel on July 1 following the June 18 MOU, was trading at $82.31 on August 7 per the Hormuz Live Tracker, reflecting the market's reassessment of supply risk following the July 7 ceasefire collapse and the ongoing effective closure of the Strait. The EIA's July 7 STEO, released the same day as the Hormuz attack, had projected gasoline averaging $3.80/gallon in Q3 2026 and forecast most Gulf crude production returning to near pre-conflict levels by end of 2026, with shut-in production back online in Q1 2027. That forecast now reflects the optimistic scenario rather than the base case, given that the ceasefire assumptions underlying it have not held. The next EIA STEO releases August 11, and it is the most important energy data point of the month for freight budget planning.

The practical planning framework is straightforward. Fuel costs across modes remain structurally elevated relative to any pre-2026 baseline. Ocean carrier Emergency Bunker Surcharges are being re-filed for August following the July 7 events. Air cargo fuel surcharges are under review by multiple airlines as jet fuel prices respond to renewed Hormuz risk. Domestic diesel is rising after its brief mid-summer relief. The companies managing this best have done three things: they have negotiated fuel escalation clauses indexed to current weekly EIA data rather than monthly averages; they have locked forward ocean and air capacity at rates established before the latest surcharge rounds; and they have shifted volume where possible to intermodal rail, which provides meaningful diesel cost insulation relative to full truckload. Waiting for the EIA to forecast relief and building that relief into current cost models is a planning error that has been repeated multiple times in 2026.  

ADDITIONAL READING