The freight shipping market is a reactive industry. Freight carriers can’t create demand; they just react to it. For those unfamiliar with how the freight and logistics industry works, the fluctuating market can cause confusion. Carriers need to constantly shift their plans, while shippers need to be able to follow the changing rules. So, what causes volatility in the shipping industry, and how can carriers and shippers combat it?
Market Volatility is the New Normal
Kearney, a global management consulting firm, authored a report that examined the state of logistics in 2026. It concluded that the most consequential finding was that disruptions within the logistics industry are no longer temporary, but instead volatility is permanent. The 2026 market is especially different, as it’s encompassed by a variety of risks, including:
– slower global growth
– tariffs
– regulatory friction
– vulnerable shipping chokepoints
These risks together have created the volatile markets that we’ve seen over the past few months. Rising fuel prices, shifting trade policies, routing disruptions, and tightened capacity are all disruptions that the freight industry has had to navigate.
Fuel Prices Surge
One of the biggest disruptions to freight shipping is rising fuel prices. The Strait of Hormuz has been closed since the beginning of March 2026 due to the conflicts in the Middle East. About 20% of the world’s oil passes through the Strait of Hormuz. Due to the closure, countries have had to look elsewhere for their oil supply in the meantime. As a result, the price of oil has risen almost 60 percent since the end of 2025.
Companies have had to replan their spending as oil prices fluctuate. Many businesses have been able to recover costs through added fuel surcharges, but for smaller businesses, they don’t have the structure or buying power. This means the cost of shipping rises so that businesses are able to break even.
Shifting Trade Policies and Regulations
Just as unpredictable as oil prices is trade policy. Tariffs, on average, were implemented every 1.5 weeks throughout 2025. Due to the changing conditions, companies have had to restructure their supply chain a number of times. This has led to some companies experiencing a “paralysis effect”, as the report called it. When they experience this effect, they aren’t able to decide how to reconfigure their network to adapt to the changes.
Regulations have also been tightened. There’s been an increase in customs scrutiny and regulatory complexity that’s slowed clearance time at ports, leading to lengthy delays. For carriers, stricter equipment tracking and driver qualifications have been enforced. If a driver is found in noncompliance, that means the truck is pulled off the road, leading to delays and a smaller fleet.
Geopolitical Routing Disruptions
The Strait of Hormuz isn’t the only freight chokepoint currently. The Red Sea and the Panama Canal have both experienced uncertainties.
Freight traveling through the Red Sea, which links the Mediterranean Sea and the Indian Ocean, has been experiencing attacks by Houthi forces since 2023. Many major ocean freight carriers, due to the attacks, have begun sending freight around the Cape of Good Hope at Africa’s southern tip rather than attempting to go through the Red Sea. Due to the rerouting, freight traveling from Asia to Europe and the United States’ eastern coast experiences an added 10-14 days of travel.
The Panama Canal has been affected by the climate. The probability of El Niño forming, leading to reduced rainfall around Panama, is higher than normal this year. The Panama Canal primarily relies on freshwater from lakes near it, but these lakes have been affected by drought. The Panama Canal Authority reduced the maximum authorized draft to 15.09 meters in June 2026. Ocean freight carriers need to be aware of Panama Canal draft changes, as they’ll need to replan how much cargo they can carry and how they plan their voyage.
Tightened Supply, Rising Demand
Throughout 2026, demand has steadily been rising. With new industries rising, the need for freight transport has risen alongside them. Driving demand is industrial real estate construction, particularly data centers. With equipment, such as power and cooling units, needing to be shipped, trucks are in high demand.
However, supply within the freight industry has shrunk. With greater oversight of CDL eligibility, Electronic Logging Device (ELD) compliance, and driver training standards, a large portion of the driver pool has been removed. Many carriers haven’t been able to remain profitable over the years, especially now with fluctuating prices and changing rules. These carriers have had to close, limiting the number still operating. Equipment availability has fallen. For those entering the industry, trucks take a long time to make, meaning they aren’t readily available as soon as they start. Technology is another factor. Some carriers don’t have the technology to keep up with demand.
How Can Carriers Embrace Volatility?
To combat volatility, many businesses have utilized one of the biggest technological advancements in years: Artificial Intelligence. AI has come to be invaluable to the freight industry. The leading logistics providers utilize AI and other technologies to navigate volatility before, during, and after it happens. Their systems can identify demand forecasting, supply chain visibility, and transport planning. The gap between companies that have integrated AI into their systems and those that haven’t is growing faster than before. For companies left behind, this means being unable to keep up with the volatile environment.
Carriers can no longer rely on a set plan to calculate the cost of services. It’s best to build tariff and route scenarios into procurement planning to ensure an accurate cost. Dedicating a procurement team to examining changing routes and new tariffs will ensure you have accurate rates, and they can model alternative sourcing and transportation scenarios. Shift with the changing tides; what may have worked for the past few decades won’t work in today’s freight industry.
How Can Shippers Navigate the Confusion?
With the freight industry constantly changing, shippers may have a hard time understanding it all.
For shippers who schedule multiple shipments throughout the year, it’s best to secure capacity early. Securing capacity ensures that you get a spot with the carrier, even during busy seasons. It also means you’ve locked in lower rates, avoiding peak surge pricing and any last-minute premiums. Planning around any disruptions helps as well. Avoid sending out shipments during peak times, such as produce or holiday season. This ensures that delays are kept to a minimum. Embracing flexibility by leveraging various freight modes, such as less-than-truckload (LTL) or intermodal, helps keep time and costs down when needed.
The best way to navigate volatility and confusion is through third-party logistics companies (3PLs). 3PLs work with shippers on various logistical functions, such as transportation, freight forwarding, and warehousing. At FreightCenter, we have over 25+ years of experience helping shippers navigate the world of freight. We specialize in LTL and truckload (TL) shipping, helping shippers find the best option for them. With our extensive, fully vetted carriers, we’ve got your shipping covered. We help you look at the big picture, finding the best rate, the best carrier, and the best route to maximize your money.
Get a free online quote today or call one of our expert agents at (800) 716-7608.
