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Foreign Trade Zones in Today’s Trade Policy Environment

Published

5 mois ago

11 décembre 2025

Foreign Trade Zones In Today’s Trade Policy Environment

In 1934, when Congress passed the Foreign Trade Zone (FTZ) Act and established the FTZ program, the U.S. economy faced a policy environment similar to today’s: high (and prevalent) tariffs and heightened concern for protecting domestic industries and encouraging domestic investment. Then, as now, policymakers sought mechanisms to help U.S.-based companies stay competitive in the face of escalating costs by offsetting the burden of high tariffs.

For decades, FTZs have been used actively and on trend with overall U.S. import and export statistics, providing importers, exporters, and manufacturers with a toolkit to manage customs duties, streamline operations and bolster cash flow. Today, however, recent tariff actions on steel and aluminum that for most countries doubled to 50% under Section 232 of the Trade Expansion Act of 1962, as well as sweeping International Emergency Economic Powers Act (IEEPA) reciprocal tariffs imposed on nearly all commodities from all countries, have upended global trade and shifted the FTZ landscape significantly.

As trade tensions push import duties to record highs, companies big and small are looking for ways to insulate themselves against tariff volatility and stabilize cash flow against economic uncertainty. While FTZs are resonating as a strategy to mitigate or avoid absorbing higher tariffs into operating costs, the program is not a silver bullet. Instead, FTZ participation in 2025 demands a more nuanced cost-benefit analysis that weighs the traditional advantages of FTZs compared to the current benefits against changing trade policy.

Traditional FTZ Benefits

Licensed by the U.S. FTZ Board, FTZs are secure, designated sites traditionally located within 60 miles or a 90-minute drive from a U.S. port of entry (although FTZ sites now are often located at further points as well), in which domestic and foreign merchandise (i.e., inventory) receives the same treatment by U.S. Customs and Border Protection (CBP) as if it were outside the commerce of the United States. FTZs enable companies to defer, reduce or eliminate duties, depending on where goods end up (e.g., distributed domestically or exported to avoid applicable duties and taxes).

Historically, one of the most important FTZ benefits was inverted tariff relief for manufacturers. Through the Boggs Amendment of 1950 and regulatory clarifications in the 1980s, U.S. manufacturers could import higher-duty inputs, process them domestically, and release finished products into the commerce of the U.S. at lower duty rates of the finished products. This helped manufacturers reduce overall tariff costs, enhance profitability and get on more even footing with offshore manufacturers.

Put another way, it gave U.S.-based businesses federal approval to rationalize what historically was “irrational tariff treatment” in the Harmonized Tariff Schedule of the U.S. (HTSUS). Irrational tariff treatment is when imported parts and materials are assessed at higher duty rates than the finished goods they are incorporated into. Without the ability to invert duty rates, companies would be financially incentivized, from a customs duty treatment perspective, to import finished goods rather than produce them domestically.

Beyond inverted tariffs, FTZs offer additional benefits:

Export relief: Goods brought in and stored or manufactured in an FTZ can be exported in bond without incurring quota charges or U.S. duties, insulating businesses from the adverse effects of tariff hikes. Plus, merchandise exported from FTZs to international customers and subsequently returned can be admitted to an FTZ for storage, repair and export again without being subject to duties.

Cash-flow benefits: The timing of when duties are paid makes a significant difference to cash flow. By deferring the payment of duties until goods leave an FTZ, companies improve working capital. By bringing the duty cost closer to when goods are sold to the customer, companies can shorten the cash cycle and optimize cash flow. Depending on how fast a business turns its inventory, this can be a critical part of a company’s ability to maintain its U.S. operations.

Weekly customs entry and Merchandise Processing Fee (MPF) savings: MPF is paid per customs entry (.3464% against the value reported on the entry) but has a maximum amount today of $651.50 with routine incremental increases each year. However, FTZs permit qualified companies to consolidate an entire week’s worth of shipments out of the FTZ into a single weekly customs entry, thereby creating the opportunity to possibly save broker entry fees and significantly reduce annual MPF spend. Filing consolidated weekly entries is especially appealing for high-volume importers but comes with its own set of complexities in the current trade policy environment.

State and local tax savings: In states that assess ad valorem tax on inventory, such as Texas, Kentucky, Louisiana and Puerto Rico, inventory held in FTZs may be preempted from such taxes through the federal FTZ law. Likewise, some states have codified state-level tax benefits, such as Arizona’s reduction of up to 75% for real and personal property held in FTZs. These tax exemptions and reductions—above and beyond the traditional duty benefits of the program—create additional financial incentives and help further reduce operational costs for FTZ users.

A Changing Trade Landscape

For decades, these advantages attracted a diverse mix of manufacturers and distributors into the program. In 2018, however, key tariff developments began to disrupt the global trade landscape. In January 2018, the U.S. imposed safeguard tariffs on solar panels and washing machines from all sources (except Canada) under Section 201 of the Trade Act of 1974. In March 2018, Section 232 tariffs on steel and aluminum took effect, with temporary exemptions for Canada, Mexico, Australia, Argentina, Brazil, South Korea and the EU. By June, however, exemptions had expired for Canada, Mexico and the EU, and Section 232 tariffs were imposed.

In April 2018, the U.S. Trade Representative (USTR) released a list of 1,333 China-origin imports for proposed 25% Section 301 duties, as part of a broader and new trading strategy with the East Asian nation. Within days, China imposed retaliatory tariffs of its own on U.S. exports. By June, the USTR proposed a new list of products from China, worth $50 billion in trade, to be subject to Section 301 duties of 25%. These initial trade remedy actions in 2018 were just the beginning of what is now an almost eight-year-long, increasingly complicated but fundamental change in U.S. trade policy.

Interestingly, with the first six months of 2018 also came a pivotal shift in how FTZs function today: a change to mandating the election of Privileged Foreign (PF) status for imported merchandise at the time of admission to an FTZ, which locks in an item’s classification and duty rate on that date. For decades, imported raw materials, components and finished goods were largely admitted into FTZs in Non-privileged Foreign (NPF) status, which requires classification on the item’s condition as removed from the FTZ at the duty rate in effect on the date of entry. For FTZ manufacturers authorized by the U.S. Department of Commerce, NPF status elected for imported parts and components is what drove inverted tariff benefit (i.e., the ability to apply the finished good duty rate to the value of the parts/components consumed in the finished good). With 2018’s new tariff actions, the Administration through the U.S. Trade Representative and the U.S. Department of Commerce began requiring FTZ imports to be admitted in PF status. PF status “locks in” the normal, or Most Favored Nation (MFN), duties and any remedy tariff rates on goods at the time of their admission into an FTZ, which means the imported component’s duty and tariff rates apply even if the finished good made in the FTZ carries a lower duty rate.

What does this mean in practical terms? It means the inverted tariff benefit for FTZ manufacturers was essentially eliminated in April of this year when the PF status admission stipulation began applying to nearly all imported commodities from all countries of origin via IEEPA reciprocal tariffs. Now, existing FTZ manufacturers as well as manufacturers considering the program must recalculate the savings opportunities from FTZ usage. For some manufacturers, the program may continue to make sense or drive even more benefit, while for others the program may no longer make sense. Paradoxically, tariffs intended to protect U.S. jobs are simultaneously hampering some FTZ manufacturers from promoting domestic production, the original intent of the program. If the same finished product is made in another country, under IEEPA reciprocal tariffs, it still offers a lower overall tariff rate when imported than the imported parts and components used to make the finished product in the U.S. If the goal of current trade policy, however, is to reshore and nearshore manufacturing, don’t FTZ manufacturers still need the inverted tariff benefit to rationalize what is otherwise still an irrational HTSUS?

FTZ Advantages Today

What are the main advantages for FTZ users today then? For many importers, it’s cash flow: by delaying duty payments, companies can preserve capital. This benefit, however, depends heavily on inventory turnover. Large retailers cross-docking goods through distribution centers may realize little advantage as goods enter U.S. commerce within days, triggering prompt duty payments. By contrast, businesses holding inventory for weeks or months can extract more meaningful benefit from duty deferral, such as industrial distributors, seasonal retailers, or exporters awaiting foreign buyers.

In the absence of inverted tariffs, the importance of export relief has grown. Manufacturers that ship even a portion of their production abroad can typically eliminate duties altogether on exported goods. For many businesses that traditionally relied on inverted tariffs, this now represents one of the few clear savings opportunities. Additionally, some manufacturers that previously had little reason to consider FTZs are now compelled to join the program precisely to avoid duties on outbound shipments.

While tariff relief is the focus for many, ancillary benefits remain material. Although now more administratively complex, weekly entry/MPF savings continue to appeal to some while the compliance requirements may outweigh the fee savings for others. Inventory and real/personal property tax abatements are still available in states such as Texas, Kentucky, Louisiana, Arizona and Puerto Rico, but these benefits are not guaranteed. They require negotiation with local impacted tax recipients and cannot be assumed across the board. Companies that install imported production equipment in their FTZ production facilities can also achieve duty/tariff deferral benefits on the machinery until it begins being using in production.

Looking Ahead: Uncertainty and Opportunity

The FTZ program is at a crossroads. Its historical role as an engine for tariff rationalization for U.S. manufacturers has been curtailed, but its potential as a platform for cash flow management, export relief and targeted ancillary tax savings is legitimate. In addition, pending litigation, including possible Supreme Court rulings, could dramatically reshape the tariff landscape overnight. A rollback of tariffs could potentially restore inverted tariff benefits for many industries and commodities, while new tariff exemption frameworks could offer parallel relief.

For importers and manufacturers, the shift in trade policy has forced more sophisticated supply chain analyses. Establishing and operating an FTZ requires significant time and investment in an extremely complex trade compliance environment. Understanding if setting up and operating an FTZ makes sense in the context of this complexity is not a simple exercise. For tax and finance professionals, determining whether FTZ participation will yield measurable benefit requires a more granular assessment of inventory turn rates and export volumes. Companies must model turnover rates, tariff exposures, and compliance costs in detail to decide whether an FTZ is advantageous for the organization’s unique product mix, trade patterns, and risk tolerance.

Parting Thoughts

For businesses, agility is critical. Companies must reassess FTZ participation regularly, model cash flow implications under various scenarios, and assess measures for ancillary benefits, including engaging with local authorities on property and inventory tax opportunities where appropriate.

For policymakers grappling with the challenge of reconciling tariff policy with industrial strategy, FTZs may represent an underused tool. In an era when tariff policies are used both as protectionist levers and geopolitical instruments, FTZs provide a stable, regulated framework for balancing trade governance with competitiveness.

FTZs are not loopholes. They are highly regulated, overseen by U.S. CBP and the Department of Commerce, and subject to annual reviews and public interest considerations for manufacturers. In many ways, they are better suited to provide equitable tariff mitigation than ad hoc exemption processes. A 2019 econometric study conducted by The Trade Partnership titled The U.S. Foreign-Trade Zones Program: Economic Benefits to American Communities quantified that—all else being equal—employment, wages, and value-added activity are higher in areas with FTZs than similar areas without FTZs, and that a company’s access to FTZ benefits has substantial positive ripple effects throughout its U.S. supply chain.

And so, as they were conceived, FTZs are an effective mechanism for encouraging domestic manufacturing and facilitating global competitiveness.

By Rebecca Williams, Managing Director, Rockefeller Group Foreign Trade Zone Services and Eric Dalby, VP Support, Professional Services at Descartes

The post Foreign Trade Zones in Today’s Trade Policy Environment appeared first on Logistics Viewpoints.

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The Digital Backbone of the Warehouse: Trends Shaping the 2026 WMS Market

Published

4 heures ago

12 mai 2026

The Digital Backbone Of The Warehouse: Trends Shaping The 2026 Wms Market

The Warehouse Management Systems (WMS) market continues to grow, driven by e-commerce growth, increasing fulfillment complexity, faster delivery expectations, and the need for real-time operational visibility. Organizations are investing in WMS to improve inventory accuracy, throughput, and responsiveness to customer demand. Suppliers are driving WMS progress by implementing capabilities that allow customers to see their warehouse operations digitally, respond to disruptions more quickly, and address labor shortages before they arise.

WMS is shifting from a transactional system of record to a coordination layer across warehouse execution, orchestrating workflows across people, automation, and digital systems. This reflects broader changes in supply chain execution, where integration with robotics, AI, and adjacent systems is now a baseline expectation. ARC research reinforces this view: WMS providers are increasingly expected to manage both manual and automated processes holistically, rather than operate in isolation from material handling systems or automation layers.

Key Trends Redefining the WMS Landscape

Automation as a Core Requirement: Warehouse automation is no longer an add-on; it is a central requirement shaping WMS development. Systems must integrate with robotics, autonomous mobile robots (AMRs), and material handling equipment while balancing human and machine workflows. Learning from past decisions, recommending new ones, and looking into the future to identify anticipated disruptions before they occur.
AI-Driven Execution and Decision Support: AI is increasingly embedded into WMS platforms to support predictive analytics, dynamic slotting, and operational decision-making. In many cases, this includes agent-based tools that help diagnose issues and simulate potential outcomes. Chatbots and agents allow warehouse operators to access information and data faster, reducing the time spent making decisions. Increasingly, companies are releasing solutions on a low-code platform that can be easily customized to an organization’s specific needs.
Convergence Across Supply Chain Execution, WMS is increasingly part of a broader execution ecosystem that includes transportation, yard, labor, and order management. Vendors are positioning their solutions as part of integrated platforms rather than standalone applications. AI is playing a role in the de-siloing of systems. When systems are unified and data is accessible, AI can perform traditional processes, such as stock-out scenarios, which require the ability to see into multiple systems, such as inventory, shipping, and warehousing, much faster than a supply chain planner.

The Challenge: Evaluating a Blurred Market

As these trends converge, the WMS market is becoming more difficult to define and evaluate:

Functional overlap between WMS, WES, robotics platforms, and planning systems
Increasing variation in how vendors describe similar capabilities
Expansion of WMS into adjacent execution domains

This creates a disconnect between traditional market analysis and how buyers actually evaluate solutions. From ARC’s perspective, many of the legacy ways of analyzing the market, such as segmentation by tier or deployment type, do not fully explain how solutions differ in real-world performance or how they are evolving. In response, ARC is shifting its research methodology to better reflect how buyers evaluate technology today. Rather than focusing primarily on market size, segmentation, and historical growth, the approach is placing greater emphasis on:

Functional capabilities (e.g., receiving, picking, optimization, labor management)
Technical architecture (modularity, scalability, cloud readiness, interoperability)
Integration with automation and execution systems
AI capabilities and data utilization
Execution quality and measurable performance impact

This approach aligns with ARC’s internal research scope for WMS, which includes both core execution processes (receiving, put-away, picking, shipping) and add-on modules such as labor management, analytics, and optimization. The shift reflects a broader goal: moving beyond describing the market to understanding solution performance and differentiation at a deeper level.

The Role of the ARC Market Map

To support this shift, ARC has introduced the Market Map as a core analytical framework. The Market Map provides a structured, visual representation of supplier positioning in the WMS market, enabling more consistent and transparent evaluation across vendors.

Evaluation Framework

Suppliers are assessed across two primary dimensions:

Solution Capabilities (Execution Today)
Includes:

Functional capabilities across warehouse processes
Technical architecture (cloud, scalability, interoperability)
Integration with automation and adjacent systems
Execution quality and support services

Strategic Vision (Future Positioning)
Includes:

Product roadmap and innovation strategy
Corporate direction and ecosystem alignment
Customer base and growth trajectory

These dimensions are equally weighted and supported by a structured scoring model that incorporates multiple sub-criteria across both capability and strategy dimensions. The Market Map reflects ARC’s view that the WMS market is no longer defined solely by functionality; it is defined by how well solutions integrate across the warehouse ecosystem. WMS solutions are being compared on their ability to support automation and AI-driven execution, and how well the vendors are prepared for future supply chain demands. As markets grow and technology progresses, we also need to develop new ways to analyze and understand market dynamics. By combining both current capabilities and long-term strategy, the framework provides a more complete view of vendor positioning than traditional market rankings.

Vendor Outreach

ARC has been conducting market research for over 30 years, and we, too, have changed and adapted with the times and technology. From pen and paper to an online market analysis platform that allows for dynamic visualizations. We have adapted and progressed alongside the clients we serve, which is why we are looking forward to delivering our first batch of Market Maps this summer.

We are currently speaking with Vendors in the Warehouse Management System market. Learning about each solution’s differentiators, functional capabilities, and much more. If you’d like to be added to our vendor list and included in our WMS Market Map research, please reach out to (gsimon@arcweb.com).

Manhattan Associates
Blue Yonder
Oracle
SAP

Körber (HighJump / Infios)
Infor
Microsoft (Dynamics 365)
NetSuite

Epicor
Acumatica
Tecsys
Made4net

Mecalux
Generix Group
Deposco
Logiwa

ShipHero
3PL Central (Extensiv)
Infoplus
Cadre Technologies

The post The Digital Backbone of the Warehouse: Trends Shaping the 2026 WMS Market appeared first on Logistics Viewpoints.

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Help Shape the Supply Chain Decision Intelligence Market Map

Published

5 heures ago

12 mai 2026

Help Shape The Supply Chain Decision Intelligence Market Map

As AI, visibility, planning, risk, and orchestration platforms converge, Logistics Viewpoints is developing an analyst-defined Market Map to clarify where decision-making value is emerging — and supplier participation is now welcome.

Supply chain technology markets are becoming harder to evaluate. Established software categories still matter, but they no longer explain where much of the new differentiation is emerging. Planning systems are adding orchestration. Visibility platforms are moving into exception management and recommendation engines. Risk platforms are becoming operating signal layers. Enterprise application vendors are embedding AI across broader suites. Specialized providers are using external data, event intelligence, and analytics to help companies respond faster to disruption.

For buyers, the result is a more complicated evaluation environment. For suppliers, the challenge is positioning. Many companies now use similar language — AI, orchestration, control tower, resilience, visibility, automation, intelligence — while solving different problems at different layers of the operating model.

That is why Logistics Viewpoints is developing the Supply Chain Decision Intelligence Market Map, an analyst-defined view of one of the most important emerging layers in supply chain technology.

Supplier participation is now welcome. If your company is listed below, or if your company is active in supply chain decision intelligence, AI-enabled decision support, orchestration, event intelligence, risk, resilience, control towers, visibility, planning intelligence, or related areas, this is the time to engage. Participation helps ensure that your capabilities are understood accurately before the Market Map is finalized.

The Market Map is designed to clarify the layer above and across core supply chain systems where data is interpreted, signals are connected, tradeoffs are evaluated, and better operating decisions are made. This is not intended to be another logo landscape. The purpose is to define the market, establish boundaries, organize the provider landscape, and create a more disciplined basis for buyer and supplier conversations.

Why Decision Intelligence Matters

For decades, supply chain technology was organized around familiar application categories: ERP, WMS, TMS, planning, procurement, order management, visibility, and execution platforms. Those systems remain essential. But they do not fully explain where value is moving.

The most important shift is the emergence of an intelligence layer that helps companies understand what is changing, why it matters, what options are available, and what action should be taken. That is the practical meaning of Supply Chain Decision Intelligence.

The category includes technologies that materially improve how supply chain decisions are made across planning, execution, coordination, disruption response, risk management, logistics, sourcing, fulfillment, and multi-enterprise operations. It is broader than a single application category, but it is not a catch-all for every vendor using AI language.

The governing test is straightforward: does the technology improve decision quality in a meaningful supply chain operating context?

A dashboard is not decision intelligence. A transactional execution system is not decision intelligence simply because it stores operational data. A generic AI platform is not automatically part of the category unless it is materially tied to supply chain decision-making. The Market Map is intended to hold that boundary.

Providers Currently Under Review

The Supply Chain Decision Intelligence Market Map is being developed around a curated set of providers whose capabilities appear to intersect with this emerging intelligence layer. Providers currently under review include:

Altana
Blue Yonder
Coupa
e2open
Everstream
FourKites
Interos
Kinaxis
Manhattan
o9
Oracle
Overhaul
project44
SAP

These companies do not all compete in the same way. That is precisely why the market needs structure.

Some are associated with planning, scenario analysis, and decision optimization. Some are stronger in logistics visibility, event data, transportation intelligence, or control tower capabilities. Some focus on supplier risk, trade intelligence, resilience, or multi-enterprise network coordination. Some are broad enterprise application providers extending intelligence across large installed bases. Others are more specialized providers focused on risk signals, shipment intelligence, orchestration, or external operating context.

The analytical value of the Market Map comes from making those differences visible. A buyer evaluating supply chain decision intelligence should not treat all of these providers as interchangeable. Nor should suppliers be forced into legacy categories that obscure their actual role in decision support.

Why Suppliers Should Participate

Supplier participation matters because this market is still being defined.

Many providers have capabilities that cross legacy category lines. A company may be known for visibility but now offer decision automation. A planning vendor may increasingly support cross-functional orchestration. A risk platform may function as an operating intelligence layer. A network provider may support decision-making across parties, geographies, and systems.

If those distinctions are not understood clearly, suppliers risk being positioned too narrowly, grouped with adjacent providers that solve different problems, or evaluated only through outdated category labels.

Participation gives suppliers an opportunity to clarify:

How their platform improves supply chain decision-making
Where their capabilities sit relative to planning, execution, visibility, risk, and orchestration
What data, AI, analytics, workflow, or network capabilities support decision quality
Which use cases best demonstrate enterprise value
How their solution differs from adjacent providers that may sound similar in the market

This is especially important in a category where language has become crowded. “AI,” “control tower,” “visibility,” “orchestration,” “resilience,” and “decision intelligence” can mean very different things depending on the provider. The Market Map process is intended to separate substance from terminology.

For suppliers, the benefit is not promotional placement. It is accurate market understanding. A well-informed Market Map helps buyers better understand the provider landscape — and helps suppliers avoid being misread by the market.

Inclusion and Exclusion Logic

The Market Map will focus on technologies that contribute directly to better supply chain decisions.

Relevant capabilities include decision-support layers, orchestration and coordination tools, AI and advanced analytics tied to operating decisions, control towers with real decision depth, context and event intelligence, scenario modeling, cross-functional intelligence environments, and selected enabling infrastructure where the connection to decision quality is explicit.

This includes technologies that help enterprises interpret signals from internal systems and external operating environments. Shipment delays, supplier risk, demand shifts, geopolitical events, inventory constraints, transportation disruption, port congestion, regulatory exposure, and weather events become more useful when they are connected to decisions.

Clear exclusions are equally important. Core systems of record are not included simply because they are important. ERP, WMS, TMS, planning, procurement, and asset management systems belong in the discussion only when they demonstrate a meaningful intelligence layer above the transactional core.

Pure execution tools without decision depth also remain outside the center of the category. The same applies to horizontal BI tools, generic enterprise AI platforms, and narrow point solutions with limited strategic relevance.

These technologies may be useful. Some may even enable decision intelligence. But enablement is not the same as category membership. The objective is not to reward every AI message in the market. The objective is to identify where real decision-making value is emerging.

Why This Is Commercially Important

Decision intelligence is becoming one of the more important ways to understand the next stage of supply chain technology. The market is not moving simply toward more software. It is moving toward more interpretation, more coordination, more contextual awareness, and more decision support across fragmented operating environments.

That shift has implications for both buyers and suppliers. Buyers need a better way to compare providers whose capabilities cut across traditional categories. Suppliers need a more disciplined way to explain where they fit and why they matter. Analysts need a framework that can separate category substance from marketing language.

The Supply Chain Decision Intelligence Market Map is designed to provide that structure.

It will not answer every selection question. No market map can. But it can help buyers ask better questions, compare providers more intelligently, and understand which capabilities are truly central to decision improvement. It can also help suppliers understand how their market position may be perceived within a broader, analyst-defined framework.

Participation Is Welcome

Logistics Viewpoints welcomes supplier participation in the Supply Chain Decision Intelligence Market Map process.

If your company is listed above, participation can help ensure that Logistics Viewpoints has the most accurate understanding of your capabilities, positioning, and role in the market. If your company is not listed but is active in supply chain decision intelligence, AI-enabled supply chain decision support, orchestration, event intelligence, resilience, control tower capabilities, planning intelligence, visibility, supplier risk, trade intelligence, or related areas, we welcome the opportunity to understand where you fit.

Participation does not mean guaranteed positioning, endorsement, or favorable treatment. The value of the Market Map depends on analytical discipline. But supplier input can materially improve the quality of the research, sharpen category boundaries, and ensure that relevant capabilities are understood before the map is finalized.

For suppliers active in this market, non-participation carries a practical risk: your company may still be evaluated based on available information, but without the benefit of your most current explanation of strategy, capability depth, roadmap direction, and customer value proposition.

Next Step

Logistics Viewpoints is developing the Supply Chain Decision Intelligence Market Map as part of a broader Market Maps portfolio for supply chain technology buyers and providers.

To request the Executive Summary, discuss the Supplier Selection Guide, or explore participation in a Supplier Spotlight, contact Logistics Viewpoints.

If you are one of the suppliers listed above, or if your company is active in this market, we welcome your participation in the process.

The post Help Shape the Supply Chain Decision Intelligence Market Map appeared first on Logistics Viewpoints.

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Hormuz tension keeps pressure on rates; Section 122 invalidated – May 12, 2026 Update

Published

8 heures ago

12 mai 2026

Home

Hormuz tension keeps pressure on rates; Section 122 invalidated – May 12, 2026 Update

Published: May 12, 2026

Blog

Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 4%.

Asia-US East Coast prices (FBX03 Weekly) increased 1%.

Asia-N. Europe prices (FBX11 Weekly) increased 10%.

Asia-Mediterranean prices(FBX13 Weekly) decreased 5%.

Air rates – Freightos Air Index

China – N. America weekly prices stayed level.

China – N. Europe weekly prices decreased 3%.

N. Europe – N. America weekly prices decreased 3%.

Analysis

The US paused its Operation Freedom, designed to support vessel transits out of the Strait of Hormuz – and which sparked renewed US-Iran exchanges of fire as well as Iranian missile attacks on Gulf states last week – less than two days after its launch.

Even amid sporadic military engagement, US-Iran negotiations continue, though the sides remain far apart, with President Trump stating that he may restart the operation if negotiations stall. In the meantime, Iran announced the creation of a Persian Gulf Strait Authority through which vessels are required to request permission – and possibly pay – to pass through the strait.

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Maersk CEO Vincent Clerc estimates that elevated fuel prices due to the closure has the carrier facing $500M per month in additional costs. He also reports that Maersk has so far been able to pass those costs on to customers via higher freight rates.

Freightos Baltic Index container price behavior has varied by lane, however, with transpacific rates up about $1,000/FEU compared to before the war, while Asia – Europe prices that climbed by a few hundred dollars per FEU in March have mostly slipped back to pre-war levels. Asia – N. Europe rates climbed by 10% last week to $2,850/FEU, but prices so far this week are trending down, similar to rate behavior to the Mediterranean earlier this month.

Carriers are planning additional, likely modest, increases for mid-month. In preparation, they are stepping up blanked sailings – with reports of east-west service space getting tight and some containers being rolled – to support higher spot rates during what is still a low demand stretch, and hoping peak season demand picks up to support prices later in the year.

The latest National Retail Federation US ocean import volume report projects June arrivals to be 2% lower than May, with volumes increasing 4% month on month in July before easing slightly in August and further in September. If these estimates materialize, transpacific peak season will be a muted one relative to recent years, with the July peak 8% lower than last year’s tariff driven burst, but also 6% lower than the August peak in 2024.

The NRF suggests that this relative weakness reflects importer caution due to current economic uncertainty. Maersk’s Clerc also suggests that a coming downturn in ocean demand due to higher consumer prices is possible and could make this year’s H2 challenging and possibly loss-making for carriers still facing elevated fuel costs.

Elevated jet fuel prices are contributing to global air cargo rates that are 30% higher than before the war and year on year. Higher costs are pushing some volumes away from the skies when feasible, including some Asia – Europe shippers opting for ocean-air services via West Coast US ports.

Overall though, the market is stabilizing as air space closures decrease and capacity from Gulf carriers continues to recover. Jet fuel prices have also leveled out after coming down from April highs as the market has shifted sourcing for jet fuel – and energy exports more generally – to the extent possible to account for the Persian Gulf export drop, and as demand for fuel has also eased as carriers scrap unprofitable flights.

Freightos Air Index rates decreased slightly or were level on most major lanes last week. Prices out of China were stable at $5.47/kg to N. America and dipped 3% to $5.16/kg to Europe. While China – US rates are now back to pre-war levels, prices to Europe remain 50% higher, but down 15% from their peak in April. S. Asia – Europe rates were stable at $4.66/kg last week – a level 80% higher than in February – but down 10% from a month ago. SEA – Europe prices meanwhile were up double digits last week to a new high of $5.74/kg.

In trade war news, President Trump and China’s Xi Jinping are set to meet in Beijing later this week for a summit aimed at stabilizing the US-China trade relationship – whose status quo will expire in November – but complicated by the Iran war.

US tariffs on China are lower at the moment than before the US Supreme Court invalidated Trump’s IEEPA-based tariffs in February. The White House replaced IEEPA duties with a 10% global tariff based on Section 122 that is set to expire in late July, with the administration working to replace the 122 duty with Section 301-based IEEPA-like tariffs by then.

Last week though, the US Court of International Trade ruled that the president’s use of Section 122 was invalid. The ruling and the court-required refunds were limited to the specific plaintiffs in the case, but open the door for other businesses to sue as well. The White House has appealed the ruling and asked that the tariffs stay in place during the appeals process or until they expire, but these developments do set the stage for another possible widespread tariff refund.

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Judah Levine

Head of Research, Freightos Group

Judah is an experienced market research manager, using data-driven analytics to deliver market-based insights. Judah produces the Freightos Group’s FBX Weekly Freight Update and other research on what’s happening in the industry from shipper behaviors to the latest in logistics technology and digitization.

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