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Supply Chain Scenario Analysis: Global Manufacturing Impacts of a Short vs. Prolonged U.S. – Iran Conflict

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Supply Chain Scenario Analysis: Global Manufacturing Impacts Of A Short Vs. Prolonged U.s. – Iran Conflict

On February 28, 2026, the US and Israel launched a precision military strike against Iran, triggering global market panic. Looking back at US-Iran tensions in early 2020 that nearly escalated into a full-scale war—though they lasted only about a week before de-escalating and did not evolve into sustained military conflict—many observers at the time believed the impact would be limited. Yet subsequent developments confirmed a fundamental supply chain principle: short-term shock, long-term transmission.” A 7-day military conflict may appear fleeting, but disruptions to global manufacturing, shipping, and energy supply chains are typically transmitted with a lag and can persist for several months.

Notably, President Trump publicly stated that this military operation may not end quickly and could last more than 4 weeks. If prolonged, its impact on global manufacturing would be significantly greater than that of a short 7-day conflict. It is therefore necessary to develop forward-looking assessments based on both historical precedent and current market conditions. This article analyzes two hypothetical scenarios: a conflict lasting 7 days and a conflict extending beyond 4 weeks.

Energy Impact: Oil Price Volatility and the Lagged Transmission of Cost Pressure

The most direct impact of the 2020 US-Iran standoff was concentrated in energy markets, shipping, and key raw materials. After the standoff began, Brent crude oil prices rose rapidly from $60 per barrel to $75 per barrel, an increase of 25 percent. Although tensions eased within a week, oil prices did not immediately decline. Instead, they remained elevated and volatile for nearly two months, returning to more stable levels only after market expectations and supply chain sentiment normalized.

If the current conflict ends within 7 days, military deployments in the Strait of Hormuz would not be withdrawn immediately, and market anxiety regarding oil supply disruption would likely persist. According to projections from multiple external market institutions, crude oil prices could surge to $100–$110 per barrel and remain elevated for one to two months. This would directly increase energy and chemical raw material costs for global manufacturing. As seen in 2020, rising oil prices rapidly translated into higher costs for industries such as chemicals, plastics, and chemical fibers, compressing corporate profit margins.

If the conflict lasts more than 4 weeks, the energy impact would escalate to a systemic level. Current market analysis suggests that navigation risk in the Strait of Hormuz would increase sharply, placing approximately 30 percent of global seaborne crude oil and 20 percent of liquefied natural gas shipments at risk of significant disruption. Brent crude prices could rise to $120–$150 per barrel, potentially approaching the $138 per barrel peak observed in early 2022. Unlike short-term volatility, such elevated prices could persist for more than six months. Combined with speculative buying, global manufacturing energy costs could effectively double. High-energy-consuming industries such as steel, chemicals, and cement could face widespread production suspensions, and even large enterprises might be forced to curtail capacity due to sustained cost pressures. At the same time, prolonged high oil prices would accelerate investment in alternative energy solutions. Demand for photovoltaic and wind power, along with traditional alternatives such as coal and coal chemicals, would likely increase significantly, creating structural shifts across related industrial value chains.

Shipping Disruption: Route Adjustment is Easier than Cost Normalization

The lagged impact on global shipping was particularly evident during the 2020 standoff and provides a direct reference point for current risk modeling. Although the Strait of Hormuz was not formally blocked in 2020, shipowners adjusted routes and reduced sailing speeds as precautionary measures. War risk insurance premiums for Middle East routes surged threefold within a short period and remained elevated for three to six months, declining only after regional stability returned. Simultaneously, temporary route adjustments reduced global container turnover efficiency, delayed empty container returns, contributed to port congestion, and drove freight rates higher.

If the current conflict ends within 7 days, previously implemented detour strategies—such as routing vessels around the Cape of Good Hope—would not be immediately reversed. A single detour can add 10–14 days per leg, extending the global fleet turnover cycle. As a result, tight shipping capacity, elevated freight rates, and shortages of empty containers could persist for two to four weeks or longer, replicating patterns observed in 2020. Manufacturing sectors dependent on Middle East trade routes would face both cost inflation and delivery delays.

If the conflict extends beyond 4 weeks, shipping disruption would likely exceed 2020 levels. Carriers may suspend Middle East routes entirely rather than rely solely on detours. Global container turnover efficiency would decline sharply, and empty container imbalances would intensify. Major global ports could experience widespread congestion, with berthing delays extending up to one month. War risk premiums could surge further, and some insurers might refuse to underwrite Middle East-related routes altogether, making cargo transport operationally impossible regardless of cost. Potential airspace closures would further complicate international logistics. The Persian Gulf and the Red Sea—critical trade corridors linking Europe and Asia—could face severe disruption. Global manufacturing delivery cycles could extend by two to three months, export orders could be canceled or disputed, and cross-border logistics providers could face significant financial distress.

Raw Material Shortages: From Temporary Gaps to Structural Supply Cutoffs

The 2020 standoff also revealed vulnerabilities in key raw material supply chains, underscoring the longer-term risks behind even a brief conflict. Public data indicates that Iran is a significant global supplier of certain industrial raw materials, including neon gas used in chip lithography and methanol, where it accounts for a meaningful share of global production capacity. During the 2020 standoff, temporary production and export constraints increased methanol import costs and disrupted downstream industries such as photovoltaic manufacturing, chemical fibers, and semiconductors. These effects persisted for one to two months until supply normalized and inventory levels were restored. Many small and mid-sized chemical manufacturers globally faced production suspensions and order delays due to raw material shortages and higher costs.

If the conflict lasts more than 4 weeks, raw material disruption could escalate from temporary shortages to structural cutoffs. Sustained military strikes could halt industrial production, interrupting exports of key materials such as neon gas and methanol. The global semiconductor industry could experience capacity constraints, affecting automobiles, electronics, and AI hardware manufacturing. Such disruptions could persist for three to six months or longer. Additionally, shortages of chemical feedstocks such as sulfur and liquefied petroleum gas could widen, further increasing input costs and compressing manufacturing margins worldwide.

Current Outlook and Strategic Response: Building Supply Chain Resilience Under Geopolitical Stress

If the conflict ends within 7 days, its impact would likely follow the 2020 transmission pattern: a controllable short-term shock followed by sustained medium-term disruption. Energy prices could remain elevated for one to two months, shipping premiums could persist for three to six months, and raw material disruptions could affect production scheduling for one to three months. While a systemic supply chain collapse would be unlikely, manufacturing sectors—especially automobiles, electronics, and chemicals—would experience cost inflation, component shortages, and delivery delays. The primary challenge would not be the immediate conflict but the lagged impact in the one-to-three-month recovery window, requiring careful management of energy costs, logistics exposure, inventory buffers, and production planning.

If a conflict lasting more than 4 weeks materializes, global manufacturing could face four simultaneous pressures: soaring costs, logistics paralysis, raw material cutoffs, and weakened demand. Energy costs could double, logistics costs could rise three to five times, and key inputs could become unavailable. Core manufacturing sectors could suspend production, global trade volumes could decline, and consumer demand could weaken, reinforcing a negative cycle. Even after hostilities cease, supply chain recovery could take one to two years, resulting in a prolonged adjustment period characterized by high costs, constrained output, and uneven recovery.

Compared with 2020, today’s global manufacturing ecosystem is more interconnected, more energy-dependent, and potentially more exposed to Middle East supply chain disruptions. Many industries are still in recovery phases, with elevated demand for energy and raw materials and tighter logistics requirements. Under either scenario, manufacturing enterprises should accelerate supply chain diversification, redesign logistics networks, increase strategic reserves of critical raw materials, optimize cost structures, invest in energy efficiency and digital manufacturing capabilities, and continuously monitor geopolitical and compliance risks to strengthen long-term supply chain resilience.

The post Supply Chain Scenario Analysis: Global Manufacturing Impacts of a Short vs. Prolonged U.S. – Iran Conflict appeared first on Logistics Viewpoints.

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Ocean rates climb again even as fuel costs ease – June 23, 2026 Update

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Ocean rates climb again even as fuel costs ease – June 23, 2026 Update

Published: June 25, 2026

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Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 19%.

Asia-US East Coast prices (FBX03 Weekly) increased 13%.

Asia-N. Europe prices (FBX11 Weekly) increased 13%.

Asia-Mediterranean prices (FBX13 Weekly) increased 16%.

Air rates – Freightos Air Index

China – N. America weekly prices increased 17%.

China – N. Europe weekly prices were level.

N. Europe – N. America weekly prices increased 2%.

Analysis

The US-Iran interim agreement appears to be driving a gradual reopening of the Strait of Hormuz, even with Iran announcing a renewed closure following Israel and Hezbollah exchanges of fire.

Though still well below pre-war levels, Hormuz transits have increased since the announcement of the Memorandum of Understanding. As part of this week’s renewed negotiations, Iran and the US have opened a hotline between the two to avoid miscommunications regarding traffic through the Strait. But talks have also shown Iran intends to assert some control over the waterway as part of the settlement – a big shift from the pre-war status quo.

The renewed traffic comprises mostly tankers, and container carriers are likely to activate mostly feeder services instead of long haul port calls to the Gulf once transits do rebound and until confidence returns to the lane. The prospect of peace has driven CMA CGM to increase its Red Sea transits, which could signal more carriers will follow that lead at some point if negotiations progress.

The prospect of more stability as well as the fact of an increase in oil flows have already driven down crude prices, with some measures now only 5% higher than before the war. Bunker and jet fuel prices are also easing with bunker rates down 25% from their March highs and 12% compared just to the start of June, though prices remain about 40% higher than in February. Jet fuel prices are down more than 40% from their peak and are 20% higher than before the closure.

But even as fuel costs ease, container rates continue to climb as peaking demand from an early busy season is keeping vessels full at least into July. This development likewise means spot rates will start easing from the current or near term levels as demand decreases, regardless of what happens in the Strait.

The early start to peak season – driven by multiple factors including frontloading ahead of BAF increases, coming Section 122 tariff expirations and Section 301 introductions for transpacific shippers, and July manufacturer price hikes – has some observers expecting bookings to peak in June, which could mean carriers will find more resistance to July rate increases than they have to June price hikes so far.

For now though, prices are high and getting higher. Transpacific rates climbed 19% to the West Coast to more than $5,700/FEU, with daily prices past the $6k/FEU mark so far this week. Rates to the East Coast increased 13% to $7,400/FEU last week with daily rates now past $8,000/FEU – a mark already above last year’s peak season high. Some carriers have announced additional steep increases for July.

Asia – Europe rates grew 13% last week to $4,700/FEU and Asia – Mediterranean prices increased 16% to $6,300/FEU, both well above last year’s peak season highs but level so far this week. The recent increases pushed Mediterranean rates to about the announced GRI or PSS levels, while Europe prices are about $1k/FEU beneath the target set by several carriers.

Planned July increases have some carriers aspiring for Asia – Europe rates $3k/FEU higher than current levels and Mediterranean prices $1-$2k/FEU higher, with increases announced across an array of secondary lanes as well.

The sharp June rate gains show that even as the global fleet continues to grow, significant increases in demand and shipper urgency – currently helped along by a fuel price-adjusted elevated starting point, Red Sea diversions, and peak season congestion causing delays and likewise effectively reducing capacity – are still enough to push spot prices to very elevated levels, at least for a while.

But with rates on some lanes already below aspired-to levels, and frontloading implying an early end to the fairly sudden demand boom, the question remains how much higher prices will climb and for how long.

As noted, jet fuel prices have eased since the prospects of a reopened Hormuz have increased. So far though, air cargo rates have stayed level, though down from earlier highs on most lanes, including for China, South Asia and Southeast Asia cargo flows to Europe. Prices to N. America have nonetheless trended upward, possibly buoyed by last chance Amazon Prime Day demand.

The European Union will suspend its de minimis exemption on July 1st. Though many observers expected last year’s US rule change to drive a transpacific e-commerce exodus from the air, the big e-comm platforms mostly adjusted tactics, preserving e-comm volumes as a still major – if not as colossal – driver of air demand. Most experts, therefore, don’t expect the EU rule change to trigger a sharp drop in e-comm flows or air rates.

But the change will make the EU, in comparison, suddenly much less attractive to cross-border e-comm sellers than the nearby UK market, which will only change its de minimis rules in 2029. This looming disparity has some in the UK warning of a coming flood of low cost goods starting in July, and urging the government to expedite the policy shift.

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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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The post Ocean rates climb again even as fuel costs ease – June 23, 2026 Update appeared first on Freightos.

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The Future TMS Buyer May Not Be Buying Software Alone

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For years, the transportation management system market has been framed as a software market. A shipper buys a TMS to plan, execute, settle, and analyze freight. The software manages routing guides, tenders loads, tracks shipments, calculates freight costs, audits invoices, and produces reports.

That model still exists. But it no longer fully describes the market.

The boundaries between TMS, managed transportation, freight brokerage, digital freight platforms, control towers, and 3PL services are becoming less clean. Buyers may enter the market asking for software, but what they often need is a better transportation operating model.

That distinction matters.

The future TMS buyer may not be buying software alone. They may be buying technology, execution capacity, market access, analytics, workflow automation, and outcome ownership in a combined package.

Download the TMS Market Research Executive Summary for a strategic view of how TMS buying decisions are expanding beyond traditional execution software.

The Clean Category Lines Are Breaking Down

Historically, the categories were easier to separate. A TMS vendor sold software. A broker sourced capacity. A managed transportation provider operated freight on behalf of the shipper. A 3PL provided logistics services. A visibility provider tracked shipments. A control tower monitored network performance.

Those distinctions have become harder to maintain. Some brokers now offer shipper-facing platforms that look like TMS-lite systems. Some TMS vendors support embedded procurement and capacity access. Some managed transportation providers combine software, people, analytics, and carrier management in one service. Some 3PLs offer control tower capabilities. Some visibility and network platforms are expanding into execution workflows.

The market is converging around the buyer’s actual problem: transportation is difficult to operate well. The buyer may not care whether a provider fits perfectly into a legacy category if the provider can help move freight more reliably, reduce manual work, improve decision-making, and create better cost and service outcomes.

Buyers Want Outcomes, Not Just Functionality

A traditional software evaluation might focus on features. Can the system tender loads? Can it build shipments? Can it rate freight? Can it track milestones? Can it produce dashboards?

Those questions still matter. But many shippers are facing a broader set of challenges.

They may lack transportation staff. They may have fragmented regional operations. They may struggle with carrier performance. They may not have strong freight procurement analytics. They may lack the data quality needed to use a sophisticated TMS well. They may need help redesigning processes, not just digitizing them.

In those cases, software alone may not solve the problem.

A TMS can enable better transportation management, but it does not automatically create transportation excellence. The organization still needs process discipline, carrier strategy, exception management, data governance, and analytical capability.

That is why buyers increasingly consider hybrid models.

The Rise of Embedded Services

One of the most important developments in transportation technology is the blending of software and services. This is not simply outsourcing under a new label. It reflects the reality that transportation outcomes depend on both system capability and operational execution.

A shipper may want a TMS, but also need freight procurement support, carrier onboarding, routing guide design, spot market access, exception management, freight audit support, performance analytics, customer communication workflows, network optimization, and continuous improvement. Some organizations will build these capabilities internally. Others will look for providers that combine technology and managed services.

This creates opportunities for TMS vendors, 3PLs, brokers, and managed transportation providers, but it also creates confusion. The buyer has to determine whether they are selecting software, a service model, a capacity provider, or an operating partner. Often, the answer is some combination of all four.

Why Brokers and TMS Vendors Are Moving Toward Each Other

The convergence between TMS and brokerage is especially important.

Brokers historically made money by sourcing capacity and managing transactions. But as digital freight models evolve, brokers increasingly need technology interfaces that make it easier for shippers to quote, tender, track, and analyze freight.

At the same time, TMS vendors recognize that execution decisions often depend on capacity availability and market pricing. A TMS that can recommend a carrier but cannot help solve a capacity problem may be limited. Embedded capacity options can make the software more useful.

This does not mean every TMS becomes a broker or every broker becomes a TMS vendor. But the overlap is increasing.

The shipper does not care about category boundaries as much as they care about whether freight moves reliably, cost-effectively, and with minimal operational friction.

The Control Tower Complication

Control towers add another layer to the convergence. Many companies want an integrated view of transportation performance, exceptions, inventory impact, customer risk, and network disruption. That requirement does not fit neatly into one traditional category.

A control tower may be delivered by a software vendor, a 3PL, a managed transportation provider, or an internal team using multiple tools. It may include visibility, analytics, workflow management, decision support, and escalation processes.

This reinforces the broader point: the buyer is often not simply buying a TMS. The buyer is trying to improve transportation control.

How Shippers Should Evaluate the Market

As the category boundaries blur, shippers need to be more precise about their own needs. The first question is not simply which TMS has the best feature set. The first question is what operating problem the organization is trying to solve.

Some shippers need better software because they already have the internal transportation team, procurement discipline, and process maturity to use it effectively. Others need a more complete operating model because they lack staff, carrier analytics, procurement support, or exception-management capacity. Still others need better access to capacity, stronger control tower visibility, or a more standardized transportation process across regions and business units.

These distinctions matter. Buying software when the real problem is operating capability can lead to disappointment. Outsourcing execution when the real need is better internal process control can create a different kind of problem. The best buying process starts with a clear view of which transportation capabilities should be owned internally and which are better delivered through a partner.

The Market Will Reward Clear Operating Models

The future transportation technology market will not be defined only by software functionality. It will be defined by operating models.

Some shippers will want best-of-breed TMS platforms they operate themselves. Others will want managed transportation services with strong technology. Others will want embedded brokerage and procurement capabilities. Others will want network platforms that connect execution, visibility, and analytics.

There is no single right answer.

But there is a wrong answer: buying software when the real problem is operating capability, or outsourcing execution when the real need is better internal process control.

The TMS market is no longer just about systems of record or systems of execution. It is becoming part of a broader transportation decision and operating infrastructure.

The future TMS buyer may still buy software.

But increasingly, they will also be buying a model for how transportation gets managed.

Download the TMS Market Research Executive Summary for a strategic view of how the TMS market is moving toward software, services, analytics, and decision infrastructure.

The post The Future TMS Buyer May Not Be Buying Software Alone appeared first on Logistics Viewpoints.

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Autonomous Tendering Is Coming for the Routing Guide

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The routing guide has long been one of the central control mechanisms in transportation management. It reflects negotiated rates, preferred carriers, service expectations, contractual commitments, and years of transportation experience. For many shippers, it is the operating logic behind freight execution.

But that logic is increasingly being tested.

As AI-enabled transportation management systems evolve, tendering will become more dynamic, more automated, and more analytical. Instead of transportation teams manually working through static routing guides, systems will continuously evaluate carrier performance, capacity conditions, service risk, cost, spot market alternatives, appointment constraints, and historical behavior.

Download the TMS Market Research Executive Summary for a strategic view of how AI, automation, and decision intelligence are reshaping transportation management.

The result is a major shift in transportation execution: autonomous tendering.

This does not mean humans disappear from freight procurement. But it does mean the traditional routing guide will be forced to evolve from a static sequence of carrier preferences into a dynamic decision framework.

The Routing Guide Was Built for a More Stable Market

The traditional routing guide makes sense in a world where conditions are relatively stable. A shipper runs an annual or semiannual bid. Carriers are awarded lanes. Primary, secondary, and backup carriers are ranked. The TMS tenders freight according to that hierarchy.

When the market is balanced and carrier commitments hold, this model works well enough. It creates structure, supports compliance, and helps transportation teams manage cost.

But freight markets are rarely static for long.

Capacity tightens. Spot rates move. Carrier service performance changes. Facilities become congested. Customer requirements shift. Weather, labor constraints, port delays, equipment imbalances, and regional disruptions alter the real economics of a shipment.

A routing guide created months ago may not reflect today’s best decision.

This is where autonomous tendering becomes powerful.

What Autonomous Tendering Actually Means

Autonomous tendering is not simply automated tender sequencing. Basic tender automation has existed for years. The more important development is decision automation.

An AI-enabled TMS can evaluate multiple variables at the time of tender. It can consider historical acceptance rates, recent lane-level performance, real-time capacity conditions, cost and service tradeoffs, facility constraints, appointment availability, customer priority, spot market alternatives, emissions considerations, and exception risk. The system is no longer only asking, “Who is next in the routing guide?” It is asking, “Which option is most likely to produce the best outcome under current conditions?”

That may still mean tendering to the primary carrier. But it may also mean skipping a carrier with deteriorating performance, selecting a carrier with better recent reliability, using a digital freight option, or escalating the shipment before failure occurs. The point is not automation for its own sake. The point is better execution under changing conditions.

Why This Is Controversial

Transportation has always depended on judgment. Experienced transportation managers know which carriers perform well, which lanes are difficult, which facilities create dwell time, and which relationships matter. Freight procurement is not purely mathematical.

That is why autonomous tendering can feel threatening.

It challenges the idea that the routing guide should be the primary expression of transportation strategy. It also exposes uncomfortable realities. Some routing guides are stale. Some carrier rankings reflect old assumptions. Some decisions are shaped by habit rather than current performance. Some “preferred” carriers are preferred because they won a bid, not because they are the best choice today.

AI does not eliminate the need for procurement judgment, but it does make weak logic more visible.

From Static Compliance to Dynamic Optimization

For years, transportation organizations have measured routing guide compliance. That made sense when the routing guide was considered the best available plan. But in a more dynamic market, strict compliance is not always the right goal.

A better question is whether the shipment was executed according to the best available decision at the time.

This changes the role of the routing guide. It becomes one input into a broader optimization model, not the entire model. Contracted rates and carrier commitments still matter, but they must be evaluated alongside service risk, acceptance probability, market conditions, and business priority.

The future routing guide may look less like a fixed ladder and more like a decision policy.

Human Oversight Still Matters

Autonomous tendering should not be confused with unmanaged automation. Transportation is too important to leave entirely to opaque systems. Shippers will need guardrails, approval thresholds, exception rules, and auditability.

The system may be allowed to autonomously tender standard freight within defined parameters. But high-value shipments, strategic customers, expensive expedites, unusual equipment, and contractual exceptions may still require human review.

The best model is not human versus machine. It is human-supervised autonomy.

Transportation managers define the strategy, constraints, and escalation rules. The system executes within those boundaries, learns from outcomes, and surfaces exceptions when human intervention is valuable.

What Buyers Should Look For

Shippers evaluating TMS capabilities should look beyond whether a platform can automate tenders. The more important question is whether it can improve tendering decisions.

A strong system should be able to evaluate acceptance probability, incorporate recent carrier performance, consider spot market intelligence, and explain why a carrier was selected. It should also allow users to define operating rules by customer, lane, region, facility, shipment priority, or business unit. In practice, this means the system should not merely execute a routing guide. It should help transportation leaders understand whether the routing guide is still producing the intended cost, service, and reliability outcomes.

The best platforms will also learn from tender rejections, service failures, and changing market conditions. That learning loop is what separates basic execution automation from transportation decision intelligence.

The Routing Guide Is Not Dead, But It Is Being Redefined

The routing guide will not disappear. Shippers still need contracted capacity, procurement discipline, and carrier strategy. But the routing guide will no longer be enough on its own.

Autonomous tendering is coming because the transportation environment is too dynamic for static decision logic. The winners will be the organizations that treat AI not as a replacement for procurement expertise, but as a way to operationalize that expertise at scale.

The future routing guide will not simply tell the system who to tender to first.

It will tell the system how to decide.

Download the TMS Market Research Executive Summary for a strategic view of how autonomous tendering, routing guide strategy, and transportation execution are evolving.

The post Autonomous Tendering Is Coming for the Routing Guide appeared first on Logistics Viewpoints.

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