THE DAILY

Tuesday, February 17, 2026

The ten minutes that make you the most informed person in freight today

The Daily

UPS names the 22 facilities it’s closing that represent 30,000 jobs

The biggest parcel carrier in the country is shrinking its network faster than anyone expected — and now we know exactly where the cuts are falling.

Court documents filed in connection with a Teamsters lawsuit reveal the specific locations UPS plans to shutter in the first half of 2026: 22 package sortation centers with union employees across 18 states, including Dallas, Miami, Baltimore, and Atlanta. CFO Brian Dykes confirmed on the January earnings call that a couple dozen facilities would close and 30,000 jobs would be eliminated. These aren’t satellite offices — they’re major nodes in the UPS package network, and their closure will reshape parcel routing across the country.

The closures are part of a restructuring plan internally called "Network of the Future." The numbers tell the story of just how aggressive it is: last year alone, UPS eliminated 48,000 operational jobs (including 15,000 seasonal positions), shuttered 93 leased and owned distribution centers, and saved $3.5 billion. The five-year target is up to 200 facility closures and $3 billion in annual savings by 2028.

What’s driving this isn’t a temporary volume dip — it’s a structural shift in UPS’s business model. The company is on track to halve its Amazon volume by June because those deliveries aren’t generating acceptable margins. Amazon has been UPS’s largest customer for years, but the economics of delivering low-margin packages to residential doorsteps at scale never worked for UPS the way it works for Amazon’s own logistics arm. Cutting that volume means cutting the infrastructure that supported it.

For the broader freight market, this matters in two ways. First, the parcel capacity that UPS is removing doesn’t just vanish — the demand it served still exists. Regional parcel carriers, USPS, and last-mile startups will absorb some of it, but the network fragmentation creates service gaps that shippers need to plan for, particularly in the 18 states with named closures. Second, the labor market impact of 30,000 job cuts in the first half of 2026 is significant for warehouse and logistics labor availability in those metro areas.

So What? UPS is betting that a smaller, more automated, higher-margin network beats the volume-at-all-costs approach that defined the last decade. The Teamsters lawsuit challenging these closures is still active — any injunction could delay the timeline. But the strategic direction is clear. If you’re a shipper relying on UPS sort centers in those 18 states, check your service commitments now. And if you’re a regional carrier or last-mile provider near those closures, there’s volume about to come loose.

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Top Stories

A federal gas tax cap could cut your fuel bill overnight — but there’s a catch

Rep. Kevin Kiley (R-Calif.) is drafting the "Gas Tax Reduction Act," which would penalize any state with fuel taxes above 50 cents per gallon by slashing 8% of its federal highway funding. In California alone, that would immediately cut the state fuel tax burden by roughly 21 cents per gallon. Pennsylvania, Illinois, New Jersey, and Michigan would also be in scope. For the average trucker spending $50,000–$70,000 a year on diesel, the savings could be material. But the catch: those highway funds maintain the freight corridors your trucks depend on.

So What? Lower fuel taxes sound great until the roads they fund start deteriorating. If you run lanes through high-tax states, watch this legislation closely. It could reshape regional operating cost differences — but the infrastructure trade-off is real.

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Truckload rates keep climbing — and volume has nothing to do with it

Spot rates are up, tender rejections are holding firm, and yet freight volumes continue to run below last year. The Logistics Managers’ Index paints a stark picture: transportation capacity plunged to 36.9 in December — the lowest since October 2021 — while transportation pricing hit 66.7. That’s a nearly 30-point gap between capacity and price, the widest spread we’ve seen in years. Capacity is exiting the market at roughly the same pace demand is declining, and that’s enough to keep rates moving up. C.H. Robinson’s models are calling for +2% year-over-year on both dry van and reefer, driven entirely by supply-side forces.

So What? Rates driven by capacity exits rather than volume growth raise a durability question. But for bid season purposes, the math is the math — there are fewer trucks, and that’s enough to move pricing. If you’re a shipper banking on soft demand to keep rates flat, the supply side disagrees.

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Estes picks up Key Trucking to plant a flag in the Pacific Northwest

Estes Logistics — the brokerage and logistics arm of LTL heavyweight Estes Express Lines — acquired Kent, Washington-based Key Trucking, adding dry van, flatbed, warehousing, and 50,000 square feet of climate-controlled staging space in the greater Seattle metro. It’s the latest move in a growth campaign that has expanded Estes’ door count by 32% over five years, with plans to surpass 14,000 doors by year-end. The company now runs over 10,500 tractors and 24,000 employees.

So What? While other carriers are shrinking, Estes is buying. The Pacific Northwest has been underserved by major LTL players since Yellow’s collapse, and Estes is filling the gap methodically. If you ship pallets into the Seattle corridor, your options just got a little better.

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Carriers and shippers see 2026 completely differently — and bid season is where that tension plays out

Echo Global Logistics surveyed over 1,800 carriers and shippers, and the gap in rate expectations is striking. Most carriers expect mid-single-digit rate increases and are positioning for pricing power. Shippers? A substantial portion expect flat or declining rates, with transportation costs ranked as their top challenge for the fourth consecutive year. Volume expectations are more aligned — both sides see demand growth — but the pricing disconnect will define procurement negotiations through 2026. A growing share of shippers say their network strategy now depends on market conditions rather than fixed annual plans.

So What? Someone’s going to be wrong. If capacity keeps tightening, carriers have the leverage. If demand stays soft, shippers may hold the line. Either way, flexibility is the theme — rigid annual contracts are losing favor fast.

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From the Research Desk

What We’re Watching

▸ The Teamsters vs. UPS lawsuit over facility closures. Any injunction could delay or reshape the 22-facility closure timeline. The union is fighting hard, and the outcome will affect how aggressively UPS can execute its restructuring in the first half of 2026 — and sets precedent for every unionized carrier negotiation ahead.

▸ Bid season pricing dynamics. With carriers expecting mid-single-digit rate increases and shippers budgeting flat, something has to give. February and March contract negotiations will set the tone for the rest of 2026.

▸ The gas tax cap legislation. Rep. Kiley’s bill hasn’t been formally introduced yet, but if it gains traction, the ripple effects on state highway funding and regional fuel economics could reshape operating cost calculations for fleets in high-tax states like California, Pennsylvania, and Illinois.

That’s your Daily for today. See you tomorrow.

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