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The Daily
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NEWSLETTER BROUGHT TO YOU BY — QUANTIX
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Amazon, retailers paid more for freight in third quarter
Higher fuel and transportation expenses weighed on retailers’ supply chains during the third quarter, even as fulfillment improvements helped some companies contain costs, according to Stuart Chirls’ reporting. Early reports from Amazon, Tractor Supply and Carter’s point to an uneven environment heading into the holiday season, with shipping inflation alongside isolated delays in getting merchandise into inventory.
Amazon said on its earnings call that its fulfillment operations faced higher fuel costs and line-haul rates on long-distance trucking between facilities. Better inventory placement, shorter shipping distances and package consolidation still helped lower its cost to serve customers. Shipping costs rose 11% from a year earlier, compared with a 12% increase in units. Excluding fuel and line-haul inflation, shipping expenses increased 8%.
Tractor Supply attributed gross-margin pressure primarily to higher transportation and fuel costs, alongside investments in pricing. Gross margin declined to 36.4% from 37.4% even as sales increased 5.1%. Carter’s said port congestion and container availability issues left inventory somewhat below plan. Inventory totaled $587 million, down 11% from a year earlier, and the company said the disruptions had not materially affected its business to date.
Supply-chain performance weighs on retailers’ holiday profits, as higher freight costs squeeze margins while late merchandise can miss its selling window and require discounts.
ShipMatrix forecasts 4% rise in parcel demand this holiday season
Parcel carriers will deliver about 2.4 billion packages during the current peak shipping season, up 4% from the same period last year, according to a ShipMatrix estimate reported by Eric Kulisch. An extra shopping day aids the increase, and the projected volume would be the highest for the parcel industry since 2022. Retailers have also seen a 16% jump in parcel shipping rates from last year, driven largely by broad fuel surcharges, other new fees and general rate increases.
In the first half of 2026, Amazon’s U.S. domestic parcel volume rose 9.7% and FedEx’s rose 4.6%, while UPS fell 5.7% and the U.S. Postal Service fell 3.1%, per ShipMatrix. UPS will hire 100,000 seasonal workers, down from 109,000 last year, while Amazon is hiring 300,000, a 20% increase.
October’s 55.5 manufacturing PMI beats expectations
U.S. manufacturing activity remained in growth mode for a 10th straight month in October, with the Institute for Supply Management’s Manufacturing PMI at 55.5, according to Todd Maiden’s reporting. The reading was one percentage point ahead of analysts’ expectations and the September result. The new orders index also expanded for a 10th straight month at 55.5, and production, at 59, reached its highest level in five years. The prices index, at 75.2, remained elevated but fell 2.7 points from September.
ISM data typically leads changes in LTL shipments by approximately three months. XPO said half of its customers expect stronger demand in the first half of 2027 than in the second half of 2026, and LTL stocks were up over 3% on average in early Monday trading.
Flexport volumes up 40% as headcount grows only 5%
Flexport’s freight volumes are up 40% from a year ago while its headcount has grown 5%, founder and CEO Ryan Petersen told FreightWaves, according to Thomas Wasson’s reporting. He credits artificial intelligence tools the company runs across customs, routing and engineering. In customs, any AI-suggested tariff code still goes to a licensed customs broker for review before filing.
Petersen said audits of competing brokers’ entries, run through a free Flexport tool, found an average error rate of 20%, a figure that comes from Flexport’s own audits. He put Flexport’s own error rate on U.S. customs filings last year at 0.2%.
Pamt posts third-quarter net loss and 109.1% truckload operating ratio
Pamt Corp. reported a third-quarter net loss of $8.1 million, or 38 cents per share, on Monday after the market closed, according to Todd Maiden’s reporting. The company pointed to elevated driver procurement costs and higher diesel fuel prices. Consolidated revenue rose 8% year over year to $163 million but was up just 2% excluding fuel surcharges. The truckload unit logged a 109.1% operating ratio excluding fuel, 240 basis points worse y/y, and its 12th straight quarterly operating loss.
President Lance Stewart said the company is aligning customer rates with inflationary costs, but cumulative cost increases continue to outpace the pricing gains achieved to date. The logistics unit posted a 92.6% OR, 650 bps better y/y.
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| Time | Guest | Topic |
|---|---|---|
| 12pm | Chris Pickett | Chief Commercial Officer at Flock Freight |
| 12:30pm | Peter Niro | Progressive Product Development Manager |
| 12:45pm | John Kingston | Editor at Large at FreightWaves |
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Infios research shows the 2025 tariff overhaul turned transport mode, tariff exposure and trade-route selection into variables shippers now have to manage actively, not fixed costs they can set and forget.
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WARNING: Don’t Expect This Freight Cycle to End SoonZach Strickland breaks down 20 years of freight market cycles, from the muted early 2000s to the current volatile environment. |
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LTL vs. Truckload: Who Emerged Stronger From Q3 Earnings Reports?FreightWaves Finance Editor Todd Maiden shares his insights as third-quarter earnings season continues, comparing LTL and truckload carriers. |
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Electric Trucking: Why 2,500 Tesla Semis Will Transform FreightZET Scale, a shipper alliance, placed the largest electric truck order in U.S. history: 2,500 Tesla Class 8 trucks. Cristiano Façanha of Smart Freight Centre weighs in. |
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Holiday parcel capacityShipMatrix projects 2.4 billion packages this peak season, up 4%, with UPS hiring 100,000 seasonal workers and Amazon 300,000. Watch whether rising shipping rates, up 16% for retailers, dent demand. |
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Manufacturing as a leading indicatorThe October PMI of 55.5 and production at a five-year high point to firmer demand. ISM data typically leads LTL shipments by about three months, so watch LTL tonnage early next year. |
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Retail freight costsAmazon’s shipping costs rose 11% on 12% more units, and Tractor Supply’s gross margin fell to 36.4%. Watch how retailers handle transportation costs through the holiday season. |
