THE DAILY

Wednesday, April 1, 2026

The five minutes that makes you the most informed person in freight today

The Daily

Cold chain operators pivot to AI and flexible storage as tariffs reshape food logistics

Right now, the cold chain costs more to run. It’s also being rebuilt from scratch.

Lineage, the largest temperature-controlled warehouse operator in the world, surveyed 1,000 supply chain decision-makers across the U.S., Canada and Mexico for its Cold Chain Insights report, released this week. The findings are a clear-eyed look at how food and beverage companies are absorbing simultaneous pressure from tariff disruption and rising demand for cold storage capacity. Here’s what they’re actually doing about it.

The cost picture is stark. Seventy-three percent of respondents expect tariffs to continue negatively affecting their finances in 2026. Fifty-seven percent said tariff impacts on 2025 costs came in higher than expected. Nearly all, 95 percent, adjusted strategic plans over the past year due to shifting policy. "Supply chain leaders are operating in an environment where volatility is the norm, not the exception," said Greg Lehmkuhl, Lineage’s president and CEO.

Demand is offsetting some of that pressure while also adding complexity. About 72 percent of organizations reported rising demand for refrigerated and frozen foods, a structural shift in consumer buying patterns that translates into more temperature-controlled truckload freight, tighter cold storage capacity near borders and ports, and greater 3PL reliance for visibility and compliance support. The challenge: the market is absorbing that demand growth against significant warehouse oversupply. New cold storage space grew 14.5 percent from 2021 through 2025, while demand increased only 5 percent, Lineage officials said on their Q4 earnings call in February.

Technology investment is accelerating as companies work to close the gap. Sixty percent of respondents ranked data and AI among the top forces transforming operations in 2026, with 24 percent reporting they exceeded ROI expectations from AI investments. Flexible storage capacity topped the list of asks from logistics partners, cited by nearly half of respondents, followed by better data and analytics.

So What? Cold chain operators sitting on oversupply need to convert flexibility into a competitive offer fast. Shippers with cross-border food freight, particularly along U.S.-Mexico corridors, should be stress-testing tariff exposure in sourcing and distribution networks now. Companies getting ahead of this are combining AI-driven planning with 3PL relationships built to absorb volume swings. Those still running on static contracts and fixed storage arrangements will feel the next policy shift before they see it coming.

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Top Stories

UP accuses CN of inaccurate claims in UP-NS merger traffic dispute

Union Pacific executive vice president Kenny Rocker pushed back Monday on rival Canadian National, saying CN made "inaccurate claims" about the traffic study in the UP-Norfolk Southern merger application. CN had argued that UP and NS understated how much traffic the combined railroad would attract from other carriers. Rocker countered that the methodology is identical to what CN itself used in the Iowa Northern merger application. The Surface Transportation Board previously rejected the original UP-NS filing as incomplete, citing three deficiencies including problems with the market share data. A revised application is due April 30.

So What? The STB hasn’t cleared this merger, and CN’s public challenge on the traffic data methodology is a substantive obstacle heading into the revised filing. If the April 30 application fails to satisfy the board’s data concerns, the timeline slips and so does certainty for shippers planning around a combined UP-NS network.

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CBP seizes $19.8 million in drugs hidden in commercial freight during March

U.S. Customs and Border Protection intercepted $19.8 million in narcotics at ports of entry last month, with the largest single seizure coming at the Pharr International Bridge in Texas. Nearly 2,000 pounds of methamphetamine were hidden inside a blackberry shipment on a commercial tractor-trailer from Mexico, valued at more than $17.7 million. Additional interceptions included 129 pounds of cocaine inside an empty trailer at Laredo’s Colombia-Solidarity Bridge, cocaine and heroin in a box truck at the World Trade Bridge, and 944 pounds of liquid methamphetamine extracted from a tractor-trailer fuel tank at the Otay Mesa cargo facility in California. CBP officers also stopped 39 live pythons being smuggled in a tractor headed to Mexico at the World Trade Bridge.

So What? Drug trafficking organizations continue exploiting commercial freight, including produce loads, fuel tanks and empty trailers, as cover for cross-border operations. For carriers and brokers running Mexico lanes, the enforcement environment is intensifying. Documentation integrity, driver vetting, and real-time cargo visibility are baseline requirements in this operating environment, not optional.

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Benchmark diesel reaches $5.401 per gallon in 11th straight weekly increase

The DOE/EIA benchmark diesel price rose 2.6 cents to $5.401 per gallon this week, its 11th consecutive increase and the highest level since late November 2022. The gain looks modest compared with the prior three weeks, which posted increases of 96.2, 21.2 and 30.4 cents per gallon respectively, driven by the Iran war’s escalation. The cumulative 11-week run has added $1.942 per gallon since Jan. 12. CME futures remain in backwardation, with the most immediate delivery barrels pricing around $183 per barrel and spot physical diesel for early April delivery running well above that. Jeffrey Currie of The Carlyle Group put the global supply dynamic plainly: "There’s no more price spread, there’s no more spare barrels, there’s no policy fix, and it’s just physics."

So What? Eleven consecutive increases totaling nearly $2 per gallon is a material hit to carrier operating costs. Fuel surcharge mechanisms typically lag cash costs by one to two weeks, meaning carriers on contracts negotiated before January are still absorbing the gap. Shippers currently at the table on rate negotiations should expect fuel surcharges to be a sticking point.

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PRESENTED By TrainsPro

Freight theft now targets the booking process, not the truck

Modern cargo theft doesn’t look like a heist anymore. Contributor Phil Brink writes that today’s pattern begins before the truck moves. Documents match, communications line up, and nothing flags as unusual until the freight fails to arrive. Recent U.S. examples include Costco lobster, Guy Fieri Santo Tequila shipments, and Tucker Carlson nicotine pouches. The playbook is consistent across markets: 35,000 pints of Guinness taken from a UK logistics hub, 1,000 wheels of cheese redirected in a coordinated scheme, 400,000 KitKat bars lifted from a truck running Italy to Poland. Once the cargo changes hands, it moves through existing distribution channels fast and without questions about origin. Estimated annual U.S. losses run up to $35 billion.

So What? The exposure isn’t at the dock. It’s at the booking screen. Shippers and brokers who haven’t tightened carrier vetting, load confirmation protocols, and real-time tracking requirements are running on trust in a system that organized crime has learned to exploit at scale.

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From the Research Desk

From Our Partners

What We’re Watching

▸ Diesel at the pump. With the EIA benchmark at $5.401 per gallon and futures in backwardation, spot physical diesel for April delivery is running well above futures. Watch for further fuel surcharge adjustments from carriers over the next two weeks. The cumulative math on this 11-week run still favors carriers.

▸ The UP-NS revised merger application, due April 30. The STB rejected the first filing over data deficiencies, and CN has now publicly challenged the traffic study methodology. How UP and NS respond on the market share question determines whether the board accepts the revised filing or sends it back, setting the timeline for the sector’s biggest rail restructuring in a generation.

▸ Cross-border cold chain capacity near the southern border. With 73 percent of food companies expecting continued tariff pressure and sourcing strategies shifting in select categories, watch refrigerated trucking capacity on U.S.-Mexico lanes. Demand is rising while overall cold storage oversupply masks the lane-level tightening happening near the crossings.

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

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