MODE Insight October 2026 by MODE Global

MODE INSIGHT Transportation Market Overview

TRUCKLOAD

INTERMODAL

LTL

PARCEL

O C T O B E R 2 02 6

INTERNATIONAL

TRUCKLOAD Truckload Market Update The current picture remains carrier-favorable, but the market signal is more nuanced than a straight-line acceleration. Capacity is still relatively tight, spot pricing is outperforming normal seasonality, diesel remains historically elevated despite recent moderation and intermodal is absorbing freight on select lanes. The recovery still looks more supply-led than demand-led, with pricing power supported more by carrier selectivity and cost pressure than by broad-based freight demand. Bottom line: Conditions still support firmer transportation pricing into Q4, but the most recent data suggests a steadier, more selective rate environment rather than a rapid breakout. Teams should plan for persistent cost pressure, limited routing-guide relief, and continued volatility tied to fuel, modal shifts and carrier acceptance behavior.

What Changed Since the Prior Outlook The earlier outlook emphasized stronger pricing power, tender rejections near 13%, and elevated fuel as the main drivers of Q4 risk. The latest data largely supports that view, with some refinement: Carrier pricing power remains intact, though the SONAR Pricing Power Index slipped modestly to 70 from 71 for the week of October 12. Tender rejections are stable rather than accelerating immediately, holding near 13.85% and remaining well above balanced-market norms. Spot truckload rates continue to beat seasonal expectations, especially in dry van, which posted unusually strong gains for the week ended October 9. Diesel prices have eased from recent highs, but they remain extraordinarily elevated, and inventories are still tight. Intermodal has gained share on mid-length lanes, reflecting truckload selectivity and shipper search for alternatives. The net effect is that the original thesis still holds: transportation buyers should not expect a quick return to cheaper capacity. However, the market now looks like it is consolidating at elevated pricing power rather than sharply tightening every week.

October 2026 MODE Insight

TRUCKLOAD Truckload Market Update Current Market Signals

Indicator Tender Rejections

Latest Signal About 13.85%, steady week over week

What It Means for Q4

Implication

Carrier selectivity remains elevated

Routing guides remain vulnerable on challenged lanes

SONAR Pricing Power Index

70, down from 71

Still clearly favors carriers

Rate negotiations are unlikely to swing back toward shippers near term

3-month PPI Outlook

Model expects leverage to build into mid-January

Near-term easing should not be assumed

Spot Rates

National spot rate near $3.52 per mile

Still in the 95th percentile historically

Spot remains expensive relative to normal seasonal patterns

Intermodal Rates

Fell to $1.61 per mile from $1.68

One of the few softening indicators

Intermodal may offer targeted relief where service fits

Diesel

$6.199 per gallon, down week over week but still very high

Fuel pressure remains material

Surcharges and linehaul resistance should continue

Rate Outlook for the Remainder of Q4 The latest evidence points to a firm but uneven rate environment. Truckload conditions still support elevated pricing, especially where carriers can be selective or where routing-guide performance weakens. At the same time, the modest decline in the pricing power index and softer intermodal contract rates suggest that not every mode or lane will tighten at the same pace.

October 2026 MODE Insight

TRUCKLOAD Truckload Market Update Rate Outlook Cont’d Dry van deserves particular attention. FTR reported that dry van spot rates recorded the strongest gain for this seasonal week since at least 2008. That is an important signal because it suggests the market is outperforming normal October behavior even as diesel prices have recently come off their highs. If spot firmness continues while fuel retreats, the explanation shifts more toward underlying freight-market dynamics and capacity discipline than simple fuel recovery. Contract pricing is also still catching up. FreightWaves noted van contract rates increased to $2.74 per mile while the spot-contract spread narrowed to negative $0.11 from negative $0.15. That implies contract repricing is continuing upward even though spot has cooled slightly from its early-July peak. For shippers and brokers, that means legacy pricing assumptions may still lag actual buy-side conditions. Planning risk: The biggest Q4 margin risk remains the same as in the earlier outlook: buying freight in a market where carrier costs and acceptance behavior move faster than customer or budget pricing.

Fuel, Modal Shift and Demand Context Fuel has moderated, but it is not resolved. Diesel fell 18.3 cents in the latest reported week and is down 33 cents over two weeks, yet it remains above pre-Labor Day levels and far above prior historical highs. Distillate inventories are still exceptionally low for this time of year, which leaves the market exposed to renewed price pressure from harvest activity, winter heating demand, or further supply disruptions. Demand signals are mixed rather than weak. Goods imports rose strongly in August, led by crude oil, gold and semiconductors. Wholesale inventories became leaner as sales outpaced stock growth. Nonresidential construction still shows limited broad strength, but data centers remain a major source of activity. None of these signals point to a broad freight boom, but together they support a floor under freight demand while capacity remains disciplined. Intermodal continues to matter more in this environment. Rail volume remains elevated in the 99th percentile, and truck-to-rail conversion is continuing on lanes of roughly 550 to 1,500 miles. That creates a partial release valve for truckload demand, but it also confirms that shippers are actively seeking alternatives where truck pricing or acceptance is challenging.

October 2026 MODE Insight

TRUCKLOAD Truckload Market Update Recommended Actions for Q4 Planning Re-test routing guides on vulnerable lanes and identify where tender acceptance has become unreliable. Review fuel-surcharge assumptions against current diesel levels and inventory risk rather than assuming continued relief. Watch the spot-to-contract spread weekly to identify customer pricing or procurement positions that are lagging market reality. Explore intermodal on service-compatible lanes where IMDL pricing and capacity is favorable Monitor carrier financial health and compliance performance, especially among smaller providers exposed to fuel and insurance cost pressure. Avoid budgeting for broad Q4 rate deflation; plan instead for persistent volatility and lane-by-lane divergence. Practical takeaway: The market still offers an advantage to organizations with dependable carrier relationships, disciplined pricing and modal flexibility. The edge in Q4 will come less from predicting a major directional move and more from executing consistently while costs remain elevated.

References FreightWaves: SONAR Pricing Power Index Slips to 70 as Intermodal Contract Rates Fall FTR Weekly Transportation Update, October 9, 2026

October 2026 MODE Insight

INTERMODAL Intermodal Market Update Peak season in California is projected to continue through the end of 2026 and into 2027. Northern and Southern California peak season surcharges have not changed since late August, but there is potential for additional increases over the next few weeks as volumes increase due to truckload shippers' continued intermodal conversions. Many drayage companies are increasing rates due to higher volumes and a shrinking driver pool that has created driver capacity challenges across the industry. Drayage rate increases combined with railroad linehaul increases are expected to continue into 2027. Intermodal rates are currently anticipated to increase 10.3% for 2026 and 8.8% in 2027; these increases do not include fuel surcharges. Intermodal volume growth projections are forecasted to be 3.9% for the remainder of 2026, 2.9% in 2027 and 2.2% in 2028. Intermodal growth for domestic containers will be driven by over-the-road trucking capacity constraints.

October 2026 MODE Insight

LTL LTL Industry News September’s 54.5 Manufacturing PMI Comes with Inflation Concerns

XPO Opens 2 Service Centers as Network Expansion Continues

Estes Bets $56M on Cross-Border, Offshore Freight Expansion

A. Duie Pyle Rolls Out a New Camp Hill, Pa.-Based Warehouse Facility

LTL Market Update As we move into the fourth quarter, the LTL market appears to be shifting from a period of gradual recovery toward a tighter capacity environment. While freight demand has not rebounded evenly across the industry, recent conversations with carriers suggest available capacity is becoming increasingly limited. Some carriers are reporting that their networks are operating near capacity, a notable change from earlier in the year when excess capacity was still a common theme. This suggests the market may be tightening faster than overall shipment volumes would indicate. Manufacturing continues to provide a positive signal. September's ISM Manufacturing PMI registered 54.5, marking another month of expansion. New orders, employment and order backlogs all improved, pointing to continued industrial activity and a potential pipeline of additional freight. For LTL carriers, particularly those with significant exposure to manufacturing and industrial customers, these trends could support stronger shipment demand through the remainder of the year. Pricing and capacity are becoming increasingly connected. As carrier networks fill, opportunities for aggressive rate negotiations may become more limited, particularly in markets or lanes where capacity is constrained. Carriers remain focused on improving yields and managing the freight moving through their networks rather than simply adding volume. While competitive pricing opportunities still exist on specific lanes and customer programs, shippers should not assume the broader market will continue offering the same flexibility seen earlier this year. Fuel costs are also adding considerable pressure. September diesel prices averaged approximately $6.29 per gallon, significantly higher than both August and the same period last year. Combined with carrier pricing initiatives and tightening capacity, higher fuel surcharges are increasing the overall cost of LTL transportation. Heading into Q4, the focus is shifting from whether freight demand will recover to how much available capacity remains as that recovery develops. If manufacturing activity holds and carrier networks continue tightening, shippers could face a more challenging pricing environment through year-end. Proactive carrier management, routing flexibility and identifying cost-saving opportunities across individual lanes will become increasingly important as the market evolves.

October 2026 MODE Insight

LTL UPDATE Industry Spotlight: LTL Carriers Benefit from Improving Freight Conditions in Q3 SOURCE: Transport Topics, September 14, 2026. Article: “LTL Carriers Benefit in Q3 From Rebounding Freight Market” Author: Keiron Greenhalgh The LTL industry is seeing encouraging signs of recovery as heavier shipments, improving freight demand, and tightening capacity contribute to stronger carrier performance heading into the fourth quarter. While overall shipment volumes remain mixed, carriers are benefiting from higher weight per shipment and continued pricing discipline, helping support revenue growth and profitability. Recent carrier results highlight this trend. ArcBest reported a 14% year-over-year increase in weight per shipment during August, while Saia experienced gains of 7.5%. Old Dominion also reported a 12.4% increase in August revenue per day, despite a slight decline in overall tonnage. These results suggest that carriers are generating more revenue from freight moving through their networks, even without a widespread increase in shipment counts. Pricing remains another important factor. Carriers continue to secure rate increases as available capacity tightens, with Old Dominion reporting a 4.8% improvement in revenue per hundredweight, excluding fuel. Rising diesel prices are also contributing to higher transportation costs, with fuel surcharge structures providing additional revenue support for carriers. Overall, the industry appears to be entering a more favorable operating environment for LTL providers. However, the recovery is not uniform, and the combination of heavier freight, higher rates, and elevated fuel costs is creating new challenges for shippers managing transportation budgets.

What This Means to MODE Global The changing LTL environment reinforces the importance of proactive freight management and strong carrier relationships. As capacity becomes more constrained and pricing continues to firm, customers may find it increasingly difficult to secure the same rates and service flexibility available earlier in the year. For MODE, this presents an opportunity to demonstrate the value of our carrier network, pricing expertise and multimodal capabilities. By evaluating individual lanes, optimizing carrier selection and identifying opportunities to consolidate shipments or utilize alternative transportation solutions, we can help customers manage rising costs while maintaining reliable service. The increase in weight per shipment is particularly relevant as customers evaluate their transportation strategies. Heavier LTL shipments may create opportunities to compare traditional LTL pricing against volume LTL, partial truckload and other capacity solutions where appropriate. As we move through Q4, maintaining close communication with our carrier partners and staying ahead of capacity and pricing changes will be critical. MODE's ability to provide customers with options, visibility and informed transportation decisions becomes even more valuable as the market tightens.

October 2026 MODE Insight

LTL UPDATE United States ISM Manufacturing PMI The ISM Manufacturing PMI registered 54.5 in September, down slightly from 54.6 in August, but remained firmly in expansion territory. New orders (55.3) and employment (52.7) both improved, signaling continued demand and hiring activity, while production (56.7) moderated slightly but remained strong. Order backlogs also increased (56.4), suggesting manufacturers are maintaining a healthy pipeline of work. Despite the positive demand indicators, manufacturers continue to face rising costs and supply chain challenges. The Prices Index climbed sharply to 77.9 from 71.1, reflecting higher raw material and energy costs, along with ongoing tariff pressures. Supplier deliveries remained slower, while inventories slipped back into contraction territory. Overall, manufacturing continues to show resilience, although elevated input costs and supply chain uncertainty remain challenges heading into the fourth quarter.

Source: Trading Economics & Federal Reserve

Fuel The U.S. national average cost per gallon for on-highway diesel in September 2026 came in at approximately $6.29, which is $0.83 (15.2%) higher than August 2026's average of approximately $5.46. September 2025's average was approximately $3.75, putting September 2026 about $2.54 (67.8%) higher year over year. The latest weekly reading, for the week ending October 5, came in at $6.20 per gallon, approximately $0.09 (1.5%) below the September monthly average.

October 2026 MODE Insight

PARCEL 2027 FedEx Rates, New Peak Fees Arrive and UPS & FedEx Compete on Services Peak season is now fully underway, and discussions are shifting from this holiday to next year’s budget. Let’s take a look at the three things influencing Parcel right now:

1. FedEx’s 2027 increase is 5.9% on paper, but not on the invoice FedEx announced its 2027 general rate increase on September 18, an average of 5.9% effective January 4, 2027. It’s the fourth consecutive year at that figure. The headline is pulled down by Express Saver, which rises just 3.09%, while five of FedEx’s seven major services come in above the average. Ground and Home Delivery rise about 6.1% across Zones 2 through 8, and lightweight Ground packages from 1 to 20 pounds land between 6.1% and 6.5%. Surcharges climb faster still. Additional Handling rises 6.8% to 7.6%, the residential Extended Delivery Area Surcharge jumps 9.1%, and more than 2,500 ZIP codes move from Extended to Remote delivery area status. The changes also arrive in three waves rather than one: Base rates and surcharges change January 4. A new $25 paper document fee and international fee changes follow on January 18. FedEx reclassifies Ground zones on February 1. A zone change can raise what a client pays on a lane without touching the rate card at all. UPS has not yet published its 2027 increase, but it is expected later this month. DHL Express has also confirmed a 5.9% increase for January 1, so UPS’s number will show whether 5.9% holds as the industry standard. UPS matched FedEx at 5.9% for both 2025 and 2026, and last year its increase took effect December 22, nearly two weeks ahead of FedEx. Clients should also watch for UPS zone changes. UPS reclassified zones five times between December 2023 and June 2025, with most changes moving lanes to a higher zone. We’ll share the UPS GRI numbers once they’re released. For most shippers, 5.9% is the floor, not the budget number. Lightweight, residential and rural shippers should expect their effective increase to run higher once surcharges and zone changes are included. Average list-rate increase by service or surcharge, effective January 4, 2027. Sources: FedEx 2027 rate and surcharge tables, with analysis from Reveel, TransImpact, and Logistics Management.

October 2026 MODE Insight

PARCEL UPDATE 2. The second wave of peak fees lands this month, and USPS is now stacking September’s surcharges were the first step. The flat per-package fees on ordinary residential packages come next. UPS adds $0.50 per residential Ground package on October 25, rising to $0.75 from November 22 through December 26. FedEx follows on October 26 with $0.50 per Ground residential and Home Delivery package, climbing to $0.80 from November 23 through December 27, a 60% jump between windows. FedEx Ground Economy rises from $2.55 to $4.05 per package over the same period. USPS holiday pricing took effect October 4 and runs through January 17, 2027. Unlike UPS and FedEx, USPS charges flat per-piece adders, and they sit on top of the 8% temporary increase in place since April 26. One industry analysis puts this year’s commercial adders about 40% above last year’s, with lightweight long-zone Ground Advantage up roughly 57%. USPS also lengthened service expectations on October 1 for Alaska, Hawaii and U.S. territories, with Ground Advantage to and from those locations now taking 10 days or more. Shippers who moved lightweight, long-distance packages to USPS to avoid UPS and FedEx fees should rerun the math. This year, that profile took one of the steepest peak increases of any carrier. UPS and FedEx: flat per-package fee on residential Ground packages. USPS: commercial Ground Advantage peak adder for 0–3 lb packages, on top of the 8% temporary increase in place since April 26. Sources: UPS and FedEx peak surcharge announcements; USPS 2026 holiday price filing.

3. UPS and FedEx are competing on services, not price With 2027 headline increases converging at 5.9%, UPS and FedEx are adding services rather than competing on price. On September 29, UPS announced that its Happy Returns subsidiary will offer box-free, label-free returns to TikTok Shop sellers through nearly 10,000 drop-off locations, a timely fit with the January returns wave flagged last month. UPS followed on September 30 with UPS Secure Commerce, a new fraud and revenue-protection offering. FedEx announced a long-term partnership with Stripe on October 6 to give small and mid-sized shippers more financing and payment options, with the first joint product planned for early 2027. For shippers, these launches matter less as standalone products than as signals of where each carrier is investing, and they provide areas to consider beyond rate alone.

October 2026 MODE Insight

INTERNATIONAL Key Trends Volume: September containerized imports to the U.S. showed a YoY volume growth of 10%. Rates: Asia to U.S. rates have reached record level highs but most analysts feel peak has been hit, with rates expected to stay elevated but stable for the rest of the year. Capacity: Carriers are prioritizing blank sailings in the weeks after China’s Golden Week holiday. Panama Canal Update: The Canal Authority is easing draft restrictions which will improve vessel capacity and throughput.

Volume Moving into October, the U.S. containerized import market has likely entered a stabilization period. Volumes are slowing after an unusual early but somewhat extended peak season. While overall volumes are beginning their typical Q4 declines, prolonged global routing diversions and structural capacity constraints have kept carrier vessels full, triggering elevated spot rates far above historical baselines. Global container shipping volumes reached a record 17.46 million TEUs in August, while freight pricing climbed to its highest level in more than two years, according to a recent report. August’s actual reported volumes surpassed the previous record set in July and increased 3.7% over August 2025. Through the first eight months of 2026, global volumes were up 4.7% year over year. The transpacific trade experienced a more traditional September as imports from Asia continued to be above expectations. U.S. Ports have not yet reported actual September numbers, but Global Port Tracker has projected a drop to 2.16 million TEU, which is projected to be +2.8% YoY. October is forecast to be around 2.13 million TEU, down from the prior month. November is currently estimated to be around 2 million TEU, or a decrease of about 1%, and is expected to be the slowest month of Q4. A little farther out, January 2027 is forecast at 2 million TEU, down 1.9% year over year, and February at 1.92 million TEU as the impact of the Chinese New Year holiday shutdown takes effect. Overall, demand should remain solid with a possible mid-October recovery as last-minute holiday demand could play a factor. However, it is not very likely that this short-term demand will continue much beyond the end of the month.

October 2026 MODE Insight

INTERNATIONAL UPDATE Rates Moving into early October, market-average spot rates moved higher, reaching $8,346 per FEU to the U.S. West Coast and $11,523 per FEU to the U.S. East Coast. Those increases of 1.4% and 0.7%, respectively (from late September), left rates more than four times their February 28, 2026 pre-Iran conflict crisis levels While Asia to U.S. West Coast rates remained firm, spot rates to the U.S. East Coast decreased from four-year highs. Most of the decreases can be attributed to Panama Canal restrictions, which severely limited vessel cargo weight as well as the number and size of vessels transiting through the Canal. This in turn prompted several carriers to file lower spot rates for lighter commodities. These actions dragged average Asia-U.S. East Coast rates down by nearly 11% since their peak in late August. Rates did not increase on October 1 as expected and, given the inactive period following the China National Day holiday (October 1-8), are unlikely to increase on October 15. Carriers will likely wait for cargo recovery in China during the second half of October before assessing the opportunity of GRIs. Delaying what may be a hasty increase on October 15 may give the lines a better chance of raising rates on November 1. Spot container freight rates from Asia to the United States have likely reached their post-Middle East crisis peak, but shippers should expect elevated costs through the remainder of 2026.

Asia to U.S. East Coast 3-month trend

Asia to U.S. West Coast 3-month trend

Capacity The October capacity outlook for U.S. imports will vary by lane. Golden Week holiday capacity cuts out of China, connection challenges for India-origin freight, Suez Canal changes and Panama Canal restrictions are making truly available capacity hard to predict and/or track.

October 2026 MODE Insight

INTERNATIONAL UPDATE Capacity (continued) Vessel delays in Asia remain prevalent, with main China ports especially hard hit with average delays in the 7–9day range. Secondary direct linehaul ports are suffering similar delays of between 3-5 days, and service consistency remains a concern has lines shuffle and omit ports as they seek to recover schedules. Elevated levels of blank sailings during the October 1-8 Golden Week holiday will continue reducing effective capacity through roughly mid-October due to the lag in schedule recovery time. This will likely mean the first postholiday departures will be particularly exposed to rollovers as factories resume production and volumes return. The U.S. East Coast is expected to remain tighter than the West Coast, reflecting the continued limited vessel utilization and continued exposure to Panama Canal restrictions. India to North America remains very constrained moving into October, with strong demand and reduced vessel capacity continuing to limit booking flexibility. Incremental vessel capacity has been added, but it has not changed booking conditions, particularly into the U.S. East Coast and Gulf Coast. Inland and drayage networks at the Port of Los Angeles and Port of Long Beach are experiencing intense capacity constraints, with import container arrivals tracking roughly 50% higher than last year's baselines for the first few weeks of October. Shippers are being urged to lock in November drayage capacity early to avoid localized logjams. West Coast rail operations continue to be very congested and delayed. For off-dock rail shipments—which require drayage from the marine terminal to an offsite rail yard—delays are even more acute. Shippers report that it is taking up to 10 days just to move containers to rail staging areas, followed by an additional 7 to 10 days to successfully load them onto an outbound train. Source: M+R Spedag Group

October 2026 MODE Insight

INTERNATIONAL UPDATE Panama Canal Update The Panama Canal Authority has announced an easing of draft restrictions following a period of improved rainfall in the region. This ultimately should help ease weight and load restrictions in the coming weeks. Daily transit slots for the Neo-Panamax locks (for accommodating larger vessels) will increase from 9 to 10 vessels starting on October 15, and the total transit capacity will rise to 33 vessels per day. The immediate draft level increase allows ships to carry more cargo through the canal. A 10,000-TEU containership can lose roughly 450 TEUs of carrying capacity for every foot of draft restriction, according to one industry estimate. Because of the PCA’s actions, both cargo volume and vessel volumes going to the U.S. Gulf and East Coast should improve in October.

October 2026 MODE Insight