If you're a supply chain leader trying to make sense of the current freight market, you're not alone in feeling like the ground keeps shifting. Every time the data starts to paint a coherent picture, something happens in the world that rewrites the context entirely. This month's Trax Freight Market Report webinar covered exactly that dynamic — and Steve Beda, Trax's Executive Vice President of Customer Engagement and Advisory, brought the kind of grounded, practitioner-level perspective that supply chain executives need right now.
What follows is a summary of the key themes, data points, and strategic recommendations from that conversation — and why all of it matters for how you're managing transportation spend today.
Key Takeaways
- The distinction between a blip and a trend is the most important analytical question supply chain leaders should be applying to every current disruption — duration determines whether a tactical response or a structural strategic adjustment is warranted
- The Strait of Hormuz situation affects all modes of freight, not just ocean — fuel is indexed across road, air, and rail, making this a system-wide cost pressure event
- Coming into this disruption, the market was already capacity-constrained with upward-trending base rates; the fuel increase compounds an already elevated pricing environment
- Steve's contract recommendation: secure capacity now, but avoid long-term rate commitments in a market that may correct if demand softens or capacity comes online
- The ability to model disruption scenarios in real time — rerouting costs, transit time impacts, alternative carrier options — requires clean, current, normalized freight data as the underlying infrastructure
The Framework That Matters Most Right Now: Blips vs. Trends
Before getting into any specific market metric, Steve opened with a framing device that's worth keeping front of mind as you read everything that follows. When something disrupts the freight market — a conflict, a chokepoint, a policy change — the first question to ask isn't "how bad is this?" It's "how long will this last?"
A blip is something transient. It creates short-term disruption, but the market resumes its prior trajectory once it resolves. A trend is different. It represents a directional shift that persists — and sometimes, what looks like a blip ends up generating a new trend because of the secondary effects it triggers in costs, demand, capacity, or carrier behavior.
That distinction, Steve emphasized, should govern how supply chain leaders interpret what they're seeing in the data right now — and how aggressively they respond to it.
The Strait of Hormuz and What It Means for Every Mode
The central geopolitical event shaping this month's freight market report is the conflict in the Middle East and its impact on the Strait of Hormuz — a passage through which approximately 20% of the world's oil supply flows. The reduction in traffic through that corridor, both before and after recent escalations, is evident in the data and is rippling through freight costs, affecting every mode of transportation.
Steve was direct about the mechanism: there is no mode of transport that doesn't carry a fuel surcharge. Road, ocean, air, rail — all of it is indexed to fuel costs in some form, and those costs are a pass-through. When it costs the carrier more, it costs the shipper more. When it costs the shipper more, it eventually costs the consumer more. The Strait of Hormuz isn't an ocean freight story. It's a supply chain story.
There's a second dimension to this that doesn't get enough attention: insurance. Moving assets — particularly high-value cargo — through a high-risk geographic area significantly increases insurance premiums. Those costs add to base rates and fuel surcharges, further compressing the economics for shippers who can't easily reroute. Steve noted that the insurability of product and asset is a meaningful variable in risk assessment that supply chain leaders often underweight.
For air freight specifically, the impact of jet fuel is notable. Express and parcel modes that rely on air capacity are facing material cost pressures, and for companies that have historically used air freight as a contingency when ocean lanes are disrupted, that safety valve is becoming more expensive to use.
Capacity Is Constrained and Has Been for Months
One of the more important data points in this month's report is that the market came into the current geopolitical situation already under pressure. Capacity was constrained heading into the year. Base freight rates across modes were trending upward on a consistent, multi-month basis — not a one-month spike, but a clear directional trend. The graphs in the report make that unmistakable.
The capacity constraint, Steve explained, is in part a function of carrier behavior. Coming out of Q4, carriers were managing their own margin challenges and making deliberate decisions not to add capacity aggressively. The result is classic supply and demand: fewer available assets competing for the same freight volume means shippers pay more.
When you add fuel cost increases on top of a market that was already pricing high due to constrained capacity, the pressure compounds. Base rates go up. Surcharges go up. And the combination hits a demand environment where U.S. GDP growth came in at a notably weak rate in Q4 — which creates uncertainty about how much of these cost increases can actually flow through before demand softens.
What Supply Chain Leaders Should Be Doing Strategically
Steve was characteristically direct on tactical recommendations — not hedged, but appropriately conditional on how the next 30 days play out.
On carrier contracts: if you're approaching a renewal in the current environment, think carefully about the duration. Locking in rates now makes sense if you're not already contracted, because base rates are elevated and likely to stay there in the near term. But signing a long-term deal in a market that may correct — if demand softens, if capacity comes online, if the geopolitical situation resolves — limits your ability to renegotiate when conditions improve. Shorter duration commitments give you more optionality without leaving you fully exposed.
On fuel specifically, Steve's recommendation is to avoid baking in a fixed fuel rate right now. Indexed fuel agreements, even with their volatility, are preferable to a fixed rate negotiated at a market peak. Caps can help manage upside risk while still allowing you to benefit when fuel comes down. The goal is to participate in the index in both directions rather than locking in today's elevated rate as a floor.
On routing and rerouting: when major carriers like Maersk make visible moves — rerouting sailings, pulling back on specific service strings — the instinct to follow their lead is understandable. But Steve's framing was more structural: the real answer is to have backup strategies already in place, not to reactively build them when a disruption forces your hand. That means balanced supplier networks across regions, inventory levels that can absorb a short-duration disruption, and pre-modeled routing alternatives that can be activated quickly when needed.
The rerouting cost isn't just a freight cost — it's a transit time cost, and the two interact. If you reroute to avoid a high-risk corridor and your transit time extends by two or three weeks, your inventory position changes. Goods that were scheduled to arrive by a certain date now arrive later. If you were running lean inventory, that gap becomes a revenue impact, not just a logistics inconvenience.
Tariffs: Still Here, Still Complex
Beyond the situation in the Middle East, Steve addressed the tariff environment, which remains unresolved in several important respects. The Supreme Court ruling didn't end tariffs, nor did it clarify anything about the reclamation or refund of duties already paid. That ambiguity is weighing on the balance sheets of many shippers who made inventory decisions based on assumptions about how tariff relief would work.
Steve's recommendation there hasn't changed month over month: don't react impulsively, but plan deliberately. Duty mitigation strategies — duty-free zones, adjusted sourcing geography, nearshoring — are not new concepts, but their relevance has grown. Companies that have been systematically tracking duty as a transportation cost component, rather than treating it as a finance problem, are better positioned to model the actual cost of different tariff scenarios at the lane and carrier levels.
That kind of visibility requires data. And that's not a coincidental observation — it's the throughline of every strategic recommendation Steve made across the entire conversation.
The Data Point That Governs All the Others
Steve closed with a message that supply chain leaders have heard from Trax before, but that the current environment makes newly urgent: the data asset has never been more important, and how you operationalize it within your management structure is what separates companies that can respond to disruption from those governed by it.
When you have clean, normalized, current transportation data — across all modes, carriers, lanes, and currencies — you can do scenario modeling. You can ask what happens if the fuel price goes up by a given percentage. You can model the cost impact of rerouting a set of ocean shipments through an alternative corridor. You can identify the carrier relationships and lane concentrations that most significantly expose you to a particular geopolitical risk. You can monitor those KPIs on an ongoing basis and see whether your mitigation strategies are actually producing the outcomes you expected.
Without that data foundation, you're making those same decisions — you just have to make them on instinct rather than evidence.
Trax's freight audit and data management platform provides that foundation — across 100% of invoices, normalized to consistent global standards, with reporting and analytics that surface the insights supply chain leaders need to act before a disruption becomes a crisis.
Stay Current on the Market
The Trax Freight Market Report publishes monthly and is available free to supply chain leaders who want current, data-grounded intelligence on what's happening across all modes, geographies, and cost categories. Steve's expert commentary accompanies each report, connecting the data to the strategic decisions supply chain teams are making in real time.
Subscribe to the Trax Freight Market Report to receive it directly in your inbox each month — and join us for the monthly webinar where Steve and the Trax advisory team walk through the key findings and what they mean for your transportation program.