Mark Twain wrote: “I’m in favor of progress, it’s change I don’t like.” Well, change is very much in the air, and the impact of e-commerce on freight transportation continues to drive fundamental shifts in how products move. Back in the 1940s the New Haven Railroad produced a promotional film showing an aunt in Boston buying a bicycle and sending it to her nephew in New York. She took it to South Station, gave it to the agent, who then put it in the express car. Upon arrival at Grand Central, an agent picked it up and delivered it to the nephew’s apartment the next morning—no drones required. While that sort of service was not unusual then, the level of expectations and execution has risen to a much higher level. For example, on the afternoon of Jan. 9, I ordered a Roku streaming device (USB) for $30.41. The delivery was confirmed between 4:00 p.m. and 8:00 a.m. the next morning. When I awoke, there it was. No urgency, just rapid fulfillment. This is becoming more the norm than the exception for a wide array of consumer products. Expectations have risen to the point where same-day service or next-day service is pressuring vendors and carriers to ratchet up service to a level never seen before. All of this has a distinct impact on transportation. In addition to the rise in demand for speed, last-mile delivery is continuing to be a major factor, which can be particularly challenging in and around urban areas in terms of congestion and in rural areas in terms of density. Advances in technology and the galloping pace of AI, Gen-AI and the rapid growth in robotics—along with more efficient routing and scheduling—are driving improved services. At the same time, a major improvement is being made in “pick-pack-ship” routines in fulfillment centers, which are now being sited much closer to the end users—driving up demand for short-haul trucking and parcel services. If you look at the makeup of e-commerce shipments today, the shift is clear: far higher volumes of smaller, more frequent orders rather than large, bulk moves. That change is steadily pulling freight away from traditional truckload and toward parcel and LTL networks, while last-mile delivery continues to evolve toward autonomous vehicles, drones, and other nontraditional models as shippers, carriers, and technology providers all look for a competitive edge. Together, these forces are reshaping not just how goods are delivered, but how freight networks are designed, managed, and priced. The downstream effects are now being felt across every mode of transportation and every link in the logistics chain. Alison Conway, professor of civil engineering at City College of New York, recently said: “This new freight reality is exposing significant gaps in transportation planning and infrastructure design, driven in part by limited data visibility around facilities, vehicles, and labor. At the same time, urban street and curb designs are increasingly misaligned with modern delivery patterns, creating tension between freight efficiency, community impacts like congestion and noise, and access for workers and vulnerable road users.” Taken together, these pressures point to continued shifts toward LTL and parcel freight. According to global data and business intelligence platform Statista, U.S. package volume totaled 22.4 billion shipments in 2024—roughly 61 million per day—and is expected to climb to 24 billion shipments, or about 65 million per day, in 2025. At a more granular level, Capital One Research reinforces this trend, finding that the number of packages the average American received between 2017 and 2022 increased 73%, to roughly 66 packages per person annually. Between 2017 and 2024, total package volume increased 78% and is projected to reach 31.1 billion packages by 2028. At the same time, tariffs are having a measurable impact on trade volumes and freight flows. China–U.S. air cargo volumes, for example, are down 60% since April, according to investment bankers Cassel Salpeter & Co. Given that a large share of consumer goods originate in the Asia-Pacific region, this decline is expected to ripple across supply chain networks. Studies examining the impact of tariffs indicate that approximately 96% of tariff costs are ultimately borne by buyers of goods and services—an effective cost increase of roughly 4.5%. To gain shipper perspective, I spoke with Bill Hutchinson, a veteran supply chain executive and now an independent adviser. Hutchinson sees capacity across all modes continuing to tighten as the prolonged freight recession and rising underlying costs push weaker players out of the market. Even as fuel costs moderate, labor, insurance, and equipment expenses are moving many carriers in the wrong direction. Hutchinson also believes most e-commerce shippers are broadening their routing guides to take advantage of the lane-specific strengths of both regional and national carriers. “There are some great solutions in the market to help smaller shippers do this without the high legacy cost of carrier onboarding from years past,” he says. In addition, micro-fulfillment centers and store-based fulfillment models are giving shippers more flexibility in how they approach local delivery. Hutchinson notes that local sourcing can reduce freight costs and improve customer cycle times, but only when paired with disciplined inventory management practices. Finally, network modeling and capacity planning are capabilities e-commerce shippers need immediately. Legacy peak-planning cycles are simply too slow to support modern inventory placement decisions. Getting this right, Hutchinson says, will ultimately separate winners from losers from a margin perspective. Now, let’s take a look at the anticipated impact on the most closely linked modes—truck, parcel, air, and ocean—through the spyglasses of our panel of modal experts. According to parcel industry veteran Brian Sternberg, traditional delivery companies have historically handled the bulk of e-commerce shipments. “USPS for low-value, smaller items, followed by UPS and FedEx,” he says. “At one point, this accounted for roughly 90% of e-commerce deliveries in North America.” That model shifted dramatically after the pandemic, as B2C and C2C activity surged and consumers began expecting rapid home delivery as the norm. The result has been an explosion in last-mile parcel volumes, with carriers across all modes attempting—often unevenly—to replicate what Sternberg calls the “Amazon experience.” But parcel services are not created equal, nor are they available uniformly across geographies. Sternberg points to two persistent real-world challenges tied to global sourcing. The first is duty and tax exposure, which many U.S. consumers and even some shippers underestimate based on declared product value. The second is returns, which frequently must move back to the original sender—often across borders—driving up reverse logistics costs that are increasingly borne by customers. As parcel complexity increases, Sternberg advises shippers to focus on a tighter set of operational fundamentals. These include a clear understanding of product composition and country of origin, accurate tariff classification and HTS code updates, and vendor compliance around shipment size, weight, and mode selection. He also stresses the importance of clearly defined Incoterms and regularly reviewed transportation contracts—managed internally or through trusted third-party expertise. Inventory discipline is equally critical. Sternberg notes that shippers must pay closer attention to packaging optimization, dimensional weight calculations, and return policies, while also ensuring ERP, WMS, and TMS platforms are fully integrated with carrier networks. In today’s parcel environment, speed alone is no longer the differentiator—visibility, compliance, and cost control increasingly define performance. Those same service expectations and cost pressures are also reshaping how trucking capacity—particularly in LTL and last-mile segments—is deployed. The most significant impact e-commerce has had on trucking has been concentrated in the LTL and small-package segments, largely due to the rise in smaller, more frequent orders. That shift has placed added pressure on last-mile delivery and reverse logistics operations, where both LTL and parcel carriers are managing higher touch counts and tighter service expectations than ever before. While capacity constraints in this segment have not been as acute as in other parts of the trucking market, peak-season surges continue to pose challenges—particularly when it comes to securing sufficient labor. At the same time, the growth of e-commerce has opened the door for new providers to enter the market, even as barriers to entry remain significantly higher than in the dry-van truckload sector. Despite the increase in e-commerce activity, overall LTL volumes have remained sluggish, with most carriers reporting declines late in 2025, ArcBest being a notable exception. John Larkin, veteran industry analyst and strategic advisor at Clarendon Capital and senior partner at Venture 53, notes that e-commerce demand is more truckload- and last-mile-intensive than many shippers realize. “With housing-related demand depressed by high interest rates and industrial production flat to down for several years, incremental e-commerce demand has not been sufficient to absorb excess capacity across the industry,” he says. As a result, trucking rates have hovered at—or near—non-compensatory levels for an extended period. Still, e-commerce has raised the service-level bar for carriers, as shippers and consumers alike increasingly expect same-day, next-day, or, at worst, two-day delivery performance. Looking ahead, Larkin sees a potential inflection point forming. “The administration’s crackdown on non-domiciled CDL holders, non-English-speaking CDL holders, and non-compliant driver-training schools will likely rein in capacity,” he says, “just as lower interest rates begin to support housing demand and tariffs encourage increased investment in domestic manufacturing.” If reduced capacity coincides with even modest demand growth, the market could begin to turn in 2026—creating conditions in which carriers regain pricing power and earn their cost of capital. “Given this setup,” Larkin adds, “shippers would be wise to lock in rates as early as possible in 2026, before pricing leverage shifts back to carriers.” Is e-commerce driving a meaningful shift from ocean and ground transportation to air in pursuit of speed and reliability? The data suggest a strong case can be made. E-commerce currently accounts for roughly 20% of global air cargo volumes and is projected to grow by more than one-third by 2027. At the same time, the nature of air cargo itself is changing. As we said earlier, shipments are skewing toward smaller, more frequent, parcel-sized freight, a trend that favors express carriers over traditional freight haulers. This shift has helped fuel new market entrants, including Amazon and several large Chinese players that are building out their own air cargo capabilities. Amazon, for example, now operates a fleet of more than 100 cargo aircraft and approximately 250 daily flights, with plans to expand its fleet to 200 planes or more. Growth is particularly pronounced in cross-border e-commerce. According to a recent report published in Air Cargo Week, the global cross-border e-commerce logistics market was valued at $97.85 billion in 2023 and is projected to grow at a compound annual rate of 25.4% between 2024 and 2030—far outpacing domestic e-commerce growth. While speed remains a core driver, technology is increasingly central to air cargo performance, improving predictability, visibility, and route optimization. But near-term uncertainty remains. “Air cargo will live or die with the Supreme Court’s decision on the Trump tariffs,” says Chuck Clowdis, principal at air cargo consultancy Trans-Logistics. “The entire air cargo rate environment depends on getting back to serious business once the current turmoil moderates.” From a market-structure perspective, capacity is tightening as consolidation accelerates. According to Joey Smith, director of aviation services at investment bank Cassel Salpeter, rising insurance costs and stricter regulatory requirements are pushing smaller carriers out of the market, leaving larger players with increasing scale advantages. At the same time, Smith says technology is reshaping how shippers view air freight economics. Air cargo is shifting from a pure cost center to a strategic ROI lever, as shippers increasingly prioritize reliability and speed over price. Failed or delayed deliveries, he notes, often carry hidden costs in the form of customer churn and reshipping expenses. “An interesting trend is shippers moving away from legacy national carriers toward more flexible, tech-first platforms,” Smith says. “These providers offer real-time visibility, automated quoting, and predictive analytics that help manage disruptions before they occur.” Looking ahead, Smith expects artificial intelligence to play an expanding role in air cargo operations. “AI already supports routing, pricing, fraud prevention, customer support automation, and delivery-instruction compliance,” he says. “In 2026, its use will broaden into forecasting, real-time network balancing, and dynamic rate cards—optimizing speed, reliability, and cost at the parcel level, while also helping carriers and shippers navigate tariff-related complexity.” While air cargo is being pulled forward by speed-sensitive demand, ocean shipping is grappling with a very different set of market dynamics. According to Phil Damas, managing director at Drewry and a long-time tracker of ocean carrier trends, carriers are continuing to add capacity even as demand softens. Drewry data show global container capacity increased 13% between January and October 2025, while demand declined 4% over the same period. Early indicators suggest January 2026 will reflect a similar divergence. Excess capacity has pushed vessel utilization below 80%, firmly shifting the market in favor of shippers and sustaining downward pressure on rates. Spot rates from Shanghai to Los Angeles, for example, fell 44% year over year to roughly $2,900 per 40-foot container as of January 15, according to the Drewry World Container Index. Service reliability, however, has shown notable improvement—albeit from a low base. Carriers such as Maersk and Hapag-Lloyd have raised on-time arrival performance into the 70% to 90% range, well above the 40% to 50% levels that have long characterized container shipping. For logistics teams still working to rebuild resilience after the pandemic-era disruptions, that improvement has been a welcome development. “In our discussions with shippers, we see logistics teams placing greater emphasis on service reliability as part of the ocean bid process,” Damas says. “Our advice is to remain agile and plan for potential trade disruptions, even though the market overall is expected to remain soft in 2026.” Drewry forecasts minimal growth in both imports from Asia and exports to Asia this year—roughly 1% year over year—following several quarters of declining trade volumes driven by tariffs, inventory drawdowns, and cautious consumer spending. The challenge for shippers has shifted accordingly. While 2024 was about managing volume growth, and 2025 was defined by sharp, policy-driven swings in demand, 2026 will require managing slow overall growth punctuated by intermittent peaks and valleys. Looking ahead, tariff policy remains a major wildcard. A potential Supreme Court ruling against the IEEPA tariffs could trigger refund claims worth millions of dollars for importers, though those refunds would not flow through to consumers. The prevailing view is that new tariffs would likely follow quickly, setting the stage for another short-term surge in imports between policy shifts. From a logistics perspective, shippers may once again face a narrow window of accelerated inbound volumes, the duration of which remains uncertain. Another key variable to watch is when—and to what extent—major ocean carriers resume regular transits through the Suez Canal, a move that would further influence capacity deployment and service reliability across global trade lanes. While intermodal does not play as central a role in e-commerce logistics as parcel, trucking, or air cargo, it remains an important option for shippers looking to balance cost, flexibility, and service. The ability to transload inbound freight from Asia-Pacific origins—moving cargo from ocean containers into domestic equipment—offers shippers the opportunity to lower transportation costs while also breaking down inventory and reallocating it “on the fly” once containers arrive. “Based on my work, transloading accounts for about 60% of import TEUs moving inland from the U.S. Southwest by rail, compared with roughly 40% moving as intact IPI,” says Larry Gross, president of Gross Transportation Consulting and a long-time observer of intermodal trends. “That said, the transload share is down about five percentage points from where it stood during the post-pandemic surge.” Gross notes that the share of inland port intermodal (IPI) moves increased as shippers sought flexibility during labor disruptions on the East and Gulf Coasts and security concerns tied to Red Sea shipping. “IPI was easier to reroute during the ILA and Houthi-related disruptions,” he says. “I expect the IPI share to decline gradually from here, but I don’t see any significant direct e-commerce impact on intermodal volumes.” Taken together, intermodal’s role in e-commerce is best viewed as situational rather than transformative—valuable when flexibility and cost control align, but not a primary driver of network change. As this analysis shows across every mode, few conclusions are definitive. What is clear, however, is that the pace of change in freight and logistics due to e-commerce growth continues to accelerate, forcing shippers and carriers alike to adapt in real time.

Escalating tensions and risk to maritime arteries

Rising hostility between the United States and Iran has heightened fears of interruptions to international trade lanes, with the Strait of Hormuz taking center stage as a vital chokepoint for energy shipments. Analysts and logistics professionals view instability in the region as a direct threat to the movement of oil and other commodities that rely on that passage.

Interview with a supply chain expert

Supply Chain 24/7 spoke with Sarah Jinhui Wu, a Professor of Operations Management at Fordham University’s Gabelli School of Business, to explore how unrest in the Middle East can cascade through shipping networks, energy markets, and global supply chains.

How uncertainty manifests in supply networks

Wu explains that uncertainty typically appears first as increased supply chain variability. She emphasizes that "variability is the enemy of a lean system," because unpredictable conditions force companies to abandon tight, cost-focused practices in favor of measures that preserve continuity.

Operational consequences for carriers and shippers

When conflict disrupts the region, carriers often slow steaming, reroute vessels, or suspend sailings, making shipping lead times less reliable and schedules harder to trust. Those operational changes increase the time goods spend in transit and make planning and forecasting more difficult for all parties in the chain.

Firm-level responses to preserve continuity

In response to rising variability, firms tend to add buffers and prioritize continuity over lean efficiency. Common actions include expedited shipments, raising safety stock levels for critical SKUs, and pursuing multi-sourcing strategies—particularly for inputs that depend on energy and chemicals.

Why energy prices react sharply

Wu identifies two reinforcing channels that drive up fuel and freight costs during regional conflict. The first is an energy price shock: threats to supply continuity and shipment reliability around the Gulf push oil and gas markets to price in scarcity and elevated risk. The Strait of Hormuz is especially significant because about 20 million barrels per day—roughly 20% of global petroleum liquids consumption—transit that route, so even a partial disruption can rapidly alter price expectations.

How logistics amplify the cost shock

The second channel is a logistics cost shock. Carriers commonly add emergency or conflict surcharges, which quickly appear on shipper invoices. Rerouting traffic increases distance and transit time, ties up vessels and aircraft for longer periods, reduces effective capacity and therefore raises freight rates.

Practical knock-on effects across supply chains

The combined impact of longer transit times, higher fuel costs, and added surcharges creates a broad ripple through supply chains. Companies face higher operating expenses and must adjust inventory and sourcing strategies to maintain service levels. Typical consequences include shipment delays, constrained transport capacity, elevated freight charges and a shift in emphasis from cost optimization toward resilience.

Read the full discussion

For the complete interview and more detailed analysis, see the full article.

Read the full interview

Last month, President Donald Trump inked an Executive Order (EO) focused on restoring United States maritime dominance and also revitalizing the American shipbuilding industry. The primary objective within the EO directs the creation of a Maritime Action Plan (MAP), which will provide a strategy with specific actions in order to restore and create sustained resiliency for the American maritime sector. This plan was part of a mandate issued by a White House EO issued in April 2025, entitled “Restoring America’s Maritime Dominance.” “Up until now, government procurement processes and over-regulation have hindered private industry’s ability to build vessels on time and on budget—this Order reverses that trend,” the EO stated. Key aspects of the White House’s Maritime Action Plan in a White House fact sheet include: The White House cited President Trump’s recent State of the Union address, in which he pledged to “resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding.” “We used to make so many ships,” he said. “We don’t make them anymore very much, but we’re going to make them very fast, very soon. It will have a huge impact.” The MAP also calls for a universal infrastructure or security fee on all foreign-build commercial vessels calling on U.S. ports, which would be assessed based on the tonnage of imported cargo arriving on a vessel, with $0.01 per kilogram of imported cargo able to bring in around $66 billion over a 10-year period and $0.25 per kilogram bringing in around $1.5 trillion for the same period—with revenues from this fee to be directed into a new Maritime Security Trust Fund to support shipbuilding capacity, fleet expansion, and maritime workforce development. It also calls for a land port maintenance tax, focused on ensuring land border ports contribute more equitably to U.S. trade infrastructure costs. The fee would be comprised of a 0.125% of the value of merchandise entering the through land ports of entry, Mexico and Canada, with proceeds allocated towards a Land Port Maintenance Fund, for port planning, construction, maintenance and improvements. John D. McCown, Non-Resident Senior Fellow at the Center for Maritime Strategy, the Navy League’s think tank, told LM that, in his assessment of the MAP, the U.S. has a “pretty amazing” shipbuilding industry in certain niches, which needs to be further leveraged. “I think we ought to build on that,” he said. “The higher end you go, the more effective we are…and layer that on top of everything going on, whether it is molten sulfur, atomic plants, automation, or AI—things which the U.S. should be leading. I embrace all of that but where it [MAP] got a little confusing to me are the fees. There are certain aspects of this that are kind of a redo of what the USTR had proposed. But this is broader and does not really just affect China. If you are doing this to build the maritime base, you need to be clear in stating that.” The MAP’s focus on expanding mariner training, including at the U.S. Merchant Marine Academy, was welcomed by McCown, whom called it a critical need. To that end, he explained that a high priority should be placed on operating vessels that have spots for crew personnel and staff coming out of U.S. Merchant Marine academies.