BTX MARKET INTELLIGENCE REPORT - May 18, 2026

SUMMARY

AIR FREIGHT: The Baltic Air Freight Index (BAI00) is 35.8% above year-ago levels after a 0.4% weekly gain in the week ending May 11. Renewed Middle East tensions have created a global air cargo capacity shortfall of up to 16%.

OCEAN FREIGHT: Drewry's World Container Index surged 12-16% this week to roughly $2,553-$2,557 per 40ft, driven by Transpacific and Asia-Europe rate spikes. Carriers are layering Emergency Fuel Surcharges and Peak Season Surcharges as Cape of Good Hope routings remain in effect.

TRUCKING: DAT May spot rates climbed across all equipment types: dry van $1.58/mile (+5¢), reefer $1.94/mile (+9¢), and flatbed $2.01/mile (+4¢). The dry van load-to-truck ratio jumped to 4.4 from 1.9, signaling materially tighter capacity.

TRADE COMPLIANCE: CBP is on track to disperse more than $35 billion in IEEPA tariff refunds following the Supreme Court ruling. On May 7, the Court of International Trade ruled the 10% Section 122 global tariffs unlawful.

COMMODITIES & MACRO: Brent eased to roughly $102/bbl and WTI to $106/bbl on May 18, but WTI remains up 46.8% YTD on Iran-related disruption. April nonfarm payrolls rose 115,000 with unemployment holding at 4.3%; ISM Manufacturing PMI held at 52.7%.

AIR FREIGHT INSIGHTS

The global Baltic Air Freight Index (BAI00) rose 0.4% in the week ending May 11, 2026, leaving the index 35.8% higher year-over-year. The slight weekly uptick follows an outsized +23.09% month-over-month jump in April that was driven largely by Middle East airspace disruption. Iranian missile and drone attacks on the UAE on May 4 forced renewed airspace restrictions, and industry estimates point to a global air cargo capacity shortfall of up to 16% as a result.

Corridor performance was mixed. Outbound rates from Hong Kong and India eased modestly week-on-week as carriers redeployed capacity following the UAE's reopening, though both lanes remain well above prior-year benchmarks. The Transpacific corridor stayed firm: rates from South Korea and Northeast Asia to the U.S. continued to rise as shippers prioritized speed-to-market amid ocean rate volatility. Outbound China-to-Europe and China-to-U.S. lanes softened slightly week-on-week but remain significantly elevated versus 2025.

IATA's most recent monthly data (February 2026, the latest officially released) shows total cargo tonne-kilometer demand rising 11.2% year-over-year, with capacity up just 8.5%, a divergence that continues to push load factors higher. IATA's full-year 2026 outlook calls for record load factors and 2.4% volume growth, with the airline body projecting 71.6 million tonnes of cargo for the year. That backdrop of demand exceeding capacity growth signals a structurally tight environment heading into the second half.

The near-term outlook hinges on the Middle East situation, the duration of any airspace restrictions, and whether transpacific demand softens after the early-peak pull-forward. Cathay Cargo's resumption of Hong Kong-Bangkok freighter service and Qatar Airways Cargo's planned 12% capacity expansion will add some relief, but the capacity squeeze is unlikely to fully unwind in Q2.

OCEAN FREIGHT INSIGHTS

Drewry's World Container Index (WCI) surged this week, with the composite climbing 12-16% to roughly $2,553-$2,557 per 40ft container depending on the data cut. The increase is concentrated on the Transpacific and Asia-Europe trade lanes, where carriers have implemented Emergency Fuel Surcharges (EFS) and Peak Season Surcharges (PSS). Shanghai-to-New York rates rose 14% to $4,252/FEU, Shanghai-to-Los Angeles rose 10% to $3,357/FEU, Shanghai-to-Genoa jumped 20% to $3,701/FEU, and Shanghai-to-Rotterdam climbed 11% to $2,413/FEU.

Carrier capacity discipline is doing most of the work behind these moves. Underlying volume growth remains soft, but carriers have continued to manage utilization through blank sailings and slow steaming. The result is a market that feels materially tighter than the demand fundamentals would otherwise suggest. Worst port congestion is currently at Qingdao (vessel waits near 4 days), Manila North (3+ day berth delays), and the Rotterdam/Hamburg complex (yards running 80-89% utilization).

The Strait of Hormuz remains closed and there has been no broad return of container vessels to Suez routings. Most Asia-Europe and Asia-U.S. East Coast services continue to route via the Cape of Good Hope, adding roughly 10-14 days of transit time and absorbing the capacity equivalent of a meaningful chunk of the global fleet. Transpacific Eastbound spot rates are running approximately $3,800/FEU to the U.S. East Coast and $2,800/FEU to the West Coast. Notably, Asia-Europe rates have eased back toward pre-war levels in some assessments, though Drewry's weekly print captures the surcharge-driven spike.

Carrier news this week: Emergency Fuel Surcharges have been a primary tool for passing through bunker volatility tied to elevated crude. Peak Season Surcharge announcements are accelerating earlier than usual, consistent with carrier expectations of a front-loaded peak.

NORTH AMERICAN TRUCKING

DAT spot rates strengthened across all three major equipment types in May 2026. Dry van linehaul averaged $1.58/mile, up 5 cents from April; reefer averaged $1.94/mile, up 9 cents; and flatbed averaged $2.01/mile, up 4 cents. The synchronized move higher reflects stronger seasonal van and reefer volumes, the Roadcheck inspection event tightening capacity, and pre-Memorial Day shipping concentration.

The dry van load-to-truck ratio jumped to 4.4 loads per truck in May from 1.9 in April, the most pronounced monthly tightening this cycle. The broader DAT load-to-truck ratio also climbed from 7.2 in late April to 8.3 going into May, compared with just 4.6 one year ago. Equipment availability is running roughly 44% below the long-term post-2017 average, indicating a structurally thinner truck market than at any point in the past two years. Flatbed remains the tightest segment, with the equipment-specific ratio near 64.

Diesel remains a meaningful input cost driver. With WTI crude up roughly 47% year-to-date and Brent above $100/bbl through much of May, fuel surcharges are running materially higher than year-ago levels. Near-term, expect spot capacity to remain tight through the early summer produce season, with reefer and flatbed retaining the most upside.

TRADE COMPLIANCE / US CUSTOMS UPDATES

IEEPA tariff refund processing is now in full swing. CBP confirmed it has processed and is on track to disperse more than $35 billion in refunds tied to IEEPA duties that were struck down by the Supreme Court earlier this year in a 6-3 decision. As of May 11, 2026, 126,237 CAPE declarations had been submitted since the system's April 20 launch, with 86,874 passing file validation and over 15.1 million individual entries with IEEPA duties accepted for removal. Approximately 8.3 million of those have been liquidated or reliquidated, with anticipated refund and interest of about $35.46 billion. Judge Richard Eaton has set May 26 as the next progress-report deadline for trade officials.

On May 7, 2026, the U.S. Court of International Trade ruled that the 10% global tariffs imposed under Section 122 of the Trade Act of 1974 in late February 2026 are unlawful. The decision is fresh and the appellate path is still being clarified, but importers who paid these duties should track the docket closely as the ruling sets up another potential refund channel.

Section 232 tariffs on steel, aluminum, and copper were substantially restructured effective April 6, 2026. Articles made entirely or almost entirely of those metals now pay a flat 50% on full customs value; derivative articles substantially made of them pay a flat 25%; certain metal-intensive industrial and electrical grid equipment pays 15% through 2027; products made abroad using American steel, aluminum, or copper pay a reduced 10%; and products with 15% or less of these metals are no longer subject to Section 232. A second April 2 proclamation set new Section 232 tariffs on patented pharmaceuticals and associated ingredients, taking effect July 31, 2026 for named companies and September 29, 2026 for all others.

WORLD NEWS & COMMODITIES

Crude prices remain elevated and volatile. Brent eased toward $102/bbl on Monday, May 18, after trading above $111 earlier in the session, while WTI settled near $106/bbl. WTI is up 46.83% year-to-date, with both benchmarks more than 45% higher since the U.S. and Israeli-led conflict with Iran began on February 28. Earlier in May, Brent printed $116.10 (May 1), $110.43 (May 12), and $111.04 (May 15), illustrating the elevated headline volatility.

Geopolitically, the Strait of Hormuz remains closed and Middle East airspace restrictions returned briefly after the May 4 attacks on the UAE. These conditions continue to feed through directly into bunker, jet fuel, and surface diesel costs, as well as ocean and air routings. Suez transits have not meaningfully recovered, so Cape of Good Hope routings remain the default on most Asia-Europe and Asia-U.S. East Coast container services.

U.S. macro: April nonfarm payrolls rose 115,000, below March's 185,000 print but well above the 55,000 consensus, with the unemployment rate steady at 4.3%. Wage growth softened, with average hourly earnings up 0.2% month-over-month and 3.6% year-over-year. Job gains were concentrated in health care (+53.9k), transportation and warehousing (+30.3k), and retail trade (+21.8k), while federal employment continued to decline. The April ISM Manufacturing PMI held at 52.7%, matching March and marking 18 consecutive months of overall economic expansion. The May Manufacturing PMI release is scheduled for June 1, 2026.

WHAT THIS MEANS FOR YOUR SUPPLY CHAIN

The market is presenting a multi-modal tightening. Air is constrained by Middle East airspace disruption and structurally outpacing capacity growth; ocean is rising on carrier capacity discipline, surcharges, and Cape routings; and truckload spot capacity is at multi-year tights heading into the summer produce season. Shippers should be aware that conditions are tightening across modes simultaneously, which is unusual and warrants closer-than-usual planning attention.

Fuel is the connective tissue. With WTI up ~47% YTD and Brent holding above $100, diesel-based surcharges across truck, drayage, and final-mile have moved meaningfully higher, and bunker-linked ocean surcharges are reflecting the same dynamic. Transit time variability is also worth modeling in: Cape routings on ocean, intermittent airspace restrictions on air, and tighter truck capacity in the U.S. each independently widen the distribution of delivery outcomes.

On the regulatory side, the IEEPA refund process is moving quickly through CBP's CAPE system, and the May 7 Section 122 ruling opens a second potential refund track. Importers should validate that all eligible entries are filed correctly and reconciled. The April Section 232 restructuring on steel, aluminum, copper, and derivatives is now in effect; sourcing and HTS classification reviews are particularly worthwhile right now given the breadth of the changes.

The BTX team monitors these markets daily. If any of the trends in this report affect your specific lanes or commodities, reach out to your account manager.

The BTX team monitors these markets daily.

If any of the trends in this report affect your specific lanes or commodities, reach out to your account manager or click here to learn more.