Full Steam Ahead – Into the New Year

Full Steam Ahead – Into the New Year

After an unpredictable 2025 wrought with trade wars, shifting tariffs, inflation, bankruptcy, losing employees and shaky supply chains, shipping, freight and trucking companies did their utmost to navigate troubled waters. Sources have decided to remain optimistic that 2026 will be less turbulent due to innovations in AI and continuing strong relationships with customers and partners.

Transportation Trends for Hardwood Logs and Lumber: 2025 in Review, 2026 Ahead

The hardwood log and lumber industry entered 2025 with cautious optimism, but the year quickly proved that transportation and trade conditions remain anything but predictable. Shifting tariff policies, changing trade lanes, and fragile supply chain dynamics shaped how exporters, importers, and logistics providers navigated the market. For 2026, the lessons learned in 2025 are providing clearer guidance on how the industry can remain resilient in an evolving global environment.

A Year of Inconsistent Volumes and Shifting Trade Lanes

Transportation trends for hardwood logs and lumber in 2025 were defined by inconsistency, particularly out of the United States. Export volumes fluctuated throughout the year, often in direct response to tariff announcements and trade negotiations. These policy changes created short-term surges in shipping activity as exporters rushed to move product ahead of new duties, followed by sudden drops once tariffs were implemented or trade conditions shifted.

One of the most notable developments was the shift in volumes between China and Vietnam. As the trade war escalated toward the end of the first quarter and into the beginning of the second quarter, shipments were redirected to alternative destinations. This forced exporters and logistics providers to adapt quickly, adjusting routings, documentation and carrier allocations to keep product moving.

In contrast, Canada experienced a comparatively steady year. Canadian hardwood export volumes remained consistent throughout 2025, providing a level of stability that many U.S. shippers lacked. This steadiness highlighted the value of diversified sourcing and trade exposure during periods of geopolitical uncertainty.

Managing Supply Chain Disruptions Through Organization and Communication

While global supply chains continued to function in 2025, disruptions were frequent. Most stemming from cargo being diverted due to trade uncertainty rather than infrastructure breakdowns. For the hardwood industry, success depended less on avoiding disruption altogether and more on how effectively companies responded when conditions changed.

Organizations that fared best focused on proactive supply chain management. Being highly organized, providing timely and transparent updates and clearly presenting customers with their options became essential. Clear communication around cutoffs, documentation deadlines, and alternative routings allowed exporters to make informed decisions quickly.

Strong carrier relationships also played a critical role. Leveraging long-standing partnerships helped secure equipment, maintain bookings during volatile periods, and adapt to sudden changes in vessel rotations or port calls. In 2026, fundamentals such as organization, communication and relationship management are expected to remain just as important as external uncertainties continue.

Freight Rates: Historically Low with Limited Upside Pressure

Despite the turbulence in trade and volumes, freight rates in 2025 remained at historically low levels. While there were isolated fluctuations tied to temporary volume spikes, the market did not experience broad-based rate increases.

So far for 2026, there is no strong indication of major rate hikes across the board. Capacity remains ample, and overall export volumes across many commodities have not fully recovered. For hardwood exporters, this rate environment presents opportunities but also reinforces the need to stay agile should conditions change quickly.

Container Availability: Working, but Fragile

Container availability in 2025 was generally manageable, but the system remained fragile. Export volumes across commodities were muted, in part because the trade war with China affected multiple sectors, not just forest products.

A key challenge was imbalance. Many importers “front-loaded” cargo earlier in the year to beat anticipated tariffs, which disrupted the normal flow of containers. As a result, empty container imbalances emerged particularly at inland rail points which led to localized shortages even when overall container supply appeared sufficient.

This imbalance underscores an important reality for hardwood exporters: availability can vary significantly by location and timing. So far for 2026, container access is expected to remain workable, but exporters should plan carefully, especially when shipping from inland origins.

A Rebound in Q4 2025 and Optimism for Early 2026

The fourth quarter of 2025 marked a turning point. Shipping volumes began to pick up once agreements were reached between the U.S. and China, restoring a degree of confidence to the market. A major catalyst was China’s decision to end its ban on U.S.-origin logs, which quickly translated into renewed shipping activity.

This momentum is expected to carry into the first quarter of 2026. While uncertainty has not disappeared, there is cautious optimism that volumes will remain stronger than earlier in 2025, supported by reopened trade lanes and pent-up demand.

Looking Ahead

If 2025 taught the hardwood industry anything, it is that transportation success depends on adaptability. Trade policy, tariffs and geopolitical dynamics will continue to influence shipping patterns, but companies that invest in strong logistics partnerships, clear communication and flexible planning will be best positioned to navigate what lies ahead.

The outlook is one of guarded optimism for 2026. Rates remain favorable, volumes are showing signs of recovery, and lessons learned during a challenging year, helped the industry prepare for the next one. In a market where change is the only constant, preparedness and collaboration will continue to move hardwood logs and lumber forward.

   As we head into the 2nd half of Q1 for 2026, the best way I can describe 2025 is that it was another erratic year. Over the last few years, we as an industry have become quite good at pivoting when needed. 2025 was the definition of needing to pivot.

With a renewed trade war igniting, it further reinforced flexibility in supply chains. Many manufacturers moved their facilities during the last trade war. This most recent round of trade disruption forced more factories to move their facilities or seek alternative suppliers. One of the biggest challenges has been finding new suppliers for organizations. This creates a ripple effect within the marketplace as hardwood lumber and logs moved in droves to Vietnam before filtering their way through to China or staying in Vietnam to be processed there.

In addition to supply chains changing (again), we saw a lack of tariff clarity. This is an issue we continue to fight on a daily basis. As a licensed customs brokerage, we are routinely working with companies to figure out what tariffs/duties are applicable, and what may be applicable at time of import. With numbers fluctuating it becomes challenging to effectively navigate.

Outside of shifting supply chains and tariffs, it was relatively “smooth” sailing from a container availability and a steamship line availability perspective in 2025. Certain carriers reorganized their alliances, with Hapag and Maersk combining on their Gemini service. There have been rumors swirling for about 6 months now that ZIM is going to be acquired as well.

 At this point, there is not much more room for consolidation. I believe when we see a reversal in volumes (which will come), we will see more new steamship line entrants into the marketplace, although I do not think that will take place in 2026. In 2026, I don’t expect to see massive rate jumps either. The freight market is still depressed. We saw some increases in freight late in Q4, but I do not think this will be sustained volume increases —merely a small blip on the radar.

In regard to trucking, 2025 saw a mass exodus of capacity leaving the marketplace. The current administration has cracked down heavily on the trucking industry. With a soft freight market the last few years and regulations being enforced, it forced north of 7,500 trucking companies to close in April alone. Some of these companies only have a truck or two, others have hundreds or thousands of trucks. It was estimated that year over year roughly eight percent of domestic trucking capacity was removed from the marketplace. These removals were either through bankruptcy, regulation, or companies simply shutting their doors during the “great freight recession” which we are currently in the midst of.

Typically, this much capacity leaving the market would lead to increased prices, however there has been such little demand in 2025 that prices have remained relatively flat. Spot load postings were 15 percent less year over year (2025 vs 2024), leading me to believe that we will need even more capacity to leave the market for a “healthy” trucking market. Now, these are broad strokes regarding the trucking industry and this does not take into account specific regions that already have capacity related issues. Those that do should expect to see some price increases in 2026, especially early in the season as weather related issues are at play.

Going forward in 2026, I think we will see relatively flat export rates, a small increase in import rates, and a slight increase in domestic trucking rates. Of course, these are all dependent upon lane, type of truck, etc. In general, 2025 was one of the most challenging years outside of COVID we have experienced as a freight industry in decades. It has never been more difficult to operate than it is today with increased costs, regulation and a slump in freight volumes.

Choosing to be optimistic, I am hopeful 2026 will be a better year for many. I do believe we will see companies shifting growth plans away from hiring and to utilizing technology (AI) more. Much of what I’m reading from many companies are their plans to “do more with less” in 2026 by doing just that, leveraging technology. Here at AGL, we have continued to pour into our service offerings, and our technology.

2025 was a very difficult year. I suspect 2026 will be difficult as well, although not as difficult as 2025 was. We’ve remained steadfast in our approach to what allows you to make it through to the other side and it’s a simple formula — offering good service and building relationships. Building relationships with vendors, clients and peers will be the driving factor towards a successful 2026, and that is exactly where AGL plans to stay focused.

I would characterize transportation trends over the last year as volatile, given the uncertainty around tariffs and geopolitical tensions, yet the year somehow ended on a high note. We ultimately met our export volume goals, with China and the U.S. reaching a trade agreement. Vietnam also picked up in a huge way, taking up the slack from missed opportunities in China.

Export ocean freight rates around the world have never been lower. I do not know how long they will remain sustainable, but I expect a $75 to $100 increase by the end of the first quarter from U.S. East Coast ports to China, Vietnam, and India. While ocean containers can be scarce in certain areas at certain times of the year, the steady flow of imports has generally supplied inland depots, allowing carriers to avoid container repositioning.

As we head into 2026, we are well positioned for a solid first quarter in exports. Our economy is growing at a nice pace, and with China expecting growth of around five percent. I believe that if we continue to work cooperatively, the two countries will get back on track. This is especially encouraging given the new opportunities that have come to fruition in Vietnam and India, which we can continue to build upon.

As far as Europe is concerned, the extension and proposed revision of EUDR are being viewed favorably for future growth, and in addition the potential acceptance of sulfuryl fluoride as early as June, as a viable fumigation treatment for certain wood species / products could open the door to additional export opportunities.

This is a resilient industry that has faced many challenges over the 37 years I have been with TMX Shipping Company, yet we are still here – finding ways to survive and provide for our families. Don’t underestimate the people in this industry, their willingness to work hard and their never-give-up attitude. I’ve witnessed it firsthand recently in loggers, truckers and sawmill owner/operators. With that mindset, we always have a fighting chance, and I love the odds.