The United States and Iran announce peace agreement
On June 14, U.S. and Iranian officials announced a peace agreement to end their nearly four-month conflict, including an immediate halt of military operations on all fronts.
Zoom in: The deal also includes plans to remove the U.S. naval blockade of Iran and reopen the Strait of Hormuz. The two countries are expected to officially sign the peace agreement Friday, June 19.
Why it matters: This deal is significant for supply chains because disruptions in the Strait of Hormuz and broader Gulf shipping lanes have pressured energy, freight and transit reliability for most of this year.
The bottom line: Markets are just reacting to the news, and disruption may continue for some time. Read the letter for additional information.
U.S. labor market showed resilience in May
The U.S. labor market remained resilient and steadier than expected in May, with nonfarm payroll growth accelerating and unemployment holding steady from April, indicating a gradual cooling rather than a sharp decline.
By the numbers:
- The labor market gained 172,000 jobs, slightly down from the revised 179,000 in April.
- The unemployment rate is unchanged at 4.3% month over month.
- The labor force participation rate held steady at 61.8% month over month.
- The average hourly earnings rose 0.3% month over month and 3.4% year over year.
- The Consumer Price Index rose 2% year over year in May, after rising 3.8% in April, the highest since April 2023. And it rose 0.5% month over month, slowing from the 0.6% rise in April.
- The Producer Price Index (PPI) rose for a fourth consecutive time in May to 5% year over year, the highest since November 2022. On a month-over-month basis, PPI rose 1.1%, in line with April’s revised increase of 1.1%.
The big picture: The broader pattern remains “low-hire, low-fire,” but with enough hiring momentum to keep labor conditions relatively firm in key operating categories.
Yes, but long-term unemployment has risen over the past year, hiring remains selective and employers are still cautious outside of a few service categories.
Why it matters: This means broad labor availability is not deteriorating sharply, but skilled trade, field and project execution labor can stay tight by region and specialty.
The bottom line: Over the next 60 to 90 days, expect overall labor conditions to remain stable but uneven, with the main operational risk being the continued tightness in skilled trades, project labor and certain transportation or field-service roles that directly affect installation schedules, maintenance work and execution capacity.
Ocean freight market shifts to early peak season
The global ocean freight market shifted meaningfully from April to May, moving from a period of geopolitical shock absorption to an early peak season.
Why it matters: In May, carriers escalated pricing through layered surcharges and other increases, including general rate increases (GRIs) and freight of all kinds (FAK) increases. An early arrival of peak season began pulling demand forward across Transpacific lanes into the United States.
The big picture: Through April and May, the Strait of Hormuz remained effectively closed to commercial shipping, which elevated bunker fuel costs and war risk premiums, costs that carriers pass directly to shippers through surcharge layering.
With the announced peace deal between the United States and Iran effectively reopening the strait, expect ocean market corrections over the coming weeks.
By the numbers:
- Drewry’s World Container Index rose approximately 21% from $2,309 FEU (40-foot equivalent unit) in April to $2,800 FEU in late May.
- Key routes, such as Shanghai to New York, saw a 17.6% increase in rates.
- Carriers implemented 10%–15% blank sailings on Transpacific services to support mid-May GRIs.
U.S. inbound container volume fell 8.3% year over year to 1.97 million TEU (20-foot equivalent unit).
Early demand planning matters for metal-intensive projects
Commodity markets remain firm but uneven entering June, driven by energy volatility with high copper, aluminum and steel prices and mixed price trends for resins and lumber.
Why it matters: The main concern is not only initial pricing but also how tariffs, freight costs and regional supply conditions are impacting the total delivered costs of imported and metal-intensive products.
In the near term, early planning matters most for copper, steel and aluminum-heavy projects. Close monitoring of petroleum-linked freight exposure and flexibility, when alternative materials or sourcing options are available, is also crucial.
Key indicators include
- West Texas Intermediate (WTI) and diesel for freight and fuel surcharges.
- COMEX and the London Metal Exchange for copper and aluminum prices.
- S. hot-rolled coil benchmarks, lead times for steel and feedstock and supplier availability for resins.
The bottom line: Over the next 60 to 90 days, expect continued headline-driven volatility, with the risks concentrated on imported and metal-intensive products. Early planning and flexibility in sourcing can help mitigate disruption.
More commodity news:
- For wood-related projects, lumber futures and Canadian trade policy remain important watchpoints. U.S. lumber futures were trading above $600 per thousand board feet in early June, the highest since March, due to tight supply despite slow housing activity. The U.S. lumber market remains especially sensitive to constrained Canadian imports, production disruptions and trade policy.
- Crude oil remains volatile but with some relief from the announced peace framework. Today, Brent crude futures fell more than 5% to around $83 per barrel and WTI futures fell 5% to around $80 per barrel, the lowest since the beginning of the conflict.
Tightening surface freight market challenges shippers
May reflected a market transitioning out of the freight recession into an early tightening cycle, where carriers are regaining pricing power.
Why it matters: Driver shortages and regulatory pressures continue to limit fleet growth, contributing to a market that increasingly favors carriers. Shippers with strong carrier relationships and proactive planning processes will be best suited to remain strong throughout the year.
By the numbers:
- Truckload spot rates have climbed to $3.08 per mile, compared to intermodal spot rates at $1.61 per mile, an approximate 48% cost advantage that is accelerating modal conversion at the fastest pace in years.
- The national load-to-truck ratio widened even further with open market load postings up 65% compared to May 2025, coupled with a 23% decline in open market capacity postings.
The bottom line: U.S. trucking capacity will likely stay constrained through summer produce season and into Q3 as seasonal retail buildup begins for fall peak.