WSI’s Warehouse Wire: July 24, 2026

Your connection to what’s happening across warehousing, transportation, and supply chain operations.

This month’s edition examines how tariffs, reshoring, fuel volatility, and peak-season congestion are affecting warehouse and transportation decisions. It covers the new U.S. tariff on Brazilian pulp imports, industrial real estate demand tied to domestic manufacturing growth, FDA food traceability requirements, rising freight rates across truckload, LTL, and parcel, and intermodal slowdowns affecting rail-served distribution networks.

Check back monthly for timely headlines and practical insights on the state of warehousing and supply chain operations.

New U.S. tariff on Brazil puts pulp and paper supply chains in the crosshairs

A 25% tariff on a broad range of U.S. imports from Brazil took effect July 22, following a yearlong Section 301 investigation into Brazilian trade practices including deforestation, digital trade restrictions, and preferential tariff policies.¹ The tariff applies to thousands of product categories, with exemptions carved out for beef, coffee, rare earths, aircraft parts, certain pharmaceuticals, and general market pulp. High-purity dissolving pulp was removed from the proposed exemption list in the final ruling, meaning it is now fully subject to the duty.²

For the pulp, paper, and packaging industry, the stakes are uneven, but real. Brazil accounts for roughly 29% of global market pulp capacity and is the dominant supplier of BEKP to the United States, representing 82.5% of U.S. BEKP imports and more than 2.8 million tonnes shipped annually³. Because BEKP is exempt, tissue and packaging producers sourcing that grade see no direct tariff impact for now. But buyers of Brazilian paper products and dissolving pulp — a feedstock for rayon and specialty applications — face the full 25% duty, and should expect pressure on sourcing decisions and supply agreements.

Reshoring and trade pressure are driving record U.S. industrial real estate demand

U.S. manufacturing construction spending hit a seasonally adjusted annual rate of $185.7 billion in April 2026, more than double pre-2022 levels, as reshoring activity and foreign direct investment continue to bring new manufacturing capacity online.⁴ Private-sector U.S. manufacturing and industrial investment commitments now total $1.765 trillion across 162 companies and 37 states, according to the IndustrialSage tracker updated July 9, 2026.⁵

Much of the new investment is flowing into Midwest and Sun Belt markets, such as Phoenix, Columbus, and Indianapolis, rather than traditional coastal logistics hubs. CBRE’s 2026 industrial outlook forecasts a 5% year-over-year increase in industrial leasing activity to nearly 1 billion square feet, driven by a flight to quality, increased outsourcing of distribution, and continued reshoring. Major anchor manufacturing investments are also attracting networks of suppliers, vendors, and logistics operators that need industrial space of their own.⁶

Production moving closer to U.S. customers can land farther from existing storage. Regionalization requires capacity in markets where a company may never have operated before; and tariff uncertainty adds inventory buffering demands as well. Companies that don’t redesign their manufacturing warehouse strategy alongside their production footprint risk losing the efficiency gains reshoring is meant to deliver.

FDA meeting highlights warehouse challenges in food traceability

The FDA’s June 15 public meeting⁷ brought stakeholders together to discuss practical challenges and potential compliance flexibilities under the Food Traceability Rule. The rule requires companies that manufacture, process, pack, or hold foods on the Food Traceability List to maintain key data elements tied to critical tracking events, including shipping, receiving, and transformation. Covered records must be available to the FDA within 24 hours when requested. Although enforcement is not expected before July 20, 2028, the agency is continuing quarterly industry engagement on implementation.⁸

Food and beverage warehouse and distribution operations were central to the discussion. Speakers described the difficulty of tracking individual lots through mixed pallets, broken cases, “eaches,” and high-volume workflows. Some distributors warned that case-level scanning and extensive warehouse management system upgrades could slow product flow and increase costs. Proposed solutions included stronger lot labeling at the source, machine-readable data, and technology that captures traceability information during ordinary warehouse tasks. Other participants cautioned that added flexibility could introduce uncertainty during recalls.

The meeting zooms in on the need to evaluate warehouse capabilities now. A qualified warehousing partner should preserve lot-level data through receiving, storage, picking, and shipping, connect records across systems, and retrieve information quickly when a product must be traced or recalled.

Fuel prices push freight rates higher across truckload, LTL, and parcel

Fuel volatility and shrinking transportation capacity are driving freight rates higher across major shipping modes, according to the Q3 2026 TD Cowen/AFS Freight Index.⁹ Although freight demand remains uneven, higher diesel and jet fuel costs pushed second-quarter rates above earlier projections, with elevated pricing expected to continue through Q3.

Persistent transportation costs may also influence warehouse strategy. Shippers could hold more inventory closer to customers, use multiple facilities to reduce shipping zones, and rely more heavily on rate shopping and alternative carriers to control fulfillment expenses.

Peak-season imports are keeping rail networks stretched

U.S. rail traffic remained above 2025 levels through mid-July, though intermodal volume hit a brief air pocket before recovering. In the week ending July 11, intermodal growth slowed to 3% year-over-year, down sharply from the 12.9% increase posted the week before, as railroads absorbed a surge in peak-season imports.¹⁰ The dip proved short-lived: for the week ending July 18, U.S. intermodal volume rebounded to 297,017 containers and trailers, up 7.2% year-over-year, while total carloads came in at 226,883, down 1.2%. Combined carload and intermodal traffic for the week reached 523,900 units, up 3.4% year-over-year.¹¹

Congestion persists at major freight hubs even as volumes recover. Containers at the Port of Los Angeles are still waiting an average of five days for rail transportation, roughly a day longer than normal, following a record June.

Year-to-date, U.S. rail traffic remains 3.4% ahead of 2025 levels through the first 28 weeks of the year, with intermodal volume up 3.8% and carloads up 2.9%.

References:

1. https://www.supplychaindive.com/news/us-tags-brazil-imports-with-25-tariff/825397/
2. https://kpmg.com/us/en/taxnewsflash/news/2026/07/ustr-25-percent-tariffs-imports-brazil.html
3. https://www.resourcewise.com/blog/what-the-us-50-tariff-on-brazil-could-mean-for-pulp-and-paper-markets
4. https://www.cbre.com/insights/books/us-real-estate-market-outlook-2026/industrial
5. https://www.industrialsage.com/us-manufacturing-investment-tracker/
6. https://www.deloitte.com/us/en/insights/industry/manufacturing-industrial-products/manufacturing-industry-outlook.html
7. https://www.fda.gov/food/workshops-meetings-webinars-food-and-dietary-supplements/fda-public-meeting-challenges-and-solutions-lot-level-food-traceability-06152026
8. https://www.fda.gov/food/food-safety-modernization-act-fsma/fsma-final-rule-requirements-additional-traceability-records-certain-foods
9. https://www.prnewswire.com/news-releases/data-fuel-price-shocks-ripple-through-freight-markets-302825125.html?_sp=40c4ee4b-c058-4461-9a02-5323ad378c05.1784653110904
10. https://www.freightwaves.com/news/peak-fatigue-intermodal-slows-in-latest-data
11. https://www.ajot.com/news/aar-reports-rail-traffic-for-the-week-ending-july-18-2026