Welcome to Issue #16 of the Palletizr Logistics Digest - a practical weekly briefing for teams that need to move freight, explain cost changes, and make decisions before the market fully settles.
This week feels split down the middle. On the cost side, there is real relief: hopes around a draft 60-day U.S.-Iran memorandum of understanding and a potential rollback of the U.S. blockade of Iranian ports pulled Brent down nearly 19% in May, its worst month since the pandemic, and dragged bunker fuel back below $900. On the risk side, the map got wider, not narrower. Israel has intensified its war on Hezbollah in Lebanon, the Houthis claimed new attacks while CENTCOM confirmed Red Sea missile launches, and the Strait of Hormuz - despite the diplomatic thaw - is still running at a small fraction of its pre-war flow. The honest read is that energy prices are pricing in a possible path toward peace while the security picture quietly adds fronts. Meanwhile container rates rose for a fourth straight week, air freight finally cracked lower year-on-year for the first time since 2024, and U.S. ports kept doing the unglamorous work of staying fluid. Cheaper fuel does not mean a calmer world - and operators have to hold both of those truths at once.
This Week at a Glance
| Metric | Current Level | Change / Context |
|---|---|---|
| U.S.-Iran framework | U.S. officials reported a mostly completed 60-day MOU draft; Iran has not confirmed final approval | Nuclear stockpile left out; broader talks expected to run 30-60 days; Trump sent one draft back for revisions |
| U.S. port blockade | Draft terms would gradually roll back the blockade as commercial shipping is restored | Still not evidence of a clean reopening; Iranian-controlled transit rules remain |
| Brent crude (May 29) | ~$92.56/bbl | ▼ ~19% on the month; ~20% off 2026 highs as the Hormuz war premium deflates |
| VLSFO (G20 index) | Slipped below $900/MT (~$884-913/MT depending on index) | Singapore ~$830, Rotterdam ~$794, Houston ~$859 |
| Hormuz throughput | Still roughly 5% of pre-war average | IRGC says it coordinated 26 vessels in 24 hours; many ships transit with transponders off |
| Vessels still trapped | 600+ tankers inside the Gulf, ~240 waiting outside | ~22,500 mariners affected per U.S. military testimony |
| Lebanon war | Israel ordered deeper operations; seized Beaufort Castle; strikes ordered on Beirut's Dahiyeh | U.S. floated a de-escalation "roadmap"; April 16 ceasefire never observed |
| Red Sea / Houthis | Houthis claimed new attacks on May 24; CENTCOM confirmed Red Sea missile launches | Damage attribution remains disputed; MARAD Advisory 2026-006 remains active |
| Drewry WCI (May 28) | $2,800/40ft | ▲ 3%; fourth consecutive weekly rise |
| WCI Shanghai-New York | $4,597/40ft | ▲ 6% |
| WCI Shanghai-Rotterdam | $2,861/40ft | ▲ 3% |
| CMA CGM Asia-Europe FAK | ~$4,700/40ft | Effective June 1 (Asia-Med ~$5,500-5,700) |
| ONE Transpacific PSS | $2,000/40ft eastbound | Effective June 1 |
| Air freight (global spot) | First year-on-year decline since April 2024 (~-4% YoY) | BAI00 down |
| Middle East-linked air capacity | Some estimates still put usable capacity ~15% below normal | Gulf airspace restrictions still bite through Q2 |
| IEEPA refunds (CAPE) | $20.6B certified, ~$85B accepted, 15.8M entries | Trade court pressing CBP on finally-liquidated entries; hearing June 9 |
| Panama Gatún Lake | 85.3 ft (healthy) | Auction slots averaged ~$385K (vs. ~$135-140K pre-conflict); El Niño watch |
| LA/LB truck dwell | 2.59 days (April) | Under 3 days for 15 straight months |
Story 1: Draft Iran MOU Hopes Pull Oil Lower - But Hormuz Is Not Reopened
Category: Geopolitics / Energy & Fuel
The single biggest cost story this week is that the market started pricing in a possible path toward peace. After President Trump described an Iran deal as "largely negotiated," U.S.-sourced reporting pointed to a mostly completed 60-day memorandum of understanding draft to pause hostilities and reopen commercial shipping through Hormuz. Iranian officials, however, have not confirmed a final agreement, and subsequent reporting says Trump sent one version back for revisions. The same draft framework would gradually roll back the U.S. blockade of Iranian ports as commercial shipping is restored. The market reaction was still immediate: Brent fell nearly 19% in May to about $92.56/bbl, its worst month since the COVID shock, and the G20 VLSFO bunker index slipped below $900/MT for the first time since the war premium took hold. For anyone budgeting fuel surcharges or bunker-linked freight, that is genuine, spendable relief - but it is relief built on expectations, not an executed reopening.
But this is exactly the kind of week the digest exists to slow down. A framework is not a settlement. The deal reportedly leaves Iran's nuclear stockpile out, broader talks are expected to take another 30 to 60 days, and one draft was already sent back for revisions. More to the operational point: the Strait of Hormuz is not reopened. Vessel-tracking data still puts throughput at roughly 5% of the pre-war average. Iran's new Persian Gulf Strait Authority continues to run a permission-and-toll regime - the IRGC says it coordinated 26 vessels in a single 24-hour window, which tells you transit is happening by exception, not by schedule. Hundreds of tankers remain stranded: industry estimates still count 600-plus inside the Gulf and another ~240 waiting outside, with thousands of mariners caught in between.
The EIA's own working assumption captures the gap between price and reality: it now expects Hormuz traffic to only begin resuming in June, with a full return to pre-conflict levels not likely until late 2026 or early 2027. And the second-order effects are still spreading - the UN's FAO warned this disruption is moving "in stages" through global agrifood systems and could trigger a food-price shock within 6 to 12 months if it persists.
| Hormuz / Iran Indicator | Latest Signal |
|---|---|
| Framework status | Mostly completed 60-day MOU draft reported by U.S. sources; final approval disputed |
| U.S. port blockade | Draft terms point to gradual rollback tied to restored shipping |
| Strait throughput | ~5% of pre-war normal |
| Transit mechanism | IRGC/PGSA permission + tolls, case by case |
| Vessels stranded | ~600 inside Gulf, ~240 outside |
| EIA reopening assumption | Traffic begins resuming June; full recovery late 2026-early 2027 |
| Brent (May 29) | ~$92.56/bbl, ▼ ~19% on the month |
The Bottom Line: Take the fuel relief - reprice bunker-sensitive lanes and surcharges to today's curve, not last month's. But do not rebuild your Gulf-linked routing or LNG/energy timelines around a "reopening" that has not happened. If the mine-clearance and MOU process stalls inside that 30-60 day window, the premium snaps back fast. Plan for cheaper fuel and a still-broken corridor at the same time.
Story 2: Lebanon's War Widens and the Houthis Reactivate - The Risk Map Just Got Bigger
Category: Geopolitics / Maritime Risk
While oil markets celebrated, the security map quietly added fronts. Over the weekend, Israeli forces seized the 900-year-old Beaufort Castle and a strategic ridge in southern Lebanon, and Prime Minister Netanyahu - calling it a "dramatic shift" - ordered the military to strike Hezbollah targets in Beirut's southern suburbs (Dahiyeh). A ceasefire announced in mid-April has, in practice, never held; Lebanon's health ministry now reports more than 3,400 people killed and over a million displaced since the fighting escalated in early March. Washington has floated a de-escalation "roadmap" in which Hezbollah halts attacks first, but the diplomacy is stalled. This is the same conflict that began with the February 28 U.S.-Israel war on Iran - it has simply found a second theater.
For shippers, Lebanon itself is not a major container origin. The operational risk is contagion and insurance. A widening Israel-Hezbollah war keeps the entire Eastern Mediterranean threat assessment elevated, sustains war-risk premiums on hulls and cargo with regional exposure, and - most importantly - keeps Iran's network of allies activated at exactly the moment the Hormuz MOU is supposed to be calming things down. The deal that markets are pricing on contains no mechanism that binds the Houthis or Hezbollah.
That gap showed up at sea on May 24, when the Houthis claimed simultaneous attacks on three vessels across three zones. CENTCOM confirmed two anti-ship ballistic missiles fired into the Red Sea, but did not attribute specific vessel damage; a Mediterranean claim was also disputed by the vessel's manager. MARAD's advisory 2026-006 remains live, and UKMTO is still the primary reporting point for the Red Sea, Bab al-Mandeb, and Gulf of Aden. The structural exposure is real: with Hormuz throttled, Saudi Arabia is now routing on the order of 5 million barrels a day out through the Red Sea port of Yanbu, leaving an estimated 70-75% of Yanbu's exports within Houthi missile range at Bab al-Mandeb - a 20-mile-wide strait the group is openly weighing a toll regime over.
| Risk-Map Signal | Latest Reading |
|---|---|
| Lebanon | Israel escalating; Beaufort Castle seized; Dahiyeh strikes ordered |
| Casualties / displacement | 3,400+ killed; 1M+ displaced since March |
| Diplomacy | U.S. "roadmap" floated; ceasefire not observed |
| Houthi activity (May 24) | Two CENTCOM-confirmed ASBMs in the Red Sea |
| Advisory status | MARAD 2026-006 active; UKMTO VRA reporting in force |
| Bab al-Mandeb exposure | ~70-75% of Yanbu's ~5M bpd within strike range |
The Action: Do not let the oil rally talk you out of risk discipline. If you have cargo or carrier relationships touching the Eastern Med, Red Sea, or Gulf, confirm war-risk coverage terms now, expect carriers to keep favoring the Cape of Good Hope on Asia-Europe (and to keep charging for it), and treat the ceasefire headlines as a reason to verify routing - not relax it.
Story 3: Drewry WCI Rises a Fourth Straight Week as June Surcharges Land
Category: Freight Markets / Container
The container market is no longer reacting to a single shock - it is grinding higher into an early peak season. Drewry's World Container Index for the week ending May 28 rose another 3% to $2,800 per 40ft container, its fourth consecutive weekly increase. The strongest fresh move was on the Transpacific, where Shanghai-New York jumped 6% to $4,597 and Shanghai-Los Angeles rose 3% to $3,473, while Asia-Europe kept firming with Shanghai-Rotterdam up 3% to $2,861 and Shanghai-Genoa up 4% to $4,253.
What makes this more than a number is the wall of surcharges now hitting at once. CMA CGM's new FAK rates take effect June 1 at roughly $4,700/40ft to North Europe and $5,500-5,700/40ft to the Mediterranean, and ONE's $2,000/40ft Transpacific eastbound PSS also lands June 1. Carriers are reinforcing those filings with disciplined capacity: Drewry counts about 47 blank sailings over the next five weeks against 707 scheduled departures - a ~7% cancellation rate that keeps just enough pressure on the system to make the increases stick. Drewry's forward language is still pointing up, not flattening.
The nuance worth holding: this is being pulled forward, not purely demanded. Bookings are front-loading ahead of the expected July bunker-adjustment-factor changes and an earlier-than-usual peak. That can reverse if demand softens or capacity returns - but for June cargo specifically, the bill is rising in real time.
| Lane / Signal | May 28 Reading | Move |
|---|---|---|
| Drewry WCI composite | $2,800/40ft | ▲ 3% (4th straight) |
| Shanghai-New York | $4,597/40ft | ▲ 6% |
| Shanghai-Genoa | $4,253/40ft | ▲ 4% |
| Shanghai-Los Angeles | $3,473/40ft | ▲ 3% |
| Shanghai-Rotterdam | $2,861/40ft | ▲ 3% |
| CMA CGM FAK (Asia-N.Europe) | ~$4,700/40ft | Effective June 1 |
| ONE PSS (TP eastbound) | $2,000/40ft | Effective June 1 |
The Action: Treat June 1 as a cost step-change, not a normal week. Lock what you can before the FAK and PSS layers stack, separate spot reality from announced surcharge risk, and book early-peak volume on the assumption that "wait and see" is now the expensive option.
Story 4: Air Freight Posts Its First Annual Decline Since 2024 - But It Is Not Cheap
Category: Air Freight / Modal Shift
Air cargo finally gave back some ground, and the way it happened matters. According to Xeneta, the global air cargo spot rate fell about 4% year-on-year in May to roughly $2.44/kg - the first such annual decline since April 2024. TAC's BAI00 index was down about 5% in the week to May 18, helped by a roughly 10% drop in jet fuel prices in early May as the oil premium deflated.
But the relief is mostly sentiment and fuel, not slack capacity on the lanes most exposed to the Middle East. The same data still puts BAI00 around 30% above last year, jet fuel up roughly 80% year-on-year even after easing, and some industry estimates still put usable Gulf-linked capacity about 15% below normal because airspace restrictions are forcing longer routings and thinner payloads through hubs like Istanbul and Central Asia. And the lane picture is anything but uniform: as the U.S. tariff backdrop shifted, China-to-US spot rates actually rose 14% to about $4.31/kg in the week to June 1, climbing back above China-Europe levels.
In plain terms, air has stopped getting worse and started, selectively, getting better - but "just fly it" is still an expensive decision, and the savings are uneven by lane. This is a market for surgical use, not a green light.
| Air Market Signal | Latest Reading |
|---|---|
| Global spot (May) | ~$2.44/kg, ~-4% YoY (first decline since Apr 2024) |
| BAI00 (week to May 18) | Down ~5% WoW; still ~30% above last year |
| Jet fuel | ~-10% in early May; still ~+80% YoY |
| Middle East-linked capacity | Some estimates: ~15% below normal through Q2 |
| China-US (week to June 1) | ~$4.31/kg, ▲ 14% |
The Bottom Line: The air market is easing on price, not on tightness. Reserve it for cargo that genuinely protects margin, a customer, or a production line - and reprice lane by lane, because the China-US bounce shows the "relief" is not landing everywhere at once.
Story 5: IEEPA Refunds Are Flowing - But the Trade Court Wants More
Category: Trade Policy / Customs
The refund money is real, and it is moving. In a May 26 declaration to the Court of International Trade, CBP reported that its CAPE system has certified about $20.6 billion in IEEPA refunds and accepted roughly $85 billion in potential and certified refunds across 15.8 million Phase 1 entries. First payments began the week of May 11. For importers who paid the now-invalidated tariffs, this is the stage where filings turn into actual Treasury disbursements.
The complication is who is still left out. Phase 1 covers unliquidated entries and certain entries within 80 days of liquidation - but finally-liquidated entries remain stuck. On May 27, Judge Eaton signaled real impatience, expressing particular concern about the "millions of informal entries" that liquidated at or near the time of entry and are now final, for which CBP "has not presented a proposal." The next steps are now split across three dates: show-cause briefs are due June 4, an in-person hearing with CBP Commissioner Rodney Scott is scheduled for June 9, and CBP must file a CAPE progress report by June 10 ahead of a closed settlement conference on June 11. The court may yet lift the suspension that lets CBP refund only on its own phased timeline.
This sits on top of an already busy trade calendar: the Section 301 continuation windows are live (the July 2018 action window runs through July 5, the August 2018 window opens June 24), and the temporary Section 122 10% duty is set to expire July 24. Refund timing, eligibility, and tariff continuation are all moving at once.
| Trade-Policy Item | Current Reading |
|---|---|
| CAPE certified refunds | ~$20.6B (sent to Treasury) |
| Accepted in system | ~$85B across 15.8M entries |
| Gap | Finally-liquidated entries not yet covered |
| Court deadlines | Show cause June 4; hearing June 9; report June 10; settlement conference June 11 |
| Section 301 (July 2018) | Window closes July 5 |
| Section 122 10% duty | Expires July 24 |
The Action: If your entries are inside Phase 1, make sure ACH enrollment and ACE access are clean so the money actually lands. If you have finally-liquidated entries outside Phase 1, do not assume you are out of options - the June 9 hearing could change eligibility, so have your entry data and counsel ready to move quickly.
Story 6: Panama's Water Is Healthy - Its Slot Prices Are the Tell
Category: Chokepoint / Energy Logistics
With Hormuz throttled, the Panama Canal is the cleanest read on how much diversion pressure is sloshing through the system - and right now it is sending a mixed signal. Operationally, the canal is in good shape: Gatún Lake sat at about 85.3 ft in late May, near maximum and a world away from the 2023 drought, thanks to unusually heavy dry-season rainfall. Transits and volumes are up - the authority logged 6,288 transits in the first half of FY2026, up 224 year-on-year, with tonnage up about 5%.
The pressure is in the pricing. Average auction slot prices jumped to roughly $385,000 in March-April, up from $135,000-140,000 before the Middle East conflict, with isolated bids reportedly topping $1 million and a single LPG vessel paying a reported $4 million for priority. The canal authority is right to stress these are exceptional, demand-driven outliers - only three to five slots are auctioned daily and most traffic moves on advance reservations - but the spread is a useful barometer: energy traders are paying up for certainty because the alternatives (a closed Hormuz, a risky Bab al-Mandeb) are worse.
One forward risk worth tracking: the canal is watching a possible El Niño later this year, with 84 ft flagged as the early-warning threshold. Water is not the problem today, but it could re-enter the conversation by Q3.
| Panama Signal | Latest Reading |
|---|---|
| Gatún Lake level | ~85.3 ft (healthy) |
| H1 FY26 transits | 6,288 (▲ 224 YoY) |
| Avg. auction slot | ~$385K (vs. ~$135-140K pre-conflict) |
| Extreme bids | $1M+; one reported $4M LPG slot |
| Watch threshold | 84 ft (El Niño early warning) |
The Bottom Line: Panama is not a bottleneck this week, but its auction prices are quietly telling you how stressed the energy supply chain still is. If you move time-sensitive cargo through the canal, book advance slots early and treat the auction market as a last resort, not a plan.
Story 7: LA/Long Beach Stays Fluid While the U.S. Port Map Quietly Reshuffles
Category: Port Operations
The most reassuring story this week is again the least dramatic one. At the San Pedro Bay complex, truck dwell held at 2.59 days in April - essentially flat with March and under the three-day mark for a 15th straight month, per the Pacific Merchant Shipping Association. Rail dwell ticked up to 5.06 days but remained in line with the modestly elevated pattern of the last five months rather than breaking down. Across the West Coast, on-dock dwell is running a calm 2-3 days.
Underneath that stability, though, volume is rotating. Year-on-year March inbound TEUs were down ~1.2% at Los Angeles and ~1.6% at Long Beach, even as Houston (+7.5%), Virginia (+10%), and Vancouver, BC (+9.7%) posted real gains. None of this is a crisis at the big West Coast gateways - they remain the structural anchor of North American freight - but it is a reminder that East Coast, Gulf, and PNW alternatives are absorbing share, often with healthier dwell profiles.
The Action: Use the West Coast calm to tighten execution and clean up load plans while you have the room - and if your network has leaned on LA/LB by default, this is a sensible quarter to pressure-test Houston, Virginia, or Vancouver as relief valves before peak-season pricing makes the comparison for you.
Story 8: Figure AI Moves Humanoids From Demo to a Real Distribution Center
Category: Technology / Strategy
The week's most concrete automation story was not a livestream - it was a contract. Figure AI signed a commercial deal with Catalyst Brands (the retail group behind JCPenney, Brooks Brothers, Aéropostale, and others) to deploy its Figure 03 humanoids running the on-device Helix-02 model in a Reno, Nevada distribution center, working alongside staff on sorting and packing. It follows a 200-hour continuous test in which the robots handled nearly 250,000 packages without reported hardware failure, and lands as Figure's valuation reaches roughly $39 billion on the back of a Brookfield-anchored round - notably, Brookfield holds equity in both companies.
The operational signal for logistics teams is less about the robot and more about the pattern. This is humanoid automation moving into an existing facility without a costly structural redesign, aimed squarely at the repetitive, physically demanding tasks that drive labor cost and turnover. It is still a single deployment on a specific workflow - worth watching, not yet worth rebuilding your warehouse around.
The Bottom Line: The winners here will not be the firms chasing the flashiest demo. They will be the ones who already know exactly which repetitive tasks - in sorting, packing, or loading - are clean enough to hand off without creating new failure points.
Palletizr Tip of the Week
Bank the Fuel Relief - Don't Spend It on Complacency
This week's contrast is sharp: fuel and air costs are easing while rates, surcharges, and geopolitical risk are still climbing. That is precisely when disciplined container planning pays for itself.
- Reprice to today's fuel curve - With Brent down ~19% and VLSFO back under $900, push your carriers and 3PLs to reflect lower bunker costs in surcharges now, rather than carrying last month's premium into June invoices.
- Get ahead of the June 1 surcharge wall - CMA CGM FAK and ONE PSS both land June 1. Model and lock exposure before the cost layers stack, and load every booked container to its true cube so a rising rate moves fewer boxes, not more.
- Use the calm gateways well - With West Coast terminals fluid, tighten load plans and execution while ports are not the bottleneck. Efficiency you build now is efficiency you keep when the next disruption arrives.
When the market hands you cheaper fuel and calm ports in the same week, the smart move is to convert that breathing room into structural efficiency - not to assume the quiet will last.
Key Dates to Watch
| Date | Event | Significance |
|---|---|---|
| June 1 | CMA CGM FAK + ONE PSS take effect | Stacked new cost layers on Asia-Europe and Transpacific |
| June 4 | CBP show-cause response due to CIT | First test of whether refunds expand to finally-liquidated entries |
| June 9 | CIT hearing; CBP Commissioner to appear | Could lift the suspension and broaden IEEPA refunds |
| June 10-11 | CAPE progress report and closed settlement conference | Court pressure on refund execution continues |
| June 24 | Section 301 (Aug 2018 action) window opens | Second trade-policy continuation clock starts |
| 30-60 days | U.S.-Iran MOU / Hormuz mine-clearance window | If it stalls, the oil and fuel premium can snap back |
| July 5 | Section 301 (July 2018 action) window closes | First key trade-policy deadline |
| July 24 | Section 122 10% duty expiration | Potential landed-cost change |
| Sep 22 | MARAD Advisory 2026-006 expiry | Red Sea threat guidance remains live unless superseded |
The Palletizr Logistics Digest is published weekly to help logistics professionals stay informed and make better decisions. For container loading optimization that reduces costs and prevents damage, visit palletizr.com.