Retailers Face Freight Squeeze Ahead of Holidays
Higher fuel and transportation costs weighed on retailers' third-quarter margins and left some inventory below plan.
Updated on Nov. 2, 2026 in Retail
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Retailers paid higher freight and fuel costs in the third quarter, pressuring margins across several companies. Amazon shipping costs rose 11% from a year earlier while units rose 12%, and Tractor Supply's gross margin fell to 36.4% from 37.4%.
Why it matters
Transportation expenses flow through to prices, inventory levels and margins for retailers serving U.S. shoppers heading into the holiday season. Port congestion and container availability issues also left some inventory below plan.
Amazon shipping costs rose 11% and units rose 12% from a year earlier, while Tractor Supply's gross margin slipped to 36.4% from 37.4% and sales grew 5.1%. Carter's reported inventory of $587 million, down 11% year over year, and said the disruptions had not materially affected its business to date.
The players
Amazon
Amazon is a global e-commerce and cloud computing company whose fulfillment network is one of the largest in U.S. retail logistics.
Tractor Supply
Tractor Supply is a U.S. retailer of farm, ranch and rural lifestyle products operating a large store network across the country.
Carter's
Carter's is an American retailer specializing in children's apparel that sells through its own stores and wholesale channels.
The details
Amazon's fulfillment operations faced higher fuel costs and line-haul rates on long-distance trucking between facilities, though better inventory placement, shorter shipping distances and package consolidation helped offset some of the cost. Tractor Supply attributed its margin pressure mainly to higher transportation and fuel costs, alongside investments in pricing.
Timeline
Third quarter (2026): retailers faced higher fuel and transportation expenses.
Heading into the holiday season: retailers faced shipping inflation and inventory delays.
Market Landscape
The freight and port strains reported this quarter echo the 2021-2022 West Coast container congestion that pushed shipping rates to record levels across U.S. retail. Companies with large logistics networks, such as Amazon, appear better positioned to absorb these cost swings than smaller retailers that rely on outside carriers.
Higher freight costs can filter into shelf prices and shipping fees for shoppers buying holiday gifts. Inventory shortfalls may also mean some items are harder to find in stock during the busiest shopping period.
The takeaway
Shoppers planning holiday purchases may find it useful to order earlier, since freight delays and inventory gaps could affect availability and delivery timing.
Further reading
For more on how transportation costs are reshaping store economics, see the Retail section.
Source note: This article includes information reported by FreightWaves.
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