U.S. freight demand is in a decidedly lower gear heading into the critical fourth quarter. Recent industry measures and comments from trucking executives suggest that shipping volumes are softening from last year’s urgent demand. The WSJ Logistics Report’s Liz Young writes that freight rates are also pulling back from historic highs as domestic operations grow less strained and the capacity constraints of the past two years recede. The broad Cass Freight Index last month reached its lowest point since April and freight rail shipments appear to be sputtering. The pullback comes as a pivot in consumer spending toward services looks to be in full swing, leaving retailers weighed down by excess inventory. Trucking executives note shipment volumes remain strong by historical standards and say business is moderating after a period of rapid growth. They just need shipping demand to build back up to its usual fall peak.

• Dean Croke of DAT Solutions says shippers are gaining significant rate discounts in a softer market by rebidding their contracts. (Heavy Duty Trucking)
• Less-than-truckload carrier Saia is sharply increasing its capital spending plan to expand its terminal network. (Transport Dive)

Alarms are going off in the Taiwan Strait again. China is resuming its military drills in the region following the surprise arrival of a new delegation of U.S. lawmakers. The WSJ’s Chun Han Wong and Yang Jie report the drills appear aimed at demonstrating Beijing’s ability to mount a blockade of Taiwan, raising new questions about the impact that a broader and more sustained military action would have on global business. Experts say a Chinese blockade of Taiwan would cripple global supply chains and raise freight prices in Asia and potentially beyond, because of the outsize role that the island of roughly 23 million people plays in global business. It would also close off one of the world’s busiest routes, cutting shipping capacity as vessels sail on longer voyages around the region. That would drive up shipping rates, which spiked when tensions arose a couple of weeks ago.

Growing U.S. competition with China over technology isn’t stemming the flow of high-tech goods across the Pacific. A regulatory review process of U.S. tech exports to China approves almost all requests, the WSJ’s Kate O’Keeffe reports, and has even overseen an increase in sales of some particularly important technologies. According to trade data, officials required a license for less than half a percent of the U.S.’s total $125 billion in exports to China in 2020, and they greenlit all but a handful. The reviews come as the U.S. treats intensifying technological competition with Beijing as a national security issue. The trade data shows the U.S. continues to send to China a wide array of semiconductors, aerospace components, artificial intelligence technology and other items that could be used to advance Beijing’s military interests. Critics say Commerce Department officials are improperly prioritizing U.S. commercial interests over national security.

• China’s semiconductor output tumbled 16.6% in July. (South China Morning Post)

Brent-crude futures tumbled to less than $93 a barrel amid expectations of rising supply and waning demand from China. (WSJ)

Japan’s economy recovered its prepandemic size with 2.2% annual growth in the second quarter. (WSJ)

The yen’s historic decline is boosting sales and profits at top Japanese companies. (WSJ)

A measure of home-builder confidence fell for the eighth straight month. (MarketWatch)

Water levels on the Rhine fell to new lows, further restricting barge traffic on the key waterway. (DW)

Dockworkers at the U.K.’s Port of Liverpool voted to authorize a strike over pay and working conditions. (Reuters)

Ukraine war insurance rates for the shipping industry are moderating. (Lloyd’s List)

Prices for bulk shipping’s largest capesize vessels fell to a six-month low. (TradeWinds)

Altera Infrastructure, an offshore support services ship owner, filed for chapter 11 bankruptcy protection. (Bloomberg)

Intermodal rail transport remains a weak link at the ports of Los Angeles and Long Beach even as a ship backup dwindles. (Daily Breeze)

Mediterranean Shipping Co. took a stake in a South African company that runs several private hospitals. (ShippingWatch)

U.S. regulators ordered the U.S. branch of a Hong Kong-based WIN.IT Information Technology to pay more than $1 million in back wages to warehouse workers in Kentucky and California. (DC Velocity)

Discount retail grocery chain Aldi is raising pay for its warehouse workers in the U.K. by 9%. (Financial Times)

Australia’s Qantas is adding six A321 converted freighters to its fleet to meet e-commerce demand. (Simple Flying)

Aircraft maintenance company Aspire MRO is starting a 777 freighter conversion program. (Air Cargo News)

Paul Page is editor of WSJ Logistics Report. Write to him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.