Warehouse Wisdom. Weekly. 01/24/2025

Happy Friday!

It seems the future of logistics tech isn't quite ready to soar just yet—Amazon has temporarily grounded its drone delivery program in Texas and Arizona. While the official explanation is a “pause,” it’s hard to ignore that this comes hot on the heels of a rather unfortunate “safety incident” involving two drones, some light rain, and a software malfunction. Turns out, even cutting-edge tech can’t quite handle a drizzle without needing a reboot. Innovation might be flying high in theory, but in practice, it’s a bumpy ride to the skies.

Stay tuned as we unpack the week’s headlines, including the Houthis signaling calmer seas, more global tariff talk, warehouse leases picking up steam, potential trucking growth in 2025, TikTok’s fight for survival, and much more. Let’s dive in…

Global Freight and Shipping

Houthis hit pause, freight prices may drop, and tariff talk heats up

In a rare moment of something resembling diplomacy, the Houthis have released the 25 crew members of the hijacked cargo ship after holding them for 14 months. Yes, you read that right—14 months. Thank goodness for the released for the sake of those crew members and their families. Adding to the mix, the Houthis announced they will only target Israeli ships going forward. While this “partial pause” in Red Sea attacks is being cautiously welcomed, the shipping industry isn’t exactly uncorking champagne yet.

This shift in chaos on the Red Sea could also provide some hope for shippers and freight budgets: DP World has hinted that freight prices could plummet by as much as 20% if Red Sea attacks simmer down. That’s a big “if,” of course. But should this hold, it might finally give logistics managers a reason to stop hyperventilating over shipping invoices.

The new administration is already eyeing changes to the USMCA, barely letting the ink dry on the last round of negotiations. Their goal? A revamped North American trade deal that could streamline cross-border freight. Of course, in the process, we’re also hearing renewed tariff talk aimed at Canada and Mexico, because what’s a good trade discussion without a little saber-rattling? Whether this turns into meaningful policy or just more political posturing remains to be seen.

Speaking of tariffs, it seems everyone is getting in on the fun—or frustration. Europe is gearing up for a “proportionate” response to potential U.S. tariffs, Mexico is urging calm, and Canada is vowing a “strong response” if provoked. And let’s not forget China, with February 1st looming as the start date for new tariffs. If you’re in the business of global supply chains, it’s like watching a high-stakes poker game where every player’s bluffing with a full deck of trade threats.

On the topic of China, a U.S. investigation has revealed what many in the shipping industry already suspected: China has been leveraging unfair trade practices to dominate global ocean shipping. These practices, which include alleged state-backed subsidies, have given Chinese companies a leg up while squeezing competitors. Whether this leads to new regulations or just more noise remains to be seen, but it’s clear the ocean shipping landscape is as turbulent as ever.  

Warehouse Operations and Tech

Post-election leasing boom meets Amazon’s Quebec exit

Prologis is reporting a post-election surge in warehouse leasing, suggesting that businesses are feeling optimistic—or at least decisive—about the future. Whether it's e-commerce, manufacturing, or just a collective need for more space to store regrettable bulk purchases, the market seems to be bouncing back. It's a good sign for the logistics sector, even if it does mean we’re about to see even more industrial parks sprouting up in places you’ve never heard of.

Meanwhile, Amazon is pulling the plug on all seven of its warehouses in Quebec, cutting 1,700 jobs in the process. Officially, the closures are due to "streamlining," and the company plans to use third-party warehouses instead.

Logistics Vitals

Global supply chain disruptions surge in 2024

Global supply chain disruptions surged in 2024, highlighting the ever-growing complexity and fragility of logistics networks. From geopolitical tensions to climate events, it appears the only thing supply chains can consistently deliver is unpredictability. Key Data Points:

• 38% increase in disruptions globally in 2024 compared to the previous year, according to Resilinc.

• The top cause of disruptions: Factory fires, contributing to 2,299 incidents, followed by labor disruption.

• Extreme weather disruptions increased by 119%, reflecting their growing impact on supply chains.

Freight and Shipping

Rising freight rates, costly job shortages, and a highway makeover (maybe)

Analysts are predicting a brighter year ahead for the trucking industry, with volumes and rates expected to rise in 2025. It’s a welcome sign for carriers, who have endured a rollercoaster ride of fluctuating demand, pricing pressures, and higher operating costs. Of course, optimism is the easy part and execution will depend on everything from economic conditions to whether we can fix the driver shortage (spoiler alert: probably not quickly).

Speaking of the driver shortage, new research estimates the trucking industry loses a staggering $955 million a week because there simply aren’t enough people behind the wheel. That’s right—nearly $1 billion per week in lost revenue, delayed shipments, and general supply chain chaos. As it stands, the shortage remains one of the biggest headaches in logistics, and unless there’s a massive influx of new drivers—or a miraculous leap in autonomous trucking—we’ll likely be stuck with the bill for a while.

Lawmakers are already setting their sights on 2025 with plans for improved highways, which, let’s face it, are overdue for a glow-up. While the details of any proposed legislation remain murky, the agenda signals at least some commitment to easing the bottlenecks and delays that plague U.S. freight routes. If nothing else, it’s a step in the right direction—assuming it doesn’t get lost in the usual gridlock of Congress.

Marketplaces

Smarter e-commerce, Walmart’s in-home testing, and TikTok’s temporary reprieve

E-commerce platforms are rolling out new tech models designed to predict low-quality products before they hit the customer’s cart. These models analyze product data and reviews to help shoppers avoid items destined for the return pile. While this is great news for consumers tired of sifting through knockoff chargers and suspiciously thin leggings, it could spell trouble if Big Brother gains too much decision-making authority.

Walmart is taking supplier partnerships up a notch with enhanced in-home customer testing. Suppliers can now gain insights directly from real households to better understand how their products perform in the wild. This initiative could raise the bar for product quality across the board.

TikTok lives to scroll another day—but only barely. After a meeting with the new administration, the app has been granted a 75-day reprieve from a potential ban in the U.S. While this gives creators and advertisers a temporary sigh of relief, the platform’s long-term fate remains a toss-up. If you’ve been meaning to sign up, though, good luck: App downloads are already restricted in some places, making new accounts harder to come.  

Warehouse Quick Deliveries

Long Beach’s freight boom, cargo theft’s alarming high, and more…

• Port of Long Beach shatters freight records.

• Cargo theft set a record in 2024.

• Symbiotic acquires Walmart’s robotic business to speed up and improve e-commerce fulfillment.

• CPB is getting closer to de minimis changes.