Warehouse Wisdom. Weekly. 10/03/2025

🚚 Happy Friday.

Peak season surcharges hit across major carriers despite flat volumes since 2021—Amazon starting October 26th, UPS and FedEx following similar patterns. Meanwhile, Trump's 25% furniture tariffs start October 14th after importers spent three months adjusting since the July 1st Commerce report, while Asia-West Coast container rates crashed 15% to $1,853 as demand dropped 14.58% year-over-year.

Between carriers charging peak fees without peaks, policies announcing tariffs after adaptation windows close, and sophisticated automation failing over commodity defects, this week reminded small businesses that "efficiency" means paying more for less predictability while managing vulnerabilities nobody mentioned in the sales pitch. Let's dive in.

Global Logistics

Tariffs hit furniture while ports dodge funding cuts

Trump's furniture tariffs arrive October 14th with a three-month warning nobody needed. His Monday executive order implementing 25% tariffs on upholstered furniture and kitchen cabinets, plus 10% on lumber, codifies the Section 232 investigation delivered July 1st. Rates escalate January 1st: furniture to 30%, cabinets to 50%.

UK imports face 10% duties, Japan and EU products get 15%. Most major ports already spent the money Trump's rescinding. The One Big Beautiful Bill Act eliminated $60 million in EPA funding for diesel emissions reduction. Port of Los Angeles deployed its $2 million grant in 2021. Port of Long Beach's $1.4 million from 2019 is operational.

Container rates plummeted 15% to $1,853 as demand fell 14.58% year-over-year. Carriers blanked 13% of sailings. Without a deal, tariffs snap back to 145% on November 14th. China, at the same time, plans retaliatory port fees starting October 14th—the exact same day as the furniture tariffs. Coincidence, not coordination.

Policy chaos creates pricing chaos. Small businesses scramble to calculate which regulatory whiplash costs more.

Small Parcel Freight

Peak fees arrive without the peak

UPS began charging $8.25 for additional handling Sunday, rising to $10.80 on November 23rd. Ground shipments face $0.40 surcharges starting October 26th, overnight air gets $1.10—both escalating a month later. FedEx, USPS, Amazon, and OnTrac deployed similar charges despite flat volumes since 2021. ShipMatrix projects 2.3 billion packages during peak season, up just 5% from last year due to an extra shopping day. The strategy? Charge more when there's no surge.

Canada Post workers walked off Friday demanding 19% wage increases over four years—$2 billion annually—as market share collapsed from 62% in 2019 to below 24% today. The union wants 17 personal leave days, up to seven weeks vacation, and restrictions on contracted services as volumes plummeted 50% year-over-year.

Alison Layfield, VP at ePost Global, explains the death spiral: her company now tenders only 10% of volumes to Canada Post, diverting the bulk to TForce, UniUni, and Fleet Optics at premium rates. UPS dropped 5.4% and USPS fell 6.7% while Amazon gained 6.1% and FedEx added 5%. Alternative networks aren't stealing 102 million packages. They're just cleaning up the mess.

Logistics Vitals

Automation demands perfection from $12 wood

Modern Materials Handling's 2025 Pallet Report reveals that as warehouses automate, they become vulnerable to the most basic component failing. Wood pallets represent 92% of all units—unchanged for three years—while quality standards tighten dramatically.

• 89% of companies demand minimum pallet specifications for automated systems, with 100% rating quality as "extremely important" or "very important"

• 75% call broken components critically important while 63% equally prioritize protruding nails and dimensional tolerances

• The 48x40-inch standard dominates at 72% usage as used market tightens with 18% reporting supply shortages

• 41% call tariff impacts on wooden pallet prices "undetermined" proving even basic commodity costs resist predictable analysis

Warehouse Tech

AI fills trucks, robots stall, food giants test agents

Trucking has a dirty secret Y Combinator-backed Oway just raised $4 million to exploit: not all truckloads are full. The startup uses machine learning and ELD telematics data to identify opportunities for carriers to pick partial loads along routes they're already traveling. Founder Phillip Nadjafov reports carriers on popular lanes increase annual revenue by 30% while shippers see 50% cost reductions versus traditional LTL. The innovation isn't technology—it's proving partial loads can pay premium pricing.

Robots don't like sidewalks. DoorDash unveiled Dot, an autonomous electric delivery robot traveling 20 mph on roads, sidewalks, and bike lanes while carrying 30 pounds. The robot integrates into DoorDash's platform combining human couriers, sidewalk robots, drones, and autonomous vehicles. When Dot encounters obstacles, it stops and waits for human assistance. No remote teleoperation. No navigation around obstacles. Not futuristic—just frozen.

The catch? Speed doesn't guarantee success. Kraft Heinz piloted The Cookbook, an AI agent built on Azure OpenAI giving workers access to 150 years of ketchup production expertise. The tool went from idea to prototype in under three months. S&P Global reports 42% of companies abandoned most AI projects in 2025, up from 17% in 2024. Oway proves AI works solving business problems. Dot proves autonomy stops at sidewalk cracks. Kraft Heinz proves speed isn't immunity from failure rates.

Marketplaces

Amazon charges sellers more while undercutting grocery retailers

Amazon's peak surcharge timing reveals the playbook. The company deployed fees starting October 26th with per-package charges hitting $0.60 from November 23rd through December 27th, plus additional handling reaching $10.80 and extra heavy packages topping $540. The timing coincides with attracting BarkBox and KiwiCo away from competitors by touting "faster delivery times and more economical shipping rates"—right before installing the holiday fee stack.

The real play: Amazon simultaneously launched Amazon Grocery, a private-label brand with 1,000+ items priced under $5. Albertsons dropped 2% on the announcement while Walmart, Kroger, Costco, and Target each fell 1%. The strategy? Charge existing shipping customers more while undercutting grocery competitors on price—extracting margin from captive logistics users to subsidize market-share wars in fresh food.

Meanwhile, a federal judge dismissed Temu's antitrust claims against Shein Tuesday, ruling the court lacked jurisdiction over conduct in China. Temu alleged Shein captured 75% of the U.S. fast-fashion market through "mafia-style intimidation" and thousands of sham copyright takedowns. Judge Kelly allowed narrow IP claims to proceed but stripped the bigger antitrust case. U.S. courts keep the interesting allegations offshore.

Warehouse Quick Deliveries

Tariffs hit domestic production, construction booms while jobs disappear

• Trump's 25% truck tariff takes effect October 1st despite 99% of Class 8 trucks being manufactured domestically, with $15.6 billion in Mexican and $4.5 billion in Canadian imports expected to override USMCA

• Manufacturing construction spending hit all-time highs after doubling versus 2021, yet U.S. manufacturers cut 33,000 jobs this year as 77% of leaders cite workforce limitations

• Gartner places supply chain cybersecurity at "Peak of Inflated Expectations" while GenAI enters "Trough of Disillusionment" as integration challenges expose implementation gaps

• FedEx launched Dublin-Indianapolis cargo flights four days weekly, cutting delivery times by one full day to serve Ireland's 68% export flow to U.S. pharma markets

• Swedish startup Einride completed the world's first cabless autonomous border crossing between Sweden and Norway using digital customs integration