Warehouse Wisdom. Weekly. 10/10/2025

🚚 Happy Friday.

Chinese maritime giants just called Trump's bluff on port fees, absorbing charges that could cost $2.1 billion through Beijing subsidies while trans-Pacific rates crater to loss-making levels. But the real story? Trucking spot rates surged overnight as immigration enforcement removed drivers faster than demand could adjust—tender volumes stayed flat yet the market turned "extremely blue."

And ground parcel pricing hit all-time highs of 32.0% above 2018 baselines even as carriers manipulated fuel surcharges up 18.6% while diesel fell 7.8%. October's chaos stems from deportation fear and carrier pricing games, not supply-demand fundamentals. Capacity looks tight, but only in people's heads.

That mix of policy and pricing panic sets the tone for global trade this week.

Global Logistics

Carriers absorb fees, tariffs slide, LMI hits recession levels

Cosco and Orient Overseas Container Line won't pass October 14th port charges to customers, absorbing fees that could cost $2.1 billion in 2026 through Beijing subsidies. Post-Golden Week, trans-Pacific rates collapsed. Asia-U.S. West Coast dropped 16% to $1,554 per FEU and East Coast fell 18% to $3,260—both at "possibly loss-making" levels and 60%+ lower than last year. The subsidy math only works if volume never returns. When carriers absorb billion-dollar fee schemes through state subsidies while slashing rates below profitability, tariff theater proves commercial shipping operates under different economic rules. Because nothing says economic recovery like loss-making freight rates and billion-dollar subsidies.

The November 1st truck tariffs target Mexico and Canada, which supply over 90% of truck imports. Trump's 25% levies arrive during a freight recession when domestic production can't handle demand—everyone pays more for trucks nobody can build anyway.

September's Logistics Managers' Index delivered conditions that signal an eerily freight recession with transportation utilization hitting exactly 50.0—the lowest September reading in LMI history. Warehouse capacity tightened as inventory pushed over 54.2, but transportation prices barely expanded at 51.4. Peak season delivered the worst transportation reading in dataset history while warehouses overflow with inventory—either the metrics broke or the economy did.

Logistics Vitals

Ground rates hit records while express flatlines

TD Cowen/AFS Freight Index data tracking $39 billion in annual parcel spend reveals express rates stayed within 4.5% of January 2018 baselines for five years while ground rates hit all-time highs at 32.0% above that baseline in Q2 2025.

• Express parcel rates forecast at just 2.3% above January 2018 levels in Q3 2025, staying flat despite constant pricing noise

• Ground fuel surcharges jumped 18.6% at UPS and 16.3% at FedEx from Q2 2024 to Q2 2025 while diesel prices fell 7.8%

• Ground parcel rate per package hit 32.0% above January 2018 baseline in Q2 2025 as carriers deploy "subtle yet potent pricing actions"

• One consumer electronics company cut $100 million spend by 20% through volume consolidation; a retailer recovered $300,000 in misapplied residential surcharges

Small Parcel Freight

Deportation fear spikes rates, Amazon deadlines pass, peak fees arrive

Spot rates jumped across the country while tender volumes stayed flat and rejection rates sat at 5.5%. The heat map turned "extremely blue" without volume pressure. FreightWaves CEO Craig Fuller traced the anomaly to immigration enforcement creating psychological impact—immigration lawyers advising clients to stay off roads even with valid permits. Deportation fear removed capacity faster than anyone expected. Translation: psychology moves freight faster than metrics.

Black Friday and Cyber Monday deal submissions closed October 7th—before most sellers finished reading Amazon's peak season announcement at Accelerate 2025. FBA shipment cutoffs create a cascading timeline already past critical dates: Amazon Warehousing and Distribution by October 9th, FBA minimal splits by October 20th, Amazon-optimized splits by October 30th. For sellers who missed Amazon's deadlines, January is the new December.

Even as peak season surcharges escalated across FedEx, UPS, USPS, and Amazon, carriers increased holiday fees despite flat volumes. FedEx residential surcharges range from $0.90-$8.75 per package, UPS adds $1.50-$8.75 for residential deliveries. OnTrac and GLS US added $1 residential surcharges while UniUni, SpeedX, LSO, and GoBolt advertise zero peak fees to steal volume. Peak pricing without peak demand is now the norm.

Behind the headlines, the data confirms what shippers already feel.

Warehouse Tech

Power fears drive decisions, eight driverless trucks deploy, drones crash

Prologis surveyed 1,816 global executives: 89% experienced energy disruptions last year, 83% claim power reliability will drive the next supply chain crisis, and 77% now prioritize energy over labor costs. Nearly 80% would relocate after one to five major outages annually. Yet only 27% have "advanced power resilience" capabilities. When executives identify problems without solving them, it's basically every corporate survey ever.

Kodiak Robotics went public at a $2.5 billion valuation, operating eight completely driverless trucks in the Permian Basin with empty cabs—no observers, no safety personnel. The trucks deliver loads across 75,000 square miles for oil and gas operations where remote locations face excessive driver turnover. Eight trucks running driverless is real progress—though calling it an "inflection point" might be premature when the fleet fits in a single loading dock.

Amazon restarted Arizona drone deliveries days after two Prime Air MK30 drones collided with a stationary construction crane, causing "substantial" damage. Amazon's internal review found no system faults and introduced "enhanced visual landscape inspections" to monitor obstacles. When your drones can't detect stationary construction equipment in daylight, "enhanced inspections" means adding the human oversight you said you didn't need.

Marketplaces

AI shopping hits $180B potential, Walmart steals traffic, Amazon expands

Agentic AI commerce could generate $73-292 billion in annual GMV based on ChatGPT's 2.5 billion daily prompts. The math: 2.1% of queries involve "purchasable products"—53 million shopping interactions daily—converting at 5-20% rates with $80 average orders. At the midpoint of $182 billion, agentic commerce would rival the largest retailers' online sales. The twist: Amazon blocked most AI shopping integrations while Walmart's 420 million-SKU catalog became the "backbone of many AI shopping results," with ChatGPT driving referral traffic equal to 20% of Walmart's total visits.

Amazon announced plans for a 1 million-square-foot fulfillment center in Greenfield, Indiana, joining the state's 13 existing fulfillment centers plus 11 delivery stations. Amazon opened an 800,000-square-foot robotics center in Elkhart last month featuring hundreds of autonomous robots, plus a 2.8 million-square-foot facility in Charlton, Massachusetts. Meeting demand growth means building bigger facilities with more robots working alongside fewer humans per square foot.

Warehouse Quick Deliveries

3PLs unprepared as rates stay brutal, fraud hits €800M

• Penn State's 30th annual study found 52% of shippers are confident adapting to Trump trade policy yet 41% of 3PLs have no near-term tariff strategy

• Derek Leathers warned at the WEX OTR Summit that freight rates remain "stably horrible" and "well below operating costs" while Class 8 truck orders hit historic lows

• Brazil's Grupo Petrópolis achieved 98% delivery performance across nearly 3,000 vehicles serving 160 locations, reducing overtime 9% and fuel consumption 5%

• Operation Calypso uncovered systematic customs fraud blocking €700-800 million in losses where 2,435 containers declared as "tyres and screws" actually held electric bicycles and clothing