Warehouse Wisdom. Weekly. 10/30/2025

🚚 Happy Friday.

This week’s headlines: Treasury Secretary Bessent admits they'll refund half the year's tariff revenue if the Supreme Court rules against them November 5th: $108 billion collected on legally questionable authority. Meanwhile, trucking hemorrhages 600,000 drivers. UPS returns to USPS after union wages make Ground Saver math impossible and volumes drop 33%.C.H. Robinson's AI just added $50 million to forecasts with 40% productivity gains. All this and more - let’s dive in!

Global Logistics

When policy and capacity collide, small operators pay first

The Supreme Court hears oral arguments November 5th on whether Trump's emergency tariff powers were legal. Treasury Secretary Bessent already admitted they'd refund roughly half the year's revenue if courts rule against them: potentially $108 billion. U.S. Customs and Border Protection could face refund requests "100 times more than anything they've seen previously." The legal problem? EEPA tariffs weren't customs decisions. The White House told CBP to collect money, and CBP collected money. Customs might reject protests with "your beef is with them, not with us." Nothing says "emergency powers" like collecting billions you're already planning to refund.

Trucking faces 600,000 driver elimination over three years: 17% of the workforce gone. The September 26th FMCSA emergency ruling means 97% of 200,000 non-domiciled CDL holders can't satisfy new requirements. Add English proficiency enforcement and immigration sweeps, and small carriers relying on immigrant labor face extinction. Fraudsters reverse-engineered Highway's and RMIS verification platforms. Brokers now refuse to override even benign flags. Legitimate carriers get locked out when volumes already dropped 18% year-over-year. Anti-fraud systems that can't distinguish fraud from paperwork problems make everyone with an accent or compliance hiccup unemployable.

Former CBP Director Richard DiNucci delivered simple advice at an October 15th Port of Los Angeles briefing: stop assuming what customs will do and start asking the right people. Getting answers from CBP headquarters remains difficult four weeks into the shutdown. Operator takeaway: when trade policy becomes guesswork, knowing who to call beats knowing the rules.

Small Parcel Freight

Union wages meet market economics. Someone blinks first

UPS reached a "preliminary understanding" with USPS to resume last-mile delivery for Ground Saver after discovering their union workforce can't compete with postal economics. CEO Carol Tomé contacted new Postmaster General David Steiner in July hoping for better terms than when they insourced SurePost in late 2024.Their delivery costs ran $85 million above Q2 projections. When they raised Ground Saver rates, volumes plummeted 32.7% year-over-year. The deal includes Mail Innovations, which lost USPS discounts and saw rates jump 20 to 40%. Bottom line: their union cost structure makes money impossible on ground packages at customer rates.

UPS eliminated 34,000 positions and shuttered 93 buildings through Q3 while orchestrating a 50% Amazon volume reduction by June 2026. Amazon volume dropped 21.2% year-over-year as the network shakeup saved $2.2 billion, targeting $3.5 billion total by year-end. The carrier deployed automated systems in 35 facilities expecting 66% of Q4 volumes through automated processes. Losing your biggest customer's unprofitable packages means "efficiency" translates to fewer people, fewer buildings, and more robots.

Amazon launched Amelia, prototype smart glasses providing delivery associates with hands-free navigation, package scanning, and real-time hazard alerts. The glasses automatically power up when vehicles park and shut off when moving. Amazon claims Amelia cuts about 30 minutes from daily delivery time by eliminating phone juggling and handheld scanners. Future iterations may identify incorrect drop-offs and spot yard animals before drivers approach homes.

Logistics Vitals

Wage data exposes 'driver shortage' myth

Driver wages flat for 15 years while union drivers hit $170K. But ATA President Chris Spear claims truck driver wages increased 19% during the recession as evidence of a driver shortage. Unfortunately, the Bureau of Labor Statistics data tells a different story: inflation-adjusted wages for heavy and tractor-trailer truck drivers increased just 1.1% since 2010.

• Real wages for heavy and tractor-trailer truck drivers increased 1.1% since 2010 when adjusted for inflation. Nominal wages rose 45.6% while CPI climbed 43.9%

• UPS Teamsters drivers average $170,000 in pay and benefits by end of five-year contract negotiated in 2023

• Truckload sector turnover reaches 80 to 90% compared to 10 to 15% in less-than-truckload operations where pay is higher

• Driver wages lagged behind inflation in 2015, 2021, and 2022, indicating actual purchasing power decline

Warehouse Tech

AI delivers measurable gains while automation spreads

AI-driven efficiency gains pushed C.H. Robinson to raise its 2026 operating income target by $50 million to $965 million or $1.04 billion. Stock surged 12.85% to $146, an all-time high and double where it traded in April 2024. The broker's North American Surface Transportation productivity jumped 40% since end of 2022. CEO David Bozeman emphasized market share gains don't depend on freight recovery: "We are comfortable operating in an environment that is lower for longer." The real story is operators finally trusting software more than spreadsheets.

In China Grove, North Carolina, Macy's opened its largest and most-automated facility: 2.5 million square feet of AutoStore robots and Knapp pocket-sortation systems cutting fulfillment to under one day. Senior VP Sean Barbour: "Customers want to see as few tracking numbers as possible. That also matters to us, because it's very expensive to send more than one package per order." The 167-year-old retailer reported its first quarterly sales growth in three years. Turns out, spending decades watching Amazon eat your lunch eventually motivates investment.

In Poland, PepsiCo is implementing an automated storage and retrieval system connected directly to production lines. Mecalux's solution features six stacker cranes enabling 24/7 pallet flow. Energy recovery systems save 15 to 20% per movement while AI-powered computer vision replaces traditional photocells. Operating 24/7 happens to reduce emissions by 200 tonnes annually. Sustainability becomes the side benefit, not the justification.

Green Logistics

Reusable packaging scales on economics, not virtue

Across export-heavy industries, companies are replacing disposable packaging with durable systems designed for dozens or hundreds of shipping cycles because the math works. Automotive, electronics, and pharmaceuticals lead adoption of return programs where packaging flows back through supply chains for inspection, repair, and reuse. IoT sensors monitor container condition. Blockchain verifies sustainable sourcing. AI-powered analytics optimize routes to reduce empty backhauls. Companies see measurable ROI through lower costs, reduced landfill fees, and decreased exposure to raw resource volatility. Reusables cost less than disposables, so corporate sustainability suddenly aligns with procurement budgets.

MIT's 2025 State of Supply Chain Sustainability Report surveyed 1,200+ professionals across 97 countries revealing the gap between commitment and capability. Finding: 80% believe sustainability is important to long-term success. The problem is that even though over 75% of a company's total emissions are from Scope 3, they're the most difficult to monitor. The biggest issue? 70% report a lack of supplier data. Spreadsheets remain the top tracking tool with 66.1% using them. When 80% call sustainability critical but 66% track it via Excel, good intentions now live in copy-paste formulas.

Warehouse Quick Deliveries

Costs shift down, automation scales up

• Amazon ends FBA prep and labeling services in US starting January 1, 2026, requiring sellers to handle packaging themselves or use vetted third-party providers as improperly prepped shipments won't be eligible for reimbursement if damaged

• McCormick raised 2025 tariff impact from $90 million to $140 million, planning to offset through productivity savings, alternative sourcing, and price increases

• Levi Strauss expects to complete warehouse network transition from owned to hybrid leased facilities by early 2026 after 19.5% year-over-year increase in Q3 distribution costs due to parallel operations

• Nvidia and Palantir partner on corporate logistics with AI agents that generate shipping routes around disruptions and enable hourly supply chain re-optimization based on product costs and regional demand