Warehouse Wisdom. Weekly. 11/07/2025

🚚 Happy Friday.

Ocean freight rates crashed 68% to $1,150 per container. A UPS cargo plane crash at Worldport injured crew members and shuttered the facility processing 416,000 packages hourly—five weeks before peak season. Warehouse demand hit 60 million square feet in Q3 as companies with balance sheets signed leases.

Meanwhile, Amazon cut 14,000 corporate jobs while holiday shoppers plan to spend $890 per person hunting deals before tariffs drive prices higher. Companies with cash lock in rates and space. Everyone else gets flexibility. Let’s dive in!

Global Logistics

Rates crash 68%, Suez stays empty, shippers negotiate revenge

Ocean freight rates from Asia collapsed to $1,150 per container as carriers canceled voyages to prevent total price destruction. MGA Entertainment shifted 75% of shipments to spot rates, saving over $18,000 per container compared to pandemic peaks. The Port of Los Angeles reported 17 canceled voyages in recent weeks. Cut capacity, bumped containers, stranded inventory—your holiday stock moves when the carrier decides it moves.

The Suez Canal Authority hosted 20 major carriers after reporting 229 ships returned in October, its best month since late 2023. CMA CGM sent two 17,000 TEU vessels through as tests while 23,000 TEU flagships avoid the Red Sea entirely. MSC anticipates a "swift return" while Evergreen waits for "complete and permanent" stability. The actual obstacle? Marine insurance costs remain prohibitively high. Carriers "monitoring developments" are waiting for someone else to eat the insurance premiums first.

Maersk raised full-year guidance to $9 billion despite third-quarter EBITDA dropping from $4.8 billion to $2.68 billion year over year. CEO Vincent Clerc credited "resilience of demand" and upgraded container volume forecasts to 4% growth for 2025. The stock dropped 6%. Beating expectations while profits fall in half apparently disappoints investors when your business model depends on moving boxes. Clerc insists talk of globalization's death has been "quite premature." The markets disagreed.

Small Parcel Freight

UPS loses hub, Canada loses reliability, both bet on healthcare

A UPS cargo plane crashed Tuesday evening at Worldport in Louisville, injuring crew members and halting operations at the facility that processes 416,000 packages per hour. The company activated contingency plans to reroute shipments through regional hubs before peak season. Every other facility works overtime while hoping shippers don't notice the delays. Supply chain invisibility works great until it doesn't.

Canada Post employees deployed rotating strikes as the holiday rush approaches, a year after a national strike shut down operations during last peak season. The union won't announce strike locations or durations in advance. Shippers are diverting volume to UPS and FedEx. UPS suspended service refunds on Canada domestic offerings while extending delivery commitments. UPS will take your volume. Just don't expect it to arrive on time.

While parcel networks face operational chaos, UPS closed its $1.6 billion acquisition of Andlauer Healthcare Group, adding specialized cold chain capabilities and 17 million square feet of distribution space. Buying into high-margin healthcare logistics beats fighting for residential delivery scraps—especially when your core business involves mass layoffs while competitor networks stay congested.

Logistics Vitals

Warehouse leasing hits 60M sq ft as big players ignore tariff chaos

U.S. industrial real estate net absorption reached 60 million square feet in Q3, the highest level since Q1 2023, as companies signed leases despite tariff uncertainty. Phoenix and Indianapolis led demand growth driven by big-box activity and build-to-suit deliveries.

• Net absorption jumped nearly 20 million square feet year over year in Q3 despite year-to-date absorption still trailing 2024 levels

• Industrial construction dropped to 270 million square feet, the lowest level since 2018, signaling a shift toward balanced development in markets with sustained demand

• Vacancy rates hit 7.4% in Q3, up 72 basis points year over year, but limited future supply could stabilize vacancies in coming quarters

• Dollar Tree and Ahold Delhaize announced new distribution centers while New Balance opened its Salt Lake City facility last month

• Prologis customers are "more desensitized to short-term noise" as large companies lead long-term commitments that smaller operators follow once they see big players aren't waiting

Marketplaces

Amazon flattens 14,000 jobs while shoppers hunt deals before tariff hikes

Amazon announced 14,000 corporate layoffs with more cuts expected in January, marking the largest round in the company's 31-year history. CEO Andy Jassy blamed "too many layers" from multiyear hiring sprees, setting a goal to increase individual contributors to managers by 15% by Q1 2026. More than 27,000 jobs eliminated since late 2022. One customer support staffer laid off after 15 years said "they remove people but not the work" while senior leadership appears "extremely disconnected from the workers." The phrase "staying nimble" from the layoff memo quickly became a meme on internal Slack channels. Your CEO wants to operate like "the world's largest startup." Everyone does more with less while waiting for the next round of cuts.

The National Retail Federation forecasts Americans plan to spend $890 per person on holiday gifts, down from last year's $902. Bank of America found higher earners spending more while lower-income consumers shop earlier to spread costs and dodge tariff hikes. Lower earners shop early to spread expenses over several months, but also to beat price increases—if they don't shop now, tariffs make it more expensive later. Retailers like Nordstrom and Wayfair rolled out early Black Friday savings hoping to capture customers spreading out expenses. Shop now or pay more later stops being a marketing tactic when tariffs make it literal.

Green Logistics

Electric fleets scale on economics while cold chain discovers where 80% of emissions hide

Amazon deployed 160 electric heavy-goods vehicles to its UK network because electricity costs less than diesel, not because councillors monitor impacts. The 40-tonne Mercedes-Benz eActros 600 trucks join 35,000+ electric delivery vans globally. Fast-charging infrastructure replenishes batteries from 20% to 80% in just over an hour, making eHGVs operationally viable. Amazon also expanded on-foot delivery in London—over one million packages delivered on foot in Camden alone. Scaling remains limited by charging infrastructure. Amazon invested in its own facilities because waiting for government collaboration meant waiting indefinitely.

Refrigerated transport drives 80% of cold chain emissions, which makes route optimization more valuable than electrification press releases. Researchers analyzing the sector found the biggest savings come from strategic distribution site selection and applying the right algorithms. Genetic algorithms and ant colony optimization emerged as the technical workhorses, balancing costs against emissions. Current models overlook critical trends including the rise of air and water transportation in emerging markets. Algorithms deliver measurable carbon reductions. Sustainability announcements deliver press releases.

Warehouse Quick Deliveries

Costs shift down, automation scales up

• Maersk opened its largest contract logistics facility in Asia Pacific, a 180,000-square-meter distribution center in Malaysia with 100,000 pallet positions

• Greece maintains position as world's largest shipping nation with 16.4% of global deadweight tonnage capacity, outpacing China's 14.4% and Japan's 9.9%

• Eighteen U.S. senators urged rigorous STB review of Union Pacific-Norfolk Southern merger, warning the combined network would handle 40% of U.S. freight

• C-store retailers struggle with contract negotiations as mid-size operators lack scale and negotiating power against larger suppliers