Warehouse Wisdom. Weekly. 11/14/2025

🚚 Happy Friday.

Manufacturers are abandoning China despite the negotiated ceasefire. Simon Lichtenberg's $20 million Vietnamese factory joins Nike, Apple, and Intel's exodus while his Shanghai facility sits vacant with 500 laid-off workers. Ocean carriers jumped rates 48% only to watch them collapse as tariff-driven frontloading created the spare capacity that now kills pricing power. Meanwhile, 14 deaths in a Louisville crash grounded 57 UPS and FedEx MD-11 aircraft just as FAA ordered 10% traffic cuts during government shutdown. Lot of news as always, so let’s dive in!

Global Logistics

Factories flee China while carriers discover frontloading kills pricing power

Simon Lichtenberg spent $20 million moving his leather sofa factory from China to Vietnam this year, joining Nike, Apple, and Intel in abandoning the country that once defined global manufacturing. His newly built Shanghai factory sits mostly vacant. 500 laid-off workers, empty metal shelves, motionless assembly robots. Trump's ceasefire with China changed nothing for manufacturers who've already eaten millions in tariff losses. Vietnam now makes more sneakers for Americans than China does, while U.S. smartphone and laptop imports have shifted to India and Vietnam even for products with tariff exemptions.

Ocean carriers responded to collapsing demand by pulling capacity levers that aren't working. Asia-U.S. West Coast rates jumped 48% to $2,958 per FEU on November 1 general rate increases, yet daily spot rates are already trending back toward October lows. October imports retreated to May-June levels when 145% tariffs crushed volumes. Carriers announced blank sailings this month to prevent backsliding, but overcapacity keeps building as 2024's Red Sea windfall profits fade. GRIs have become aspirational rather than actual. Markets refuse to pay announced rates.

UPS and FedEx grounded their combined 57 MD-11 aircraft after a deadly Louisville crash killed 14 people. Boeing recommended suspending flight operations pending engineering analysis, forcing both carriers to activate contingency plans during a period when FAA already ordered 10% traffic cuts at 40 major airports due to government shutdown. MD-11s represent 9% of UPS' fleet and 4% of FedEx's. Nothing says "operational readiness" like discovering your backup plan requires aircraft that just got grounded.

Small Parcel Freight

Alternatives build capacity while majors extract through fees

Veho, Jitsu, and Gofo added over 650,000 square feet of processing capacity ahead of peak season, with Veho doubling year-to-date volume across 15 cities and Gofo's New Jersey "Super Hub" handling 800,000 daily parcels. Veho expanded Philadelphia and Indianapolis hubs by 50,000 combined square feet while opening a 150,000-square-foot Atlanta facility. Jitsu built warehouse management systems capable of handling triple normal volumes, recruiting early and offering peak-day pay adjustments to ensure driver availability. The strategy? Alternatives to FedEx and UPS gain market share by investing in infrastructure while majors squeeze margins through surcharges. Incumbents extract value through fees; competitors build it through capacity.

DHL Express watched U.S.-bound volume crater 32% in Q3 as de minimis elimination killed business-to-consumer shipments. Time Definite International billed weight to the U.S. plummeted after August 29's $800 duty-free threshold death exposed low-value B2C packages to Trump tariffs. CFO Melanie Kreis noted customers "changing to different forms of transporting B2C into the U.S." while B2B shipments showed resilience. What did DHL say? Shift capacity to underutilized trade lanes and abandon B2C to the U.S. entirely. CEO Tobias Meyer expects no rebound even if courts strike tariff authority: "There are other legal grounds the president could use." Operator takeaway: regulatory uncertainty doesn't just reduce volumes, it forces carriers to exit entire segments rather than absorb unpredictable costs.

The Big Three posted holiday shipping deadlines that compress decision windows to days. USPS Ground Advantage and First Class cut off December 17, UPS 3-Day Select stops December 19, and FedEx waits until December 23 for most services including Ground and Home Delivery. USPS pushes customers toward Priority Mail Express ($23 December cutoff), while FedEx maintains Ground acceptance through December 23 to capture volume competitors refuse. Compress the windows, monetize the panic. Peak season deadlines aren't about operations, they're about extracting premiums from shippers with no alternatives.

Logistics Vitals

Tariff hoarding created the spare capacity that killed inflation

GEP's Global Supply Chain Volatility Index registered -0.33 in October, tracking 27,000 businesses worldwide to reveal manufacturers are buying less, working down inventories, and curbing new purchases across all major economies. North America led the inventory drawdown after months of tariff-driven stockpiling earlier in 2025, with input demand falling to the steepest decline since May. The index reflects demand, shortages, shipping expenses, stock levels, and delays; negative values imply unused capacity, which stabilizes market fluctuations.

• North America index dropped to -0.45, lowest since March, as manufacturers restrict raw material purchasing through winter

• Asia index fell to -0.30 from -0.06, driven by Chinese manufacturers slowing procurement while India maintained strength

• Europe index rose to -0.25 from -0.53 three-month high, but suppliers remain underutilized as Germany, France, Italy and UK restrict purchasing

• UK index plummeted to -0.80 from -0.57, marking sharpest regional decline in supplier activity

• Global transportation costs ticked down to just below historically average levels after spare capacity eliminated pricing pressure

• Material shortages tracker stayed well below long-term trend, signaling healthy supply levels with little challenge sourcing commodities

Warehouse Tech

AI handles warehouse calls while SPACs chase exits over operations

DHL Supply Chain expanded its partnership with HappyRobot to deploy AI agents handling appointment scheduling, driver follow-ups, and warehouse coordination across hundreds of thousands of emails and millions of voice minutes annually. The autonomous agents interact via phone, email, and messaging while integrating with DHL's internal systems, reducing manual effort and enabling teams to focus on exception handling rather than repetitive communication. .

Swedish autonomous trucking firm Einride agreed to go public via SPAC merger at $1.8 billion valuation, seeking up to $100 million in PIPE funding after raising $100 million in October. Founded in 2016, Einride reports $65 million contracted annual recurring revenue. The SPAC route follows pandemic-era electric vehicle listings that saw Nikola, Lordstown Motors, and Proterra collapse under competition, operational challenges, and cash burn. Einride bets $1.8 billion valuation on $65 million ARR will deliver exits faster than profitability. Capital markets reward liquidity over operational milestones. SPACs become the shortcut past actually running a business.

Wise Systems launched Strategic Planner and Performance Manager tools for last-mile delivery operations, generating repeatable schedules considering historical volumes and analyzing route efficiency through on-time percentages and planned-versus-actual comparisons. Market fragmentation transformed route optimization from operational luxury to competitive requirement. Dozens of regional carriers are taking market share from UPS and FedEx while major retailers like Walmart expand internal logistics. The operators with better algorithms win. The timing isn't coincidental—it's necessary.

Marketplaces

Retailers chase basket size while sellers absorb fraud costs

Target launched conversational AI gift finder and "List Scanner" functionality that transfers handwritten shopping lists into digital carts, betting that app-using in-store shoppers generate basket sizes nearly 50% higher than those without phones. Target joined OpenAI's 11 retail partners welcoming ChatGPT-based apps later this year. The metric that justifies every AI experiment? Basket size.

Amazon introduced returns dashboard ahead of January's expected tsunami as extended holiday policy allows November-December purchases to be returned through January 31st. The dashboard tracks ASIN-level insights, performance metrics, and recovery data. One seller responded: "85% of return reasons are lies to get free shipping for the return itself." Another reported soiled reusable swim-diapers returned and resold as new by Amazon, nearly tanking her business before detection. The dashboard doesn't address the fundamental imbalance where buyers face zero proof requirements while sellers must document every dispute. Friction-free customer experience requires someone to absorb the fraud costs. That someone is always the seller.

TikTok Shop reached eBay's size despite volatile tariff regime, executive shake-ups, and perpetual ban threats. The platform's ecommerce division continues massive growth by combining live-stream selling with algorithm-driven product discovery. Essentially reinventing the Home Shopping Network for vertical video. Retail now sells excitement as much as product.

Warehouse Quick Deliveries

Frontloading hangover meets logistics AI platforms

• Port of Long Beach handled 8.2 million TEUs through October, up 4.1% year-over-year on track to match 2024's record despite tariff uncertainty driven by frontloading

• U.S. container imports projected to drop 17.9% in December to 1.75 million TEUs, slowest month since March 2023 as retailers work through tariff-driven stockpiles

• Samsara unveiled AI ecosystem including route planning and voice AI agent making thousands of simultaneous customer calls with no add-on costs

• DHL opened Europe Innovation Centre in Troisdorf constructed from cross-laminated timber with zero emissions and DGNB Platinum pre-certification