Warehouse Wisdom. Weekly. 12/06/2024

Happy Friday!

It’s that magical time of year when we pretend we have the gift of prophecy, and this week, U.S. Bank has thrown its hat in the ring with a bold look at the top three supply chain impacts for 2025. Will tariffs disrupt the supply chain? Are longshoreman strikes over automation going to hit us for a round two? Will sophisticated freight fraud continue to shock the industry? And, most importantly, can anyone guess if 2025 will finally be the year we stop saying “unprecedented”? (Spoiler: no.)

In this week’s newsletter, we’ll bring you the highlights, including Cyber 5 sales results, the latest on tariff tensions, the rise of no-frills international shipping, and why your packages might actually show up faster than expected. It's a mix of the promising, the puzzling, and the potentially disruptive—just another week in logistics. Let’s dive in!

Online Marketplaces

Pajamas win, TikTok grows, and Amazon stock outs frustrate

This year’s Cyber 5 shopping extravaganza brought a noticeable shift in consumer habits. Though the numbers are estimated at this point, in-store shopping grew over last year, where as online shopping dipped compared to the previous year. There were still more shoppers that opted for online shopping than in-store, as shoppers collectively said, “Why fight over a discounted toaster when I can buy it online in my pajamas?” It’s a clear reminder that the allure of clicking "Add to Cart" beats battling mall parking lots. Meanwhile, Cyber Monday appears to have claimed the title of the highest e-commerce sales day ever.

Speaking of online trends, Amazon sellers are flocking to TikTok like it’s the new gold rush. Despite murmurs of a looming U.S. ban, sellers are all-in, capitalizing on TikTok’s Shop feature to reach Gen Z and Millennial buyers. Turns out, scrolling through memes and dance trends is just a gateway drug to impulse-buying gadgets and questionable kitchen accessories. Whether TikTok’s shopping wave sustains or crashes remains to be seen, but for now, it’s keeping Amazon sellers—and their ring lights—very busy.

Over at Amazon Haul, stock outs were the buzzkill of the season. With a temporary 50% discount being offered on everything sold, demand outpaced supply as eager shoppers found themselves greeted with “out of stock” notices instead of deals. It’s a cautionary tale for even the e-commerce giant: when demand hits a fever pitch, even the best logistics machine can hit a wall. While Amazon works to iron out these kinks, customers are left to ponder a tough question—what’s worse, missing the sale or paying full price later?

Global Freight Disruptions

2025’s chaos checklist starts early

The tariff dance is in full swing, with the U.S. threatening 100% duties against BRICS countries, and China retaliating by banning exports of critical minerals (gallium, germanium and antimony). It’s a geopolitical staring contest where neither side wants to blink—and small businesses are caught in the middle, nervously calculating the cost of their next inventory shipment. SMBs are most worried about increased prices and the inability to procure products – forcing them to have to shut down. If you’re a retailer relying on BRICS imports or tech components from China, your 2024 New Year’s resolution might be finding a new supplier or investing in aspirin.

Negotiations with Canada Post workers are moving at a glacial pace, raising concerns over how long the 55,000-person strike can last. There is a “good amount” of back and forth though, so perhaps an end is in sight. Meanwhile, U.S. port operators are digging in their heels over automation proposals, with labor unions pushing back harder than a jammed container crane. Companies are already bracing for what many are calling an inevitable January strike on the East and Gulf Coasts. It seems “supply chain disruption” will remain on our collective bingo cards for the foreseeable future.

Logistics Vitals

The season of receiving (carriers collecting your money)

Holiday shipping fees are moving higher, with rates climbing to new heights as carriers capitalize on peak demand. If you thought holiday cheer came with free shipping, think again.

• FedEx and UPS cumulative base price increases have risen 33% since 2021.

• FedEx revenue per package is expected to grow 4.6% in the current fiscal year.

• UPS is estimating a 1.9% growth rate in its revenue per package in 2025 after a drop this year.  

Freight and Shipping

Air cargo climbs, no-frills shipping rises, and delivery times race ahead

The air cargo industry is set to soar, and no, it’s not because general cargo suddenly got more glamorous. Express traffic, fueled by the e-commerce juggernaut, is projected to outpace general cargo growth by 33% through 2043. Translation? Those late-night, “I definitely need this random gadget tomorrow” orders are reshaping the skies. The industry better buckle up, because the demand for faster delivery isn’t just a trend—it’s the new baseline. And there will be a lot more cargo aircrafts flying the friendly skies, projected to increase from 2,340 units to 3,900 units, according to Boeing.

Meanwhile, the rise of no-frills international shipping proves that less really is more. Businesses are increasingly opting for these pared-down services to get goods across borders efficiently and cost-effectively. Forget premium tracking and flashy packaging; the focus is on affordability and reliability. Sure, packages might skip the VIP treatment, but hey, if it gets there intact and on time, who’s complaining? And new companies like SpeedX are capitalizing on the opportunity.

Speaking of time, November saw the fastest average delivery times since the early pandemic days, clocking in at a sleek 3.7 days. It’s a win for retailers and consumers alike—because nothing says "holiday cheer" like not having to explain why Aunt Susan’s gift is still “on the way.” As carriers step up their game, the pressure to maintain these speeds year-round will likely become the next big challenge.

Industrial Warehousing

New Jersey’s $28M question

In New Jersey, a town shelled out a cool $28 million to block warehouse development, effectively saying, “No thanks” to the logistics boom. Now, they’re left scratching their heads over what to do with the land. Parks? Housing? A really expensive monument to indecision? While local leaders debate, it’s a reminder that saying “no” is easy, but figuring out “what next” is a pricey puzzle—especially when warehousing could have paid the bills.

Warehouse Quick Deliveries

Amazon faces delivery scrutiny, Alibaba invests big, and AI startups take the wheel

• Amazon under fire for slower ship times in low-income areas.

• Alibaba invests $71 million in South Korean e-comm platform Ably. 

• HappyRobot lands $15.6 million backing for its agentic AI.

• Vooma expands war chest to build AI solutions to automate logistics tasks.

• One last correction from our previous week’s newsletter: we incorrectly stated Mexico’s current President as Lopez Obrador instead of Claudia Sheinbaum Pardo. Our sincerest apologies and thank you to our readers for identifying the correction.