Logistics Trends & Insights LLC

Friendly reminder that FedEx reports its Q3 (ending Feb 28) earnings this afternoon. A Substack article on FedEx’s earnings will go out tomorrow in case you are interested in reading more. https://lnkd.in/djGzMTK How will FedEx do? Here are a few articles that might shed some light: ·??Analysts are expecting FedEx’s revenue to grow 1% year on year to $21.96 billion, a reversal from the 1.9% decrease it recorded in the same quarter last year. https://lnkd.in/eV8AdRxE ·?Growing investor concerns over tariffs, weaker consumer demand, and a slowdown in industrial activity. Citi analyst Ariel Rosa notes that market sentiment appears overly negative, with many expecting FedEx to lower its full-year F2025 earnings outlook again. https://lnkd.in/e6Cxbgei ·?“We also look for management commentary on progress around building out a dedicated LTL salesforce and infrastructure for the standalone freight business,” Citi analysts noted. https://lnkd.in/endT-XBi? I expect revenue growth due to rate and surcharge increases and slight profit due to its network redo and other strategic initiatives such as combining Ground and Express. I think they’ll protect revenue per package ok but the volumes may be down because of more options available in the parcel market. What do you expect? The earnings call is scheduled for 5:30 pm ET today - https://lnkd.in/etUYrVjZ Stay tuned for more! - Cathy

Yesterday, the Bureau of Labor Statistics (BLS) published its monthly import and export price index for February. There's alot of interesting stats in the report. Check it out here - https://lnkd.in/giTP_XW. Also note that it expanded the use of data from a?non-survey source but did not create a break in series?with previously published price indexes. As tariffs begin to take hold, I think these will be interesting indices to monitor. Check out the import index for China. February was the biggest monthly increase since Dec. 2022. Note that I pulled out mostly import data from the report to share here: U.S. import prices increased 0.4% for the second consecutive month in February. Prices for U.S. imports rose 2.0% over the past year. Higher prices for petroleum and natural gas contributed to the overall increase in import fuel prices in February. Import fuel prices rose 1.7% after increasing 3.5% in January. Prices for nonfuel imports increased 0.3% in February following an increase of 0.1% in January. Higher prices for nonfuel industrial supplies and materials and consumer goods more than offset lower prices for capital goods. The price index for nonfuel industrial supplies and materials rose 1.8% in February, after a 0.6% increase in January. Nonfuel industrial supplies and materials prices increased 8.0% from February 2024 to February 2025, the largest over-the-year increase since the index rose 8.4% for the year ended August 2022. Import Prices by Country Prices for imports from China rose 0.5% in February, after rising 0.2% in January. The February increase was the largest 1-month increase since a 0.5% rise in March 2022. Import prices from China increased 0.5% over the past 12 months, the first over-the-year increase since December 2022. The price index for imports from Japan increased 0.2% in February following a 0.7% advance in January. Prices for imports from Japan decreased 0.1% over the past 12 months. Import prices from Canada rose 0.8%in February, after increasing 1.6% the previous month. Prices for imports from the European Union increased 0.7% in February Import prices from Mexico increased 0.2% over the same period. Prices for all U.S. exports edged up 0.1% in February following increases of 1.3% in January and 0.5% in December. Higher prices for non-agricultural and agricultural exports each contributed to the increase in February. Check out the chart below – This shows the increase in BLS’ import price index for manufacturing from Mexico. - Cathy

The US Census’ manufacturing and trade inventories and sales report for January was published yesterday. Per the report, total manufacturing and trade inventories, adjusted for seasonal and trading day differences but not for price changes were estimated up 0.3% from Dec 2024 and up 2.3% from January 2024. https://lnkd.in/gXaucH3z Looking at the total manufacturing and trade inventories, unadjusted, they were up 1.4% from December 2024 but sales were down 10%. Manufacturing inventory, in terms of millions of USD, unadjusted, increased 2.1% from December while sales declined 4.6%. Meanwhile, retail inventories, unadjusted, increased just 0.3% from December while sales dropped 18.8%. The slowdown in sales is a bit worrisome. I’m not sure if this is due to just seasonal or if folks are actually tapped out/cautious (This is what I suspect). The February retail sales added to the worry. Retail sales from January were up only 0.9% and up 0.5%, unadjusted. ?https://lnkd.in/d9cFmNY From the retail sales report - Nonstore retailers’ sales were down 7.7% from January, unadjusted, and down 0.2%, adjusted. It appears this year is starting slow for retail and manufacturing sales. However, due to the slowdown in sales, they will likely have extra inventory heading into the final month of Q1 and into Q2 – Good for those looking to avoid real and potential tariffs but a drawback for those having to pay for extra inventory costs. For more: Reuters - US business inventories increase in January https://lnkd.in/e6EEr5SG WSJ - Retail Sales Edge Up in February but Miss Expectations https://lnkd.in/eiN6rHwy - Cathy

After back-to-back conferences (TPM and RLA), I'm back at my desk until late April when I head out to an Oracle analyst meeting. It's Monday and that means a new Freight Forward - https://lnkd.in/e8E6CwRb A new Freight Reverse - https://lnkd.in/e4yjDAMh And finally, a new Substack article - Online Platforms Offer Ocean Freight Services to SMBs - https://lnkd.in/etbFPAh8 Look for a second Substack article later this week after FedEx reports its quarterly earnings on Thursday, March 20. ?? Lastly, a reccomendation..it's a bit dated but well worth the watch or read - The Perfect Weapon by David Sanger and also a HBO documentary. David Sanger spoke at TPM a couple of weeks. I was fascinated by his talk and wanted to read/watch more of his work so I watched the HBO documentary last night and was like ??. Anyways, enjoy today and I'll get back on track to regularly posting here and elsewhere. - Cathy

Thank you to Ian Putzger for the email exchange about UPS' latest 'fee adjustments' while I'm here at the RLA conference. Check out his Loadstar story here - https://lnkd.in/eKy6nGfb Flattered to be quoted along with former boss, John Haber ?? -Cathy

Happy Wednesday! This week I'm at the Reverse Logistics Association Conference. The photo below is of our startups and judges - I'm super proud of the RL pitch contest now in its 3rd year and so important to reverse logistics. ?? Winners will be announced tomorrow so stay tuned. Also, a quick share from our friends at UPS, a surge fee goes into effect next Monday, March 16 thru March 29 from origin countries - China, Hong Kong and Macau - to the US. Per the announcement, the Surge Fee ($0.29 per lb) is subject to the UPS Fuel Surcharge, and the Surge Fee will apply based on the billable weight of the shipment. I'm not 100% sure why the fee going into effect other than this may be due to Spring/Summer seasonal imports or perhaps higher e-commerce volumes. Thoughts? Let me know please. Thanks, Cathy

It's been a while since I last talked with Ian Kerr of the The Postal Hub but we did last month about UPS. ?? https://lnkd.in/eWYbfpaq

Alibaba's B2B platform and Maersk, a long time Alibaba partner, announced yesterday that Maersk’s LCL and FCL logistics services will be available on Alibaba.com. According to the press release, "this will allow SMEs to directly book transparent, cost-effective shipping with a single click." Per the announcement, the service includes: ● SMEs can secure preferential rates ● Guaranteed Capacity & Rates: Lock space and prices to mitigate supply chain risks. ●??Monitor shipments from factory pickup to delivery. ●??Automated Compliance: Streamlined documentation for cross-border trade. The service appears to be similar to Amazon Global Logistics which allows shippers to ship ocean cargo from China directly into the Amazon fulfillment network in the US, UK, and EU. https://lnkd.in/gXdS9-tv. Stay tune for more via a Substack article this weekend on this and more. Happy Friday! Cathy

Congratulations to Spee Dee Delivery Service, Inc. who announced yesterday that it plans to expand into Missouri and Kansas effective April 7. This is another example of regional parcel carriers and parcel tech providers expanding their geographic reach and providing shippers with more delivery options. The parcel market is evolving as two of its leaders, FedEx and UPS, retool their networks and focus on higher margin deliveries such as healthcare/life sciences while the USPS continues to face its own unique issues and Amazon grabs volume - its own and as a 3rd party carrier. The US Parcel Market Q1 report will be available in April to Substack paid subscribers. https://lnkd.in/djGzMTK Other subscriber-only reports in the works are: ??Quarterly Logistics M&A Review and Analysis ??Cold Chain Stay tune for more report announcements. - Cathy

A couple of interesting tidbits I found this morning: For those keeping up with UPS and FedEx surcharges etc. - effective March 24, 2025, the applicable zone will change for certain origin/destination ZIP code pairs. Revised zone charts will be available via UPS.com beginning March 24, 2025. "UPS rate updates help to support ongoing expansion and capability enhancements as we strive to maintain the high service levels you expect from UPS." Sounds like a new way of raising rates while not raising rates....?? The second tidbit I found really interesting particularly regarding the potential upcoming steel and aluminum tariffs on March 12: Per Recycling Today - The Recycled Materials Association says its review and analysis of the executive orders on inbound steel and aluminum tariffs indicate ferrous and aluminum scrap can continue to trade freely across the United States border. https://lnkd.in/ehNKwUsS - Cathy