UPS fined $45mm by SEC, LTL classification changes delayed

Weekly Updates

12/6/2024

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·???????? Parcel – As FedEx continues to merge its Express and Ground networks, it announced the closing of its ship center in Durham, NC and a workforce reduction in its Raleigh ship center. In total, the two cutbacks will impact 341 employees.

·???????? Parcel – At least the increased rates that shippers are paying are making an impact: According to project44, parcel delivery speeds improved November over November by 27%.

·???????? Parcel – Good news for shippers here…no matter how small. Midwest-focused parcel provider Spee-Dee Delivery has announced that it will not increase its base shipping charges along with many of its competitors.

·???????? LTL – The SEC has fined UPS $45mm for overvaluing it’s LTL unit during the 2021 sale to TFI.

·???????? LTL – Freight classification changes that had been originally scheduled to roll out in May of 2025 have been delayed and will go live on July 19th, 2025.

·???????? Truckload – Spot market activity dropped last week due to the Thanksgiving holiday. Rates and ratios ended the month ahead of last year's pace for dry van and flatbed freight, with fuel costs down 10% compared to a year ago. Here are the truckload modal spot postings and rate comparisons (WoW/MoM/YoY).

o??? Van: Load-To-Truck: -13.3%/-6.7%/+19.8% - Rates: +0.0%/+0.0%/+0.5%

o??? Flatbed: Load-To-Truck:?-28.1%/-22.3%/+44.1% - Rates: +0.4%/+0.8%/+2.0%

o??? Reefer: Load-To-Truck: -31.9%/-0.4%/+13.2% - Rates: +0.9%/+0.4%/-1.7%

·???????? Trucking – Government shutdowns are in the news again with the senate needing to approve the budget for the Department of Transportation (among others) in order to avert a federal shutdown on December 20th.

·???????? International – During the first Trump presidency, Dick’s Sporting Goods developed strategies to minimize its exposure to tariffs. It plans on utilizing very similar strategies as potential new tariffs are discussed.

·???????? International – Trump tariff considerations are creating tensions between Canada and Mexico as Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum have traded barbs over border security.

·???????? International – The top 3 transpacific ocean carriers make up nearly 40% of marketplace with CMA CGM (13.2%) leading over Maersk (13.1%) and COSCO (12.9%).

·???????? International - Air cargo growth is projected to slow in 2025 due to saturated e-commerce markets, regulatory changes, and capacity constraints. Improved planning and shifting fulfillment models are stabilizing rates, but geopolitical risks and tighter customs rules pose ongoing challenges.

·???????? International – “Automation” is one of the major disagreements between the sides in the East/Gulf Port labor negotiations. What, specifically does that mean? SCMR takes a look.

·???????? Supply Chain – Considering a TMS? They are excellent tools for both shippers and carriers. However, TMS is a tool. If your transportation strategy logic is faulty, TMS will only allow you to execute a faulty strategy faster.

·???????? Supply Chain – Supply chain leaders have reverted to prioritizing cost management over resilience, with 88% viewing supply chains as cost centers. Progress on technology and collaboration lags due to short-term cost focus and internal disconnects.