Cargo Chaos: Rate Hikes, Strikes & Thieves Rock Supply Chains

Supply chain news is in overdrive, and this week's roundup is your front-row seat. UPS is playing Grinch with a 5.9% rate hike, while Amazon Air pulls an Airbnb move by renting out its cargo holds. East Coast ports are still reeling from the ILA's three-day temper tantrum, and hundreds of workers are getting pink slips faster than a Prime delivery. But that's not all — lawmakers are prescribing a dose of DSCSA exemptions to keep the meds flowing, trucking rates are doing the limbo with spot prices, and a gang of tech-savvy porch pirates is making off with AT&T iPhones quicker than you can say "signature required." Get comfortable because this week’s rundown has more twists and turns than a warehouse forklift race.

UPS Delivers a Peak Season Price Hike

Just as holiday shoppers gear up for the busiest time of year, UPS drops a bombshell. The delivery giant announces a 5.9% rate increase set to kick in on December 23rd, right in the thick of peak season madness.  

Santa's Sleigh Gets a Price Tag: Explaining the 5.9% Bump

UPS isn't sugarcoating this one — shipping costs are going up across the board. Ground, air, and international services will all see an average 5.9% increase starting December 23rd. The company claims it's necessary for "ongoing expansion and capability enhancements," but the timing is hard to ignore. Implementing the hike two weeks before rival FedEx and smack in the middle of last-minute gift-sending panic has UPS positioned to cash in on the most lucrative part of the holiday rush. While the impact will vary based on factors like package weight and delivery distance, sending those Christmas presents clearly got more expensive.

Beyond December: UPS's Year-Round Pricing Strategy Unfolds

The holiday price hike is just the beginning of UPS's plan to squeeze more revenue from every package. October 21st will bring changes to surcharge zones, potentially affecting shipping costs in major cities. Then, on January 27th, 2025, the company will revamp how it calculates fees for large packages and additional handling. These moves reveal a broader strategy: UPS is fine-tuning its pricing to maximize profit on every shipment, whether oddly shaped, extra large, or headed to a busy urban area. While some price-sensitive customers might balk, UPS is betting that many will pay a premium for its reliable service.

After the Storm: Confronting Shipping Challenges Post-ILA Strike

The International Longshoremen's Association (ILA) strike may be over, but shippers aren't out of the woods yet. While the union and management reached a tentative deal, extending their contract until January 15, 2025, the brief work stoppage left a wake of disruption in its path. Cargo backlogs and freight constraints continue challenging supply chains across East and Gulf Coast ports. So, what should shippers prioritize to get back on course?

Untangling the Knots: Port Congestion and Capacity Issues

Experts predict it could take most of October to return port operations to normal. The three-day strike created a ripple effect, with each day of closure requiring 3-5 days to clear the resulting backlog. Shippers now face a double whammy of congestion at primary ports and strain on alternative routes. Many companies diverted cargo to the West Coast or rushed to frontload goods before the strike, putting pressure on rail operations and inland point intermodal volumes.

Preparing for Future Waves: Long-Term Strategy and Risk Management

While the immediate focus is clearing backlogs, smart shippers are looking ahead. The current contract extension offers breathing room, but another potential strike looms if negotiations stall by early 2025. Contingency planning remains vital, regardless of shipping mode, route, or commodity. Experts advise maintaining open communication with clients and mapping out strategies well into Q1 2025. With the holiday peak season and Lunar New Year on the horizon, proactive shippers can weather potential storms by diversifying carriers and building flexibility into their supply chains.

Amazon's Sky-High Ambitions: Spreading its Wings in Airfreight

Amazon's empire is taking to the skies in a big way by muscling into the airfreight world and offering its spare cargo plane capacity to other businesses. It's a gutsy move that fits into Amazon's growing bag of tricks for outsourced logistics, putting them on a collision course with the likes of FedEx and UPS.

From Prime to Partner: Amazon Air's New Mission

What started as Amazon's personal delivery fleet has grown into a beast of burden ready to shoulder others' loads. Amazon Air, born in 2016 to keep Prime promises, now boasts over 100 planes buzzing between 54 U.S. airports on 250+ daily flights. And the craziest part? They've got space to fill. Enter the Amazon Air Cargo website, a digital marketplace where anyone from small businesses to big-time freight forwarders can snag space on an Amazon jet. Want a single shipment? They've got you. Need regular cargo blocks? No problem. Feeling fancy? Charter the whole plane. It's a clever play to squeeze every dime out of their massive network, mainly as Amazon tweaks its shipping strategy to rely less on long-haul flights.

The Amazon Effect: Reshaping Logistics One Service at a Time

Amazon's jump into airfreight wholesaling isn't coming out of left field — it's part of a bigger picture. They've been slowly but surely building a logistics empire that goes way beyond delivering online impulse buys. We're talking ocean freight booking, customs paperwork, and even offering Prime perks to other online stores. By adding air cargo to the mix, Amazon created a supply chain Swiss Army Knife that can go toe-to-toe with the old guard of shipping. Sure, they'll have to manage their own needs with paying customers when things get busy, but let's face it — Amazon has deep pockets and a knack for shaking things up.  

Supply Chain Shakeup: 600+ Jobs on the Chopping Block Across Three States

The supply chain sector is facing turbulent times as over 600 workers find themselves caught in a wave of layoffs sweeping across California, Illinois, and New York. From e-commerce giants to produce distributors, companies are tightening their belts and closing facilities, leaving employees scrambling for new opportunities.

Amazon Leads the Pack with Chicago Facility Closure

Amazon again makes a headline in our weekly news roundup. However, this time, it’s focused on not growing its business but on the decision to shutter a Chicago fulfillment center, impacting 211 employees. The company cites a non-renewal of the facility's lease as the reason behind the closure. While Amazon reassures that it's working to find new positions for affected staff within the company, the move signals a significant change in its operational strategy.

Smaller Players Feel the Pinch

While Amazon's layoffs grab attention, smaller supply chain firms are also feeling the heat. Green Thumb Produce Inc. is closing its Banning, California facility, leaving 115 workers jobless. In New York, 3E Logistics NJ is letting go of 84 employees after losing a crucial contract. These smaller-scale layoffs, though less publicized, are no less significant and stress the widespread nature of the industry's challenges and aftershocks across various supply chain segments.

Lawmakers Sound Alarm: FDA Urged to Loosen DSCSA Reins as Supply Chain Chaos Looms

Imagine a world where your local pharmacy runs out of life-saving medication. This nightmare scenario could become a reality if the FDA doesn't act fast, according to concerned lawmakers. On October 7, Representatives Troy Balderson (R-OH) and Lori Trahan (D-MA) fired off a letter to FDA Commissioner Robert Califf that paints a doomsday-esque picture of potential drug shortages and patient struggles.

Congressional Plea: Broad Exemptions Needed to Dodge Supply Chain Meltdown

The lawmakers didn't mince words, warning that "absent government intervention, there will likely be disruptions that could lead to drug shortages and patients being unable to access critical medications." They're pushing the FDA to ditch its case-by-case waiver approach and instead roll out sweeping exemptions from the Drug Supply Chain Security Act's (DSCSA) enhanced tracing requirements. While they applauded the FDA's recent one-year compliance extension announced in August 2023, these representatives argue it's simply not enough to prevent chaos when the law kicks in on November 27.

Clock Ticking: FDA Faces Pressure to Act Before November Deadline

With less than two weeks until their requested October 25 status update, lawmakers want answers. They're demanding details on waiver applications, approval rates, and the FDA's game plan for industry communication. The representatives even floated the idea of a staggered compliance timeline, suggesting manufacturers could lead the way this November, followed by wholesalers 6-8 months later, and pharmacies bringing up the rear in February 2026. As the Healthcare Distribution Alliance (HDA) recently stressed, confusion reigns supreme among industry players dealing with waiver eligibility and submission timing. The FDA's next move could make or break the stability of America's pharmaceutical supply chain.

Truckers Rev Up Rates: Peak Season Sparks Contract Price Climb

After a two-year freight slump, trucking companies are hitting the gas on contract rates. Recent data shows a 1% uptick in new agreements compared to their predecessors, hinting at a potential market turnaround. But what's driving this shift, and will it stick?  

Economic Pressures Fuel Rate Increases

Trucking firms face a perfect storm of rising costs and legal risks. Inflation eats into profit margins while the specter of massive lawsuit payouts looms large. Werner Enterprises CEO Derek Leathers puts it bluntly: rates must climb during the 2025 bid season to offset these pressures. The big question is how high they'll go, with capacity shifts and overall economic health acting as key factors.

Market Signals: Mixed Messages on the Dashboard

While contract rates show signs of life, spot rates tell a different story. The spot premium ratio reveals prices still lagging behind contract rates, indicating lingering softness in the market. DAT Freight & Analytics' Chad Kennedy notes we've been stuck in this low gear for over two years. Recent hurricanes in the Southeast add another wild card, potentially tightening capacity in affected regions. Carriers and shippers alike will need to keep a close eye on these conflicting indicators to deal with the twists and turns ahead.

​​Porch Piracy 2.0: The High-Tech iPhone Heists Sweeping America

Gone are the days when porch pirates simply snatched random packages. A new breed of tech-savvy thieves is targeting AT&T iPhone deliveries with surgical precision, often grabbing the goods within seconds of FedEx dropping them off. Needless to say, this nationwide crime spree has homeowners stunned and police desperate to catch up.

Tracking Numbers to Lightning-Fast Thefts

These porch pirates aren't your average opportunistic cargo thieves. Armed with inside information — specifically, FedEx tracking numbers for AT&T iPhone shipments — the pirates strike with uncanny timing. Doorbell cameras across the country have captured a similar scene: A FedEx driver drops off a package, and within moments, sometimes even crossing paths with the delivery person, a thief swoops in to claim their prize. The brazenness is shocking, with some thieves even donning Amazon delivery vests as a disguise.

AT&T's No-Signature Policy: A Pirate's Paradise?

While competitors like Verizon and T-Mobile require signatures for smartphone deliveries, AT&T generally doesn't. This policy, aimed at customer convenience, has inadvertently created a recipe ripe for theft. Some customers learned this the hard way when five iPhones vanished from a porch in just 10 seconds. AT&T defends its approach, citing "tens of thousands of packages" delivered daily without incident. However, other victims question why they can't opt for signature-required delivery, even on replacement devices. As porch piracy and cargo theft evolve, the battle between convenience and security intensifies, leaving customers in the crossfire.

From Shipping Surprises to Supply Chain Smarts

If there’s anything to learn from this week's logistics rollercoaster, it’s the importance of adaptability and building resilience. Whether you're puzzled over UPS's rate hike or scratching your head about vanishing iPhones, the message is clear: yesterday's solutions won't cut it for tomorrow's challenges. And that’s where Intelligent Audit and its solutions come in:

• Freight Audit Software streamlines complex freight auditing processes.
• Real-Time Visibility offers unparalleled insight into complex supply chains.
• Anomaly Detection leverages machine learning to ensure maximum accountability in parcel audits and beyond.

Get started with Intelligent Audit, and learn how 25 years of supply chain innovation can transform your operations today.

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