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U.S. Economy, Trade and Transportation Policy
- Federal Reserve holds interest rates steady and signals tariff-driven inflation may ease: The Fed kept its benchmark rate at 3.5% to 3.75%, citing stable employment and persistent inflation, with Chair Jerome Powell saying the inflationary effects of tariffs are likely to recede around mid-2026.
- Trump targets countries supplying oil to Cuba with potential tariffs: A new executive order authorizes cabinet officials to recommend discretionary tariffs on nations selling crude oil or petroleum products to Cuba, framing trade penalties as a national security and foreign policy tool.
- Trump threatens 50% tariff on Canadian aircraft tied to certification dispute: The president warned of steep duties on Canadian-made aircraft and potential decertification of Bombardier jets if Canada does not fully certify four Gulfstream models, escalating trade pressure without a defined timeline.
- DOT launches inquiry into hazmat risks of electric trucks: The Pipeline and Hazardous Materials Safety Administration issued a request for information comparing safety risks of battery-electric versus diesel trucks hauling hazardous materials, focusing on fire behavior, vehicle weight, electronic interference and charging infrastructure.
- FMCSA defends foreign driver restrictions amid multi-state backlash: The agency is seeking approval to collect three years of data on non-domiciled CDL holders despite a court-ordered stay, arguing the information is necessary to ensure licensing integrity.
- Data shows English Language Proficiency enforcement failing to deter repeat offenders: Analysis of FMCSA inspection data indicates ELP violations are concentrated among carriers domiciled in a handful of states and frequently involve repeat offenders, raising questions about the effectiveness of current enforcement.
- New FMC chair signals stronger focus on geopolitical shipping risks: Chairman Laura DiBella said the Federal Maritime Commission will increasingly scrutinize chokepoints, shadow tanker fleets and foreign port actions, expanding its role beyond traditional commercial shipping disputes.
Carrier Outlook & Updates
- UPS plans deeper network cuts and Amazon pullback to lift 2026 profitability: UPS will eliminate 30,000 frontline jobs and close at least 24 facilities as it reduces Amazon volumes by more than 50% by mid-2026, betting that automation, higher-yield B2B traffic and a smaller footprint will support margin expansion in the second half of the year.
- UPS supply chain business pressured by trade shifts and expects weak start to 2026: Fourth-quarter supply chain revenue fell 12.7% as air and ocean rates declined and China-to-U.S. volumes dropped, with management warning of extreme weakness in international flows early in 2026 before tariff and de minimis effects ease later in the year.
- FedEx Freight outlines density-focused strategy ahead of June spinoff: In securities filings, FedEx Freight emphasized door count rather than terminal count as the key measure of network capacity, highlighting a 26,000-door footprint concentrated around roughly 65% of industry freight volume.
- Schneider posts weaker Q4 profit but sees capacity exits tightening the market: Net income fell more than 30% year over year, but management said regulatory crackdowns on non-domiciled CDLs, English proficiency and driver training could drive sustained truckload capacity attrition through 2026.
- CH Robinson expects muted freight demand early in 2026 despite operational gains: The broker reported declining air and ocean volumes in Q4 and said there is no near-term demand catalyst, though artificial intelligence initiatives helped manage weather-driven truck rate spikes without margin erosion.
- Maersk Air Cargo exits Asia-U.S. flying with 767s and ends Amerijet partnership: Maersk is discontinuing trans-Pacific operations with Boeing 767 freighters in favor of larger 777s, terminating its Amerijet contract, triggering pilot furloughs and selling three factory-built 767s expected to be acquired by Amazon.
- ONE reports quarterly loss as container volumes and rates weaken: Ocean Network Express posted an $88 million loss as Asia-North America and Asia-Europe volumes softened and spot rates declined, though the carrier expects improvement as capacity is managed and Red Sea diversions continue.
- Union Pacific to refile revised Norfolk Southern merger application within weeks: Union Pacific said it is addressing Surface Transportation Board concerns that its initial $85 billion merger filing lacked sufficient detail on future growth assumptions and plans to handle added intermodal volume, and expects to submit a revised application as early as March while still targeting a first-half 2027 closing.
Parcel Logistics
- UPS retires MD-11 fleet following fatal crash and accelerates shift to 767s: The permanent grounding of MD-11 aircraft, which previously represented about 9% of UPS’ air fleet, resulted in a $137 million non-cash charge and higher lease costs, with capacity to be replaced by 18 Boeing 767s through 2027.
- Amazon appears to be testing shipper demand for a standalone LTL service: Morgan Stanley reports Amazon has begun selectively reaching out to shippers ahead of a potential June or July launch of an LTL network with roughly 26 terminals, a move analysts say could be highly disruptive if scaled.
- American Eagle Outfitters is shutting down Quiet Logistics and Office Depot is exiting Veyer’s external fulfillment business, underscoring the difficulty of profitably operating multi-client logistics platforms alongside core retail operations.
- Canada Post finalizes tentative labor agreement with letter carriers: Canada Post and the Canadian Union of Postal Workers completed final contract language covering wages, benefits and weekend parcel delivery, setting the stage for a membership ratification vote after prolonged labor unrest.
