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As the holidays rapidly approach, carriers are nervously eyeing a newly-emboldened Federal Maritime Commission. After the passage of the Ocean Shipping Reform Act, the FMC is looking to test the limits of its new regulatory capabilities.
But that’s not the only news waiting under the tree for logistics professionals this year: plummeting volumes continue to plague FedEx Ground, and Walgreens is branching out into an already overcrowded last-mile delivery sector. Regardless of whether you’ve been naughty or nice, here are the nine industry headlines you need to know.
The FMC, newly empowered after the June passage of the Ocean Shipping Reform Act, is preparing to begin investigations into complaints against ocean carriers per the new law.
According to Supply Chain Dive, “The FMC will investigate complaints using interim procedures as it works on crafting a more permanent process. The burden of proving whether or not fees were justified is on the carriers — shippers will not need to testify or provide additional information beyond an initial complaint.”
For shippers, the OSRA ensures greater responsibility on the part of bloated carriers; carriers, however, face a growing tide of regulatory struggles due to the OSRA.
After several years of management missteps, FedEx Ground continues to see volumes plummet. FreightWaves, in collaboration with transportation industry consultancy ShipMatrix, reports that annual volumes at FedEx Ground have fallen by more than a million packages since 2020.
The declining demand plaguing FedEx results mainly from shifting volume from its partnership with the U.S. Postal Service to its own network of parcel carriers. As a result, rates for FedEx Ground have increased significantly, sending shippers searching for alternative options. In an interview with FreightWaves, Dean Maciuba, U.S. Managing Partner at Crossroads Parcel Consulting, predicted a grim future for FedEx, despite recent efforts to earn back shippers’ trust. “FedEx has found its way, and it is now competing again on price,” Maciuba said. “But it’s too late. The damage has been done.”
Last-mile delivery provider Better Trucks has announced plans to increase its coverage area significantly. Currently, the Chicago-based parcel shipper covers 25 metro areas across 17 states. After securing $15 million toward expansion efforts, the company hopes to double its service area in the coming year.
"This first outside investment allows us to expand our footprint and build upon our proprietary tech stack to deliver a better experience for our clients and their customers," a representative of Better Trucks said in a Nov. 15 press release.
However, the rapid growth of small 3PLs like Better Trucks is troubling for standby last-mile providers UPS and FedEx.
Customers usually come to Better Trucks because they are frustrated with service from some of the big players, co-founder and CEO Andy Whiting told Supply Chain Dive. He said they are looking for alternatives after experiencing "challenges with service or price or a combination of the two."
For business professionals, Foreign Direct Investment (FDI) serves as an accurate measure of foreign business activity occurring in a country. In Mexico, the FDI has hit a record-breaking $32 billion, with 45% of that sum coming from new investments and another 44% from reinvestments in existing partnerships.
Rosemary Coates, executive director of the Reshoring Institute, predicts continued growth in Mexican manufacturing as companies look to reshore operations, at least partially, from Asian countries.
"Executives are starting to rethink that decision of going to China and repositioning their strategy in terms of having dual manufacturing sites," she told FreightWaves, noting the significant increase in contract manufacturing in Mexico over the past five to 10 years despite the pandemic.
As the United States continues to struggle with ongoing drug shortages, experts are pointing to structural flaws within the pharmaceutical manufacturing process.
Often, drugs have one or two ingredients that may be produced only at a few facilities—leaving manufacturers vulnerable to unexpected supply chain issues and customers frustrated because pharmacies cannot fill their prescriptions. A manufacturer's reluctance to produce excess supply due to cost considerations merely exacerbates the problem.
Erin Fox, a pharmacist and an expert on drug shortages, understands both sides. "It's costly. If you're going to sell something for a dollar a vial, there's no incentive to invest there," she told Vox. "It makes a lot of sense when you think about it from their perspective. But when you think about it from the hospital perspective, it's very frustrating."
As consumer demand for same-day delivery continues to increase, companies must oblige. After partnering with multiple delivery providers since 2020, including delivery industry leaders DoorDash and InstaCart, Walgreens has launched a 24-hour same-day delivery service.
"As the place customers turn to for their last-minute needs, we know they will find value in being able to access the items they need most, no matter the hour, right to their door," Stephanie Kruse, Group Vice President of Digital Commerce, said in a Dec. 4 press release.
As part of the Biden Administration's $1.9 trillion COVID-19 Relief Bill, the IRS introduced significant changes to how it will tax gig workers and online sellers in coming years. Section 6050W, which dictates the amount of money someone can make before being required to pay federal taxes, has been vastly overhauled. Previously, workers making below $20,000 a year were exempt from taxes on that income. New changes, however, lower that number to $600.
The shift will likely significantly impact gig economy workers, many of whom use gig economy jobs such as delivery driving, online retailing, or on-demand transportation to supplement their income.
Katie Vlietstra, vice president of government relations and public affairs for the National Association for the Self-Employed, cast some doubt on the efficacy of the changes to Section 6050W.
"There is a segment of the population that is probably making ends meet, and, of course, they should be aware of their tax obligations," Viestra told FreightWaves. "But as they try to cobble together an income, should we be going after these people?"
The USDA-funded TASC (Technical Assistance for Specialty Crops) program, in collaboration with the FAS (Foreign Agricultural Service), has spent much of the past year focused on streamlining agricultural export and import processes for U.S. growers and produce industry professionals.
According to FreshPlaza.Com, the FAS spent $7,182,146 on 15 USDA projects throughout the fiscal year 2021. Despite these efforts toward streamlined trade in the produce sector, regulatory hurdles remain.
"Trade barriers such as burdensome requirements related to pre-export plant health inspections, low or missing pesticide maximum residue levels, labeling, or quality certification may discourage some U.S. specialty crop producers from shipping products overseas," writes FreshPlaza.Com. "However, USDA is committed to assisting U.S. agricultural stakeholders to overcome trade barriers that deter U.S. specialty crop exporters and help them compete in the global marketplace."
Facing mounting pressure from environmental advocacy organizations, Whole Foods Market has paused purchasing Maine lobsters. The decision comes after a change in third-party verification standards and concern from both the Monterey Bay Aquarium (MBA) Seafood Watch Program and the Marine Stewardship Council (MSC).
"These third-party verifications and ratings are critical to maintaining the integrity of our standards for all wild-caught seafood found in our seafood department," a representative from the Amazon-owned grocery chain said in a statement given to Grocery Dive.
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