With New Year Underway, Key Players Look Back On 2022

With 2022 now in the past, key players in the transportation industry are reflecting on the wins, losses, and toss-ups of 2022. For UPS, the end-of-year peak season shipping boom gave them a chance to strut their stuff, while for FedEx CEO Raj Subramaniam, 2022 held challenge after challenge. Regardless of whether 2022 offered shippers a smooth ride or a bumpy road, it’s time to reflect and prepare for 2023. Here’s what you need to know about the latest news and trends in an industry that’s always moving.

UPS Leads Industry for Peak Season On-Time Delivery

In a Jan. 6 post, parcel delivery giant UPS announced that it had led the parcel delivery industry in on-time peak season performance for the fifth consecutive year. The results came from delivery consultancy ShipMatrix, whose annual review of the parcel delivery industry has become a benchmark for carrier performance. 

From Nov. 25 to Dec. 24, UPS delivered 97.5% of packages on time. Meanwhile, primary competitor FedEx delivered 95.2% of packages on time. The USPS came third with a 94.3% on-time delivery rate. 

2022 An Eventful Year for New FedEx Ceo Subramaniam

For new FedEx CEO Raj Subramaniam, 2022 was a year of challenges. Appointed CEO in June, Subramaniam’s tenure began with an extensive, network-wide overhaul, set to cost $2 billion. However, shortly after Subramaniam started working to implement his vision for the carrier, FedEx contractor Spencer Patton led a rebellion among contractors struggling with high operating costs due to inflation. 

Despite having navigated tense contractor conflicts in 2022, 2023 and its volume shortage are sure to bring new challenges to the parcel delivery giant, as Supply Chain Dive reports: “...the company has shifted into a cost-cutting mode to shield itself from macroeconomic pressures as it waits for volumes to recover.

LMI Reveals Bleak Outlook for Transportation Industry

As rates continue to fall, industry metrics are beginning to reflect a new reality for the transportation market. The Logistics Managers Index (LMI) showed a reading of 36.9% for December, marking the metric’s fastest decline ever recorded. If the LMI, which surveys supply chain industry leaders, has a reading above 50, it means there has been growth in the market, while any reading below fifty indicates market contraction. According to FreightWaves, “Transportation utilization (48.1) fell into contraction territory for the first time since April 2020, while transportation capacity (69.5) expanded at a historically high but more tepid pace.”

The fall in utilization and pricing, accompanied by a rising capacity reading, reveals a growing crisis in the transportation industry. A far cry from pandemic-era capacity shortages, today's shippers are struggling to find the freight volumes they need to remain competitive in a high-stakes transportation marketplace.

Walmart Completed Over 6,000 Drone Deliveries in 2022

Walmart completed over 6,000 drone deliveries in 2022 through its partnership with drone delivery companies DroneUp, Flytrex, and Zipline. Walmart now offers customers drone delivery service through these vendors in Arizona, Arkansas, Florida, North Carolina, Texas, Utah, and Virginia. 

In the new year, the company hopes to expand drone delivery. “I’m incredibly proud of our team for creating the largest drone delivery footprint of any U.S. retailer and providing customers with an incredibly fast – and innovative – option for delivery,” said Vik Gopalakrishnan, Walmart’s U.S. Vice President of Innovation and Automation. “We’re encouraged by the positive response from customers and look forward to making even more progress in 2023.

In Blow to Shippers, UPS Extends Peak Season Surcharges

In a blow to shippers weary after a year of rate increases from parcel delivery giants, UPS has announced that peak-season surcharges will remain for certain packages and services into the new year. Generally, surcharges disappear following the end of the peak season volume crunch. However, this year, UPS says that a challenging inflationary landscape is forcing the parcel carrier to leave surcharges in place. 

Despite UPS’ claims that the surcharges need to remain due to economic pressures, industry leaders have sharply criticized the mega-carrier. In an interview with Supply Chain Dive, Josh Taylor, Senior Director of Professional Services for Shipware, said: “With actual demand down year-over-year and diesel costs predicted to drop, the post-peak residential ‘demand surcharge’ is UPS finding an additional way to drive profits without delivering more value.

Forward Air Buys Land Air Express in $56.5 Million Acquisition 

After a year of high-profile mergers and acquisitions in the overland freight industry, Greenville, TN-based Forward Air has announced plans to acquire LTL provider Land Air Express for $56.5 million. The addition, announced Jan. 4, will bring Land Air Express’ assets – including 302 power units, according to the Federal Motor Carrier Safety Administration – to Forward Air, which expects the integration of the two companies to take approximately one year. 

This acquisition will accelerate the expansion of our national terminal footprint, particularly in the middle part of the United States, and we believe it will strategically position us to better meet the current and future needs of customers,” said Tom Schmitt, Chairman, President, and CEO of Forward Air.

Amazon Layoffs to Affect 18,000 Workers

Amazon’s CEO has confirmed the company’s plans to lay off a significant number of workers in the new year. FreightWaves, reporting on an Amazon internal memo later released to the public, notes that number will ultimately be over 18,000.

“We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” Amazon CEO Andy Jassy said, explaining that the company will provide separation payments, transitional health insurance benefits, and external job placement support to each affected employee.

DoorDash Announces Return Service to Meet Post-Holiday Demand For Reverse Logistics

Following the holiday season, retailers expect consumers to return as much as $171 billion in merchandise, according to reporting from Supply Chain Dive. DoorDash announced plans to institute a package pickup service to meet the growing demand for streamlined reverse logistics. The service, detailed in a Jan. 4 post on the company’s website, will allow customers to request a DoorDash delivery worker (a“dasher”) to pick up prepaid packages and bring them to participating UPS, FedEx, and U.S. Postal Service locations.

With Package Pickup, we’re leveraging our existing logistics infrastructure to meet a new use case for consumers and simplify the package returns process,” according to the DoorDash announcement.

Frank McGuigan Steps Down from a Top Position at Uber Freight

Uber Freight President and COO Frank McGuigan announced his intentions to step down in a Jan. 5 email sent to employees. McGuigan, who came to Uber Freight following the company’s acquisition of transportation management company Transplace, was able to grow the organization’s revenue from $3 billion to $15 billion, according to reporting from FreightWaves

Though stepping down from his role as President and COO, McGuigan will continue to work with Uber Freight as a member of its board of directors. “He will continue to support, advise and advocate for Uber Freight’s ongoing and future success as a member of our board of directors, and we wish Frank the best in his next endeavors,” according to Uber Freight’s prepared statement.

Partner with Intelligent Audit in 2023 to Discover the Power of Supply Chain Innovation

After reflecting on the lessons of 2022, it’s time to look toward the future. Facing falling volumes, an uncertain labor landscape, and a long list of mergers and acquisitions, shippers are turning to innovative supply chain solutions to keep pace with the global transportation industry. With Intelligent Audit, shippers can access a broad range of logistics intelligence assets: 

  • Real-Time Parcel Visibility to ensure that parcel shipments arrive on time, every time.
  • Business Intelligence and Analytics to bring actionable insights to your supply chain. 
  • Finance and Accounting Tools to optimize outdated, inefficient spending strategies. 

With 2022 now in the past, it’s time to look toward the future. Start a conversation with Intelligent Audit today, and see what the future of supply chain intelligence has to offer your business.

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