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- [00:00]
Max Garland
We're all looking at Q4 and I think to just continue with this Canada Post strike, that is a big concern mainly because this is all happening as shippers are preparing for the holidays and people in Canada are ordering stuff online too. We're going to have to see how shippers respond to that. So it's still good to keep track of this and see what shippers are doing because who knows, whenever a strike happens in the U.S. be it the Postal Service, ups down the road, it's good to be prepared for these sorts of situations and see how it plays out in real time.
- [00:32]
Supply Chain Now Announcer
Welcome to Supply Chain now, the number one voice of Supply Chain. Join us as we share critical news, key insights and real supply chain leadership from across the globe, one conversation at a time.
- [00:44]
Scott Lewton
Hey, good morning, good afternoon, good evening wherever you may be. Scott Lewton here with you on Supply Chain now. Folks, today on Breaking News now, we're going to be gaining some insights on some of the top news on recent developments in global supply chain. We're going to hear from one of the best industry reporters out there on topics such as what do 2025 peak season fees look like, who is Amazon Shipping taking market share from? What's the latest ripple effect related to the end of D minimus, all that much, much more. And to walk us through some of these intriguing industry developments, I want to welcome in my friend, the one and only Max Garland, senior reporter at Supply Chain Dive. Max, how you doing today?
- [01:25]
Max Garland
Great Scott. Good to be back once again. I'm like that. We're getting a regular cadence out of this.
- [01:31]
Scott Lewton
No doubt you're back by popular demand. The people demanded it. Max Garland, I tell you, kidding aside, we really enjoyed your reporting and your analysis on an installment of Breaking News. Now last month we just had to have you back. But before we dive into five great stories here today, I want to level set with folks out there. Would you share a little bit about what you regularly cover at Supply Chain Dive? Max?
- [01:52]
Max Garland
Sure. Yeah. So I'm a senior reporter at Supply Chain Dive covering all things delivery and logistics. So if you're managing a supply chain out there and using the likes of FedEx, UPS, the Postal Service, I write articles on what those carriers are doing regularly, how it impacts their customers. Also report on wider logistics news as well, such as cross border trade, warehouse fulfillment. So there's a variety I cover there. Over at Supply Chain Dive, you got.
- [02:21]
Scott Lewton
Your finger on the pulse. And it's information and analysis and reporting that folks gotta lean into, right? One of the trusted voices in industry. So it's great to have you here on supply Chain now via our Breaking News Now. So I want to get into some of what you've been reporting on in recent weeks, recent days, maybe recent hours. We got five stories to walk through here on Breaking News now. And I want to start with an overview of the fees set for the 2025 peak season. So it seems like of course an annual rite of passage for fee increases at FedEx, UPS, USPS and others. However, Max, some carriers are touting no fee increases as a means of hoping to gain market share. Let's see here. Uni, Uni, Speedx, lsobolt to capitalize on a no fee, no fuss approach. So Max, tell us more.
- [03:11]
Max Garland
Yeah. So as you noted Scott, holiday surcharges are an annual tradition. This year is no different. If you're a company that ships a lot in Q4, think Black Friday, Cyber Monday, days before Christmas. Peak season could be a huge pain point in terms of your bottom line. And I don't think these surcharges are just copy and pasted from last year. Right? For a lot of the big carriers their fees have increased from 2024. And for FedEx and UPS they cover a bunch of services including Ground Express. The bigger and bulkier packages too, like FedEx has a demand surcharge that can be as high as $3.55 for ground economy and that's their economical option. If you're a retailer shipping thousands of packages a day, that can add up. And even Amazon's getting in on the action. Amazon Shipping has a very similar peak season surcharge structure. So it's going to be interesting to see what companies do to navigate these this year. Especially since consumers are so price sensitive. Right. You don't want this to trickle down to the consumer. So for shippers, negotiate with your carrier. Maybe incentivize customers to buy gifts earlier. Use alternative delivery providers, including the one Scott mentioned that don't have these peak season surcharges. There's a lot of strategies you could do use but you have to be proactive with it, right? Don't wait, don't wait.
- [04:34]
Scott Lewton
You wait, you lose I think is the old saying. And you made a great point there because consumers ain't looking to write a bigger check anytime soon. Am I right Max?
- [04:43]
Max Garland
Yeah, absolutely. I mean the past few years, Scott, we've had inflation becoming a big issue and tariffs are exact impact right now remains to be seen. But consumers, shoppers definitely more price conscious and that's what they're prioritizing a lot over anything else nowadays. So you're going to want to make sure that any sort of shipping fees, stuff like that, doesn't inhibit them from ultimately making that checkout and making that order with you.
- [05:10]
Scott Lewton
Good stuff there, Max. And folks, if you're using one of those carriers that aren't increasing their fees during peak season, let us know. Let's give us your experience. I'd love to learn more. Okay, so Max, moving right along at prime speed, Amazon Shipping continues its march forward. And in this case, Bark, which owns a popular Barkbox monthly pet treat delivery service, is the latest to make the switch. And by the way, don't tell my two hounds that Barkbox is out there because Ruby and Sunny would be the next subscribers. But Max, tell us about this latest win from Amazon Shipping.
- [05:45]
Max Garland
We talked earlier about Amazon mirroring those FedEx and UPS holiday fees to an extent, and now Amazon's beginning to look a lot like FedEx and UPS in other ways. They're attracting shippers that previously used more traditional carriers instead using their service Amazon Shipping, which makes deliveries for orders everywhere, even outside of Amazon's website. Right. So we at Supply Chain Dive, we covered some notable examples recently of companies opting to use Amazon Shipping instead of an old school established option. And one is a familiar name for a lot of dog owners, that is Bark, owner of Barkbox, as Scott mentioned. Yeah, don't get in trouble with your dogs about that. Mine too. Unfortunately, they're using Amazon for delivery seven days a week. They switched over. They say it's improved transit times by at least a day for the majority of their customers. It's also coming to lower cost for them. They used to be using a lot of postal service reliant options and there have been a lot of price increases there Right, from those traditional carriers. So they looked elsewhere, found a home with Amazon. There's also Kiwico, they have a kid subscription box service. They made a similar sort of switch. They use Amazon Shipping to send around 200,000 packages a month and they said Amazon was cheaper on a per package basis. Now, this isn't a plug for me for Amazon Shipping is just to demonstrate that shippers have a lot of options for delivery nowadays and, and they don't like the service or the price point of their current carrier. They can switch. So that sort of diversification could challenge FedEx and UPS out there.
- [07:18]
Scott Lewton
Max is great, great comment. Options are a good thing, right? And there's more options today than arguably, maybe ever before, which is a good thing as well. All Right. So, Max, let's get to the real news. So my two hounds, Sunny and Ruby, both are rescue hounds. And I'll tell you, I've never seen it, but both of them love. I go to Costco, get a big bag of organic carrots, cost me four bucks. They're massive carrots. They tear these things up. It's the cheapest dog treats I've ever found. What are your hounds into?
- [07:47]
Max Garland
Oh, they, they love anything. Salmon treats. Salmon treats are kind of in vogue at the Garland household. So a lot of salmon treats, a lot of very stuffed toys, although they tend to be less entertained with the stuffed toys after a day or two. So. Right. Gotta keep up with them. Gotta keep by.
- [08:05]
Scott Lewton
No doubt, man, the pet trends these days. Okay, well, before we continue with the news, I want to, you know, we're big on sharing resources like the great trust resource of Max Garland and Supply Chain Dive is certainly. But folks, I want to invite you to join us on October 21st for our regular monthly leadership series we call the Bridge, where the one only Deborah Dole is going to join us to tell us how we can optimize our digital transformer leadership ability. So come join us on October 21st. So, Max, let's see here. We. Let's talk about UPS for a moment because a ripple effect from the major mover and shakers navigation of a bevy of buyouts continues. And a lot of those buyouts have come at the driver and management ranks. Max, what's the latest here?
- [08:51]
Max Garland
Yeah, so for those who haven't been keeping up, UPS is offering buyouts for drivers for the first time. And it's very long history. The buyout started at the end of August, and at the end of September, UPS started buying out operations managers, too. Or that's what the announced date was. But from the sources I talked to and what UPS has said, Scott, it's really geared toward those more senior drivers who have a lot of years likely at the top end of the pay scale that UPS is trying to entice here so they get younger and cheaper in their workforce that can help their bottom line. But I think what we're all going to be watching closely to see is how this impacts service without some of that tribal knowledge of drivers who have been there for decades. Right. Or operations leaders. Does that impact service? It's a risk. And while this has been happening, the Teamsters union, which represents a lot of UPS employees, is saying there's a big overtime problem currently. So will more buyout strain that issue? Because UPS's workforce has shrunk quite a bit since the heights of the pandemic already. And the holidays aren't that far away, Scott, as they're doing these buyouts. So if you drop the ball as a delivery company during that time, that can hurt your reputation. We'll have to see how they handle it and if they handle it smartly.
- [10:08]
Scott Lewton
Yeah, it really is interesting times for the dominant major carriers and the upstarts. So appreciate your reporting analysis there, as always. Speaking of change, D Minimus came to an end on August 29th, I believe. Right. And the ripple effect, max, the ripple effect is still being felt across industry. Tell us some of your latest observations here.
- [10:33]
Max Garland
Yeah, so the end of de Minimis. It's been a recurring topic for us here, Scott, in our chats. And there's a good reason for why that is. It's because it's forcing a lot of companies to drastically rethink how their supply chain should operate. So De Minimis was a rule. It allowed low cost imports into the US less than 800 to enter duty and tax free. As of August 29th, as you mentioned, no longer the case. So if you're in the US and you order a shirt from Canada, it has to face the same tariffs as a big container of shirts. So. And that's a problem Lululemon is facing right now as one of the big examples. Lululemon, they have a lot of warehouses in Canada that are designed to fulfill E Commerce orders going to US customers. In fact, 2/3 of US orders are fulfilled through Canada. So those locations were fine when they didn't have to worry about import taxes. But now it makes that fulfillment and shipping process a lot more expensive. They're saying gross profit for the year is expected to take a hit of 240 million due to no more de minimis. Those tariffs, they're more exposed to, so they want to limit the potential for that to happen. They're considering adjustments to their distribution, smarter inventory placement, things like that. They're hard but necessary changes, Scott. And I imagine Lululemon is just one of a few companies that are looking for a big supply chain overhaul due to no more de minimis.
- [11:58]
Scott Lewton
Man, question, I can't remember if I asked you this last time or not. Do you see in a situation where D Minimis and that exception that's been used quite a lot in recent years, do you see it ever coming back?
- [12:10]
Max Garland
It's possible. I wouldn't rule it out, but we'd have to see kind of a collective push from the businesses. The smaller merchants and the consumers as well that are impacted by this. Right. Because for a while now people have been flagging the concerns about de minimis, you know, bringing or allowing more kind of illicit shipments into the US Due to less monitoring of those types of shipments. So, so there's been, I guess for a couple of years now, debates both ways of the benefits and the downsides of deus. So that sort of debate could continue. But whether that sways things back to where they were, it would take quite a bit of effort for us to get back there.
- [12:53]
Scott Lewton
I'm with you. I'm with you. If anything, I might would see a very modified version of it. But to your point, it would take a groundswell from policymakers in D.C. to industry voices to the consumer base demanding it. So we shall see. I really appreciate your take there. We got one more story here today to tackle with you, Max Garland, and that is what's going on at Canada Post because it continues at strike. However, it moved I think as of this morning from a nationwide strike to more of a rotating strike approach. Max, what's the latest here?
- [13:28]
Max Garland
Yeah, yeah, it's very appropriate. We're talking about this on a breaking news now, Scott, because, yeah, the union representing Canada Post workers announced they'll be scaling back their nationwide strike starting this Saturday. So the strike has been going on for a little over two weeks now. So that's a relief for businesses that use Canada Post because they've been saying no parcels, mail will be processed, delivered, anything like that. But the shift doesn't mean all the disruption is over. Right. They're shifting instead to rotating strikes. So shippers will really need to keep an eye out to see if there are disruptions in specific areas they use Canada Post a lot for. So this is all still a big concern, obviously for a lot of shippers in Canada, especially for the smaller businesses, online sellers, those shipping, more rural areas, kind of a mix of folks. So the strike, it was really set off by changes Canada's government wants Canada Post to make so it stops losing the money that it has. And Canada Post is on board with those reforms. Their workers union is not. They're saying it could hurt Canada hand to Post business reputation, which the union said it could roll back some of the perks for employees as well. So for shippers, all this means that these sorts of labor disruptions could go on for quite a long time. There's still a lot left to be resolved in the dispute.
- [14:47]
Scott Lewton
We're going to keep our finger on the pulse there. And you're Kind of on a similar note with the USPS here in the United States, you and I and Kevin L. Jackson had an interesting conversation a few months back, and I can't remember if it was you or Kevin, but one of y' all made the great point. It starts with, we define the responsibilities. What are the responsibilities that USPS owes shippers and customers out here? Because it really has morphed and evolved. And Max, I don't know about you, but most of my mail these days, 95% of my mail is paid promotional stuff of, you know, companies sending marketing material out and taking advantage of a really good rate. And I think it begs the question, is that a big part of the responsibility of the USPS these days? I don't know. I think it's a conversation we got to have. Your quick thoughts?
- [15:37]
Max Garland
Yeah, yeah, absolutely. I mean, for the Postal Service and Canada Post, both of these companies are. They're going through a lot of financial issues right now, and what's kind of the direction they want to take? Is it focused on service at all costs, universal service, or is it moving to that sort of more profitable model of a FedEx and UPS type of company? So they're both kind of at a crossroads here, Right? So we're gonna probably see some big changes here in the coming years because they need to be made.
- [16:05]
Scott Lewton
So true, Max. And it goes back to the de minimis, the loophole, because there's loopholes in. I'm not as familiar with Kennedy Post as I am usps. There's loopholes that all kinds of companies take advantage of, bulk rates and whatnot. So it'll be interesting to see the next few years because of, as you point out, the financial crisis crossroads that we are at. Good stuff. I got a question for you, Max. This might be the toughest one of the day. So you've got a crystal ball that's working a lot better than mine. And as you peer deep into your crystal ball, Max, what's one story, development or trend that you think is going to create some waves in the short term ahead?
- [16:40]
Max Garland
Well, for the short term, I mean, we're all looking at Q4, and I think to just kind of continue with this Canda Post strike. That is a big concern, mainly because this is all happening as shippers are preparing for the holidays and people in Canada are ordering stuff online, too. There are options out there. FedEx and UPS deliver out there. There are smaller carriers as well. But Canada Post has this reputation of low rates and of course, that nationwide service at private carriers can't quite match themselves, so we're going to have to see how shippers respond to that. A lot of brands have already moved their volume away from Canada Post just due to the ongoing tension. So, so all of this, even if you aren't so much a Canada Post shipper or you ship a lot in Canada, it's still good to keep track of this and see what shippers are doing. Because who knows, whenever a strike happens in the U.S. be it the Postal Service ups down the road, it's good to be prepared for these sorts of situations and see how it plays out in real time so you can have contingency plans in place. Right? So I think we're all going to be watching it closely during peak, see how it develops.
- [17:45]
Scott Lewton
No doubt. And you know, hey, we hope it causes the least amount of damage, especially as you point out this time of year when families are getting together and celebrating good food and gifts and all kinds of holidays. So Max, good stuff folks. Max brought it on time in full as he always does here today. Before we make sure folks know how to connect with Max, I want to share one more great resource because again, you got to tune in to the trusted voices out there. We spoke a lot about the world of freight. Invite you to check out one of our latest Supply Chain now blog articles where Bart Demonk writes on the ever evolving world of freight and audit payment fap. Tons of innovation going on there. You can check it out. Okay Max, you're a tough guy to keep up with. You stay really busy turning out a lot of data driven fact driven facts and commentary stories and reporting and insights. How can folks though track down one Max Garland in Supply Chain Dive?
- [18:41]
Max Garland
Well, there are two good ways to do that I'd say. One is to subscribe to the Supply Chain Dive newsletter. We have a variety of newsletters actually, including a daily news roundup along with weekly editions that are geared more towards a particular topic if you're interested. So you can find that on supplychaindive.com and pick out the ones you like, be it logistics, procurement or just general news. The error is my LinkedIn page. Just search Max Garland Give me a follow. I post regularly on there about some of the stories I've covered and the comments on those posts can be fun to follow as well. A lot of industry folks weighing in. So it's a great resource as well for those wanting to keep up with with all this news we've talked about.
- [19:20]
Scott Lewton
Max, no doubt. And as we talked about I think last time, the conversations in those Comments? There's some golden nuggets there for sure, Max. Really appreciate you joining us here today on Breaking News now. And folks, Max again is one of the best. If you're not checking out what he and the team are doing at Supply Chain Dive, you're missing out. It's one of my go tos. And Max, cover your ears, but I love the Wall Street Journal's logistics report and their regular newsletter as well. Those two are great sources to know what's going on. Max Garland, really appreciate you being here today and I look forward to you joining us. I think we got you lined up for November and December too. Is that right?
- [19:56]
Max Garland
We do. We do. So until next time, Scott, and then we'll, we'll discuss the latest and greatest news then.
- [20:02]
Scott Lewton
Outstanding. We finally, we got through Max's agent and we got him booked and it's terrific to have him here, folks. We're going to make it really easy. You can check out Follow Connect Max on LinkedIn and I encourage you to do just that. All right, everybody. I hope you enjoyed and learned from this conversation as much as I have. Love Max's perspective. Hey, the pace of global business philosophy, it's only getting faster and faster. You got to stay informed by turning to trusted sources of sound information and analysis. And as I told you, Max Garland is one of the best in the biz. Be sure to connect with him in the Supply Chain Dive team. Supply chain dive.com and again, you can follow Max. Connect with Max on LinkedIn. So all that said, Scott Luton here on behalf of the Supply Chain now team, challenging you. Do good, give forward. Be the change that's needed. We'll see you next time right back here on Supply Chain Now. Thanks everybody.
- [20:49]
Supply Chain Now Announcer
Join the Supply Chain now community. For more supply chain perspectives, news and innovation, check out supply chain chain now.com subscribe to Supply Chain now on YouTube and follow and listen to Supply Chain Now. Wherever you get your podcasts.