In case you’re wondering, companies are still shipping air. The item on the counter (a replacement top for my coffee grinder) came in that big box with all the air padding.
Yes, the more things change in supply chain and logistics, the more they stay the same! The waste lives on!
Moving on, here’s the supply chain and logistics news that caught my attention this week:
- US, China pausing most steep tariff hikes for 90 days (The Hill)
- US slashes ‘de minimis’ tariff on small China parcels to as low as 30% (Reuters)
- Walmart warns it will raise prices because of tariffs (CNN)
- Shipping Rates Rise as U.S.-China Trade Truce Drives Import Surge (WSJ – sub. req’d)
- Inside the Arizona Warehouse That Has Become Shelter in Tariff Storm (WSJ – sub. req’d)
- Amazon and FedEx reach delivery deal following pullback by UPS (Fox Business)
- Texas proposes driverless truck ban as Uber Freight, Hirschbach partnership takes off (CCJ)
- Driverless-truck lobby urges federal action toward full autonomy (Freightwaves)
- Teamsters call on Texas lawmakers to require human drivers in autonomous vehicles (The Trucker)
- DHL Group signs MOU with Boston Dynamics for additional 1,000-robot deployment and accelerates cross-business automation strategy
- Optimal Dynamics Raises $40M Series C to Scale the Decision Layer of Logistics
- Coupa Introduces Next-Generation Agentic AI to Accelerate Autonomous Spend Management Vision
- DAT redefines freight payments with Outgo acquisition
This Week in Tariffs
Last week I wrote, “I hesitate adding any analysis or commentary about what’s happening with tariffs because, really, what’s the point? Whatever I write today could become moot by tomorrow.”
Two days later, the US and China “agreed to a 90-day pause on most retaliatory tariffs imposed on each other since early April,” as reported by Sarah Fortinsky at The Hill. “Under the agreement, the U.S. would lower its tariff rate on Chinese imports from 145 percent to 30 percent, while China agreed to lower its tariff rate on U.S. goods from 125 percent to 10 percent. China also agreed to suspend or remove nontariff countermeasures taken against the U.S. since early last month, according to a White House fact sheet on the deal.”
Also, as reported by Reuters, “the U.S. will cut the ‘de minimis’ tariff for low-value shipments from China to as low as 30%.” Here are more details from the article:
The order signed by President Donald Trump said levies for those direct-to-consumer postal shipments will be reduced to 54% from 120% for items valued at up to $800, starting on Wednesday. An alternative flat fee of $100 per postal package remains in effect, but a planned June 1 increase to $200 was cancelled.
There are different rules for packages handled by commercial delivery firms such as United Parcel Service, FedEx, and DHL…The rate for those packages now defaults to the reduced U.S. tariff rate of 30% from 145% for Chinese imports, two delivery experts told Reuters on condition of anonymity for fear of retribution.”
(“Fear of retribution” for interpreting the effect of an executive order on import tariffs for parcel shipments? Really?)
This is just another snap in the “Bullwhip Effect” whip.
Many orders that were cancelled or put on hold are now back on again, as importers have a 90-day window to bring products in at a much reduced rate (even though 30% is still too high for many small businesses).
“Freight rates from China to the U.S. West Coast have risen about 8% this week as bookings have boomed, shipping executives and brokers in Singapore and London say,” as reported by Costas Paris in the Wall Street Journal. “Ocean carriers are jacking up that rate by as much as 50% in the coming 10 days or so, they added. This means shipping a container from Shanghai to Los Angeles in the coming weeks could cost over $3,000 per twenty-foot equivalent unit, or TEU, the standard industry gauge.”
Paris adds, “The rollback in tariffs has effectively pulled forward the industry’s peak season [emphasis mine], which typically runs from July to October, when big retailers such as Amazon.com and Walmart load up for back-to-school and holiday shoppers. Some analysts say freight rates could approach Covid-era peaks of about $20,000/TEU over the next three months.”
So, a boom today means a lull tomorrow.
Again, this all assumes nothing changes again between today and tomorrow.
Please fasten your neck braces for the weeks ahead because the whiplash will likely continue.
Requiring Drivers in Driverless Trucks
The Teamsters issued a press release this week “calling on Texas lawmakers to pass House Bill 4402 (HB 4402), critical legislation requiring trained human operators in autonomous vehicles (AVs), following its passage out of the Texas House Committee on Transportation.”
The press release adds:
“Requiring a human operator in a driverless truck isn’t unreasonable — it’s common sense,” said Brent Taylor, President of Teamsters Joint Council 80 in Dallas and Southern Region International Vice President. “There are hundreds of thousands of Texans who turn a key for a living. They have mortgages, medical bills, and families to support. We can’t let out-of-state billionaires steal their jobs with reckless automation. We must protect their livelihoods by passing this critical bill into law.”
As Jason Cannon reports in CCJ, “a similar bill [requiring trained human operators in autonomous vehicles] has been introduced in California a number of times and has even passed both houses, but has been twice vetoed by Gov. Gavin Newsom.”
I understand the Teamster’s concern about the potential loss of jobs, but requiring a driver in a driverless truck is not reasonable; it’s redundant. Like having a person sit in an EZ-Pass toll booth as cars and trucks pass by without stopping. It’s more reasonable to just call for the ban of autonomous trucks altogether.
Will driverless trucks bring the extinction of truck drivers? If so, not any time soon (see “The Long, Bumpy Road To Deploying Driverless Trucks At Scale”). And it won’t be a wholesale replacement, either. Driverless trucks will have a “sweet spot” in transportation operations, such as long-haul moves on interstate highways away from large urban areas.
Then there is this: the median age of truck drivers in the US is 46 compared with 41 for all workers, according to 2019 Census data. As they get older and retire, there will be fewer taking their place (our birth rate continues its 50+ year decline) and driving a truck isn’t a career many young people are clamoring for these days.
Reality bites, sometimes.
And with that, have a meaningful weekend!
Song of the Week: “On My Knees” by RÜFÜS DU SOL
