Welcome to CrossDock’s Weekly Dispatch,
We’re back with the key stories shaping supply chain, e-commerce, logistics, and retail. From escalating tariff wars to the first signs of stability in Red Sea shipping, here’s a roundup of last week’s most important trade and supply chain developments. Let’s dive in.
Big News 📣
President Trump Kicks off the Tariff Wars
As announced, President Donald Trump imposed 25% tariffs on imports from Mexico and Canada and an additional 10% on Chinese goods, citing concerns over illegal immigration, drug trafficking, and trade imbalances. Following the announcement, swift retaliatory actions ensued: Canada implemented a 25% tariff on $155 billion worth of American imports, while Mexico indicated plans for similar countermeasures.
However, things changed soon after President Trump got on a call with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau.
- Tariffs on pause ⏸️ : The tariffs were paused within 24 hours for the next 30 days after leaders from both sides agreed to deploy 10,000 personnel to guard the borders. Canada also agreed to appoint a "fentanyl czar" to lead efforts against opioid smuggling.
- Chinese attack: China announced it will impose a 15% tariff on U.S. coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, and large-engine cars. The new tariffs will take effect February 11.
- Complaint box📮: China has also filed a complaint with the World Trade Organization against President Donald Trump's tariffs and launched an antitrust investigation into Google.
U.S. Ends De Minimis Exemption for Chinese Imports
In a significant policy shift, President Donald Trump issued an executive order terminating the de minimis exemption for imports from China and Hong Kong, effective February 4, 2025. This exemption previously allowed goods valued under $800 to enter the U.S. duty-free. Chinese e-commerce giants like Shein and Temu used this loophole to circumvent import tariffs and flood the US market with cheap and inexpensive goods.
According to U.S. Customs and Border Protection (CBP), de minimis shipments account for the majority of cargo entering the U.S. The agency reported handling approximately 4 million de minimis shipments daily—a rate projected to surpass the previous year’s total of over 1 billion shipments.
Over the past decade, de minimis shipments have surged dramatically. According to the White House, the number of such shipments to the U.S. increased from 140 million in 2014 to 1 billion in 2023.
- The USPS show 📦: The USPS initially announced it would stop accepting parcels from China and Hong Kong after the US imposed an additional 10% tariff on Chinese goods. However, it quickly reversed the decision, stating it would coordinate with Customs and Border Protection to implement a collection process for the new tariffs while avoiding delivery disruptions.
- Temus goes local: With tariff exemptions removed, Temu is promoting sellers with U.S. warehouse inventory in its app, shifting focus from direct shipments from China.
Panama Denies U.S. Claim of Free Canal Access
Panama has denied claims that U.S. government vessels can transit the Panama Canal for free, contradicting a statement from the White House that touted the move as a cost-saving measure.
The U.S. State Department announced that government ships “can now transit the Panama Canal without charge fees,” estimating savings in the millions. However, the Panama Canal Authority (ACP) dismissed the claim, stating that it has full control over tolls and has made no changes. “We set the tolls, and nothing has changed,” the ACP said in a statement.
The canal remains a crucial trade route, with U.S. vessels accounting for 52% of transits in 2024. The dispute adds to growing friction between Washington and Panama, as President Donald Trump has repeatedly floated the idea of regaining U.S. control over the waterway.
U.S. Warehouse Market Key Insights from 2024 Prologis Logistics Rent Index
✅ Rent decline: U.S. and Canadian logistics facility rents fell 7% in 2024, marking the first annual drop since the 2008 financial crisis.
✅ Southern California hit hard: The region saw rents decline by over 20%, correcting from a pandemic-driven surge between 2020 and 2022.
✅ Oversupply pressure: Markets like Phoenix and Dallas faced increased vacancies, which slowed rent growth and led to more lease concessions.
✅ Class A vs. Class B/C facilities: Newer, high-quality warehouses held their value better, while older buildings had to reduce rents to attract tenants.
✅ Warehouse construction drops: New project starts fell 30% in 2024, as market rents are now 15% below replacement cost rents, discouraging further development.
✅ Leasing activity slows: Demand for space was 30% below pre-pandemic levels as companies consolidated operations and delayed expansion due to economic uncertainty.
✅ Outlook for 2025: Warehouse vacancies are expected to decline, with leasing activity rebounding as supply chain adjustments and nearshoring efforts drive demand.
TLDR 🗓️
Walmart Expands Same-Day Pharmacy Delivery to 49 States
Walmart is rolling out same-day pharmacy delivery in 49 states as competition for prescription customers heats up. The expansion comes as the retail giant battles online rival Amazon and struggling traditional drugstores like CVS Health and Walgreens.
Walmart first launched same-day prescription delivery in six states last October. Now, it says it is the first retailer to integrate pharmacy, general merchandise, and grocery into a single online order.
The move intensifies the race in the pharmacy sector, with CVS and Walgreens investing in their own same-day delivery and digital upgrades. Meanwhile, last year, Amazon announced plans to open new pharmacies in more than double the cities offering same-day prescription delivery.
EU Targets Shein and Temu Over Unsafe Products
The European Commission has ruled that Chinese e-commerce giants Temu and Shein will be held liable for selling unsafe products on their platforms. This is part of the EU’s broader crackdown on cheap imports.
It also announced a joint investigation into Shein over suspected violations of EU consumer protection rules. The move follows a similar U.S. crackdown, which ended a trade provision allowing duty-free shipments of low-value packages. The Commission cited 4.6 billion low-value imports in 2024 — 91% from China — double the 2023 figure. Officials warn that the surge in shipments harms EU retailers and has a negative environmental impact.
Global Air Cargo Growth Slows in January Amid Tariff Concerns
Global air cargo demand grew just 2% year-on-year in January, a sharp slowdown from last year’s double-digit monthly increases, according to Xeneta. Analysts attribute the decline partly to an earlier Lunar New Year, which reduced outbound volumes from China, though the drop was steeper than expected.
Cross-border e-commerce demand has been a key driver of global air cargo growth since Q3 2023. In 2024, China’s shipments to the U.S. made up 25% of its global sales and filled over 50% of cargo capacity on China-U.S. routes. The suspension of the de minimis exemption could disrupt this flow, increasing costs and customs delays.
Despite market concerns over U.S. tariffs on China and potential retaliation, Xeneta analysts say fears of a trade war hurting air cargo volumes and growth forecasts for the year are premature. The firm maintains its +4-6% growth projection for 2025.
Is Red Sea Calm Now? Can Shipping Resume?
British and American ships are cautiously returning to the Red Sea after Yemen’s Houthi rebels vowed to halt attacks on vessels linked to both nations. Since Jan. 19, six UK- and US-linked ships have transited safely, according to the Joint Maritime Information Center, marking a potential easing of tensions in one of the world’s busiest trade corridors.
For more than a year, Houthi attacks have forced many vessels to take the longer route around Africa, adding weeks to shipping times and significantly increasing fuel and insurance costs. The disruption has strained global supply chains, raising prices for consumers and businesses alike.
FedEx Acquires RouteSmart
FedEx Corp. has acquired RouteSmart Technologies, a Columbia, Maryland-based leader in route optimization solutions, with over 40 years of experience. This acquisition aims to enhance FedEx's global pickup and delivery operations by integrating RouteSmart's technology. RouteSmart will continue to operate as a standalone entity under FedEx Dataworks, a subsidiary of FedEx Corp.
Maersk Beats Q4 2024 Profit Forecasts
Maersk reported fourth-quarter profits that exceeded forecasts and expects 4% growth in the global container shipping market for 2025.
However, the company anticipates a decline in profits due to geopolitical uncertainties, including potential U.S. tariffs and instability in the Red Sea. CEO Vincent Clerc emphasized that consumer demand remains a key factor for shipping volumes.
The company resumed share buybacks, boosting its share price by 10%. Maersk's underlying EBITDA forecast for 2025 ranges from $6 billion to $9 billion, influenced by ongoing disruptions in the Red Sea, where it has avoided operations due to militant attacks.
Amazon to Increase Capital Expenditure to $100 Billion in 2025
Amazon is set to increase capital expenditures to $100 billion in 2025, up from $83 billion in 2024, as it deepens investments in artificial intelligence. The majority of this spending will go toward expanding AI infrastructure for AWS, reinforcing Amazon’s commitment to leading in cloud computing and generative AI.
The company reported $26.3 billion in capital expenditures in Q4 2024, indicating the scale of its planned investment for the year ahead. This marks one of Amazon’s most significant spending increases.
Amazon’s announcement came alongside its fourth-quarter earnings report, where it posted better-than-expected revenue and profit but issued a weaker-than-expected sales forecast for the current quarter. The cautious outlook led to a more than 4% drop in Amazon shares during extended trading.
L’Oréal Sells €3 Billion Stake in Sanofi as Part of Share Buyback
L’Oréal SA is selling €3 billion ($3.1 billion) worth of Sanofi shares back to the French drugmaker, reducing its stake after Sanofi’s stock outperformed the market over the past year. The deal includes the sale of 29.6 million shares at €101.50 each, leaving L’Oréal with 7.2% ownership in Sanofi and 13% of voting rights.
L’Oréal said the sale will strengthen its balance sheet following recent acquisitions, including its $2.6 billion purchase of Aesop. Sanofi confirmed the buyback is part of its recently announced share repurchase program aimed at enhancing shareholder value.
Q4 Freight Data Shows Decline in Shipments and Spending
Here are the key takeaways from the U.S. Bank Freight Payment Index, a quarterly report published by U.S. Bank:
- Shipment volumes fell 4.7% in Q4, marking the 10th consecutive quarterly decline, while spending dropped 2.2%, reflecting ongoing softness in manufacturing and freight demand
- Many shippers expanded in-house transportation capabilities post-pandemic, reducing reliance on for-hire carriers and contributing to structural changes in the freight market
- Spot rates rose 0.5%, the first gain since Q1 2022, while contract rates fell 1%, marking their sixth straight quarterly decline. Fuel costs also dropped, influencing overall freight spending
- The Southeast was hit hardest (-6.7% in shipments and spending) due to hurricanes and an auto industry slowdown, while the Northeast showed signs of tightening capacity, with shipments down just 1.2% but spending up 0.9%
Veteran Journalist Paul Page Announces Retirement from WSJ
Paul Page, bureau chief of The Wall Street Journal’s Logistics Report, has announced his retirement in a LinkedIn post, marking the end of an era in supply chain journalism. A veteran journalist, his work has been instrumental in shaping complex logistics trends into sharp, insightful analyses.
CrossDock deeply respects and admires his work, and we wish him the best in his future endeavors. His contributions to journalism and supply chain reporting will continue to inspire future writers and guide supply chain enthusiasts for years to come.
Tidbits 🍿
- JCPenney has launched a B2B website to support businesses and nonprofits in purchasing products at bulk order prices
- About 100,000 eggs worth $40K were stolen from a trailer in Pennsylvania. The US is currently facing an acute egg shortage and record high egg prices throughout the country
- Walmart has purchased Monroeville Mall, located 12 miles east of Pittsburgh, in an all-cash $34 million deal
- Mattel, the company behind Barbie and Hot Wheels, is weighing price increases in response to President Donald Trump’s new tariffs on China. The company sources about 40% of its products from China
- Senators Bernie Sanders and Josh Hawley, who are not known for agreeing on many issues, introduced a bill on February 6, 2025, to cap credit card interest rates at 10%.
This newsletter was written by Shyam Gowtham
Thank you for reading. We’ll see you at the next edition!