Sent Items #172: Monday, December 16, 2024

I hope peak season has been a great one! I love seeing posts and tweets by 3PL operators announcing record breaking days and weeks. This might be my final Sent Items of the year. 25th issue of the year and my goal was to write one every other week, so I guess I’m achieving that. I would like to write weekly, but when you don’t leverage AI, and write authentically, it takes effort!

Speaking of peak season, the USPS has a counter showing a rolling estimate of how many mail pieces and packages it has processed this holiday season. As of this morning, the counter had reached nearly 6.7 BILLION and climbing. Your peak is nothing in comparison to theirs 🙂 

I was excited to wake up Thursday morning and see my name and Third Person quoted in Morning Brew’s Retail Brew article titled, “Third-party logistics firms need to rethink the fundamentals in 2025” (link). I’ve been a long time reader of Morning Brew (and Retail Brew), I think it’s one of the best digests (albeit often lighthearted) of what’s going on in retail and e-commerce. You can sign up for the newsletter here (link) - fyi, I’m only 7 referrals away from bumper sticker swag.

In case you don’t hear from me before the end of the year, wishing those who celebrate a Merry Christmas, Happy Hanukkah, Happy Holidays and New Year!

The No-Frills Service That’s Delivering More and More Packages (link)

• The growth of Shein has spawned a new U.S. delivery service called SpeedX who specializes in the small international packages that Shein has been using to send low-price products directly from China to U.S. homes.

• SpeedX doesn’t hire its own drivers or buy delivery trucks. It uses independent contractors for its last-mile deliveries.

• While traditional parcel carriers such as FedEx and UPS pride themselves on fast shipping and up-to-the-hour delivery updates, SpeedX is focused on keeping costs low and getting bundles of small packages out of the belly of cargo airplanes. Its no-frills approach can leave some customers guessing.

• SpeedX also handles deliveries from sellers on Amazon, Temu, TikTok and others. The company, which started in 2022, expects to handle 350,000 to 400,000 parcels a day at the peak of the holiday shopping season. SpeedX first started delivering parcels in New York in 2022. Now it delivers packages that arrive at airports in such cities as Dallas, Miami, Los Angeles and Chicago to nearly a quarter of the country’s ZIP Codes.

• ShipMatrix estimates that carriers in the U.S. will deliver 106 million parcels a day during the peak holiday season. Many of those will come from such giants as Walmart and Amazon. It predicts that nearly three million will come from either Shein and Temu, up 35% to 40% from a year earlier.

CEOs Want Trump to Change Course on Tariffs. He Isn’t Budging. (link)

• Donald Trump’s tariff threats have triggered a behind-the-scenes lobbying campaign to soften or alter the president-elect’s plans. But the effort faces a potentially insurmountable roadblock: Trump isn’t budging. Trump has promised tariffs on imports from China, Canada, Mexico and other countries.

• Trump is largely acting on his own, leaving his incoming team of advisers with few opportunities to shape his thinking. His recent late-night social-media statements about tariffs have come with little warning even to some of his closest allies. Trump’s team has told corporate consultants there is no waving him off his plans to make liberal use of tariffs once he gets into office.

• Companies based in the U.S. and around the world are weighing the possibility that Trump will follow through on many of his campaign-trail warnings, potentially triggering a multifront trade war that economists warn could increase prices for consumers.

• Late last month, Trump said that he would place a 25% tariff on imports from Canada and Mexico if the countries didn’t do more to stem the flow of migrants and drugs across the border. He raised the prospect of imposing an additional 10% levy on goods coming from China because, he said, Beijing hadn’t done enough to prevent fentanyl from coming into the U.S. Days later, Trump warned that he could place 100% tariffs on Brics countries, which include Brazil, Russia, India, China and South Africa, if they try to replace the U.S. dollar as the main global currency. That is on top of his pledge during the presidential campaign to impose across-the-board tariffs of as much as 20% on all U.S. imports.

• Shortly after Trump announced that he is thinking about targeting imports from Mexico, Constellation Brands, a producer of wine, beer and other spirits, hired a Republican-aligned consulting firm. The aim is to emphasize to Trump the importance of cross-border business for Constellation’s U.S. workers. Constellation Brands has breweries in Mexico and imports beer, including Modelo and Corona, from Mexico to the U.S.

In the Battle Against Porch Pirates, People Will Try Anything (link)

• Thieves who grab packages off the front porch have become so common that shoppers can now spend hundreds of dollars to protect themselves. PorchPals, a subscription-based startup that just launched, says it will cover the cost of your stolen packages. It costs $120 a year and covers up to $2,000 of deliveries, or up to three claims a year.

• Victims of package theft can often get the retailer to send a replacement item. Even though the retailer doesn’t have to, it doesn’t want to lose a customer. Retailers typically pay carriers, including FedEx or the U.S. Postal Service, for shipping insurance, but that coverage ends once the package makes it to your door, and might not cover the full value of the purchase.

• Porch theft isn’t covered under standard credit-card benefits. For example, American Express says its purchase protection doesn’t cover items that aren’t “reasonably safeguarded” and left at unoccupied locations.

Somewhat relatedly, I learned last week that in the next couple of months, Shopify is implementing a rule change where all vendors providing package protection or insurance to brands must require an opt-in to this add-on service. Currently, merchants can include this in the order summary before a customer hits checkout - and is often missed by consumers or perceived as necessary given it is pre-selected. Buyers will soon be required to opt-in to this fee. I’ve learned that over 90% do not opt in since it is perceived as an additional cost of little value. Last week I chatted with the CEO of a leading player in this space who was laying off 50% of his team as a result. Remarkable and unfortunate to see how a “simple” rule change like this (which, by the way, feels right to me) can have immediate adverse impact on other businesses.

Dave Clark hires Amazon chief scientist and other former execs for his AI supply-chain startup (link)

• Auger, the supply chain technology startup founded by the former Amazon Worldwide Consumer CEO, named its initial 11-person executive team this week, two months after announcing $100 million in Series A funding. There’s a common thread among many of Auger’s new executives: Most of them have worked at Amazon, either recently or at some point in the past, in a variety of executive, operational, and technical leadership roles.

• Interestingly, the following day The Information reported (link) that one of the reasons they raised more money is to be able to have powder to do acquisitions if they wanted to. Lots of unprofitable supply chain startups out there that raised at huge multiples in 2021-2022.

DOGE-supporting lawmakers call on USPS to privatize some operations, scrap electric fleet (link)

• The Congressional DOGE Caucus plans to take a closer look at USPS operations, and identify ways to make the agency more efficient.

• The Postal Service isn’t meeting its break-even goals under a 10-year reform plan.

  GOP members of the House Oversight and Accountability Committee are pushing back on USPS plans to purchase mostly electric vehicles in the coming years, and some are calling on the incoming Trump administration’s Department of Government Efficiency (DOGE) to find additional ways for the agency to cut costs.

• USPS saw a $9.5 billion net loss in fiscal 2024, and is pursuing cost-cutting initiatives that received bipartisan pushback from the Senate Homeland Security and Governmental Affairs Committee last week.

• Another recommendation is to privatize its mail processing operations, where tens of thousands of Postal workers are employed. There are also advocates to privatize the entire organization, or parts of the business.

USPS softens service targets as DeJoy takes heat from Congress (link)

• The agency lowered its on-time delivery goals for fiscal year 2025 to 80% for some Postal Service offerings, igniting further criticism from lawmakers.

• The scaling back of on-time targets shows the Postal Service still has a ways to go to accomplish its “Delivering for America” overhaul, which aims to improve the agency’s financial health and delivery reliability. One of the goals of Postmaster General Louis DeJoy’s 10-year plan, introduced in 2021, is to meet or exceed 95% on-time service performance across all mail and shipping products.

• DeJoy said the Postal Service is making progress in its overhaul, in part by slashing transportation costs and growing revenue in services that compete with FedEx and UPS. He said the cost to achieve 95% on-time delivery wasn’t sustainable under the agency’s existing infrastructure and service standards.

Finally, my friends at Parabola run The SOP Community, a Slack channel for ops/supply chain leaders to grow their networks and get expert advice from their peers. Members include me 😉 and 200 other supply chain leaders from brands like Brooklinen, Flexport, and Vuori. There are some really interesting convos in the group. Below is one of my recent favorite threads:

If you’re not already in the community, you can apply here…and tell them that Sent Items sent you!

Have a great week!

- Matt

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