As far as transport and logistics giant UPS Inc. is concerned, access for foreign companies to China's vast express delivery market is open in name only.
The country's regulatory regime is still highly restrictive, says Atlanta-based UPS, which entered China 30 years ago through a joint venture agreement and took ownership of its business there in 2005. Foreign express delivery companies increasingly require business permits and licenses to operate, and the sector is a "target of regulatory oversight on almost every aspect of activity and by every level of government, including central, provincial, and municipal," said a person familiar with the situation. China still bars foreign providers from entering the domestic letter and document delivery markets. International express service is licensed on a province-by-province basis, and domestic express licenses are granted city by city; the government began granting UPS domestic licenses on a planned, multi-year schedule starting in 2012, the person said.
President Trump's decision yesterday to impose tariffs of 25 percent on about 1,300 imported products from China—the affected items won't be published by the U.S. Trade Representative's (USTR's) office for another week or two—is aimed at punishing China for alleged thefts of American high-end technology and intellectual property. Yet underlying Trump's action is a simmering resentment on the part of U.S. business interests that China has spent nearly two decades unfairly protecting its markets and industries while at the same time enjoying the fruits of open and profitable trade that came with its entering the World Trade Organization (WTO) in 2001.
No one would talk on the record about the broader concerns of U.S. business in trading with China. However, one person said yesterday's decision reflects a years-long buildup of tensions and aggravation about a lopsided playing field in U.S.-China trade. "There are so many stories and anecdotes" about how difficult it is for American companies to compete with state-owned Chinese firms while having to jump through one regulatory hoop after another, the person said.
Jon Gold, vice president of supply chain and customs policy for the National Retail Federation (NRF), the nation's largest retailer trade group, surmised that the administration's moves are more targeted at staying China's hand in the intellectual property, aerospace, and IT areas, the latter being critical given America's concern that China wants to procure advanced U.S. technology like robotics to support its "Made in China 2025" initiative, which aims to guide the country's industrial modernization and would, over time, substitute foreign technology with innovation developed inside the country.
For now, NRF's members are in wait-and-see mode until USTR releases the list of tariffs, Gold said. NRF and the Retail Industry Leaders Association (RILA), among other retail groups, are concerned the tariffs will hit apparel, footwear, toys, and other everyday consumer goods, effectively punishing American consumers with higher prices for many staple items.
Gold said that NRF members have not voiced concern that an escalating trade conflict with China would compel them to shift manufacturing and distribution operations elsewhere in the Asia-Pacific region just to get out of the line of fire. Many U.S. businesses have deeply rooted infrastructures in China. Moving them to lower-cost countries such as Vietnam, while a good idea in theory, is not practical in the real world, Gold said. "You can't just shut off operations and quickly move them to another country," he said.
This is not the first time the U.S. and China have battled over intellectual property protection. In 2007, the U.S. filed a complaint through the WTO's dispute-settlement mechanism, according to Dr. Fragkiskos Filippaios, who holds the title of "reader" in international business in the Kent Business School at the University of Kent in the UK. (A reader in UK universities is above senior lecturer but below professor.) The dispute was settled three years later and favorably for the U.S., with China being required to implement steps that would protect U.S. intellectual property, Filiappaios said.
Yesterday's measures reflect the Trump administration's lack of confidence in the traditional rules-based process, which takes a long time to resolve disputes and consumes a lot of resources, Filiappaios said. However, the mechanism has improved radically over the last few years and has managed to resolve issues in a more reasonable time frame, he added. In addition, stakeholders recognize that in most cases the outcomes have been fair to all parties involved, he said.
Filiappaios warned that Trump is walking down a dangerous and counter-productive path by bypassing the processes of the WTO, of which it remains a member. "There is a very clear structure to resolve disputes, and if countries start going their own way trying to resolve them, we could end up in a chaotic situation with regards to global trade that won't be beneficial to anybody," he said in an e-mail today.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.