UPS vs. Amazon: The Breakup That’s Been a Long Time Coming

UPS has finally decided it’s time to stop playing second fiddle to Amazon. The global logistics giant announced that it will slash the volume of parcels it handles for Amazon by a staggering 50% going into the second half of next year. This move is part of a $1 billion cost-cutting initiative, targeting reductions in air, labour, and road costs, along with closing several facilities.

Why the drastic shift? Amazon may be UPS’ largest customer, but it’s not its most profitable. UPS chief executive Carol Tomé made it clear: “Amazon is our largest customer, but not our most profitable,” calling out the “dilutive” impact Amazon has had on UPS’ margins. And despite the ecommerce giant accounting for just under 12% of UPS’ 2024 revenues, this breakup has already sent shockwaves through the market, with UPS’ stock plummeting 15% on the news.UPS has had a rough few years, losing a third of its value post-pandemic, as ecommerce demand normalised. And if that wasn’t enough, Q4 2024 revenues hit $24.3 billion, falling short of the forecasted $25.42 billion, with full-year 2025 revenue expectations sitting at $89 billion.

From Amazon’s Backseat to Owning the RoadBut this isn’t a white-flag moment. Instead, UPS is shifting gears. Rather than relying on Amazon’s volume, it’s pivoting toward the small parcel sector—an area it previously shunted to the US Postal Service. UPS is also making moves to capitalise on new ecommerce heavyweights, securing deals with Shein and Temu—two ultra-fast fashion juggernauts with massive logistics needs.This shift signals a more strategic, long-term play. Why continue running on Amazon’s treadmill when you can build a more profitable route?

The Bigger Picture: Visibility, Resilience & Climate Impact

What does this mean for the supply chain? Simple uncertainty. Whenever major shifts like this occur, businesses that depend on stable logistics networks suddenly face disruptions that can cripple operations.This is why implementing supply chain and climate impact visibility software is no longer a luxury—it’s a necessity. Real-time data insights empower BCOs and Logistics Service Providers (LSPs) to make business-critical decisions, mitigate risks, and navigate supply chain shocks.UPS’ pivot underscores the reality: supply chains are volatile, and those without visibility are flying blind. If your business isn’t leveraging real-time insights to anticipate shifts, you’re not steering your ship—you’re waiting to get hit by the next wave.The industry is changing. Adapt, or be disrupted.

The Perfect Storm: Global Container Congestion, China’s New Year Rush, and Why Visibility is Key

It’s the logistics equivalent of the perfect storm: Chinese factories are racing to ship goods before the New Year holiday. Add in the looming spectre of US import tariffs and some nasty winter weather, and you’ve got container ports across Asia, Europe, and North America at a breaking point.

According to Linerlytica, global port congestion has hit a three-month high, with an estimated 3.3 million TEU – nearly 11% of the global container fleet – stuck at ports. China’s Yangtze River and Pearl River Delta ports are experiencing unprecedented congestion. Why? A surge of cargo trying to beat the holiday lull and potential tariffs on Chinese imports to the US.

Take Yantian, for example. This southern port, responsible for a third of Guangdong’s international trade and 25% of China’s exports to the US, has increased its daily cap on container handling by 15%, up to 15,000 units per day. In 2024, Yantian hit record volumes of 17.37 million TEU, reflecting a 7% year-on-year increase, while neighbouring Shenzhen saw exports climb 15% to a staggering CNY2.81 trillion (£303 billion).

But it’s not just China. Severe weather across the US Atlantic coast and English Channel is delaying vessels. UK ports like Felixstowe, Southampton, and London Gateway have all faced closures, while industrial action in French ports and at ECT Rotterdam is adding to the chaos.

The Bigger Picture: Visibility and the Climate Connection

Here’s the kicker: this isn’t just a logistical headache; it’s a data problem. Businesses – especially BCOs (Beneficial Cargo Owners) and LSPs (Logistics Service Providers) – are flying blind without real-time supply chain visibility. The lack of accurate data means critical decisions are being made in the dark.

Imagine the power of a dashboard that not only tracks shipments in real time but also layers in climate impact insights. How would that change your strategy? What if you could anticipate disruptions like pre-holiday rushes, tariffs, or weather delays, and proactively re-route cargo or manage inventory?

This isn’t a fantasy. Supply chain visibility software is the next frontier for logistics, helping businesses not only adapt to disruptions but also minimise their environmental impact. With container fleets jammed at ports and emissions ticking up, the need for actionable data has never been clearer.

The takeaway? The supply chain industry is overdue for a digital transformation. Those who embrace it will thrive. Those who don’t? They’ll drown in the perfect storm.

France’s Port Strikes: A Slow Burn to Supply Chain Chaos

The Normandy gateway, Le Havre—France’s biggest container port—is bracing for a storm. Dockers and port workers, rallying against state pension reforms, have kicked off a programme of industrial action. Think walkouts, strikes, and a ripple effect that’s already starting to spread.

The plan? Four-hour walkouts on 13 specific days, stretching from yesterday to 28 February, and a series of 48-hour strikes. Mark your calendars: 27, 29, 30, and 31 January, along with 4, 6, 10, 12, 14, 18, 20, 24, 26, and 28 February, will see disruptions at Le Havre. And it doesn’t stop there.

Evidence of contagion came immediately. Yesterday, 80 workers at the port of Calais downed tools between midday and 4 pm, leaving passengers and freight stranded. Crossings? Cancelled. P&O and DFDS ships? Dead in the water.

This isn’t new. The dispute over raising France’s statutory retirement age has been brewing for over a year. Last June, a 24-hour stoppage led by the militant CGT union federation paralysed Le Havre’s terminals—ro-ro, bulk, and container. Ship calls were cancelled, vessel schedules derailed, and Marseille-Fos, the second-largest box port, wasn’t spared. There, 600 dockers blocked access, creating a logistical nightmare: delays of up to a week for hauliers, immobilised goods, and sky-high costs for logistics providers forced to divert flows to other European ports.

So why does this matter? Because this isn’t just a port problem; it’s a global problem. Every walkout, every cancelled ferry, every delayed container creates a ripple effect that hits businesses and consumers worldwide.

Here’s the kicker: we’ve been here before. Last summer, the strikes paused due to political chaos when President Macron dissolved Parliament. Two new governments later, the unions are back, ready to strike harder and longer.

For Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs), this is a wake-up call. Supply chains are delicate ecosystems—one strike in Le Havre, and suddenly goods meant for Manchester, Madrid, or Munich are sitting idle. Firms need visibility tools that provide real-time data insights, enabling critical decisions to counteract these disruptions. Climate impact visibility software adds another layer—helping businesses reroute freight with an eye on sustainability, cost, and customer expectations.

The bottom line? If your supply chain strategy doesn’t include robust visibility, you’re playing roulette with your business. Le Havre isn’t just a French story—it’s a lesson for us all.

Freight Markets in Flux: Why Excess Inventory Could Be Your Opportunity

Retail inventories are soaring, freight markets are softening, and it’s a perfect storm for supply chains. If you’re not paying attention, the next few months could wreak havoc on your logistics, profitability, and sustainability goals. But with the right tools and insights, this challenge can be turned into an opportunity.

The Numbers Don’t Lie

Retail inventories in the US are breaking records. According to Sea-Intelligence, November 2024 inventory levels were $30.2 billion higher than the norm. Alan Murphy, CEO of Sea-Intelligence, called it “the largest upwards deviation we have seen since the financial crisis.” Inventories peaked in September, exceeding the long-term trend by 3.1%, and while there was a slight dip to 3% by November, the excess remains significant.

What’s causing this? It’s a cocktail of factors. Retailers are hedging against potential tariffs, managing disruptions like the ILA strike, and overcorrecting after pandemic-era shortages. Philip Damas of Drewry pinpointed three culprits: Chinese New Year, pre-strike cargo rushes, and sky-high inventory levels compared to last year.

And the costs are piling up. Target’s 2022 initiative to “right-size” inventory is still falling short. Jefferies noted that early inventory build-ups, aimed at mitigating East Coast port disruptions, shaved nearly one percentage point off its holiday profit margins. Meanwhile, Alix Partners warned that average “days on hand” for US retailers have risen by 12% since 2021.

A Vicious Cycle or a Strategic Opening?

Excess inventory doesn’t just dent profits; it ties up capital, increases holding costs, and inflates the carbon footprint of supply chains. Alix Partners cautioned that many companies underestimate these holding costs because decision-making is siloed between inventory planners and financial managers.

But let’s flip the script: this isn’t just a crisis—it’s a wake-up call for smarter supply chains. Imagine having real-time data insights that enable Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs) to anticipate disruptions, optimise routes, and fine-tune inventory decisions.

The Case for Visibility Software

Visibility software is no longer optional; it’s mission-critical. With tools that integrate real-time supply chain and climate impact data, businesses can assess the full cost of inventory decisions. This empowers leaders to counteract challenges like tariff impacts, inventory build-ups, and market softness, making business-critical decisions with confidence.

This isn’t just about saving money. It’s about future-proofing. Smarter supply chains mean fewer carbon emissions, better margins, and happier customers. The alternative? More missed earnings reports, like Target’s, and a higher environmental toll.

The message is clear: the time to act is now. Visibility, agility, and sustainability aren’t just buzzwords; they’re the foundations of a thriving supply chain in 2024 and beyond.

The Suez Conundrum – Navigating the Future of Shipping Amid Overcapacity and Uncertainty

The maritime industry is bracing for a seismic shift as carriers weigh the decision to revert to the Suez Canal after months of Cape of Good Hope diversions. This seemingly simple change has profound implications, not just for freight rates but for the entire global supply chain.

Why? Because when the Suez becomes the norm again, the reduction in voyage tonne-miles will expose the glaring overcapacity in the market, driving freight rates down—particularly on the Asia-Europe trades. According to Drewry, rerouting via the Cape reduced effective capacity by approximately 9%, a key factor in carriers posting robust quarterly profits over the past year. But now, the industry stands on the brink of a sharp correction.

Redefining the Market: Overcapacity and Pricing Challenges

The Global Shipper’s Forum (GSF) and MDS Transmodal estimate that if Red Sea transits resume, 70 ships with around 500,000 TEU capacity will become surplus. This surplus creates a new headache for shippers and carriers alike, as freight rates plummet and market volatility takes centre stage.

Matthew Gore, partner at HFW, underscores the dilemma shippers face in navigating contract negotiations. A “wait-and-see” approach sounds safe but leaves businesses vulnerable. Spot rates, predicted to trend downward but remain volatile, provide little reassurance. Gore’s advice? Consider index-linked contracts or innovative agreements like “twin-rate contracts”—a Cape rate for the longer route and a reduced Red Sea rate once services resume.

James Hookham of GSF calls twin-rate contracts a bold but necessary innovation, reflecting resilience planning seen in other sectors. Yet even he acknowledges the challenge of securing commitments in an environment as turbulent as 2025’s freight market is predicted to be.

The Critical Role of Real-Time Supply Chain Visibility

Here’s the truth: regardless of Cape or Suez, shippers and Logistics Service Providers (LSPs) need more than rate flexibility to thrive—they need visibility. Implementing supply chain and climate-impact visibility software isn’t just a nice-to-have; it’s a survival tool.

Such software provides real-time data insights, enabling Beneficial Cargo Owners (BCOs) and LSPs to make business-critical decisions amid unpredictable shifts in routes, rates, and capacity. It allows businesses to map out the full scope of their supply chains, anticipate bottlenecks, and adapt to sudden disruptions. Whether it’s gauging the impact of returning to Suez or managing overcapacity, having a clear view of the numbers is no longer optional—it’s mission-critical.

As Hookham aptly puts it, “resilience planning” isn’t just for major crises; it’s for anticipating and navigating the small, compounding challenges that define modern shipping. If transparency and data-driven decisions can protect supply chains from the ripple effects of Suez shifts, the industry has no excuse to hold back.

Final Thoughts: Innovate or Be Left Behind

The future of shipping contracts, from twin-rate deals to index-linked agreements, will be defined by innovation and transparency. But to make these strategies work, the foundation must be a visible, measurable, and data-driven supply chain. Companies that embrace real-time insights will lead; those that cling to traditional models will struggle to keep up.

As 2025 looms, the industry’s leaders won’t just be those offering lower rates. They’ll be the ones offering certainty in an uncertain world.

The Ceasefire Mirage – Shipping, Strategy, and the Critical Need for Supply Chain Visibility

The world of logistics is no stranger to disruption, and the Red Sea’s troubled waters are no exception. As reports emerge of a potential ceasefire in Gaza, speculation mounts that the Red Sea and Suez Canal routes may soon reopen for global shipping. But let’s not be hasty. A lull in Houthi attacks is just that – a lull. Experts caution against overconfidence, pointing out that the Houthis’ disruptive leverage over global trade might be too tempting for the group to relinquish.

A Fragile Path to Peace

Houthi spokesperson Mohammed Abdul Salam made waves on X, framing the ceasefire as a potential turning point. Yet, his declaration also highlighted the group’s broader regional aspirations, leaving many to wonder if hostilities in the Red Sea are truly over. Lars Jensen, CEO of Vespucci Maritime, offered cautious optimism, suggesting Suez Canal transits might resume as early as February, with sporadic crossings before that. However, industry veterans like Michael Yarwood of TT Club remind us that shipping companies may be in no rush. His reasoning? A cautious market and slow-moving insurance adjustments.

Lessons from the Suez Blockage

Yarwood’s point holds weight. The six-day Suez Canal blockage of 2021 saw shipping routes bounce back with surprising speed. But this is different. After 15 months of disrupted Red Sea routes, the logistical, economic, and psychological toll on shippers and cargo owners alike won’t dissipate overnight. Building confidence takes time, especially when the stakes involve insurance premiums, geopolitical tensions, and the broader supply chain.

The Tech Imperative: Real-Time Visibility

What’s the takeaway for Beneficial Cargo Owners (BCOs) and Logistics Service Providers (LSPs)? Two words: data visibility. In a world where geopolitical instability can upend routes overnight, the ability to see and act on real-time supply chain data is non-negotiable. Climate impact, freight delays, and rerouting costs can no longer be reactive challenges – they require proactive solutions. Advanced supply chain software is the strategic advantage here, equipping businesses with the insights needed to make critical, time-sensitive decisions.

The numbers don’t lie. DP World’s Modal Shift Programme reduced carbon emissions by 4,500 tonnes through better rail freight utilisation. Now imagine that same strategic insight applied across disrupted shipping lanes. Real-time visibility software doesn’t just safeguard supply chains – it creates opportunities for resilience, efficiency, and sustainability.

The Bigger Picture

Let’s not overlook the broader implications. This ceasefire – if formalised – would represent a remarkable shift in Israeli policy, one met with internal political resistance. But even then, a peaceful Red Sea remains speculative. For BCOs and LSPs, the real victory lies in building resilient, adaptable systems that thrive despite disruption. Visibility is no longer optional; it’s existential.

As the Red Sea drama continues, remember: a calm sea today doesn’t mean smooth sailing tomorrow. For the logistics industry, the focus must shift from reacting to anticipating – and that begins with the right tools.