📦❄️🚢 Parcel Shake-up, Ice-olated Routes, & Asphalt Fleet
Good morning! ☀️
Grab your coffee and let’s dive into the latest in logistics.
👉 First up, FedEx and UPS have long reigned supreme in U.S. parcel delivery, but times are changing. Customers are now favoring cheaper Ground and SurePost options thanks to faster transit times.
👉 Meanwhile, up in the Arctic, we thought warmer temperatures would make shipping easier. Surprise! Thick ice from Greenland is causing chaos in the Northwest Passage, cutting safe shipping seasons by up to 70% since 2007.
👉 And over in China, COSCO Shipping is making waves by ordering four shiny new 9,000-ton special liquid cargo ships for a cool $98 million. They’re gearing up to dominate the asphalt transport game.
Stay tuned for more insights and updates to keep your logistics game strong.
“The leader has to be practical and a realist yet must talk the language of the visionary and the idealist.”
The Changing Landscape of Parcel Delivery
For years, FedEx and UPS ruled U.S. parcel delivery. However, UPS’s recent earnings report showed that customers are switching to cheaper Ground and SurePost options, driven by faster transit times. This shift started with the rise of FedEx Ground over two decades ago.
With e-commerce booming, 65% of parcels now go directly to consumers, often via smaller regional carriers. Big players like Amazon and Walmart use their own delivery networks, handling millions of parcels daily. Consumers are choosing cost over speed, and companies are adapting. By 2026, private and local fleets could surpass FedEx and UPS, delivering over 40 million parcels daily.
WHY IS THIS IMPORTANT?
In the transportation and logistics game, this shift is a big deal. The competition is heating up, and FedEx and UPS aren't the only players anymore. To stay competitive, keep an eye on these trends and be ready to adjust your strategies.
🔥 OUR HOT TAKE?
The parcel delivery landscape is evolving fast. Regional carriers and retailer-owned fleets are shaking things up. It's "survival of the fittest," and only the most adaptable will thrive. Keep an eye on this space and be ready to pivot your operations to stay ahead!
Arctic Shipping: Not as Easy as Expected
We thought warmer temperatures would make Arctic shipping easier, but thick floating ice from Greenland is causing unexpected challenges. A study in Nature found that local ice melt is pushing thick ice into Canada’s Northwest Passage, shortening the safe shipping season by 50-70% in some areas since 2007. This creates significant hazards for ships, leading to more route changes and risks.
Despite these issues, Arctic traffic is set to rise due to tourism and commercial shipping. But, the thick ice along the northern route will be a challenge for decades, so adaptable shipping strategies are essential.
Read more at Scientific American >
WHY IS THIS IMPORTANT?
For those of us in transportation and logistics, this Arctic ice situation is a big deal. The thick ice from Greenland complicates the Northwest Passage, leading to longer, costlier trips and higher risks. It’s time to rethink strategies and possibly avoid some routes.\
🔥 OUR HOT TAKE?
Arctic shipping isn’t the easy shortcut we imagined. Thick ice flow from Greenland is making this route a tricky gamble. Adaptability is key—keep an eye on ice trends and be ready to pivot your routes to dodge delays and risks. Stay ahead of the freeze!
COSCO Orders New Asphalt Carriers
China’s COSCO Shipping Specialized Carriers has ordered four 9,000-ton special liquid cargo ships from Mawei Shipyard, costing around $98 million in total. These ships, priced at about $24.5 million each, will be delivered between October 2025 and August 2026 and will be used for asphalt transport.
The project is expected to have an internal rate of return of approximately 7.2%, with an investment payback period of 11.8 years. COSCO highlighted that older asphalt carriers have been phased out due to global green and low-carbon requirements. Currently, there are only 21 vessels in the 7,000-9,000 tonne range that are under 10 years old.
COSCO is also planning to create a fleet with 7,500, 9,000, and 13,000-ton capacity asphalt carriers to boost future market competitiveness.
WHY IS THIS IMPORTANT?
In the transportation and logistics industry, this move by COSCO is significant because it signals a shift toward more eco-friendly and efficient asphalt transport. With older ships being phased out due to stricter green regulations, the introduction of new, modern vessels means there will be less competition and more reliable service in this niche market.
🔥 OUR HOT TAKE?
COSCO's investment in a new asphalt fleet is a smart play. By upgrading to greener, more efficient ships, they're setting themselves up to dominate the market as older, less compliant vessels are retired. This move isn't just about keeping up with regulations—it's about future-proofing their operations and staying competitive. Keep an eye on how this influences the market and consider what upgrades or shifts your own operations might need to stay ahead.
Daily Riddle:
I sail the seas but have no sail,
I carry goods without a trail.
From port to port, I glide with ease,
What am I, that rides the breeze?
What am I?
____________
Previous Riddle Answer: Transportation
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for September 20, 2024, from iLevel Logistics Inc.