LME Inc., a less-than-truckload carrier out of Minnesota, abruptly shut its doors last week. The shuttering of this 600-employee operation  "is an indication that trucking companies that are poorly run could be in deep trouble if the economy slows" (Economist Noel Perry Warns of More Shutdowns After LME Padlocks Doors, Transport Topics, 16 Jul 2019). Besides LME, other trucking companies have also shut their doors this year. This is exemplary of both a slowdown in the trucking industry and signs of a weakening economy. 

Other carriers who shut their doors this year include: New England Motor Freight (a Northeastern LTL carrier), TFI International Inc.'s Highland Transport Division (cross-border unit operating in  the Northeast), Eastern Connection (regional freight carrier in the Northeast), Falcon Transport (Ohio-based carrier who hauled a lot of freight to and from General Motor's Lordstown, Ohio, plant), and Starlite Trucking Inc. (California-based agricultural products hauler).  

There is a lot of competition in the trucking industry right now, and companies who are not making enough money cannot stay afloat long enough to remain in business. 

The rise in online sales and decreased capacity led to an 11.4% increase in spending costs on transportation and logistics in the U.S. during 2018. This equates to about $1.64 trillion USD.  Various costs rose: transportation, logistics, and trucking costs all increased nearly double digit percentages from 2017 to 2018. 

As 2018 was a year of tight capacity and intense growth, the forecast for 2019 is slower growth. The impact of weather and tariffs has already affected suppliers, shippers, and transportation partners. 

Read more information regarding the increase in logistics costs here. 

                                                                                Video from FreightWaves
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​As general information to our clients and readers, FedEx Express is not renewing their contract with Amazon as tensions have been heightening between the two companies. Here are a few facts we found important regarding this future contact change, which will end on June 30th: 

• FedEx Express is "used for air transportation of packages and is not used for last-mile, ground deliveries" (Amazon loses contract with FedEx Express as it builds out competing delivery network, The Verge, 7 June 2019)
• UPS handles most of the two-day Amazon Prime deliveries and other FedEx contracts are still in place
• FedEx notes they have decided not to renew the contract because they want to focus on the larger e-commerce market, including shipments for other retailers
• According to FedEx, Amazon accounts for less than 1.3% of FedEx's total revenue
• Amazon is likely interested in managing each part of their logistics chain "from the warehouses that store [Amazon's] products to the planes, cargo ships, and delivery trucks that move [Amazon's] products around the world" (The Verge)

We are interested to see what happens in the future with both companies-- from Amazon's logistics chain to FedEx's revenue and growth. 

Other sources: FedEx opt out of Express contract with Amazon may be a good thing, analysts say, MarketWatch, 11 June 2019; FedEx declines to renew Amazon's U.S. air-delivery contract, The Washington Post, 7 June 2019; FedEx Express will not renew contract with Amazon, Supply Chain Digital, 10 June 2019

Prior to Trump's imposed tariffs on China taking effect and the proposal of Mexico tariffs, April exports and imports are down.

​Transport Topics notes that "Goods shipments to China fell to $8.5 billion in April from $10.2 billion the prior month and are down 20% year-to-date, while imports from the nation have declined 13.2% in 2019. Meanwhile, merchandise exports to Mexico are little changed so far this year while imports are up 6.1%" (Exports, Imports Plummet as US Trade Deficit Narrows, 6 June 2019).

Trump's changing policies are affecting businesses' supply chains and are making it harder for businesses to account for future growth or decay.

At 12:01 AM Eastern time Friday, the United States plans to increase tariffs from 10% to 25% on Chinese imports. Trump and Beijing plan to talk prior to the tariff hike sometime today. China has stated they will retaliate if the tariff hike goes through.

If the tariff increase goes through, both the U.S. and China's imports and exports will likely be affected by both the tariff hike and retaliatory measures that may be taken on either side. 

Read more here.