Good morning,

The U.S. Postal Service's financial troubles continue to deepen. The agency reported a $2.5 billion net loss in its fiscal third quarter and warned that, without congressional action, it may be forced to close thousands of post offices, reduce service levels, and raise postage prices to stay afloat.

Postmaster General David Steiner said USPS is running out of cash, with 70% of its delivery routes and 58% of its 18,000 post offices operating at a loss.

Let’s dive into today’s edition.

Walmart has expanded its drone delivery partnership with Wing into Florida, making the service available to more than 50,000 homes and businesses around Supercenters in Apopka and Clermont. Customers can order small everyday items through the Walmart app, with drones delivering packages by tether in an average of 23 minutes.

Flying High: The retailer, which completed its one millionth drone delivery in May, now operates the service across five states and plans to add more Orlando-area locations before expanding to over 270 drone delivery sites nationwide by 2027. Wing's drones currently carry up to 2.5 pounds, fly at 150–200 feet and speeds of up to 60 mph, with a planned payload increase to 5 pounds.

Big Picture: Drone delivery is free for Walmart+ members for a limited period and costs $19.99 per order for non-members, underscoring Walmart's continued investment in faster last-mile fulfillment as it competes with rivals including Amazon.

QVC has emerged from Chapter 11 bankruptcy after eliminating roughly $5 billion in debt, completing a prepackaged restructuring aimed at repositioning the struggling TV shopping retailer.

Backstory: The retailer filed for bankruptcy in April under the weight of $6.6 billion in debt and years of declining cable TV viewership. A legal challenge from preferred shareholders, including Citadel, failed, allowing the restructuring to proceed while wiping out their equity stakes.

Current Status: The company issued $1.3 billion in new debt, secured a $600 million asset-backed credit facility from investors including Strategic Value Partners and Oaktree Capital, and will relist on Nasdaq under the ticker QVCG.

Big Picture: QVC is now betting on streaming and social commerce to revive growth. Former CEO Mike George has returned as interim chief executive, and the board has been refreshed with digital commerce expertise, including the former head of TikTok Shop U.S., as the company pivots away from traditional television retailing.

Shein is sharply scaling back its Vietnam operations just over a year after establishing a 15-hectare logistics hub near Ho Chi Minh City as part of its China-plus-one strategy, according to Reuters.

What’s Happening? According to a Reuters report, the company has reportedly reduced the site to 6 hectares, begun mass layoffs, and now uses only about one-third of the originally planned facility.

Disadvantage Vietnam: The retreat follows sweeping changes to U.S. trade policy that eroded Vietnam's advantage as an export base. Lower tariffs on Chinese goods and new 12.5% U.S. tariffs on both China and Vietnam over forced-labor concerns have reduced the cost advantage of manufacturing in Vietnam. Suppliers also cited lower labor productivity and operational inefficiencies compared with China's highly integrated manufacturing ecosystem.

Return of the Dragon: Instead, Shein is recommitting to China, with CEO Sky Xu pledging more than 10 billion yuan ($1.5 billion) to expand a smart supply-chain system in Guangdong ahead of the company's planned Hong Kong IPO.

The U.S. 3PL industry is entering a defining phase.

Warehouse rents for smaller facilities have risen 40% since 2020, nearly 28,000 trucking companies exited the market in a single year, and 3 in 4 shippers now say a 3PL's use of AI influences who they choose. For small and mid-sized 3PLs, these changes are reshaping the industry faster than ever.

Our latest report takes a deep dive into what's driving this transformation, why some operators are growing while others are struggling, and what it means for the future of logistics.

To understand what's happening on the ground, we spoke extensively with small and mid-sized 3PL owners and industry leaders across the United States, combining their insights with market data and research to tell the story behind one of the biggest shifts the industry has seen in decades.

Upgrade to a CrossDock Paid membership to get access to the full report.

Retailers including Walmart, Ulta Beauty, Wayfair, and Kate Spade are optimizing their websites to appear in AI-generated shopping results from platforms such as ChatGPT and Google Gemini, while ensuring purchases remain on their own sites where they can retain valuable customer data.

Key Details: Juniper Research estimates AI shopping agents will drive $8 billion in consumer spending this year, while Adobe Analytics found 41% of U.S. consumers used generative AI for online shopping in June, with AI-referred shoppers generating 41% higher revenue per visit than traditional traffic.

Acquisition Channel: Rather than treating AI chatbots as checkout destinations, retailers increasingly view them as customer acquisition channels. Ulta Beauty said shoppers arriving via ChatGPT and Gemini show twice the purchase intent and conversion rates, and is working with Google to integrate its shopping cart and loyalty program into AI-powered shopping.

Meanwhile, Amazon Web Services is encouraging brands to use AI for product discovery while directing customers back to their own websites. OpenAI discontinued its Instant Checkout feature earlier this year to focus on product discovery, while Etsy said shoppers who discover products through ChatGPT still return to Etsy.com to complete purchases.

Shopify shares jumped after the company forecast third-quarter revenue growth in the low-30% range, comfortably above Wall Street's expectation of 27%. The guidance would mark Shopify's sixth consecutive quarter of revenue growth above 30%, reinforcing confidence in its growth trajectory.

Strong Performance: The company also topped second-quarter estimates, driven by stronger-than-expected performance in both its subscription and merchant solutions businesses. Operating expenses rose 21%, slightly below expectations, as disciplined hiring helped offset growing AI-related costs. Shopify previously disclosed that AI now writes more than half of its code.

Rising Stocks: The upbeat earnings reversed much of the stock's 23% year-to-date decline, which had been fueled by fears that rivals such as Meta could use AI to erode Shopify's competitive advantage.

UPS has introduced a suite of new digital tools aimed at simplifying shipping for small and medium-sized businesses. The updates include a real-time pickup management dashboard, a faster single-screen label creation process, and a redesigned mobile app that gives customers greater control over shipments while reducing time spent on administrative tasks.

Handy Tool: The new pickup dashboard lets businesses schedule, track, and manage pickups with real-time notifications, while enhanced Smart Pickup features allow customers to request or cancel pickups based on daily shipping needs, potentially reducing pickup costs by up to 50%.

The refreshed UPS mobile app now allows users to create labels, schedule pickups, and track shipments on the go. It also integrates with more than 5,500 UPS Store locations across the U.S., where customers can print RFID-enabled shipping labels for improved package visibility and near real-time tracking throughout the UPS network.

Instacart raised its outlook for the third quarter after strong demand for online grocery deliveries lifted second-quarter results above Wall Street estimates.

Key Numbers: Shares climbed about 10% in extended trading as the company forecast gross transaction value (GTV) of $10.30 billion to $10.55 billion and adjusted EBITDA of $320 million to $340 million, both ahead of analyst expectations.

The company said consumers remain value-conscious but continue to favor the convenience of online grocery shopping. Its advertising business also continued to expand, with ad revenue rising 16% to $297 million in the second quarter, while overall GTV reached $10.35 billion and adjusted EBITDA came in at $313 million, both beating estimates.

Key to Success: Instacart's strategy of lowering the minimum order value for its Instacart+ membership has helped attract smaller grocery orders, while a growing customer base is drawing more retailers and brands onto its platform.

Amazon has launched its first Prime Air drone deliveries outside the U.S., with customers around its Darlington fulfillment center in northeast England now able to receive eligible orders in 60 minutes or less.

Key Details: The service covers addresses within a 7.5-mile radius, with drones delivering packages weighing up to five pounds directly to customers' gardens, yards, or driveways.

The rollout builds on U.K. aviation trials that began in 2024 and uses Amazon's AI-powered mapping system to identify safe delivery zones without requiring property surveys. Packages are picked inside the fulfillment center using Amazon's Hercules robot before being loaded onto MK30 drones, which can fly at speeds of up to 70 mph while autonomously avoiding obstacles.

What’s Next: Drone delivery is currently included at no extra cost for Prime members in the U.K. Amazon says it aims to expand the service further and has set a goal of delivering 500 million packages globally by drone by the end of the decade.