CrossDock's Weekly Dispatch #2

Welcome to CrossDock’s Weekly Dispatch,

We’re back with the most important news shaping the supply chain, e-commerce, logistics, and retail space. From Trump’s swearing-in and fresh tariff threats on Colombia to a growing list of buyers eyeing TikTok, a lot has unfolded. Without further ado, let’s dive in.

Big News 📣

Trump Orders Trade Policy Review

Mere hours after his inauguration on January 20, 2025, President Donald Trump issued a memorandum directing federal agencies to conduct a sweeping review with a sharp focus on trade relations with China. Agencies have until April 1, 2025, to submit their findings and policy recommendations.

While no executive orders have been signed yet, the memorandum signals that tariffs remain a key tool in Trump's U.S. manufacturing and trade strategy. The president reiterated that 25% tariffs on Mexico and Canada and a 10% hike on existing tariffs on China could begin as early as February 1, reinforcing his commitment to reshaping trade relationships.

• Tariffied 💵: Colombia has reversed its stance on blocking U.S. deportation flights following President Donald Trump’s threats to impose 25% tariffs and visa restrictions on Colombian imports and officials.
  

• To Russia with love ✉️: President Trump has threatened to impose steep tariffs and additional sanctions on Russia if Vladimir Putin does not bring the war in Ukraine to an end. In a post on Truth Social, Trump claimed that his efforts to negotiate a resolution were a "very big favor" to both Russia and its president.

Who Will Buy TikTok?

President Donald Trump has signed an executive order granting a 75-day extension for ByteDance to divest TikTok’s U.S. operations, delaying the previously imminent ban. This move has intensified interest from potential buyers, including Microsoft, which, according to reports, is in talks to acquire TikTok’s global operations while allowing ByteDance to retain a minority stake.

• Oracle, along with other investors, is also exploring a bid to manage TikTok’s data and software. Billionaire Frank McCourt has expressed interest in acquiring the platform and migrating U.S. users to his own social media project

• Perplexity AI has joined the mix, suggesting a merger with TikTok's U.S. business and a partnership with the U.S. government
  

• Meanwhile, YouTube star MrBeast has hinted at interest, though he has not formally entered the bidding process.

Costco’s Union Gearing Up for Strike

Over 18,000 Costco employees, represented by the Teamsters union, have voted by an 85% majority to authorize a strike if a new contract is not agreed upon by January 31, 2025.

The union is advocating for improved wages, benefits, and working conditions, emphasizing that despite Costco's record $7.4 billion net profit in 2024, the company has not adequately addressed these demands.

The potential strike could affect approximately 50 Costco locations across the United States, leading to significant disruptions in operations and supply chains. Costco has stated that it is negotiating fairly and anticipates minimal impact from the union's actions. As the deadline approaches, both parties are under pressure to reach an agreement to prevent a nationwide strike.

Coresight Predicts 15,000 Store Closures in 2025

Coresight Research forecasts 15,000 store closures across the U.S. in 2025, marking a sharp increase from 7,325 closures in 2024—the highest since 2020. Store openings, however, are expected to remain steady at 5,800, slightly lower than the 5,970 openings last year.

The decline in brick-and-mortar retail is driven by inflation, shifting consumer preferences for online shopping, and supply chain inefficiencies. According to research, retailers that fail to integrate technology and AI-driven customer experiences face the highest risk of closure.

Over 2,000 planned closures have already occurred in early 2025, with major retailers like Party City, Big Lots, Kohl’s, and Macy’s downsizing operations.

TLDR 🗓️

Symbotic Acquires Walmart’s Robotics Business

Walmart has sold its Advanced Systems and Robotics business to Symbotic for $200 million, with potential payments of up to $350 million. As part of the deal, Walmart will invest $520 million in Symbotic, including an initial $230 million payment. The acquisition will automate 400 Walmart stores and add $5 billion to Symbotic’s backlog. Symbotic’s AI-driven robotics will enhance Walmart’s supply chain efficiency, reinforcing its push toward e-commerce automation.

FTC Sues PepsiCo for Alleged Price Discrimination

The FTC has sued PepsiCo, alleging illegal price discrimination by favoring Walmart over smaller retailers through promotional payments. The lawsuit, filed under the 1936 Robinson-Patman Act, claims this practice inflates prices for consumers who don’t shop at Walmart. PepsiCo denies the allegations, arguing its pricing follows industry norms and is not discriminatory. The FTC voted 3-2 to pursue the case, with dissenting commissioners questioning the evidence. This marks the second recent use of the rarely enforced law as the FTC ramps up actions against unfair market practices.

UPS Reports Q4 2024 Earnings

✅ UPS reported Q4 2024 revenue of $25.3 billion, up 1.5% YoY, meeting market expectations.

✅ Net income reached $1.72 billion ($2.01 per share), while adjusted earnings per share was $2.75, exceeding forecasts of $2.51.

✅ The U.S. Domestic segment grew 2.2% to $17.3 billion, while international revenue rose 6.9% to $4.92 billion.

✅ The Supply Chain Solutions segment saw a 9.1% revenue decline to $3.07 billion, but operating profit surged 62.5%.

✅ UPS has announced plans to reduce its business with Amazon, its largest customer, by more than 50% by the second half of 2026.

Amazon Halts Drone Delivery in Two Facilities

Amazon has temporarily suspended its Prime Air drone delivery services in College Station, Texas, and Tolleson, Arizona, effective January 17, 2025. The pause was to implement software updates to the MK30 drones following two crashes during testing in light rain at a Pendleton, Oregon, facility in December 2024.

Amazon emphasizes that safety is paramount and that the crashes were not the primary reason for the suspension. Operations will resume once the Federal Aviation Administration approves the updates. Employees at the affected sites will continue to be paid during this period.

Private Label Sales Hit Record $271 Billion in 2024

Sales of store brands surged $9 billion in 2024, reaching a record $271 billion, according to PLMA (Private Label Manufacturers Association)’s Circana Unify+ data. This 3.9% increase outpaced national brands, which saw just 1% growth in dollar sales.

Over the past four years, private label sales have risen by 23.6%, adding $51 billion in revenue. Refrigerated goods led the growth at 7.5%, followed by General Food (4.3%) and Beverages (4%). The trend highlights consumers’ growing preference for quality, value, and innovation in store-brand products.

Amazon to Close 7 Warehouses in Quebec

Amazon is shutting down its seven Quebec warehouses and laying off 1,700 workers just months after one facility unionized and moved toward a collective bargaining agreement.

The company insists the decision is unrelated to union efforts, citing efficiency and cost-effectiveness. The closures will also impact 250 temporary employees in the Montreal area. Amazon plans to shift back to using local third-party delivery services, a model it used before 2020.

Adidas Q4 Results Show Strong Growth

Adidas posted a €57 million operating profit in Q4 2024, a sharp turnaround from a €377 million loss in the same period last year. The company saw its strongest revenue increase of the year, driven by rising demand for classic sneakers like the Samba and Gazelle and growth in both lifestyle and performance segments.

Following the positive results, Adidas shares surged 7%, reflecting renewed investor confidence in its ongoing turnaround.

ATA Forecasts Trucking Industry Growth

The American Trucking Association (ATA) projects a 1.6% growth in truck volumes for 2025, signaling a recovery after two years of decline. According to the ATA Freight Transportation Forecast 2024-2035, total truck tonnage is expected to rise from 11.27 billion tons in 2024 to 13.99 billion tons by 2035, with industry revenues projected to hit $1.46 trillion. Despite the growth, 2024 showed volatile freight conditions, with fluctuating gains and losses throughout the year.

WH Smith to Sell 520 High Street Stores in UK

British retailer WH Smith has announced plans to sell its 520 high street stores as it shifts focus to its profitable travel retail division.

The 232-year-old company, part of the FTSE 250, has been expanding its travel store footprint, operating 580 locations across airports, hospitals, and railway stations in the UK.

Its global travel business, spanning 1,200 stores in 32 countries, now contributes 75% of total revenue and 85% of trading profit. The move reflects broader struggles in the UK retail sector, as high street stores face growing e-commerce competition and rising costs.

US Egg Shortage Intensifies

The United States is currently experiencing a significant egg shortage, primarily due to a severe outbreak of avian influenza (H5N1) that has devastated poultry populations since early 2022. This outbreak has led to the culling of millions of egg-laying hens to prevent the virus's spread, resulting in a substantial decrease in egg production.

The reduced supply, coupled with sustained consumer demand, has caused egg prices to soar. As of December 2024, the average cost for a dozen large Grade A eggs reached $4.15, a significant increase from $1.48 at the end of 2021.

To know more on this, check out our deep-dive on what’s causing the egg shortage in the US

Tidbits 🍿

• Effective February 1, 2025, Dave Guggina, formerly the Executive Vice President of Walmart’s Supply Chain, has been appointed as the U.S. Chief E-commerce Officer, succeeding Tom Ward, who will transition to the role of Chief Operating Officer at Sam's Club

• Amazon has appointed Jason Buechel, the current CEO of Whole Foods Market, as the Vice President of Amazon Worldwide Grocery Stores. In this expanded role, Buechel will continue to lead Whole Foods while also overseeing Amazon Fresh supermarkets, Amazon Go convenience stores, and Amazon's online grocery operations

• Costco’s CEO confirmed a switch back to Coca-Cola at its food courts after shifting to Pepsi in 2013

• According to the National Retail Federation (NRF), consumers are projected to spend a record $27.5 billion on Valentine's Day this year, surpassing last year's $25.8 billion and slightly exceeding the previous record of $27.4 billion set in 2020
  

• U.S. Transportation Secretary Sean Duffy signed an order directing regulators to rescind the fuel economy standards established under President Joe Biden. These standards aimed to significantly reduce car and truck fuel consumption

This newsletter was written by Shyam Gowtham

Thank you for reading. We’ll see you at the next edition!