Drewry: No “lasting impact” from tariff break as ocean rates fall again

Container rates are giving back recent gains, as U.S.-bound container traffic slumps after a surge fueled by the tariff pause.

Shipping consultancy and SONAR data partner Drewry saw its World Container Index fall 9% this week, the second consecutive weekly drop following five weeks of gains. 

“This decline is a direct result of low demand for U.S.-bound cargo, and is a sign that the recent surge in imports to the United States, which occurred after the temporary halt of higher U.S. tariffs, will fail to have the lasting impact we had initially expected,” Drewry said in a note.

SONAR data shows inbound loaded containers to U.S. ports approaching record 2024 levels.

Yellow circle shows current U.S. inbound container traffic nearing record 2024 levels. (Chart: SONAR)

Rates from Shanghai to New York fell 13% to $5,703 per forty foot equivalent unit (FEU) container in the past week, but spot rates are still up a significant 56% compared to May 8. Spot rates to Los Angeles dropped 20% this past week, but are ahead 38% over the past seven weeks.

Freight rates from Shanghai to Rotterdam and Shanghai to Genoa increased 1% to $3,204 and $4,100 per FEU, respectively.

“We expect the supply-demand balance to weaken again in 2H25, which will cause spot rates to decline,” the analyst said. “The volatility and timing of rate changes will depend on the outcome of legal challenges to Trump’s tariffs and on capacity changes related to the introduction of the U.S. penalties on Chinese ships, which are uncertain.”

Container volume surged in the wake of the China-U.S. tariff ceasefire, which was announced April 12. On Friday, the U.S. announced it had come to an agreement with China on tariffs. 

Drewry’s North American Container Port Throughput Index increased 2.2% month-over-month in April to 118.4 points, representing a strong 10.3% increase compared to the same period last year. 

The rolling 12-month average growth rate for North America saw a slight recovery, reaching 10.2%. Most major ports on the U.S. West Coast experienced rising volumes in April, both on a month-over-month and year-over-year basis. 

Long Beach continued its impressive start to 2025, with April throughput climbing 6.1% month-over-month and a significant 15.6% year-over-year. Neighboring Los Angeles also performed well, with handling up 8.3% month-over-month and 9.4% year-over-year, indicating robust activity across these critical gateways for trans-Pacific trade.

The global index saw a modest month-over-month increase of 0.5% and a more substantial year-over-year rise of 5.6%. This upward trend is further reinforced by a stable rolling 12-month growth rate, holding at 6.5%. 

Looking at the year-to-date figures (January-April), North America and the Middle East-South Asia are leading the charge, both exhibiting robust growth of 9.7% and 9.6% respectively. Greater China is not far behind, at a 7.5% increase. Oceania was the sole region to report a decline, down 3.1%.

Greater China’s container ports demonstrated solid performance in April, as the regional throughput index climbed 2.3% month-over-month to 125.4 points, marking a 7.1% increase y/y. The rolling 12-month average growth rate for the region also improved, matching the global average at 6.5%. 

The top five Chinese ports collectively saw an average year-over-year increase of 10% in April. Shenzhen emerged as a particular standout, with its volumes surging by 15% year-over-year. Guangzhou also reported strong performance, with a 10.3% year-over-year increase, followed closely by Ningbo, which saw a 9.1% rise in throughput.

In contrast, the Latin America Container Port Throughput Index experienced a dip in April, falling 3.2% month-over-month. The region’s throughput remained up 2.8% on an annual basis. However, the rolling 12-month average growth rate for Latin America decreased to 9%. While still comfortably above the global average of 6.5%, this decline suggests a loss of momentum in this regional market. 

Following a surge in March, throughput at five Panama terminals decreased by 5% month-over-month in April, though it was still 1.5% above the April 2024 level. 

Brazil’s Santos port saw flat volumes month-over-month but a 2% year-over-year increase in April. Even with an 11% month-over-month decline reported at Callao, Peru, its volumes remain 11% ahead on a year-over-year basis, highlighting the uneven performance across Latin American ports.

Find more articles by Stuart Chirls here.

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In rare jump, New York-New Jersey leads US port volumes

Image shows shipping containers, cranes, trucks and pavement.

The Port of New York and New Jersey, a perennial third place finisher among American container gateways, jumped to number one in May.

The East Coast port handled 774,698 twenty foot equivalent units in May, according to the Port Authority of New York and New Jersey. That was off  2% from the same month a year ago, but 20% better than pre-pandemic May 2019.

The port cited difficult year-ago comparisons swollen by diverted traffic following the collapse of the Key Bridge that forced the closure of the Port of Baltimore.

From January through May, the port handled 3,729,611 TEUs, up 6.5% y/y, and 22.6% ahead of 2019.

In May tariff concerns hampered box flows at the busiest gateways as the Port of Los Angeles saw volumes slide 5% y/y to  716,619 TEUs.

The Port of Long Beach handled 639,160 TEUs, down 8.2% y/y.

Find more articles by Stuart Chirls here.

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US, China agree on deal for tariffs, rare-earth magnets

The U.S. and China have agreed on a trade deal that would reduce tariffs and expedite shipments of rare-earth metals.

United States Treasury Secretary Scott Bessent said on Friday that U.S. tariffs on Chinese imports will now start at 30%, while China’s duty rate on goods from the U.S. will be at 10%. The 20% fentanyl levy on China will also stay in place.

In April, the Trump administration hit Chinese imports with a 145% tariff rate. China retaliated by slapping a 125% tariff on goods imported from the U.S.

“Now our tariffs are at 30% on them, we’re at 10%,” Bessent said on Fox Business. “We’re collecting a substantial tariff income.”

President Donald Trump announced the agreement with China on Thursday during a news conference that “We just signed with China yesterday,” without further explanation. 

China’s Commerce Ministry confirmed that both nations have reached a framework for a deal in a statement on Friday.

“China will review and approve export applications for controlled items that meet the required criteria, while the United States will lift a series of restrictive measures previously imposed on China,” the country’s Ministry of Commerce said in a statement to China Daily News.

U.S. levies on Chinese goods stood at an average of 51.1% for most imports before Thursday’s trade deal was announced, while China’s duties on American products were at 32.6%, according to the Peterson Institute for International Economics.

Bessent also said China has agreed to remove its restrictions on exports of rare-earth metals.

On April 4, China began restricting exports of rare-earth magnets to the U.S., which are used in high-tech products such as computer chips and electric vehicle batteries.

“We have an agreement with them that will make magnets flow to everyone who had received them before on a regular basis,” Bessent said.

Highway: building a fortress against freight fraud

Highway, a winner of the 2025 FreightWaves Fraud Fighter Awards, is a true pioneering force in freight security with its comprehensive Carrier Identity™ platform. Designed specifically for freight brokers, Highway’s solution targets fraud at its source by verifying carrier identities, authorizations, and qualifications before they ever touch a load. The company’s rapid growth in the face of the freight fraud crisis has put the company in a leadership position.

At the heart of freight fraud lies a fundamental vulnerability: disconnection between systems and processes. As Highway explained, “Fraud thrives in gaps—between systems, communication channels, and data sources. When brokers rely on outdated or siloed tools, bad actors can exploit the opacity.”

This insight has shaped Highway’s approach to fraud prevention. “Fraud needs disconnection. It needs opacity. What an identity layer does is centralize and validate everything at the top,” the company wrote, highlighting how their solution bridges critical security gaps that traditionally plague the industry.

Highway’s fraud prevention strategies have undergone significant transformation, helping the industry move away from manual checklists and implicit trust toward building a robust digital identity infrastructure.

“We didn’t invent something new—we learned from proven practices in fintech and applied them to freight,” Highway noted. This adaptation of financial security principles has led to the development of a comprehensive “Know Your Carrier” (KYC) framework that verifies three critical elements: user authenticity, authorization, and physical capability.

This approach mirrors the evolution seen in banking, where identity verification became a prerequisite for wire transfers. By applying these established security principles to carrier relationships, Highway has created a more secure freight ecosystem.

Highway has distinguished itself in the realm of freight security with impressive metrics that validate the effectiveness of its approach. The Carrier Identity™ platform, a proud recipient of the 2025 FreightWaves Fraud Fighter Awards, combats fraud at its core by scrutinizing carrier identities, authorizations, and qualifications. Reflecting this strategy’s power, Highway reports a remarkable 97% reduction in double brokering among customers who rely on compliant carriers. Additionally, the Load Lock system, designed for comprehensive load protection, has resulted in zero reported stolen loads for its users.

The initiative’s success is further underscored by its ability to preemptively block over 914,000 fraud attempts in just the past year. Simultaneously, Highway has managed to thwart more than 9,800 suspicious login attempts from a staggering 75 countries, demonstrating the platform’s expansive vigilance in tracking potential threats. Customers who have integrated Load Lock and Secure Rate Con Delivery report an 80% decrease in cargo theft, showcasing the tangible benefits of these systems.

In a notable incident that highlights Highway’s preventive prowess, a customer managed to save a $130,000 high-value load thanks to early identification of suspicious activities before the scheduled pickup. This case emphasizes how Highway’s proactive strategies not only thwart fraud but also safeguard assets, reinforcing trust and efficiency within the freight ecosystem.

When asked about advice for others fighting fraud, Highway emphasized the primacy of identity verification: “Start with identity. If you don’t have an identity layer, everything else downstream is vulnerable.”

This philosophy extends to standardizing security practices across organizations. Highway recommends holding carriers to the same security standards as internal teams. “If you require SSO and access controls for employees, carriers shouldn’t be an exception,” the company advised.

The company issues a clear warning about resistant parties: “Anyone who wants to bypass identity validation is likely trying to hide something.” This straightforward approach has helped Highway protect more than 950 freight brokers, from high-volume enterprise operations to specialized teams handling sensitive cargo.

Highway believes fraud prevention must transcend mere compliance and become integrated into everyday decision-making. “The biggest gaps happen when floor-level decisions are made without the right signals,” the company explains.

This operational integration requires both human and technological components. “Train teams to recognize the red flags—and give them the tech to respond instantly,” Highway advises. Their solution makes it easier for representatives to flag anomalies, identify exceptions, and reduce manual subjectivity, all while providing tools that detect behavioral changes and monitor risk in real time.

Highway’s platform offers comprehensive fraud prevention across every stage of the load lifecycle, tackling prevalent and costly threats such as the theft or unlawful sale of Motor Carrier numbers, double brokering schemes, and identity impersonation. It also effectively addresses issues like fictitious pickups, email inbox compromises, and load-level fraud, where carriers may become noncompliant post-booking due to factors like expired insurance, revoked authority, or unsuitable equipment. Rather than acting as a mere vetting tool, Highway functions as an integrated fraud prevention ecosystem, which actively intercepts malicious actors before they infiltrate broker networks and ensures that every load is monitored to guarantee that the cargo is managed by legitimate carriers.

Rather than functioning as a simple vetting tool, Highway operates as a dynamic fraud prevention ecosystem that proactively blocks bad actors before they access broker networks while continuously monitoring every load to ensure legitimate carriers are handling freight.

The result is what Highway described as “a safer, faster, and more trustworthy carrier network”—a vision that has earned them recognition as a leading fraud fighter in the freight industry.

Warehouse automation surging ahead despite projected slowdown

Warehouse automation appears to be gaining traction despite prior forecasts cutting short-term market growth projections for autonomous mobile robots.

Global market researcher Interact Analysis released a report in January cutting its short-term market growth projections for the mobile robotics market by 18% over the next two years.

However, advances in technology paired with significant supply chain partnerships and increasing affordability for robotics may be reasons to reevaluate.

According to a 2025 digital supply chain industry report by logistics trade association MHI, top barriers to automation adoption are a lack of a budget, lack of a clear business case and lack of understanding of technology. 

The MHI report predicts robotics and automation will jump from 41% of supply chain leaders using it today to 83% adopting it over the next five years. Inventory and network optimization technologies are also predicted to see an increase in adoption from 58% to 92% over the next five years.

DHL scales automation

Logistics giant DHL Group announced a purchase order with Boston Dynamics in May for 1,000 more units of its package-handling “Stretch” robot. Stretch boasts case unloading rates of up to 700 cases per hour from both hot and cold trailers – with no human input necessary.

According to DHL’s news release, the purchase builds upon a warehouse technology partnership between both companies that started in 2018. In 2023, DHL’s logistics division introduced Stretch commercially in North America – and has more recently expanded deployments to Europe.

Over the past three years, DHL Group has invested over $1.17 billion in automation for its contract logistics division. DHL currently uses over 7,500 robots around the world, and more than 90% of its warehouses use at least one automation or digitalization technology.

Sally Miller, global chief information officer of DHL Supply Chain, said the company was committed to bringing robotics and automation to all of its operations and business units.

“It’s a fundamental shift that’s reshaping how we operate and elevate service for our customers,” Miller said in a statement. “Through this expanded partnership with Boston Dynamics, DHL will take a more active role in shaping and directing robotics development alongside key partners, focusing on building more resilient, responsive and smarter solutions that address the unique challenges of our company. Together, we’re setting new standards for the logistics industry.”

Making warehouse automation affordable

Better technology is also becoming more affordable. On Tuesday, Kentucky-based automation company Brightpick launched “Autopicker 2.0,” its first multi-purpose warehouse robot capable of matching human-level performance.

According to a news release, Autopicker 2.0 features physical AI and picking-in-motion software. The robot delivers on average 70 to 80 picks per hour, and can operate 24/7 at a cost of $1,900 per month.

Calculating for a 40 hour work week, that would be equivalent to paying a human worker just under $12 per hour – with the added perk of constant operability. The release stated that hundreds of Brightpick’s robots are operating using the company’s “Intuition” intelligent fleet orchestration software in warehouses worldwide.

“Autopicker 2.0 is the first robot to deliver both human-level speed and versatility in real production environments,” Jan Zizka, co-founder and CEO of Brightpick, said in a statement. “Its unique form factor gives it additional advantages, including higher vertical reach, faster navigation, and longer battery life. Through our RaaS [robotics-as-a-service] model, customers can deploy it for as little as $1,900 per month – making advanced automation more accessible than ever.”

Read more on robotics-as-a-service here.

Editor’s note: A previous version of this story incorrectly stated Interact Analysis’ report forecasted a “market dip” for the autonomous mobile robots market. This is not the case, rather the firm has lowered its own projections for market growth by 18% through 2027 due to global economic and political turbulence.

Air Hong Kong graduates to all-A330 freighter fleet

A yellow-tailed Air Hong Kong cargo jet begins its takeoff.

Air Hong Kong, a freighter subsidiary of Cathay Pacific Airways and capacity provider for DHL Express, has completed a seven-year transition from an Airbus A300-600 fleet to an all-A330 airline, the companies announced Friday.

Air Hong Kong recently received its final A330 and retired the last A300-600 cargo jet. The A330 is newer and larger than the A300.

The Asian carrier first began operating the A300-600 on behalf of DHL Express in 2004. In 2017, Cathay Pacific acquired DHL Express’s minority stake in Air Hong Kong through a sale-leaseback of aircraft and became its sole owner. Air Hong Kong operates scheduled service for DHL between Hong Kong and major cities throughout Asia, including Tokyo and Seoul, South Korea. Aircraft are also used for occasional charter work when not on duty for DHL

With the completion of the re-fleeting programme, Air Hong Kong now operates an all-A330F fleet comprising 14 aircraft. The total includes 10 A330-300 passenger-to-freighter converted aircraft, of which Air Hong Kong is currently one of the world’s largest operators, and four A330-200 production freighters.

“The A300-600F has been a stalwart of Air Hong Kong’s fleet and an important part of our story for over two decades,” Chief Operating Officer Clarence Tai said in a news release. “The new-generation A330F brings with it considerable benefits that will enable us to further enhance our operations and services for our customers, and continue to play an important role in the ongoing growth of Hong Kong’s air cargo sector.”

Compared with the A300-600, the newer A330 provides 25% more payload (65 tons) and volume enabling more cargo to be carried, in particular e-commerce shipments. It also has a longer range capability of nearly 4,600 miles, allowing Air Hong Kong to expand to new destinations such as Bahrain and Sydney, Australia. 

FreightWaves first reported in September 2023 that DHL Express was relocating the A300-600s to its in-house European airline because of difficulty securing maintenance and other support services in Hong Kong and replacing them with A330s. Air Hong Kong was the only carrier in Asia flying the A300-600 for several years after passenger airlines switched to other aircraft and vendors invested resources accordingly. Service providers shifted their focus to other aircraft because there weren’t enough A300s in circulation to turn a profit. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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ELP Rule Threatens 10% of Truckers, Risks Carrier CSA Scores

Trump and truck

The English Language Proficiency (ELP) rule, now in effect, could significantly reduce trucking capacity.

For a decade, large truckload carriers have embraced regulations like the ELD mandate and Drug and Alcohol Clearinghouse to limit market capacity, but effects were typically short-lived. The ELP mandate, enforced by a DOT Executive Order, requires commercial drivers to demonstrate English proficiency or face out-of-service (OOS) violations. FreightWaves estimates 10% of CDL holders may lack sufficient proficiency, based on insurance executive insights.

Will carriers comply with enforcement? DOT and law enforcement officers can issue OOS violations to non-compliant drivers, a major deterrent. When DOT officers or law enforcement deem a commercial driver or vehicle unsafe, often due to hours-of-service breaches, vehicle defects, improper load securement, or driving under the influence, they issue OOS violations. The DOT now includes English language proficiency as grounds for placing a driver out of service. These violations appear on a driver’s Pre-Employment Screening Program (PSP) report for three years and affect a carrier’s Compliance, Safety, Accountability (CSA) score for two years. Poor CSA scores raise insurance costs and lower shipper rankings, discouraging carriers from risking violations.

Although the ELP mandate did not create new laws, as English proficiency requirements preexisted, it empowers DOT and law enforcement to place non-compliant drivers out of service, reversing Obama Administration guidance to overlook such violations. Like a credit score, a CSA score influences insurance rates and shipper partnerships. Shippers often query CSA scores in RFPs and onboarding to assess reliability, deprioritizing carriers with eroding scores by shifting freight to safer alternatives, lowering them in routing guides, or excluding them from contracts.

Non-compliant carriers face severe consequences. A driver under a load placed out of service cannot move cargo until compliant, risking service failures and cargo theft from stranded loads. Brokers overlooking such carriers will face disruptions, prompting shippers to avoid them to protect cargo and ensure reliability

Capacity is close to being in balance with volume, with outbound tender rejection rates sitting at 6.77%, in spite of weak truckload demand. 

State of Freight Takeaways: English language rule for truckers takes effect, early impacts emerging

Just when some aspects of the freight market were starting to calm down, there’s a new factor that has the potential to inject renewed volatility into supply chains. 

That was one of the points made in the June State of Freight webinar featuring Firecrown and SONAR CEO Craig Fuller along with Zach Strickland, SONAR’s director of market intelligence.

FreightWaves’ State of Freight webinars the past few months took place against a backdrop of tremendous volatility and uncertainty in freight markets. Fuller and Strickland saw some aspects of the supply chain growing somewhat calmer, but also discussed a change in a key benchmark from the SONAR data dashboard that could be signaling any calming might not last.

Here are five takeaways from the June State of Freight webinar. 

An OTRI spike and what it means

The Outbound Tender Rejection Index in SONAR has moved up sharply in the past few days. Fuller said it could be the first signs of tightening capacity because of the English Language Proficiency requirement that began a renewed round of enforcement this week. 

The impact of enforcing the ELP–which is not a new regulation, but is getting a new enforcement push from the Trump administration–goes well past having a driver taken off the road because he or she failed the ELP during a safety stop. 

Out of Service orders that would accompany a driver being taken off the road end up on the records of a carrier, Fuller said. “If you’re a fleet and you have an out of service violation, this time is recorded on your record,” Fuller said. “And what’s interesting about that is that it shows up in your insurance rates. It also means some shippers will not book you if you have a lot of out of service violations.”

That recent spike in tender rejection rates could be a sign of carriers taking drivers off the road rather than have them become the focus of an Out of Service order that results in that mark on a company’s record, according to both Fuller and Strickland.

Has the trade war run its course?

Fuller was 50-50 on whether to call the trade war that was raging in April and into May “an afterthought.” “It  has become sort of that, but you’re still dealing with it,” he said. Fuller said he saw evidence in the news cycle that “the administration seems to have largely moved on.”

But Fuller also noted that the 90-day deadline on other countries cutting trade deals with the U.S. is coming up fast. (The 90-day pause on many tariffs was announced April 9). “My guess is they just end up extending them out because tariffs were far less popular among the independents and obviously the bond market,” he said, referring to the sharp spike in Treasury rates when “Liberation Day” tariffs were announced. 

Speaking of the U.S. bombing of Iranian nuclear facilities, Fuller said “I think it seems to be that’s where the administration is focused on. It has moved on from trade, and I think it’s a positive for everybody.”

The Vietnam and Thailand dance

Fuller and Strickland discussed the Trade War Center on SONAR and what it is saying about ocean shipments. Strickland noted that the dashboard shows that ocean going volumes are now running above last year,  “and if you recall, last year was a strong year for import activity,” he said.

And a lot of that ocean going traffic is coming out of Vietnam and Thailand, which Fuller said is an effort to take Chinese-made goods, transship them through those countries and avoid the steep tariffs on Chinese imports.

“A lot of transshipping is going on,” Fuller said. “It’s nearly impossible to know how much it is.” He added that there are estimates as much as 70% of U.S. Imports from Vietnam could be goods that were transshipped from China, but he also has seen estimates as low as 30%.

A tepid prediction for LTL

Strickland, who came out of the LTL business, said he “thought LTL was going to come out in much better shape through all this, just because the industrial sector is dying to wake up and is ready to go.”

But Strickland said he now believes LTL won’t perform any better than a recovery in truckload, which remains in the doldrums. 

But Strickland had optimism for the truckload sector, which could drag LTL along with it. “I think the truckload market will flip, and I think we’re close to it,” he said. “What’s going to happen is the truckload market is going to have an inflection point and then that’s going to trigger a downstream reaction into LTL.” He added that he believed September or October might be a period when that “flip” would occur. 

But LTL is ultimately tied to industrial activity. “And on the industrial side of things, we need economic certainty or clarity,” Strickland said. 

Electric vehicles face a big headwind from Washington 

“The biggest thing you can take from the Big Beautiful Bill is that the administration is very anti-EV now,” Fuller said. He noted the various incentives for electrification that were in the Inflation Reduction Act are being terminated in the legislation passed by the House and now before the Senate that carries that BBB name. 

As a result of that, Fuller said, “the pressure to electrify is off somewhat, because fleets no longer feel that this is a necessary thing they have to contend with,” Fuller said. 

He also noted a statement made by a leading U.S. Volkswagen official in the U.S. who said that customers were going to be offered EVs aggressively because of the huge pool of money the IRA provided to incentivize EV purchases. But that pool of money is now drying up. “If you look at the bill, we’re changing directionally,” Fuller said. 

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FedEx to close 30% of package facilities as network integration ramps up

A FedEx Express truck with orange lettering and a FedEx Ground truck with green lettering parked together on a city street.

FedEx Corp. plans to close 30% of its U.S. package distribution facilities within two years under its Network 2.0 consolidation program, which is gaining momentum and expected to contribute toward $200 million in savings this quarter, executives said during an earnings briefing.

In April, the integrated parcel and logistics giant completed the optimization of its parcel operation in Canada. The company is now turning its attention to the U.S. market, where it synthesized 45 U.S. stations in the fiscal year fourth quarter that ended May 31, CEO Raj Subramaniam told analysts Tuesday evening.

Since its founding in the early 1970s, FedEx (NYSE: FDX) has operated in a siloed manner, with each business unit running on its own. Management aims to improve the efficiency with which FedEx picks up, transports and delivers packages by integrating the legacy Express and Ground networks, with the ultimate goal of removing surplus capacity and $2 billion in annual costs. The plan is to have a single van deliver parcels to a neighborhood rather than different vans crisscrossing the same area multiple times per day. 

In June, Memphis, Tennessee-based FedEx blended the operation of 30 stations across 11 local markets and will optimize another 33 stations across nine markets by the end of the month, Subramaniam said. By then, about 2.5 million packages, or 12% of total volume, will flow through consolidated facilities on an average daily basis.

Executives said the company expects to reduce structural costs by $1 billion this year, much of it through Network 2.0. About $200 million of the total benefit will be achieved in the current quarter through the network transformation and the final stages of the Drive campaign, which has taken out $4 billion in costs since mid-2023. 

In addition to closing 100 U.S. stations, FedEx optimized 290 stations by the end of the fiscal year. 

The program was unveiled two years ago, but the company says it is on track. Management stressed that it is methodically implementing the network transformation to ensure it meets and exceeds current levels of service.

“We’re seeing good progress on both the reliability side, as well as the financial side, for those locations we have transitioned,” Chief Financial Officer John Dietrich said. “We’re seeing a 10% improvement on our pick up and delivery costs. And we’re learning and adapting along the way.”

By the end of the current fiscal year, FedEx expects about 40% of total volume to flow through redesigned facilities, Subramaniam said during the third quarter earnings briefing in March.

“We have to be mindful not to disrupt service. So this is not a speed race for us. This is a journey that we intend to get right, and we want to be sure we get it right to line up the 2.0 facilities in a way that delivers the results we want” without disrupting customers, Dietrich said last month during a Bank of America presentation. 

Dietrich said about 1 million of 1.6 million Express packages per day have a profile that allows them to be absorbed into the Ground network. 

Under a new organizational structure, FedEx Ground is now part of FedEx Express and no longer exists as a separate business unit. But the physical integration will take longer than the change at the corporate level.

“We believe there are meaningful benefits to be had from this [Network 2.0] undertaking, not just in terms of raw cost savings, but better planning and service as well,” said Stifel equity analyst Bruce Chan in a client note.

Rival UPS is also in the process or downsizing and consolidating its parcel footprint in the United States.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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Bill aims to level playing field for railroad workers

Bill gives supervisors routing yard traffic new work-hour protections. (Photo: Jim Allen/FreightWaves)

WASHINGTON — Railroad employees who supervise traffic moving through rail yards would receive the same work-hour protections as other rail workers, including those who operate trains, according to legislation introduced this week.

U.S. Reps. Salud Carbajal, D-Calif, and Mike Lawler, R-N.Y., reintroduced the Railroad Yardmaster Protection Act, a bill that places yardmasters under the same federal hours of service requirements that currently cover locomotive engineers, conductors, switchmen, dispatchers, and signal employees.

“Yardmasters are the traffic controllers of our country’s railroad network,” Carbajal said in a statement commenting on the legislation.

“Like their counterparts in aviation, they play a vital role in ensuring the safety of everyone traveling by train. My bipartisan legislation will improve working conditions and support the professionals who keep America’s railroads running safely and efficiently.”

The bill ensures that a yardmaster is not allowed to remain on duty for more than a total of 12 hours, and then must receive a minimum of 10 hours off duty.

Lawler said in a statement that the legislation “closes a long-overdue gap” in rail safety.

“Yardmasters are essential to the safe and smooth operation of our freight rail system, and it’s only right that they receive the same duty hour protections as other rail employees,” Lawler said. “This legislation is about protecting workers, improving safety, and ensuring our rail network continues to serve communities and commerce across the country effectively.”

SMART-TD, which represents yardmasters, endorses the bill, as it did when the legislation was first introduced in 2019 and reintroduced in 2024.

“For far too long, our yardmaster members have been left without the basic protections afforded to other safety-sensitive rail employees,” the union stated in a press release. “This bill finally addresses that gap by extending hours of service safeguards to these essential workers.”

 Click for more FreightWaves articles by John Gallagher.