July 17, 2025
The supply chain is all over the place right now, and it’s frankly entertaining to watch. Trucking has been stuck in a 29-month freight funk while tariffs sent rates on a roller coaster from 2% to 31% and back down again. There remain way too many truckers from the pandemic boom clogging up the roads, and last mile delivery companies failing to adapt are dropping like flies: Deliver It just became the latest casualty. Meanwhile, USPS decided to fix its problems by prioritizing efficiency over speed, while cross-docking facilities added a jolt to urban logistics. And manufacturing? Somehow they started making more stuff while getting fewer orders, which is about as confusing as it sounds.
The trucking industry keeps teasing a comeback story, but 29 months of shipment declines suggest we’re still waiting for the turnaround. FTR’s Jonathan Starks calls it a “sluggish morass,” though some bright spots are emerging.
Freight rates survived a wild tariff ride that swung from 2% at the end of 2024 to a peak of 31% when trade tensions exploded with 145% tariffs on China. The good news? Rates have found some stability around 14.3%, and FTR analysts believe the uncertainty is dropping. Import flows are shifting too — East Coast ports captured 53% of containerized imports in May, the highest since summer 2023, while Vietnam and other Southeast Asian countries nearly offset China’s container volume drops.
Overcapacity remains trucking’s main challenge, with owner-operators who jumped in during pandemic rate spikes pushed authorized firms 35% above pre-COVID levels. Contract rates inch forward at 2% growth — modest but moving in the right direction. Class 8 truck orders hit their lowest since early 2010, which sounds bad but actually helps balance supply. Record-high truck inventories mean capacity exists when demand returns, and stricter insurance requirements plus enforcement changes could naturally trim excess operators. The foundation for recovery exists; freight volume just needs to catch up.
Trucking’s overcapacity nightmare has a cousin in last mile delivery, where too many players chasing the same packages create an equally challenging situation. Deliver It is the industry’s latest casualty, following companies like Pandion, Maergo, Point Pickup, and Pitney Global E-Commerce that have gone under within the last two years.
Derek Lossing from Cirrus Global Advisors found eight different parcel companies operating in Southern California alone — and that’s not even counting the big players. Alternative carriers managed to grab 40% more volume over five years, but here’s the problem: Revenue per parcel crashed to just $9.09 in 2024. Independent carriers control less than 10% of the domestic market, which means they’re all scrapping over the leftovers while the big dogs eat. When venture capital dried up, and Chinese e-commerce volumes tanked thanks to tariffs, these smaller companies learned the hard way that residential delivery costs devour profits faster than they can make them.
The rush to grab market share made everything worse. Companies grew so fast that their service quality couldn’t keep up, creating a buyer’s market where customers started pitting delivery providers against each other. Deliver It got caught in the same trap: inflation and economic uncertainty made everything worse, while established carriers fought back with aggressive pricing that squeezed out the newcomers. Industry experts are predicting more exits and consolidation, and it’s not hard to see why.
While companies like Deliver It struggle to survive, the U.S. Postal Service took a different approach to its overcapacity problem: surgery instead of Band-Aids. Its phase two delivery standards prioritize efficiency over speed, extending delivery times for remote areas but promising $36 billion in savings over 10 years.
The numbers explain why USPS had to make this call. First-Class Mail collapsed 80% from 57 billion pieces in 1997 to just 11.7 billion in 2023, while parcel volumes tripled to 6.7 billion pieces over 10 years. Network costs exploded from $7 billion in 2011 to over $11 billion in 2021 because trucks kept making inefficient runs to remote post offices more than 50 miles from processing centers. USPS discovered the same problem airlines face: You can’t let 80% of your cargo sit around waiting for the final 20% to show up. Something has to give when trucks come back only 20 to 30% full.
So, USPS decided to stop the madness with a simple fix: fewer facilities, better coordination, and trucks that run like they have somewhere important to be. It’s shrinking from 427 scattered facilities to just 250 coordinated ones — 60 regional processing centers and 190 local processing centers that handle final mile sorting. Remote post offices now get one morning pickup instead of two daily round trips, which consolidates volume and spreads the work from those crazy crowded night shifts to normal daytime hours. The bonus? It actually speeds up middle mile delivery by four hours.
Cross-docking flips the warehouse playbook completely. Instead of products gathering dust, goods arrive, get sorted, and jump straight from inbound trucks to outbound delivery vehicles — sometimes within hours. No storage, no delays, just pure speed, which is exactly what cities need to handle the crazy demand for same day delivery.
What started as Walmart’s clever cost-cutting trick in the 1980s has exploded into the backbone of modern urban logistics. Amazon now operates 61 cross-dock facilities across the U.S., with 13 more under construction. Meanwhile, Costco has quietly made cross-docking its secret weapon — more than 90% of its products skip traditional warehousing entirely. Even middle mile startup Warp dropped $10 million to build a fully robotic cross-dock facility, proving this isn’t just for retail giants anymore.
Cross-docking demands a different breed of delivery driver — one comfortable juggling GPS apps, barcode scanners, real-time routing software, and multiple product types per shift. The trade-off proves worthwhile: Shorter city routes mean more regular hours and better work-life balance compared to long-haul trucking. Companies benefit too, slashing fuel costs, reducing carbon footprints, and keeping everything in optimal condition, from meal kit deliveries to industrial supply.
June’s Manufacturing PMI hit 49% — officially contracting for the fourth straight month, but don’t let that number fool you. Behind the headline lies a supply chain story that shippers need to decode, especially when tariff chaos meets inventory reality.
Manufacturing production jumped to 50.3% in June, climbing 4.9 percentage points from May’s dismal 45.4%, yet new orders plummeted to 46.4% — contracting faster than a retailer’s holiday budget. Companies ramped up output despite weakening demand, creating a shipping sweet spot where goods need moving but future volumes look uncertain. Customer inventories registered 46.7%, sitting in “too low” territory for nine straight months — typically a bullish signal for future production and, crucially, the last mile deliveries that get products to shelves and job sites.
Supply chain executives aren’t mincing words: “The tariff mess has utterly stopped sales globally and domestically,” reported one machinery manufacturer, while supplier deliveries registered 54.2% — still slow but improving from May’s 56.1%. Raw material prices surged to 69.7%, with steel and aluminum leading, forcing companies to reassess their entire logistics playbook. Employment contracted to 45%, with a brutal 3.2:1 ratio of layoffs to hiring comments, yet anyone, regardless of industry, still needs reliable delivery partners who can handle this volatility.
So here we are: Trucking’s still stuck in its 29-month funk, delivery companies are dropping like flies, and everyone’s playing hot potato with overcapacity while tariffs wreak havoc. But your packages still need to get where they’re going, no excuses.
That’s where we come in. At FRAYT, we’re ready for anything:
From the middle mile to the last mile, we will be with you every step of the way. Sign up with FRAYT now and watch your supply chain transform from good to great.
