Good Luck With Your Renewal

Last week in Edition 46, we covered Montgomery v. Caribe Transport II — the case where the Supreme Court unanimously stripped freight brokers of the federal liability shield they'd been leaning on for years. If you missed it: brokers can now be sued in any state if they booked a carrier with obvious safety red flags and something went wrong.

This week, the industry found out what that actually costs.

Right now, for every dollar an asset-based carrier spends on liability insurance, a 3PL spends about 10 cents. That 90-point gap is about to close.

How fast? One attorney who specializes in logistics said a large brokerage firm he works with got a renewal quote back at 3x their current rate. The Transportation Intermediaries Association, which held a member briefing the same day, is hearing estimates as high as 5x. These aren't confirmed final numbers — the market is still figuring out what the new baseline looks like — but underwriters are already asking for pauses mid-renewal to reassess. That's not a normal thing.

And if you think this is just a brokerage problem, think again. The court wrote about brokers because that's who the case was about, but the same logic applies to 3PLs, freight forwarders, and anyone else who selects carriers as part of their business.

There's a capacity consequence too. TD Cowen estimates that mid-to-high single-digit percentage points of trucking capacity could be removed from the market as brokers become more selective about whom they book. About 6-7% of current capacity comes from "conditional" carriers — those with unresolved FMCSA safety issues. Brokers who used to book them because the rate was right are now running a very different calculation. Less available capacity, on top of an already tight freight market, means rates go up for everyone.

One more layer: ATRI released separate research this week showing that trucking liability insurance premiums rose 18.6% between 2021 and 2024, even as crash rates fell 2.6%. The litigation environment — not the accident rate — is what's driving costs. Montgomery just handed plaintiff attorneys the tool they've been waiting for.

What this means for you: Get in front of your insurance broker before your renewal. The FMCSA database is public and free, and your carrier vetting process is now a legal requirement, not just a best practice. If you have carriers on your platform with red flags, the math on keeping them just changed. And if you're a 3PL that books carriers for clients, make sure you're having this conversation with your attorney.

Okay, so picture it: it's 2021. You're trying to move product. A container that cost $2,000 a year ago is now $20,000, and nobody can tell you why. Your suppliers are backed up, your shelves are empty, and every carrier you call has a three-month waitlist.

Turns out, some of that wasn't just pandemic chaos. Some of it was a cartel.

This week, the DOJ unsealed an indictment charging four of the world's largest shipping container manufacturers and seven of their executives with conspiring to fix prices and restrict output on standard dry containers from at least November 2019 through January 2024. The companies: Singamas, CIMC, Dong Fang, and CXIC. Between them, they make nearly all of the world's standard unrefrigerated shipping containers.

The scheme is almost impressive in how thoroughly it was thought through. They agreed to limit production shifts. They installed 87 surveillance cameras across 49 production lines to ensure nobody cheated by working extra hours. They created a financial penalty fund for anyone who exceeded the agreed output caps. When COVID hit, and demand exploded, supply was already artificially suppressed — and they knew it.

The profits tell the story. CIMC's container manufacturing segment made $19.8 million in 2019. By 2021, it made $1.75 billion. Singamas went from a $110 million loss in 2019 to $186.8 million in profit two years later. American businesses, consumers, and supply chains paid for all of it.

One executive, Vick Nam Ma, was arrested in France in April. His extradition is pending. Six co-defendants are still at large.

What this means for you: This doesn't get anyone's money back. But if you've ever had a client ask why their shipping costs doubled in 2021 and stayed elevated for two years, now you have a more complete answer. And if you advise on supply chain risk, this is the clearest possible case study for what happens when the people who control a critical supply decide to use that control. Concentration risk isn't theoretical. Sometimes it's a cartel with surveillance cameras.

For most of e-commerce's history, the default shipping format was a corrugated box. It still is, but the gap is closing faster than most people realize.

Amazon now ships more than half its orders in flexible packaging, primarily mailers. Boxes account for 38% of Amazon shipments. Just a few years ago, those numbers were reversed. And because Amazon is the gravitational center of e-commerce packaging decisions, where Amazon goes, the industry tends to follow.

The business case for mailers is straightforward. They're lighter, which lowers shipping costs. They take up less space per unit, which means more packages per truck. They require less material, which lowers packaging costs. And increasingly, they're made from fiber rather than plastic, which satisfies the sustainability commitments retailers and brands are under pressure to meet. The EU's Packaging and Packaging Waste Regulation, which mandates that packages contain no more than 50% empty space by 2030, will further accelerate this trend.

The consumer side is more complicated. A Ryder survey found nearly 80% of consumers prefer receiving shipments in boxes, citing better protection. But the people who build and sell mailers point to something else: the same consumers constantly complain about small items arriving in enormous boxes. The preference for boxes may be less about boxes specifically and more about the perception that a box means the item is protected. As mailer technology improves, that perception gap tends to close.

For warehouses, the shift has a real operational dimension. Mailers generally run faster through packing lines than boxes. Rightsizing equipment for mailers is becoming commercially available from multiple vendors. Returns mailers with multiple adhesive strips — so the customer can seal the return without extra tape — are in active development at Sealed Air. As the format matures, it's starting to touch more of the fulfillment workflow, not just the packaging decision.

What this means for you: If you're running fulfillment for apparel, soft goods, or any product that doesn't require rigid protection, and you haven't had a conversation with your clients about the box-to-mailer shift, you're behind. The cost savings are real, the sustainability pressure is real, and the equipment to make it operationally clean is now available at scale.

In February, a worker at an Amazon warehouse outside Atlanta hit her head on the job and got a concussion. Her neurologist put her on restricted duty. It then took over a month to get the accommodations she needed — because Amazon's internal AI assistant gave her the wrong medical form and there was no human in HR she could reach to fix it. While she waited, she was flagged for making errors. Then flagged again for working too slowly, which her doctor had literally prescribed.

That story, from a Fast Company investigation published last week, would be striking on its own. But it landed the same week Cornell University published the first comprehensive academic study of e-commerce warehouse work in the United States, and the two reports together paint a picture that the industry needs to sit with.

The Cornell study surveyed about 400 warehouse workers across e-commerce fulfillment and traditional distribution operations. The finding they call the "B2C Effect" is this: e-commerce fulfillment jobs are measurably harder, more dangerous, and more stressful than traditional warehouse jobs across almost every dimension — more physical intensity, more pressure to skip breaks, greater exposure to unsafe situations, and significantly worse overall well-being — without any corresponding pay premium. Workers in e-commerce fulfillment are getting squeezed harder and are paid the same.

When the researchers zoomed in specifically on Amazon versus Walmart, Amazon's numbers were worse on every metric: intensity, opportunity, wages, fairness, safety, and well-being. The researchers were careful to say this isn't inevitable. Walmart's results show that a different outcome is possible. But it flows directly from Amazon's strategic obsession with delivery speed. The faster you promise delivery, the harder you squeeze the people fulfilling it.

Now layer the Fast Company findings on top of that. The most striking number from their survey of over 200 Amazon and Walmart workers: 62% said their biggest concern was HR decisions being outsourced to automated systems. Only 60% said they were worried about AI eliminating their jobs entirely. Workers aren't just afraid of being replaced. They're frustrated by having no human to turn to when something goes wrong.

That's where the two stories connect. The Cornell research shows e-commerce warehouses are already higher-injury, higher-stress environments than traditional warehouses. The Fast Company piece shows that when workers in those environments get hurt or need support, the safety net has been automated away, too. You have a workforce that's more likely to need HR intervention, within a system that's made it harder to access. Those two things together are not a minor operational footnote. They're a liability.

Walmart isn't off the hook either. The Fast Company investigation found the company uses algorithms to determine shift scheduling, task time frames, and even raises. One associate described being given computer-generated time windows for stocking shelves that require skipping cleaning steps and expiration checks to hit. New employees are trained on computers and sent to the floor without hands-on instruction. Turnover follows.

What this means for you: If you run a warehouse operation, this is worth reading not as a story about Amazon and Walmart but as a story about where the industry is heading. Automating HR functions without a human fallback creates liability, turnover, and morale problems that cost real money. The workers who can't get their accommodation paperwork processed correctly become the workers who file OSHA complaints or talk to union organizers.

Next week, we are officially launching a brand-new section called The 3PL Toolbox—a dedicated weekly feature showcasing software, fintech, and infrastructure solutions built for modern operations. If you have a product, tool, or service you are trying to sell to the logistics industry, this is the most direct, high-impact place to advertise and market it to your ideal audience.

By securing a slot, your platform lands directly in front of over 7,500 supply chain executives every Tuesday morning.

We are strictly capping this at five companies per month to maintain a premium layout and ensure every advertiser gets maximum visibility. If you want to get your business featured in front of our network for next week's launch, reply directly to this email or drop a line to [email protected].

LAST MILE
Amazon now has over 300 cargo bikes delivering packages across Manhattan, with a pilot launching in Washington D.C. and more cities planned. The four-wheeled, battery-powered bikes carry over 100 parcels per load, travel in bike lanes, and, on dense urban routes, are outperforming vans in efficiency. Over 64 million packages were delivered to New Yorkers last year through bikes and pushcarts combined. The city supports it because truck crashes near logistics hubs have risen in tandem with delivery volume. (Read more)

TARIFFS
Amazon is facing a class action by customers seeking a refund of their tariff charges. The suit, filed in Seattle, alleges that Amazon collected hundreds of millions in costs tied to IEEPA tariffs that the Supreme Court struck down in February, and that it is now choosing not to apply for refunds through the CAPE portal to stay in the administration's good graces. Similar suits have been filed against Costco, FedEx, and Nike. We covered the CAPE portal launch in Edition 42 and the first refunds hitting accounts in Edition 46. The legal layer on this story is just getting started. (Read more)

OCEAN FREIGHT
Shippers are stalling on long-term ocean contracts. Nobody wants to lock in elevated rates for a year when the Hormuz situation is still unresolved, so more volume is landing on the spot market, where carriers are charging a premium. Far East-to-U.S. West Coast spot rates are still running more than 50% above pre-conflict levels. Carriers are using blank sailings to hold the floor. Dollar Tree and Bob's Discount Furniture have both disclosed that they locked in multi-year freight contracts to reduce spot exposure. (Read more)

M&A
Locus Robotics acquired Nexera Robotics, a Vancouver-based company specializing in robotic grasping. Nexera's NeuraGrasp technology uses AI, computer vision, and a patented soft membrane to handle millions of SKU types across variations in shape, texture, weight, and material — a single gripper that adapts to real warehouse inventory rather than requiring purpose-built tooling for each product type. Locus is integrating it into its Locus Array platform. (Read more)

SUPPLY CHAIN TECH
Blue Yonder announced a Model Training Factory built on NVIDIA's Nemotron models, designed to produce specialized AI agents for specific supply chain workflows — warehouse allocation, inventory exceptions, and demand planning. The pitch is that frontier models are too expensive and too general for the precision work supply chain decisioning requires, so Blue Yonder is building purpose-trained agents that are faster, cheaper, and more accurate for specific tasks. The first models will go into customer production later this year. The broader signal: supply chain software is moving away from general AI assistants toward purpose-built agents that actually understand what a late truck at 3 am means for your pick schedule. (Read more)

The right 3PL partner changes everything. Faster shipping, lower costs, fewer headaches, and the operational breathing room to actually focus on growing your brand. The wrong one costs you customers and the margin you can’t get back.

FulfillYN helps brands find the right one the first time. We match you with vetted providers from a network of 390+ warehouses worldwide, guide you through the evaluation process, and stay involved until the partnership is locked in and working. No wasted calls, no guesswork.

Find your 3PL match at FulfillYN.com