The Tank Is Almost Empty

U.S. retail sales jumped 1.7% in March, the fastest monthly pace in over three years. Sounds great until you look at what drove it. Gas station sales were up 15.5% month-over-month. Strip out gas, and retail growth was actually 0.6%, slightly below February.

Inflation came in at 0.9% for March, triple the February rate. Gas prices have risen more than $1 per gallon on average since the war began. The Strait of Hormuz, through which roughly a fifth of the world's oil passes, has been effectively closed since the conflict started.

Consumers have been able to absorb the inflated gas prices thanks to tax refunds, savings, and pay gains, which are cushioning the blow. But none of those are endless. Savings get depleted. Refunds run out. If the war stretches toward the end of the year, consumers and the economy get into real trouble.

The University of Michigan's consumer sentiment index ended April at 49.8, a record low. Below the financial crisis. Below COVID. Below the post-Ukraine inflation spike. A two-week ceasefire gave the number a slight bounce above the 48.5 economists expected, but sentiment still fell 6.6% from last month and 4.6% from a year ago. Year-ahead inflation expectations jumped to 4.7% in April from 3.8% in March, the largest one-month increase since Trump's tariff shock a year ago. Long-term expectations hit 3.5%, the highest since last October.

No diplomatic breakthrough will fix this overnight. Gulf export hubs would take months to return to normal, and as this continues, months will turn into years. The reality is that until energy prices are lowered, consumer sentiment will remain unchanged.

What this means for you: Many of you are fulfilling orders for what we call “discretionary spending,” and when consumer sentiment is low, we experience a big pullback, which is already visible in the March data. Softer demand is coming, and that’s scary for a lot of you. The longer the war goes on, the more the consumer cushion erodes, eventually showing up as reduced shipping volume across the board. It’s important to speak with your brands closer to Q3 and Q4 and figure out what the real expected volume will be this year, rather than basing it on last year, to prevent overstaffing and shrinking the already small margins.

The FTC ordered Rollins, the parent company of Orkin, HomeTeam, and Critter Control, to stop enforcing noncompete agreements against more than 18,000 employees nationwide. The company had been requiring nearly all its workers, including pest-control technicians and customer service reps earning relatively low wages, to sign two-year noncompetes prohibiting them from working in the industry within a 75-mile radius of any of Rollins' 700-plus U.S. locations.

The FTC's complaint alleges Rollins sent hundreds of cease-and-desist letters to former employees and filed multiple lawsuits against workers who left. Workers had no ability to negotiate, received no extra compensation for signing, and were given little time to understand what they were agreeing to. The FTC also sent warning letters to 13 other pest-control companies, flagging similar concerns.

The enforcement trend is clear and has been building throughout the Trump-Vance FTC's tenure, following similar actions against a pet cremation company and a building services contractor, as well as warning letters to healthcare employers. The FTC's Joint Labor Task Force isn't slowing down.

Now apply this to your business. Noncompetes are standard practice at 3PLs, particularly for sales reps, account managers, and operations leads. Sales reps are where this gets especially interesting. Companies often feel most entitled to restrict them because they carry customer relationships, pricing knowledge, and lane data. Courts have historically been more sympathetic to noncompetes for salespeople than for frontline workers. But the FTC's current posture doesn't carve out salespeople as a protected category. It looks at whether the restriction is narrowly tailored and proportionate to a legitimate business interest. A blanket two-year, wide-radius noncompete on every sales rep, regardless of seniority or what they actually had access to, is exactly the profile the FTC is targeting.

If you want to protect your customer relationships and proprietary information, there are better tools. Non-solicitation agreements, which prevent a departing rep from poaching specific accounts they personally worked, tend to survive scrutiny. NDAs covering actual proprietary data, like pricing models or customer contracts, hold up. Garden leave clauses, where you pay the person during the restricted period, are viewed far more favorably than unpaid restrictions.

What this means for you: Get your employment agreements in front of counsel before a complaint does it for you. The FTC's posture is that broad noncompetes on workers who had no real negotiating power are presumptively problematic. That description fits many 3PL sales and ops hires. The question isn't whether this trend is coming for your industry. It's whether you're ahead of it or behind it.

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UPS has deployed RFID sensing across its entire U.S. small package network, replacing traditional barcode scanning as the primary method of package tracking.

The operational shift is bigger than it sounds. The old model required workers to physically scan each package at every transition point: pickup, hub intake, loading, unloading, and delivery. RFID flips that entirely. Parcels are now automatically detected as they move through sensor-equipped vehicles, loading bays, and hubs, with no manual scan required.

What this actually changes: fewer blind spots at handoff points, earlier detection of misloads and misrouted packages, and more consistent tracking data across the network. Instead of discovering a misrouted package at delivery, the system flags it before it gets on the wrong truck.

For shippers and enterprise customers, the effect shows up in tracking reliability. More consistent scan events mean fewer gaps in tracking updates, fewer "where's my package" service contacts, and better on-time delivery performance.

What this means for you: If you have clients comparing carrier options based on reliability, UPS just raised the bar for network visibility. FedEx and regional carriers will face questions about when they'll make a comparable move. And if you're running a 3PL operation, expect shipper expectations around tracking granularity to keep climbing.

LAST MILE
Sam's Club launched one-hour delivery. Sam's Club introduced a new Express delivery tier targeting one-hour delivery windows. The average Express order is placed, shopped, and delivered in 55 minutes, with some deliveries made in under 10 minutes. Walmart reported sub-three-hour delivery usage grew over 60% year-over-year in Q4. Amazon and FedEx have both announced recent expansions of their quick-delivery services. The race to own the sub-one-hour slot is now a four-way competition, and it's accelerating fast. (Read More)

M&A
Descartes acquires Idelic for up to $40M. Descartes Systems Group picked up Idelic, an AI-powered driver safety and performance management platform built on 40 billion miles of telemetry data and over 400,000 accident records. The acquisition adds predictive accident modeling and driver risk scoring to Descartes' routing and fleet management stack. Up-front consideration was $28 million, with up to $12 million in performance-based earn-out over the next two years. For fleet operators on Descartes' platform, expect driver safety intelligence to start showing up in your operational data. (Read More)

M&A
AIP acquires Honeywell's Warehouse and Workflow Solutions business. American Industrial Partners signed a definitive agreement to acquire WWS, Honeywell's warehouse automation unit built on the Intelligrated and Transnorm platforms. The business generated approximately $935 million in revenue in 2025 and employs more than 3,300 people. AIP already owns Trew, a U.S.-based automated material handling integrator, so this is a consolidation play in warehouse automation. The deal is expected to close in the second half of 2026. (Read More)

SHIPPING
China launched its first fully electric containerships. The Ning Yuan Dian Kun, a 740 TEU vessel designed for coastal routes between Ningbo-Zhoushan and Jiaxing, entered service on April 15 after months of testing. Built by China State Shipbuilding, the ship has approximately 19,600 kWh of battery capacity and reduces CO2 emissions by roughly 1,462 tonnes per year compared with conventional vessels. It also features fully autonomous navigation. Its sister ship heads to sea trials next month, with delivery expected in June. China is also building out a parallel, swappable-battery network for inland shipping on the Yangtze River. The electric container segment just got its first real-world proof of concept. (Read More)

ELECTRIC TRUCKS
Tesla Semi mass production is happening this year. Tesla confirmed in its Q1 earnings report that mass production of the Semi begins in 2026, with serial production builds starting in the first half and a substantial ramp in the second half. The Nevada facility is designed for up to 50,000 trucks annually. The first public Megacharging site is already live in Southern California, and Tesla has mapped out roughly 46 public stations targeting completion by 2027, with Texas (19 sites) and California (17 sites) leading the rollout. (Read More)

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