⁠Amazon has aggressively expanded its third-party logistics footprint⁠. They opened their Multi-Channel Fulfillment service to merchants on rival platforms like Shein, Shopify, and Walmart, leveraging their scale to become the default logistics backbone for e-commerce.

We analyze the major corporate reality shift in Less-Than-Truckload as ⁠FedEx Freight remains firmly on track to become an independent public company by June 2026⁠, trading on the NYSE as FDXF. Despite a constrained LTL market due to a weak industrial economy, FedEx Freight announced a 5.9% general rate increase taking effect January 5th, driven by spin-off cost pressures and rising wages.

The episode shares a stark economic warning of ⁠"profitless prosperity," which projects steady, slow expansion for US GDP and freight activity through 2029⁠, yet requires operators to fight hard for margins. Persistent inflation is expected, fueled by factors like labor scarcity, fiscal deficits, and rising energy demand, making these rate increases likely to stick.

Adding to the inflation headache, ⁠the weighted average U.S. tariff rate has climbed to 16.4%, the highest level seen since the 1930s⁠, which is expected to generate 1.3% to 1.4% inflation. We also cover capacity dynamics, noting that while the Outbound Tender Rejection Index remains low (stuck just over 5%) signaling persistent excess capacity, capacity exits are expected to continue as smaller carriers struggle to afford replacing aging truck fleets.

Finally, we address critical regulatory changes related to risk and driver welfare, starting with the ⁠Department of Transportation launching a major crackdown on cargo theft⁠ after a spike of more than 90% between 2021 and 2024. ⁠New legislation is also moving fast to ban predatory lease-purchase programs⁠, which were concluded by an FMCSA task force to be "irredeemable tools of fraud and driver oppression" that shift the financial burden onto drivers.

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