US Logistics Update [Aug 30, 2025]-English

The U.S. Department of Commerce announced on Friday, August 29th that the Personal Consumption Expenditures (PCE) price index rose 2.6% compared to the same month last year, matching the annual rate for June. The core PCE price index, excluding food and energy, rose 2.9% (2.8% increase in June). Despite the Trump administration's extensive tariff measures, the Fed's preferred PCE price index showed no significant change. While prices remain well below the 7% peak seen three years ago, they are still above the Fed's 2% target. This figure explains why the Fed hesitates to cut rates despite concerns about an economic slowdown, and provides justification for avoiding President Trump's pressure for rate cuts.

Meanwhile, according to a Bloomberg survey of 79 economists, U.S. economic growth is expected

to remain modest at 1-2% for the remainder of this year and into next year, with persistent inflation

weighing on consumers (see graph above). Specifically, consumer spending, the engine of the U.S.

economy, is expected to grow only about 1.1% in the third and fourth quarters of this year, while the

core PCE price index is projected to peak at an average of 3.2% in the fourth quarter. The

unemployment rate is forecast to rise to 4.4% in the fourth quarter and for most of next year.

However, the probability of a recession within the next 12 months is projected at 32%, the lowest

level since March.

The U.S. economy grew at an annualized rate of 3.3% in the second quarter, higher than the initially estimated 3%. Gross Domestic Income (GDI) surged 4.8%, and business investment grew 5.7%. Experts assess this indicates businesses are shifting toward investment as uncertainties surrounding trade and tariff policies gradually dissipate.

The New York Times reported on August 24 that recent raids by U.S. Immigration and Customs Enforcement (ICE) targeting logistics warehouses where many immigrant workers are employed are causing major disruptions across logistics operations. On August 20th, ICE and CBP agents suddenly raided a bonded warehouse in Edison, New Jersey, arresting dozens of immigrant workers. Indiscriminate raids have caused even legal immigrants to stay away from work, paralyzing a significant number of logistics warehouses across New Jersey. According to the report, immigration raids lower overall labor participation rates, significantly reducing participation among non-citizens in particular. It also estimates that agricultural prices have risen by 5-12% due to these raids, with some farms and food processing plants reportedly seeing their operating rates drop to around 20%. Labor shortages and cost increases are occurring not only in logistics but across industries reliant on immigrant labor, including agriculture, food, construction, and hospitality.

Global container ship orders hit record high... concerns over excessive freight rate decline
Global container ship orders have reached a record high of 9.4 million TEU, equivalent to about 29% of the existing fleet as of 2025, JOC reported citing S&P Global's Sea-web data. This surge in orders represents supply that will be difficult to absorb solely through global cargo volume growth in the coming years. Analysts warn that the problem of excess capacity will worsen, especially as global economic slowdown factors like tariffs compound the issue. J.P. Morgan warns that global carriers, including Maersk, are likely to face “significant losses” in 2026-27. Currently, excess capacity is being masked by measures like the Red Sea detour (10% capacity reduction), port congestion (4% reduction), slow steaming, cancellations, and vessel scrapping. However, these are insufficient to offset the future supply-demand imbalance. While shippers may benefit from lower freight rates, concerns are emerging that carriers, having amassed substantial profits during the pandemic, could revert to the cutthroat competition (rate dumping, cargo scrambles) seen in the past.

Trump Pressures Other Nations to ‘Scale Back Climate Action’ Through Tariffs and Threats
The Trump administration is not only blocking the transition to renewable energy in the U.S. and promoting fossil fuels, but also forcing other nations to do the same through tariffs and threats, The New York Times (NYT) reported on August 27. According to the report, the Trump administration has stated it will retaliate with tariffs, visa restrictions, and port fees against countries supporting the adoption of the ‘net-zero framework’ being promoted by the International Maritime Organization (IMO) to reduce greenhouse gases in international shipping. This framework, which the IMO is scheduled to decide on for official adoption this October, sets mandatory annual greenhouse gas emission caps for large ships. Ships exceeding these caps must purchase a type of emission credit to offset the excess. However, the Trump administration criticized this in a statement on August 12th, calling it a “global carbon tax imposed on Americans.” It warned, “We will seek the support of member nations to block this measure, and should our efforts fail, we should be advised that we will not hesitate to retaliate or seek remedies for our citizens.”

Trump Administration Threatens to Cut Federal Funds to States Violating Truck Driver English Testing
The Trump administration warned California, Washington, and New Mexico that it would cut a total of $46 million annually from federal transportation safety funds for failing to properly implement English proficiency testing for truck drivers. U.S. Transportation Secretary Sean Duffy emphasized that commercial truck drivers “must be able to communicate in English and read and understand road signs,” demanding corrective action within 30 days. Failure to comply within the deadline could result not only in federal funding cuts but also additional sanctions. Secretary Duffy highlighted strong enforcement results, stating, “We have removed approximately 1,500 drivers with insufficient language skills.” However, California's enforcement effectiveness is being questioned, with only one violation detected out of 34,000 inspections.

Temu's parent company, posts better-than-expected Q2 profit... Slowing revenue growth remains a concern
Chinese e-commerce platform PDD Holdings (Temu's parent company) announced a net profit of 30.75 billion yuan (approximately $4.3 billion) for the second quarter. While this represents a 3.9% year-over-year decrease, it outperformed market expectations of a sharp 40% decline. Revenue rose 7.1% to 103.98 billion yuan, but this marked the slowest growth rate since late 2021. PDD stated that investments for long-term value creation could weigh on short-term profitability. With the end of the U.S. De Minimis policy weakening its price competitiveness, Temu is responding by expanding into other overseas markets like Europe and Brazil, and implementing a strategy to pre-stock inventory within the U.S. Market views are divided: some see these measures as negative for profitability due to rising costs and intensified competition with other e-commerce platforms like Alibaba, JD.com, and ByteDance. Others hold the opposing view that cost savings from sea freight and securing alternative markets will further accelerate the company's growth.