Core Insights - Australia Post Group will invest US$324 million to construct an ultra-large parcel processing center in South Australia, marking its largest investment in the region to modernize its network for e-commerce delivery [1][2] Investment and Facility Details - The new facility will span 893,400 square feet, making it the largest parcel processing center in Australia and a model for future automated sorting facilities [2] - Scheduled to open in 2028, the facility will utilize advanced sortation technology, capable of processing up to 400,000 parcels per day, effectively doubling the current capacity at the Adelaide Airport Parcel Facility [3] Operational Efficiency and Market Demand - The facility will integrate operations of Australia Post and its subsidiary StarTrack, enhancing parcel processing and customer experience in South Australia [3][4] - With 80% of South Australians shopping online in the past year, the new facility aims to meet the growing e-commerce demand over the next two decades [4] Expansion Plans - Australia Post is also developing a multimillion-dollar parcel facility on the Sunshine Coast, expected to open in late 2026, which will process up to 16,000 parcels daily, increasing to 21,000 during peak seasons [5] - The Sunshine Coast has seen a 10% annual increase in parcel volumes, outpacing the national average of 6% [6] - Recent expansions include plans for six new parcel facilities in New South Wales and a new international commercial facility at Melbourne Airport to expedite international parcel clearance [6][7]

Core Insights - Gofo Express has opened its first U.S. super hub in Newark, New Jersey, marking its transition from a regional to a national courier service [1] - The Newark facility spans over 400,000 square feet and is equipped to process more than 40,000 parcels per hour, with a daily capacity exceeding 700,000 parcels [2] - The company plans to invest $150 million in two e-commerce distribution centers to enhance its infrastructure for middle-mile and last-mile delivery [3] Company Overview - Gofo Express, founded in 2023 by Chuan Zhen, is a logistics provider that emerged post-pandemic, offering competitive pricing compared to FedEx and UPS [4] - The company has rapidly expanded its logistics network across the U.S., currently operating nearly 100 hubs and stations supported by over 30 linehaul routes [6] - Gofo employs more than 1,000 full-time employees and collaborates with delivery service partners for last-mile delivery [6] Market Position and Expansion - A significant portion of Gofo's historical volume has come from e-commerce merchants linked to China, but it is increasingly serving North American retailers and smaller online sellers [5] - The company's network currently covers 8,000 zip codes, representing 70% of the U.S. population, with plans to reach 10,000 zip codes by the end of 2025 [7]

Core Insights - Investors with significant capital have adopted a bearish outlook on United Parcel Service (UPS), indicating potential insider knowledge of upcoming events [1] - The sentiment among large traders is mixed, with 42% bullish and 46% bearish positions observed [2] - The price movement expectations for UPS are projected within a range of $65.0 to $125.0 over the past quarter [3] Options Trading Activity - A total of 28 unusual options trades for UPS were identified, with 4 puts totaling $236,375 and 24 calls amounting to $1,201,960 [2] - The analysis of volume and open interest provides insights into the liquidity and interest in UPS options, particularly within the $65.0 to $125.0 strike price range over the last 30 days [4] Company Overview - UPS is the largest parcel delivery company globally, operating over 500 planes and 100,000 vehicles, delivering approximately 22 million packages daily [10] - Domestic package operations in the US account for about 65% of UPS's total revenue, while international packages contribute 20% [10] Analyst Ratings - Recent analyst ratings indicate a cautious outlook for UPS, with an average price target of $86.67 from three analysts [12] - B of A Securities has maintained an Underperform rating with a target of $81, while BMO Capital has lowered its rating to Market Perform with a new target of $96 [13]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the impact of tariffs on global supply chains, particularly freight flows from China to the USA, highlighting ongoing trends in shipping and logistics [1][2][5]. Core Observations - **Freight Volume Trends**: Laden vessels from China to the USA decreased by 6% week-over-week (WoW) and 2% year-over-year (YoY) [1][3]. - **Port of Los Angeles**: Expected sequential imports are set to decrease by 26% in the upcoming week, with a further anticipated decline of 9% two weeks later [3][35]. - **Rail Intermodal Volumes**: Experienced an 8% YoY decline, indicating a shift from previously positive growth trends [3][44]. - **Ocean Container Rates**: Rates fell by 15% sequentially and are down 73% YoY, reflecting significant pressure on shipping costs [3][32]. Potential Risks and Opportunities - **Peak Season Uncertainty**: There is concern that shippers may delay orders due to uncertainty surrounding tariffs, which could lead to underwhelming volume and revenue during the peak season [5][6]. - **Restocking Potential**: If consumer demand remains resilient, there could be a significant restocking event in 2026, which would positively impact freight flows and margins [5][6]. - **Transport Stocks**: The report suggests that transport stocks may face volatility in the second half of 2025 if consumer demand does not increase, but truckers have been upgraded due to a lowered recession forecast [6][5]. Additional Insights - **High Frequency Data**: The report emphasizes the importance of analyzing high-frequency data over multiple weeks to understand tariff-related trends, as weekly data can be volatile [2][4]. - **Logistics Manager Index**: The index indicates that upstream inventories expanded while downstream inventories reverted to expansion after three months of contraction [67][68]. - **Congestion Levels**: The Supply Chain Congestion Tracker indicates fluidity levels are close to pre-COVID baselines, suggesting improved logistics efficiency [51]. Conclusion - The current trends in freight volumes, shipping rates, and inventory levels indicate a complex landscape influenced by tariffs and consumer behavior. The potential for a restocking event in 2026 could provide a significant opportunity for growth in freight flows if consumer spending remains strong.

Core Viewpoint - The implementation of demand surcharges by major parcel carriers like UPS and FedEx is being questioned as the market faces reduced retail sales and capacity cuts, potentially driving shippers to alternative delivery options [2][5][8]. Demand and Capacity - During the peak season, an estimated 2.3 billion packages are expected to be delivered in the U.S., which is a 5% increase from the previous year, primarily due to an extra shopping day [3]. - Average daily volume for the holiday shopping season is projected to increase by low double-digits compared to earlier this year, contrasting sharply with nearly 100% growth in 2013 and 50% during the 2020 pandemic [4]. Surcharges and Market Reactions - UPS has introduced an $8.25 surcharge for packages requiring additional handling, set to rise to $10.80 on November 23, with additional surcharges for ground and overnight air shipments starting October 26 [2]. - Critics argue that surcharges in a softer market are short-sighted and may lead to a loss of market share as shippers seek alternatives [5][6][7]. Competitive Landscape - FedEx and UPS are losing market share to competitors like Amazon, Walmart, and independent carriers, with Amazon's domestic parcel volumes increasing by 6.1% in the first half of the year, while UPS and USPS saw declines of 5.4% and 6.7%, respectively [9][10]. - The trend of retailers like Walmart and Target expanding their delivery capabilities is further shrinking the market for traditional carriers [11]. Future Outlook - ShipMatrix predicts that without changes, Amazon, Walmart, and independent carriers will deliver more parcels than the major carriers combined by 2027 [13]. - The diversification of carriers is expected to continue, driven by the adoption of multi-carrier shipping software and the use of gig workers for deliveries [15].

Equity Research 22 September 2025 | 5:01AM EDT US Tariff Impact Tracker: Up and Down Trends Seemingly to Persist US Tariff Impact Tracker – this past week, laden vessels from China to USA were down sequentially (-7% WoW) and remained down on a YoY basis (-13% YoY). Data suggests late-September and early-October is shaping up to be mostly mixed sequentially based on Port of LA data (up next week, down first week of Oct), following 2H-August and early/mid-September reads that were generally weak – continuing ...

Market Overview - U.S. stock futures are stable as investors await a significant phone call between U.S. President Trump and Chinese President Xi Jinping, which may address trade issues and TikTok's U.S. operations [1][5] - Major U.S. indexes reached record highs, driven by optimism in the technology sector and expectations of further monetary policy easing from the Federal Reserve [1][3][6] Premarket Trading Activity - Dow Jones Industrial Average futures are around 46,496 points, showing a slight decrease of 0.04% or about 20 points [2] - S&P 500 and Nasdaq 100 futures are mostly flat to slightly positive, with both up 0.2% [2] - This muted premarket activity indicates a consolidation phase as markets digest recent gains [2] Current Performance of Major Market Indexes - On Thursday, the Dow Jones Industrial Average closed 0.27% higher at 46,142.42, S&P 500 rose 0.48% to 6,631.96, and Nasdaq Composite increased 0.94% to 22,470.72 [3] - The small-cap Russell 2000 surged 2.51% to 2,467.70, marking its first all-time high since November 2021, largely due to a rise in semiconductor stocks, particularly Intel [3] Economic Indicators - U.S. initial jobless claims fell by 33,000 to 231,000, outperforming expectations [4] - The Philadelphia Fed Manufacturing Index rose to +23.2 in September, the highest since January [4] Corporate Earnings Reports - MoneyHero Limited is expected to report a loss of 2 cents per share, with a premarket jump of 10.36% [7] - Other companies reporting include Cantaloupe, IperionX Limited ADR, and Insig AI, among others [7] Major Stock News - Intel shares, after a 22% surge, slipped 0.5% to $30.42 in premarket trading [8] - Nvidia confirmed a $5 billion investment in Intel, which has generated optimism about a strategic partnership [9] - FedEx stock advanced 2.5% in premarket trading after reinstating its full-year outlook and reporting better-than-expected earnings, despite anticipating a $1 billion hit from U.S. tariffs [10] - Lennar shares fell 3% after reporting lower third-quarter profit and revenue forecasts [11] - Apple shares rose 1% as new iPhone 17 models went on sale globally [12] - Oracle shares increased approximately 0.4% as it is reportedly part of a consortium to control TikTok's U.S. operations [12] International Developments - Adani Group stocks are in focus after SEBI dismissed allegations of stock manipulation [13] - Yes Bank completed a strategic acquisition of a 20% stake by Sumitomo Mitsui Banking Corporation [13] - JK Tyre & Industries anticipates double-digit growth due to rising automobile sales [13] - Vedanta emerged as the preferred bidder for a manganese block in Andhra Pradesh [13]

Core Viewpoint - FedEx shares increased by over 5% in premarket trading following the announcement of stronger-than-expected profit and revenue for its fiscal first quarter [1] Company Summary - FedEx reported a fiscal first quarter that exceeded market expectations in terms of both profit and revenue [1]

FedEx Corporation - FedEx reported a revenue increase of 2.8% year-over-year to $22.2 billion in FQ1, with EPS at $3.83, surpassing the consensus of $3.61 and last year's $3.60 [5] - The operating income for the quarter was $1.30 billion on an adjusted basis, exceeding the consensus of $1.22 billion, with an operating margin rate of 5.8%, up from 5.6% a year ago [5] - FedEx is advancing its planned spin-off of FedEx Freight into a new publicly traded company, expected to be completed by June 2026, with the new ticker symbol FDXF [6] - For FY26, FedEx anticipates revenue growth of 4% to 6% and EPS between $17.20 and $19.00, with a midpoint of $18.10, compared to the consensus of $18.36 [6] Cracker Barrel Old Country Store - Activist investor Sardar Biglari is targeting Cracker Barrel's CEO Julie Felss Masino in a proxy fight, urging shareholders to vote against her re-election [7] - Biglari criticized the company's recent rebranding efforts, labeling them as one of the worst brand blunders of the century, and stated he had previously warned against the rebranding [8] - Biglari currently holds a 2.9% stake in Cracker Barrel, owning 654,141 shares [8] Novo Nordisk - Novo Nordisk has laid off its U.S. sales team focused on obesity and diabetes education, part of a broader restructuring under new CEO Maziar Mike Doustdar [10] - The layoffs, affecting several hundred employees, are aimed at cutting costs and regaining competitive edge against Eli Lilly after losing market dominance and over $400 billion in market value since mid-2024 [11]

FedEx Corporation - FedEx reported a revenue increase of 2.8% year-over-year to $22.2 billion in FQ1, with EPS at $3.83, surpassing the consensus of $3.61 and last year's $3.60 [5] - The operating income for the quarter was $1.30 billion on an adjusted basis, exceeding the consensus of $1.22 billion, with an operating margin rate of 5.8%, up from 5.6% a year ago [5] - FedEx is advancing its planned spin-off of FedEx Freight into a new publicly traded company, expected to be completed by June 2026, with the new ticker symbol FDXF [6] - For FY26, FedEx anticipates revenue growth of 4% to 6% and EPS between $17.20 and $19.00, with a midpoint of $18.10, compared to the consensus of $18.36 [6] Cracker Barrel Old Country Store - Activist investor Sardar Biglari is targeting Cracker Barrel's CEO Julie Felss Masino in a proxy fight, urging shareholders to vote against her re-election [7] - Biglari criticized the company's recent rebranding efforts, labeling them as one of the worst brand blunders of the century, and stated he had warned against the rebranding in November 2024 [8] - Biglari currently holds a 2.9% stake in Cracker Barrel, owning 654,141 shares [8] Novo Nordisk - Novo Nordisk has laid off its U.S. sales team focused on obesity and diabetes education, part of a broader restructuring under new CEO Maziar Mike Doustdar [10] - The layoffs, affecting several hundred employees, are aimed at cutting costs and regaining competitive edge against Eli Lilly after losing market dominance and over $400 billion in market value since mid-2024 [11]