Alex Bush

With the 4th of July holiday fast approaching, I wanted to take a look at where June’s dry van truckload spot market rates stand to get a sense if the market is showing any signs of turning. Two charts below using data from DAT Freight & Analytics. Thoughts: •Top chart shows dry van spot rates as well as dry van broker buy contract rates. Dry Van spot rates, while up $0.06 per mile from the April low, are down $0.03 per mile from June 2023. Given diesel prices are down just $0.08 per gallon from a year ago (https://lnkd.in/g5sUVM8V), fuel isn’t driving this difference. •June 2024’s $0.03 increase over May is quite weak relative to what we have traditionally seen in dry van TL bull markets. In 2014 the increase was $0.11 per mile; in 2017 it was $0.10 per mile; and in 2018 it was $0.17 per mile. For that matter, the increase was $0.10 in 2019 (a down year)! As such, spot prices so far are a sign of a cruel summer—my daughter is obsessed with Taylor Swift—from a pricing standpoint. •Bottom chart shows the dry van spot market cycle indicator (DVSMCI), calculated as the broker buy rate less the spot rate, with the difference divided by the average of the two measures. That ratio is currently 16.6%. While better than last year’s 19.9% reading, we are well away from the 10% threshold where we have tended to see markets flip. Implication: dry van spot market data suggest that folks who made predictions of the dry van truckload market flipping from bear to bull in late Q2 or early Q3 likely made an overly optimistic forecast. I increasingly believe the earliest the market could meaningfully flip is Q2 2025, and this will require many things to go right from carriers’ vantages for this to occur. #supplychain #supplychainmanagement #freight #trucking #truckload

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C.H. Robinson automates full freight shipment lifecycle with generative AI #inspiresce.ai #feedly https://buff.ly/4fwk874 In a Trustworthy AI-first O2C process, potential new roles could include AI Process Optimization Manager, Data Quality and Integrity Specialist, Ethics and Compliance Officer, and Customer Experience AI Specialist. SCOR DS processes affected include Plan Order, Plan Fulfill, Order, and Fulfill, scor.ascm.org. Are you ready?

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PLUG: Here are Knight, we have a few different options for customers seeking dynamic pricing. Ask me about them. :) RE: this article - I’ve read a variety of opinions surrounding CH Robinson’s recent spot-quoting AI reveal. Personally, I applaud them for being an early-adaptor within the Artificial Intelligence/Transportation Industry space. At the end of the day, finding new ways to provide their customers faster, more consistent spot-quote responses is a win/win endeavor. Now will there be an “adaptive AI learning curve” that helps ensure their AI pricing is both competitive and profitable? Yes, of course. The transportation world (as a whole) is so dynamic that it will be interesting to see how quickly AI reasoning can “detect and adjust” to market swings. Most certainly there will be people behind the scenes calling “audibles” in those situations. Will they be able to execute on the business generated? Well that’s the never-ending, never-relenting question mark behind every company in our space. Ultimately, if they can’t execute, nothing else matters. I’m guessing they have a lot of brilliant minds invested here to ensure this project not only has feet but is ultimately successful.

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“Sales is sales, people are people” This is probably a unpopular opinion, but I think this is a little misleading . I was debating with friend last night, saying that if 5 elite smb logistics sales reps competed against 5 elite enterprise logistics( no prior relationships everything equal) reps and could only sell to 1b + companies they would get destroyed. And Vice versa applies. Why? What goes into selling at the enterprise level is much different than the smb level. Different skill set. It’s the same game, but totally different conversations, relationship building , values, problems. Why do you think so many recruiting firms on the w2 side don’t touch recruiting agents or if they do aren’t very good at it? It’s the same game, still people, still recruiting, but totally different conversations and skill sets. I share this, because you don’t have to be an elite sales person in general you just have to be elite at the niche/arena you are in. Heck, you could get rich being an elite produce broker in the SE. If you aren’t good at something you might not be bad at sales, you might just be selling the wrong thing for your skill set! What do you guys think, is sales really sales and people are people or is that misleading? Happy Monday!

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8 Comments

I have long suspected FreightWaves data on truckload tender volumes and accepted loads are strongly weighted towards consumer-centric freight, especially containerized imports. Their most recent market update provides more evidence for my claim. Consider the following: •Accepted tenders have been up ~7% in 2024 from 2023. Do you know what else has been up by a similar amount in 2024 from 2023? Metric tonnage of containerized waterborne imports from Asia, which are up 14.5% year-over-year for 2024 from 2023 on a year-to-date basis. •The article mentions that tender volumes are up 15.8% today than in 2019. As tender rejection rates in 2019 and today are similar, tender volumes and load volumes would result in similar conclusions. I'm very confident that this isn't the case when you look at all of trucking freight (my trucking ton-mile index's most recent readings are within 2% of 2019 levels). However, containerized imports have steadily increased since 2019 and are following the pre-COVID trendline (and are up by roughly the amount FW's is reporting for their trucking volume data). Implication: you need to look closely at different data sources for trucking freight volumes to try and infer what industries receive the most weight. I've long felt Cass is industrial-heavy. FreightWaves appears to be the opposite. My own trucking ton-mile index is heavily slanted towards domestic manufacturing (specifically food, chemicals ex pharma, nonmetallic mineral products, paper, and primary metals) because of the Commodity Flow Survey. Things to keep in mind as you select which indexes to give more weight when undertaking strategic planning (e.g., if you are a carrier with lots of exposure to containerized imports, FreightWaves' data would likely be your preferred metric). #supplychain #supplychainmanagement #shipsandshipping #freight #trucking https://lnkd.in/giQiCCHf

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The Supply Chain Visibility Puzzle: Why the Market is So Confusing 😕 The average Fortune 1000 company has between 15-25 different supply chain systems of record (ERPs, WMSs, TMSs, OMSs, Planning, Replenishment, etc.) Achieving internal visibility across all these systems is hard enough, but extending that visibility across external stakeholders (carriers, suppliers, 3PLs, customers, etc.) can be daunting for most organizations. Oh, it gets worse. In a world where supply chain complexity is growing, the number and types of systems meant to help analyze and provide visibility to those supply chains is also becoming more complex, fragmented, and confusing. Many solution providers provide important but small pieces to the Supply Chain Visibility puzzle. Customers are often left with more systems, more data integration, more complexity, and more confusion. Below please find a quick cheat sheet of the key systems that offer various types of visibility within the supply chain. By understanding the role each system plays—whether it's external collaboration, internal operations, or transportation tracking—you can gain deeper insight into how visibility drives efficiency and decision-making across your entire network. 𝗠𝘂𝗹𝘁𝗶–𝗘𝗻𝘁𝗲𝗿𝗽𝗿𝗶𝘀𝗲 𝗦𝘂𝗽𝗽𝗹𝘆 𝗖𝗵𝗮𝗶𝗻 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗡𝗲𝘁𝘄𝗼𝗿𝗸𝘀 (𝗠𝗘𝗦𝗖𝗕𝗡𝘀) ✅𝗪𝗵𝗮𝘁 𝗜𝘁 𝗜𝘀: A platform that connects multiple companies in a supply chain. ✅𝗗𝗮𝘁𝗮 𝗧𝘆𝗽𝗲: Works with external data (suppliers, carriers, shippers). ✅𝗣𝘂𝗿𝗽𝗼𝘀𝗲: Facilitates real-time collaboration and data sharing across procurement, logistics, and manufacturing. 𝗥𝗲𝗮𝗹-𝗧𝗶𝗺𝗲 𝗧𝗿𝗮𝗻𝘀𝗽𝗼𝗿𝘁𝗮𝘁𝗶𝗼𝗻 𝗩𝗶𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗣𝗹𝗮𝘁𝗳𝗼𝗿𝗺𝘀 (𝗥𝗧𝗧𝗩𝗣𝘀) ✅𝗪𝗵𝗮𝘁 𝗜𝘁 𝗜𝘀: A system for tracking shipments and logistics in real time. ✅𝗗𝗮𝘁𝗮 𝗧𝘆𝗽𝗲: Works with external transportation data from carriers and logistics partners. ✅𝗣𝘂𝗿𝗽𝗼𝘀𝗲: Provides real-time insights on the location, status, and delivery times of goods in transit. 𝗪𝗮𝗿𝗲𝗵𝗼𝘂𝘀𝗲 𝗔𝗻𝗮𝗹𝘆𝘁𝗶𝗰𝘀 𝗦𝘆𝘀𝘁𝗲𝗺𝘀 (𝗪𝗔𝗦𝘀) ✅𝗪𝗵𝗮𝘁 𝗜𝘁 𝗜𝘀: Analytics for managing and optimizing daily warehouse operations across all systems in the 4 walls (WMS, LMS, WCS, MHE, HR, and Time Tracking). ✅𝗗𝗮𝘁𝗮 𝗧𝘆𝗽𝗲: Works with internal data (inventory, labor, space utilization). ✅𝗣𝘂𝗿𝗽𝗼𝘀𝗲: Provides real-time visibility into warehouse activities for efficient handling, storage, and movement of goods as well as trend reporting and analytics over time. 𝗘𝗻𝗱-𝘁𝗼-𝗘𝗻𝗱 𝗩𝗶𝘀𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗦𝘆𝘀𝘁𝗲𝗺𝘀 ✅𝗪𝗵𝗮𝘁 𝗜𝘁 𝗜𝘀: A central platform that unifies and consolidates supply chain data. ✅𝗗𝗮𝘁𝗮 𝗧𝘆𝗽𝗲: Works with internal data (inventory, orders, shipments, demand). ✅𝗣𝘂𝗿𝗽𝗼𝘀𝗲: Eliminates data silos to provide a cohesive view of the entire supply chain. Any systems I missed? 👇 Comment "Visibility" below and I will send you full PDF cheat sheet that includes "Key Benefits" of each solution #supplychain

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Many of you know I’ve long argued that FreightWaves Contract Load Acceptance Volume (CLAV.USA) metric is not a good representation of for-hire truckload freight volumes in the USA. The recent article Craig Fuller published (https://lnkd.in/gpa4CexE) lends support for my concerns. I want to draw attention to this quote: “Contracted load accepted volumes, another SONAR index measuring contracted load demand, tell us that the market has grown since January 2023. As of April 15, 2024, year-over-year contracted volumes are up 9%.” Here are two facts that raise serious validity concerns (in my professional academic opinion) that make me believe CLAV isn’t nationally representative: [1]: It doesn’t align with Q1 public truckload carrier financial results. When you look at the chart provided in the article, CLAV has been up throughout 2024 relative to 2023. Yet, you have carriers like JB Hunt hauling fewer loads (-6.8% YoY for dedicated and -5.2% for truckload) in Q1 2024 than Q1 2023. That decline can’t represent JBH turning down that much contractual business due to low rates from contractual customers. [2]: Other indexes such as Cass Shipments and For-Hire Trucking Ton-Miles aren’t showing strong YoY gains; they are showing the opposite in YoY declines of 2-4%. The trucking ton-mile index is nationally representative because it is constructed from the Commodity Flow Survey and various government data sources. Implication: while I really like FreightWaves’ Outbound Tender Rejection Index (OTRI.USA), which I believe is a good indicator of the current balance of supply and demand in the truckload sector, too many other data points result in me concluding that the underlying tender volume data are not representative of truckload freight demand. For anyone who wants to argue differently, ask yourself this: are you or most of the other carriers/brokers you know seeing 9% year-over-year increases in truckload freight volumes? JBH and Knight-Swift certainly aren’t. #supplychain #supplychainmanagement #freight #trucking #truckload #logistics

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One statement I routinely hear or read is surprise at how dry van truckload capacity has been so resilient given the collapse of commoditized over-the-road dry van TL lanes. Apart from abnormal profits earned in 2021 and 2022 helping keep carriers afloat, I believe another reason for the resilience of capacity is that many other services these carriers offer have not seen nearly as precipitous of a drop. One chart below showing this. Thoughts: •This chart compares the full producer price index (PPI) for general freight trucking, long-distance, truckload (NAICS 484121) (full PPI) versus the primary service PPI (which captures generic dry van services). Prior to COVID-19, these two series moved in unison. However, since late 2022, they have sharply diverged, with the full PPI falling far less (it currently hovers ~35% above pre-COVID levels, compared with 15% for the primary service PPI). Both indexes include fuel surcharges. •I’ve checked with the BLS economist who collects these data, and what we are seeing isn’t the effect of reweighing or other methodological changes. Rather, the only conclusion is that other services (which account for ~1/3rd of revenue for establishments classified as primarily over-the-road TL carriers) have shown much greater resilience. •These services could include dedicated contract carriage, warehousing and storage, specialized TL transportation, or intermodal. When you think about large public TL carriers like JB Hunt, you can see services like intermodal and dedicated operations have shown much greater price stickiness. Implication: the greater resilience of the PPI for all services offered by dry van truckload carriers helps explain why the sharp decline in rates for the commoditized portion of TL services hasn’t caused a larger shakeout of industry capacity (in addition to record profits earned in 2021 and 2022). #supplychain #supplychainmanagement #freight #trucking #truckload

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FreightWaves has never lacked modesty about their repeated claims that they correctly predicted the onset of the 2022 freight recession (though in reality they placed the date ~3-4 months too early). However, they have not had as much success predicting when the current bear market will end. In that regard, I wanted to call out an article from September 2023 that, in retrospect, missed the mark substantially (https://lnkd.in/gbmVSFEs). First some quotes and then lessons to learn: •Quote: "the freight rate cycle will begin to move at a faster pace (perhaps later this year; more likely late in the first quarter of 2024). Rates will move higher." •Quote: "Conditions for carriers could improve dramatically in Q2 2024; and they may have the upper hand in negotiations with shippers at that time." What went wrong? Let me offer the following: [1]: FW's theory of freight demand calls attention to consumer spending and containerized imports. Yet, containerized imports represent a small share of total truckload movements (across all modes, roughly 5% at best). As I keep preaching, trucking volumes are much more contingent on domestic manufacturing activity, most of which the end consumer never touches. [2]: FW's emphasizes net changes in operating authorities to proxy change in capacity (as do many organizations). Yet, this method is flawed because it doesn't consider firm size. Yellow Corp's failure would have taken out 4 operating authorities but over 10,000 trucks. Instead, look at the BLS's employment data for truck transportation. Implication: I'm sure when the truckload market does eventually turn that FW's will loudly proclaim that they "called the market swing." Don't let them fool you, as their crystal ball hasn't performed very well for predicting the end of the current bear market. #supplychain #supplychainmanagement #freight #trucking #truckload   

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Q1 has come and gone, and the dry van truckload market did not turn as more optimistic predictions had predicted (https://lnkd.in/gbWQFQB6). Q2 hasn’t looked any better? Why? The answer: demand for truck transportation remains weak. This is in spite of strong year-over-year gains in imports and robust retail trade sales. How can this be the case? Simple: domestic manufacturing still produces the bulk of for-hire trucking demand, and freight-weighted domestic manufacturing remains in a deep slump. One chart below showing this using the seasonally adjusted for-hire trucking ton-mile index that I coauthor. Thoughts: •February’s seasonally adjusted ton-mile reading jumped 1.5% from January’s low reading (which occurred due to the polar vortex) but remains down roughly 2% from this time in 2023 (and remember, we had been in a freight recession for roughly 5 months as of February 2023 [September 2022 saw the first major drop in demand]). •Relative to the seasonally adjusted peak from March 2022, demand for truck transportation has dropped 4%. That may not seem like much, but employment has fallen just 0.3% over this same period (see https://lnkd.in/gdYDGD4j). •For those wondering why demand isn’t stronger given those strong import gains, remember what I’ve been preaching for year(s): imports don’t represent that much freight relative to what we manufacture domestically. Consequently, all the stock analysts focusing on import-centric retail trade are missing the boat (pun intended). Implication: for the dry van truckload market to turn from bear to bull, we either need a much larger loss of capacity (unlikely to happen quickly) or for demand to improve substantially, which will require a sharp rebound in domestic manufacturing activity (also unlikely to happen quickly). As such, I would pencil in “blah” conditions for the immediate future. #supplychain #supplychainmanagement #shipsandshipping #freight #trucking  

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August is now mostly in the rearview mirror, so I wanted to provide an update about where dry van truckload pricing dynamics are for this month using DAT’s data on broker buy contract rates and dry van spot rates (both including fuel). Calculating contract less spot and dividing that figure by the average of the two series results in what I call the dry van spot market cycle indicator (DVSMCI). That is shown below with key dates for when pricing dynamics changed also included. Thoughts: •August’s DVSMCI currently stands at 16.8% (broker buy contract at $2.39 per mile versus dry van spot at $2.02 per mile), which places things in a weak pricing environment for carriers. We are well above the 10% threshold that has signaled transition to bull market pricing. •Consistent with this, the producer price index for general freight trucking, long-distance, truckload primary services was effectively flat in July month-over-month and down about 2% year-over-year (https://lnkd.in/d3EQCWH). •Stepping back, spot rates have been effectively flat since April 2023 (when they were $2.07 per mile). •It is very much starting to feel that predictions such as, “State of Freight for July: ‘Bullish’ market coming for freight economy” may have been premature (https://lnkd.in/gUHbrvVe) Implication: I continue to see no signs that dry van truckload spot prices are poised for a sustained upward increase in 2024. While I do expect seasonal tightening as we approach Labor Day and especially Thanksgiving and Christmas, the demand conditions just aren’t there for the type of sustained increase in spot rates that are needed to bring on a bull market pricing cycle. #supplychain #supplychainmanagement #freight #trucking #transportation

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The March 2024 trucking ton-mile index showed continued weakness in the demand for for-hire truck transportation, which closely corroborates what we have observed from many of the public carriers’ Q1 earnings calls. One chart below for the seasonally adjusted ton-mile index. Thoughts: •March’s seasonally adjusted reading was down 0.5% from February 2024 and down 1.1% from March 2023. On a not seasonally adjusted basis, ton-miles increased 2.3% in March from February 2024 but were down 2.8% year-over-year. Therefore, the negative seasonally adjusted month-over-month change indicated that the model would have expected a 2.8% increase in ton-miles as regular seasonal variation even in the absence of a trend. •One caveat: March 2024 featured Easter, which usually shows up in April. Consequently, the March seasonal adjustment factor for this year looks quite a bit different than last year. •I can safely say that the weak March seasonally adjusted reading indicates demand conditions remain weak, though for perspective, ton-miles remain 2.5% above the average we saw in 2017. •These data provide more proof of my argument that year-over-year growth in containerized imports are a poor proxy for trucking demand. Implication: the trucking ton-mile index continues to point towards weak demand conditions, which has support from numerous other data points (e.g., weak spot dry van TL prices, poor Q1 public carrier earnings). This provides more evidence for the validity claim that this index is capturing nationally representative for-hire truck transportation demand in the USA. #supplychain #supplychainmanagement #freight #trucking #truckload

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Great points and added a few more steps to this guide by Ryan. When evaluating a SaaS investment, make sure you’ve thought through the ROI. Step five: ask yourself, "What is the expected ROI here?" Efficiency gains from revenue addition, cost avoidance, or headcount reduction should yield a minimum return of 3-5x, and most freighttech solutions range closer to 5-10x. For example, if you're paying $300K, you should expect at least $1.5-3M in returns. Step six is crucial: who will champion this product internally and drive full compliance and adoption? If the answer is no one, then don’t proceed. Whether it’s freighttech, Salesforce, or any other solution, you simply won’t see value if your team isn’t held accountable for compliance and adoption. It’s like buying a Ferrari only to park it in the garage or drive in first gear—why own it at all? In today’s competitive landscape, using technology effectively isn’t optional; it’s the price of admission. Fully leverage these tools, or risk getting outpaced by those who do.

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Interesting take from Gartner's Tom Enright that the recent elevation of the role of supply chain execs may now decline. Worth reading - 2 mins. As a technology partner, I can't resist commenting on this: "Supply chain investments must have maximum impact across key priorities of the company, such as growth and sustainability, he declared. Supply chain leaders should prioritise investments that allow progress on multiple objectives, he said. For instance, new technology may have multiple outcomes across the organisation." [Tom Enright] It's a tough balance to keep the focus on solving a particular problem (or exploiting a specific opportunity) and keeping a tight number of stakeholders, versus exploring the value across the business and potentially losing the impetus to get started. I always advocate exploring the broader opportunity and delivering incrementally. But if you think your 'supply chain IT project' is simply to automate a process that used to be manual, you're not thinking strategically enough, and are likely to miss the value entirely. #supplychain #supplychainmanagement

7

Where are dry van truckload prices at? With DAT’s most recent data released this week, as well as the BLS’s PPI for general freight trucking, long-distance, truckload [primary services], I wanted to share my thoughts. Two charts below. Thoughts: •Top chart shows DAT’s dry van spot rates (red) and what they call contract rates (black) (including fuel). Both continue to move in parallel. Historically, every major market shift (2014, mid-2017, mid-2020) has corresponded to a sharp uptick in dry van spot rates, inclusive of diesel prices. We just aren’t seeing any signs of such an uptick now, which further solidifies my view that we can write of 2024 as the year the market could turn. It’s time to turn the page to 2025. •Bottom chart shows the producer price index for the commoditized portion of dry van TL freight (which includes fuel). That index continues to move sideways. Historically, as with spot rates (but to a much lesser extent [at least in 2014 and 2017-2018), we will see these rates spike when market cycles change. The BLS’s data likewise is corroborating this hasn’t happened yet. Implication: despite a lot of excitement with the election outcome, the brutal reality is that the dry van truckload sector needs a significant infusion of freight to get out of the current “limbo” conditions where we have seen one cycle end but have yet to see another cycle begin. To continue to echo the prediction I’ve made for several months, the soonest I see the market meaningfully changing towards carriers’ favor would be late Q1 to early Q2 2025. We will need to closely watch demand signals over the coming months, especially data on manufacturing new orders. For the late Q1 to early Q2 market turn to materialize, we will need to see a rapid uptick in new orders over the next few releases from ISM. #supplychain #supplychainmanagement #freight #economics #trucking 

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Recall my post just a few days ago about assessing validity claims concerning data? I was struck by a few statements made in this recent FreightWaves' article I just came across this morning that makes be even more strongly question how representative their tender volume data truly is (https://lnkd.in/g5XV3gts). Consider the following quotes: •"Dallas’ outbound tender volumes (OTVI.DAL) have grown approximately 50% over the past five years compared to the national average of 18%." •"Phoenix demand is up approximately 60% since April 2019." My simple question: over-the-road dry van capacity has increased just 4% over this period based on the BLS's payroll data for NAICS 484121: General Freight Trucking, Long-Distance, Truckload. We know from separate Census Bureau data compiled from IRS tax records and highly reliable surveys that nonemployer firms saw just a 1.5 percentage point increase in their share of revenue (from 18.5% in 2019 to 21% in 2022). As such, capacity hasn't grown more than 4.5% across all of trucking. If freight volumes were truly up 18% over this period, wouldn't we be in an incredibly tight market? Curious is anyone else can make sense of these discrepancies. My answer is simple: FreightWaves' tender volume data aren't capturing all trucking freight, and instead are capturing a nonrepresentative slice of the pie. #supplychain #supplychainmanagement #freight #trucking #transportation #logistics

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16 Comments

Now that we are halfway through July, I wanted to look at where the dry van truckload spot market was at. Using data from DAT Freight & Analytics, I’ve calculated the dry van spot market cycle indictor as broker buy contract rates less dry van TL spot rates divided by the average of the two series. One chart below. Thoughts: •Historically, when this ratio falls below 10%, we tend to see a bull market pricing cycle begin, which is picked up well the Bureau of Labor Statistics primary service producer price index for general freight trucking, long-distance, truckload (https://lnkd.in/gUXXNHrd). Conversely, anytime we see the series move above 15%, we enter a bear market pricing cycle. Key dates for bull cycles labeled in black, bear cycles in red. These dates mirror swings in observed contract & spot rates picked up by BLS. •The bad news for carriers is that July’s reading of 15.8% is well away from the 10% threshold. As such, there aren’t signs of the market being ready to turn. •For the market to turn, we need more freight demand. Unfortunately, as I’ve been noting frequently, demand conditions just aren’t great now. For example, Cass Shipments, which tracks the trucking ton-mile index quite closely, fell in June to the lowest level since the recovery from the COVID-19 pandemic (https://lnkd.in/gAZb34hZ).  As I’ll share next week, machinery manufacturing and wholesaling is especially weak. Implication: I continue to see few signs that the dry van truckload sector will enter a bull market pricing cycle in 2024. It increasingly looks like any capacity tightening felt in June was just a return of seasonality. Continued weakness in pricing and freight demand reinforces my emphasis on why domestic manufacturing activity must be front and center in discussions about freight demand, with less attention given to retail sales. #supplychain #supplychainmanagement #freight #trucking #economics #markets

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#SupplyChain is hard and complicated. Don't ever let anyone tell you otherwise. This is an internal flow chart that I just built for a training on how carriers, NVOCCs, and shippers relate do each other when building integrations. I've been doing this for 25 years and this took me over an hour to get right. "Carrier Ops" and "Freight Ops" are two Chain.io product features that help integrate these differing parties.

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7 Comments

The August for-hire trucking ton-mile index shows that freight volumes continue to move along the bottom of a trough, with no sign of substantial improvement. One chart below shows seasonally adjusted trucking ton-miles from January 2004 through August 2024. Thoughts: •The current freight recession is in its 29th month if we use the March 2022 peak. Freight volumes are down slightly year-on-year, but there is simply no sign for improvement just yet (we keep skipping along a trough, one month up, one month down, but volumes moving horizontally). •These data incorporated the BEA’s annual benchmarking of the price deflators for wholesale trade. This resulted in a sharper drop in freight volumes starting around September 2022. On a quarterly basis, the annual benchmarking shifted peak freight volumes from Q2 2022 to Q1 2022. •As I’ve suggested before, I believe there is good reason to suspect that annual benchmarking for the industrial production data will ultimately shift the current estimates of freight demand down an additional 1-2%, which means current freight volumes are right in line with where they were in 2019. •It is worth emphasizing again that, while we are in a freight recession, in terms of magnitude of freight decline, this current freight recession is maybe 1/3rd the size of the 2007-2009 freight recession brought about by the Global Financial Crisis. Implication: freight volumes continue to move along the bottom of a trough at roughly the same levels we observed in 2019. As there is strong reason to suspect supply is at the same level we saw in 2019, this suggests we should expect normal seasonal tightening as we move into November and December, with loosening in January. Assuming a few more interest rate cuts, there is the chance for a true increase in freight demand to start materializing in March or April. As such, as shippers prepare for bid season, it is worth having contingency plans for capacity tightening in Q2 and Q3 2025. #supplychain #supplychainmanagement #freight #trucking #shipsandshipping #logistics

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19 Comments