Eduardo Fernandez de Castro Treto

FedEx’s Strategic Move In light of FedEx exploring the divestment of its FedEx Freight division, it's easy to compare this with UPS’s earlier decision to sell Coyote Logistics. Both companies appear to be realigning their focus towards core competencies—FedEx towards parcel and logistics, and UPS towards the same post-Coyote. These strategic divestments highlight a broader industry trend where logistics giants are optimizing their portfolios to enhance profitability and shareholder value. - FedEx: Potential divestment of FedEx Freight to sharpen focus on parcel and logistics. - UPS: Sold Coyote Logistics to streamline and optimize core business operations. - Industry Trend: Companies are refocusing on core strengths to maximize shareholder value and operational efficiency. This shift signals a significant transformation in the logistics industry, with major players adjusting their strategies to better compete in a dynamic market. https://lnkd.in/gQwf4MS9

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Freight fraud is a hot topic right now for carriers and brokers. 2 Dawgs, 1 Pod. will be back at 2cst on Friday to talk everything fraud and highway related with Michael Caney. Is it a good idea to be sharing stories on the bad guys on social media or is that helping them get better? Should we be relying on the fmsca to fix things? There is a lot of different possible topics on the idea of fraud, I will say from everyone I talk to everyone loves Highway and they are becoming a household name in that space. I know it’s a common question that comes up when I talk to potential agents, and they are happy to hear we utlize highway. They have definitely figured something out in this space imo and excited to talk about it. #fraud #freight #logistics #trucking

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There is a lot of excitement in the trucking community that the current freight recession is over (heavily influenced by the articles from FreightWaves). While I’ve publicly said I expect a substantial increase in dry van truckload spot rates next year, it’s important to remember that a significant rebound of freight volumes will take some time to materialize (this isn’t an overnight thing). This can be seen in the most recent quarterly version of the trucking ton-mile index (now that September’s data is complete). One chart. Thoughts: •Q3 2024 came it 0.1% above Q2 2024; I feel good at this stage declaring Q2 2024 the bottom of the current freight recession, which began in late Q2 to early q3 2022. •While we saw very high levels of containerized imports, which appeared in sectors such as electrical goods wholesaling posting record inflation adjusted sales, it’s critical to remember that many freight-centric sectors of U.S. manufacturing continue to perform poorly relative to peak freight demand in the first half of 2022. These include: Wood products: https://lnkd.in/gNmwNRd5   Paper: https://lnkd.in/gYDt3kcK Plastic & rubber: https://lnkd.in/g8ya9dAw Nonmetallic mineral products: https://lnkd.in/gJEH2Gh5 Machinery: https://lnkd.in/gy2NrYza •It will take time for manufacturing activity in these industries to rebound. As I’ve said repeatedly, late Q1 to early Q2 2025 is when I truly expect demand conditions to get strong enough for spot rates to show the type of sustained increase needed to pressure contract rates. Implication: I get carriers are excited that brighter days are ahead in 2025. However, we need to be reasonable and understand it takes time for the manufacturing ecosystem to see sustained demand increases. Moreover, I have severe concerns about 2026, as I expect folks are going to be in for a very nasty inflation surprise… #supplychain #supplychainmanagement #shipsandshipping #freight #trucking

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Selecting the right shipping provider is crucial for your import supply chain's success. Here are 5 things to consider: 1. Know your free days before demurrage charges start. 2. Assess how fast and far your product needs to move from the port. 3. Opt for transloading if traveling over 200-250 miles from the port. 4. Decide on the visibility level needed for in-transit freight. 5. Use a single provider for efficiency and prioritized freight handling.  Working with a comprehensive provider like Schneider: - Simplifies your supply chain management - Reduces touchpoints - Prioritizes your success This leads to cost savings and better customer focus.

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One argument I've been making regarding seasonal capacity tightness in the truckload sector is that 2024, while having more pronounced seasonal tightening than 2023 (when capacity was quite abundant), isn't showing the same degree of seasonal tightening that we saw in 2019. This morning, FreightWaves published an article (https://lnkd.in/gT7Dn5ex) that provides corroborating evidence of my prediction. Below I've shared the plot from the link. Thoughts: •Tender rejection rates are currently around 6%, which while higher than 2023, is down more than 150 basis points from where they were at this time in 2019. From a historical standpoint, their data reporting a 6% tender rejection rate points to capacity being generally plentiful. Implication: The fact seasonal tightening isn't more pronounced suggests that January 2025, excluding some extreme weather event, will see capacity becoming quite plentiful during the nadir month of the year for truckload shipments. These data continue to point to a true recovery of trucking conditions not materializing anytime before late Q1 2025. #supplychain #supplychainmanagement #freight #trucking

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ABF Freight continues to replace transactional business from their Dynamic Pricing model with regular customer (what they call “Core”) business. Per their 2Q24 earnings announcement on Aug 2nd, they are showing greater tonnage loss and steeper shipment weight reductions than any other carrier. But ABF feels they are on the right track. Let’s see what they had to say: 🔴 Revenue dropped a concerning -1.3%, with shipment counts own -4.1% and tonnage down a staggering -16.2%. They obviously had a lot of transactional business to shed.  🔴 Revenue per cwt was up 23.0%, by far the best mark thus far, but this was impacted heavily by their shipment weight drop of -16.2%. Hard to tell exactly how much of this impressive Rev/cwt was due to intentional price change versus mix change.  🔴 ABF’s OR improved by 4.2 points, dropping from 94.0 in 2Q23 to 89.8 in 2Q24. While this is indeed an impressive drop on the surface, their 2Q23 was so poor that it is not that much of a surprise.  🔴  On a sequential basis, revenue was up 6.1%, with shipments up 2.7% and tonnage up 3.10%. And ABF saw solid OR reduction sequentially, from 92.0 to 89.8. They are still balancing their transactional business mix. 🔴  ABF noted that over 80% of revenue is currently coming from customers who have shipped with ABF/ArcBest for over 10 years. That is solid relationship building. 🔴  ABF expects July’s shipment count to be up slightly 1%, but tonnage to be down. This gives a good indication of the large amount of transactional business ABF had when Yellow shut down last year. 🔴  ABF secured a 5.1% increase on their contract basis in 2Q24.  🔴  ABF noted that their on-time performance in 2Q24 was their best in the last 5 years. A good bit of the freight that was moving with Yellow Corp is still working to find its new forever home. ABF is one of several carriers with capacity to take on this business, as they continue to shed transactional business, which has to go somewhere by the way. Bottom line, there is still a good bit of froth in the market with business moving around.  Check out the 🚛Let's Talk Logistics 🚛newsletter where additional management commentary and insight regarding ABF's recent quarter results and future plans will be expanded and expounded upon by the LTL Observers. You can check out other LTL carrier earnings news there as well. A link to the newsletter is in the comments.

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Borderlands Mexico: Mexican ports’ container volumes up 18% in first four months of 2024 In the first four months of 2024, Mexican seaports handled a record 2.95 million twenty-foot equivalent units (TEUs), marking an 18.2% increase compared to the same period in the previous year. The nine Pacific Coast ports were the primary contributors, with 2.14 million TEUs, a 19% rise year-over-year. The largest Pacific Coast ports, Manzanillo and Lazaro Cardenas, saw TEU increases of 14.5% and 35%, respectively, while Mazatlan reported a 39% increase. Gulf Coast ports handled 795,337 TEUs, up 14.3%, with the Port of Veracruz leading at 424,949 TEUs (21% increase) and Altamira at 288,187 TEUs (7.5% increase). #MexicoSeaports #TEURecord #MaritimeTrade #PacificCoastPorts #GulfCoastPorts #Logistics #SupplyChain #PortGrowth #TradeIncrease #ShippingIndustry Stay Informed: https://lnkd.in/e9cGeC-i

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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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Dry Van Spot Rate Update 6/13: -W/w National AVG Flat at $1.64 per mile -Dry van post volumes remained within 3% of last year following last week's 2% w/w decrease in the first shipping week of June -Carrier equipment posts were 24% higher as carriers returned to the market after the Memorial Day break (Thank goodness 🙌) Areas where shippers may see service issues or elevated spot rates: CA, TX, Southeast (Produce impact) How does this impact shipper operations? Surging rates out of tight areas due to high load volumes but lack of equipment primarily driven by produce season There is capacity available but securing it is highly competitive

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Despite claims that the freight recession is over, those of you who follow the public less-than-truckload (LTL) carriers note that most LTL outfits have been reporting declining year-over-year volumes for October and November (e.g., https://lnkd.in/gJ9Cf-VF). Continued soft volumes in the LTL space stem mostly from ongoing weakness in the industrial economy (e.g., manufacturing). In that regard, I wanted to share one industrial production series, focusing specifically on production of goods made by machine shops, turned products, and screws/nuts/bolts (https://lnkd.in/gnYJjMD8) that does a good job of capturing inflections in freight market cycles. One chart. Thoughts: •These industrial production data show seasonally adjusted physical unit output for this 4-digit industry. Crucially, the BEA estimates only 15% of the consumption of goods belonging to this industry are imported, suggesting an ongoing important role for domestic manufacturing (accounting for ~$70 billion in shipments each year: https://lnkd.in/g4tp2fr8). •As can be seen, during normal freight cycles, upticks of production in this sector correspond quite closely to the onset of bull market pricing cycles in late 2013/early 2014 and mid-2017. Equally, downturns in production correspond to bearish conditions. •The fact production didn’t start dropping till late Q3 2023 (about a year after the freight recession started) can be easily explained by the rampant raw material and labor shortages in 2021 and 2022 creating very large increases in order backlogs (https://lnkd.in/gB4iMH2j) that supported production even after new orders had cooled down. Implication: production by machine shops in the USA merits close monitoring as we move into 2025. An uptick of production would be another indicator that we are exiting the current limbo of flat freight volumes. As it appears this series has finally found its nadir, it will likely take a few more months for production to rise significantly (e.g., late Q1 2025). #supplychain #supplychainmanagement #freight #trucking #manufacturing 

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In July, both truckload and less-than-truckload (LTL) pricing saw an increase in the U.S., along with a rise in shipment volumes. This trend indicates a rebound in demand for freight services, despite previous concerns about the muted outlook for the trucking industry. The increase in pricing for both truckload and LTL shipments suggests that demand is outpacing available capacity, leading to higher rates. This could be a result of several factors, including seasonal demand, economic activity, or shifts in supply chains. The rise in shipment volumes also indicates that more goods are being moved across the country, which could signal a strengthening in consumer demand and business activity.

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Tacoma marine terminals grappling with heavy import rail congestion Container lines in Tacoma are warning of extended rail congestion and changes in vessel rotations due to a surge in imports and a shortage of intermodal rail cars. Hapag-Lloyd reported that rail container dwell times at Tacoma's terminals are significantly higher than normal, with no major improvement expected in August. Ocean Network Express (ONE) is altering the rotation of its trans-Pacific services, making Vancouver the first inbound call instead of Tacoma due to the severe rail congestion at Tacoma's terminals. The surge in imports is partly due to an early peak shipping season and retailers diverting goods from Vancouver to Seattle-Tacoma amid potential rail strikes in Canada. This has led to a 51% year-over-year spike in US imports from Asia through the Northwest Seaport Alliance (NWSA) in July. Union Pacific (UP) and BNSF railroads serve the NWSA, but congestion is primarily affecting UP-served terminals in Tacoma. Despite the challenges, NWSA staff and railroads are collaborating to address the increased intermodal volume, with some improvement seen at specific terminals. BNSF, which serves Seattle's terminals, reports fluid operations and has increased capacity and crew to handle the growing volume. Stay Informed: https://lnkd.in/evq2pEqX

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𝐖𝐡𝐲 𝐝𝐨 𝐬𝐨 𝐦𝐚𝐧𝐲 #freightagents 𝐬𝐭𝐫𝐮𝐠𝐠𝐥𝐞? - They’re stuck with non-competes/non-solicits. - Their brokerage competes with them for customers. - They don’t get the support they need. 𝐀𝐭 Freight Tec, 𝐰𝐞 𝐝𝐨 𝐭𝐡𝐢𝐧𝐠𝐬 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭𝐥𝐲. Here’s how we help agents grow: - Get paid faster: Weekly advanced commissions - no waiting for customer payments. - No competition: Your customers are yours. We don’t compete against you. - Full support: Our team handles invoicing, payments, and more so you can focus on your business. With competitive commission splits, easy-to-use tech, and a team that’s got your back, we make it simple for agents to succeed! No tricky contracts. No extra stress. Just the freedom to grow your business. 𝐖𝐡𝐚𝐭 𝐰𝐨𝐮𝐥𝐝 𝐲𝐨𝐮𝐫 𝐥𝐢𝐟𝐞 𝐥𝐨𝐨𝐤 𝐥𝐢𝐤𝐞 𝐰𝐢𝐭𝐡 𝐭𝐡𝐢𝐬 𝐤𝐢𝐧𝐝 𝐨𝐟 𝐬𝐮𝐩𝐩𝐨𝐫𝐭? #freight #logistics #support #brokerage

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A wise friend said, "If you think compliance is expensive, try non-compliance". As an exporter, it's essential to be aware of the obligations that come with exporting, even under EXW terms. Unfortunately, many forwarders fail to address these obligations. If you're feeling uncertain about your current export compliance or need a refresher, don't hesitate to reach out. Let's have a discussion and ensure your exporting practices are up to par.

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Breaking News for E-commerce and Shipping Professionals! Are you still using the default dimensional divisor of 166 with your current 3PL provider? It's time to re-evaluate! The more marketed 3PLS has set the standard of 166 for too long. Let's take a closer look. Imagine you're shipping a large jug of supplement powder. It weighs 3.5 lbs with dimensions of 12 x 10 x 8. The dimensional weight is calculated as 12×10×8=960 12×10×8=960 cubic inches. Divide this by the standard divisor of 166, and you get 5.78 lbs—rounded up, that's a 6 lb charge! At Your Logistics Corp , we do things differently. Using a divisor of 250, that same shipment calculates to 3.84 lbs. That means you pay for the package's actual weight, not an inflated figure. We're committed to transparency and efficiency, ensuring you get the fairest shipping rates without the unnecessary markup. (960/250=3.84LBS) Why's this so important? Well, check your shipping grids. I am confident you'll see a drastic increase across each weight range. So as the package is heavier, you are getting charged more. I'm confident if you are shipping bulkier supplements and doing over 3,000+ shipments a month that we can save you substantial money on fulfillment. Note this is utilizing specific carriers, that you are already most likely using. Why pay more for the same shipment? Let’s talk about how Your Logistics Corp can optimize your shipping needs and reduce costs. #fulfillment #shopify #ecommerce

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The world is unpredictable and changing more frequently than ever. That includes freight transportation. Ask these 7 questions to make sure you're prepared: 1. Are carriers showing any signs of financial stress? 2. How dependent are you on one major supplier of raw materials or products?  3. Are any manufacturing or supplier locations at high risk for major weather events?  4. How long is transit from your suppliers?   5. How variable is your customer demand?  6. Are the products or materials in your supply chain at a higher risk of theft?  7. Do you have visibility to inventory levels and shipments in transit?  If you're getting some answers you don't like, reach out to me for help.

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Dry Van Freight Market Update Week 28: ~Port of LA is expecting to increase volumes 45% y/y in the 2nd week of July. ~TEU volume surges typically flood the dry van spot market in LA where volumes are up 25% in the last month. ~LA spot linehaul rates are $0.12/mile higher than last year as capacity has tightened to levels of Oct. 2022. ~LA averaged $2.22/mile for dry van outbound shipments which is $0.10/mile lower than in 2020, $0.10/mile higher than last year, & $0.20/mile higher than in 2019. #freightmarket #supplychain #transportation #logistics #trucking

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