Raymond Wilder

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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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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Unlock a new era of precise and cost-effective freight shipping. Learn how you can overcome challenges in the LTL freight quoting process with the powerful integration of RXO Connect™ and Shiplify. https://bit.ly/4bCsatD

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When you service a fleet of 150 trucks in-house, there’s no room in the schedule for surprise maintenance. Learn how ultra-low ash engine oil helps Johnston Trucking avoid their #1 downtime threat.

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Tired and fed up with LTL headaches? Can’t stand when LTL carriers make up excuses for why they missed pickups, damaged goods, and frustrating delays? LTL coordination shouldn’t mean endless disruptions, hidden fees, and constant back-and-forth. With WARP’s LTL solutions, we’re here to bring the reliability and control your operations deserve. --- Stop letting LTL disruptions hold you back. Find out how WARP’s LTL solutions can bring reliability and peace of mind to your logistics. Book a Strategy Call: https://lnkd.in/gqW5QPMy #technology #middlemile #logistics #supplychain #crossdock #freighttech #logisticstech #LTL #logisticsinnovation

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With the election settled, I’ve received many inquiries regarding how I anticipate dry van truckload rates will move in 2025. To help answer that, below I’ve charted year-over-year percent change in DAT’s dry van TL spot rate (red) and the BLS’s primary service PPI for general freight trucking, long-distance, truckload (NAICS 484121). Thoughts: •The most profound change that has occurred with these data is that the PPI is now more strongly correlated (albeit with a lag) with spot rates. A decade ago, a 10% year-over-year increase in spot rates would net a ~3% year-over-year increase in the PPI. That relationship appears to have doubled since COVID-19 hit (e.g., a 10% increase in spot rates now gets you a 6% increase in the PPI). •If we assume the shift in the relationship since COVID-19 isn’t due to a unique one-time event but is an underlying product of an environment with much greater information availability, then it would be reasonable to assume this magnitude of relationship will continue. •The question then: how much will spot rates increase? I’ve been on record saying I expect the next bull market cycle to look like 2014 in that I don’t see an increase in trucking ton-miles in 2025 that would be the same pace we saw in late 2017 and early 2018 (not to mention no ELD mandate at work). With that, I’m willing to predict spot rates increase ~15-20% year-over-year by Q3/Q4 2025. That would imply an increase in the BLS PPI by 9-12% year-over-year (but with a lag). That would be the same magnitude of increase in the PPI we saw in 2018. Implication: My best guess basing on looking at underlying demand and supply conditions is dry van spot rates rise 15-20% in 2025 from where they are in 2024 (with those figures being reached in Q3 and Q4 2025). That implies the BLS’s primary service PPI for dry van trucking will rise 9-12% year-over-year, with those gains lagging the spot market changes. #supplychain #supplychainmanagement #freight #trucking #truckload

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Non-freight-related events (NFRs) draining your resources? Our NFR Management System is built to help fleets minimize hidden costs and gain control over operations. ✅ Track and manage NFR events in real-time ✅ Spot costly trends like downtime and compliance issues ✅ Use insights-driven reporting to make smarter decisions Featured in CCJ: "The Magnus platform now gives truckload fleets a holistic approach to load planning and exception management." - Jay Delaney, Director of Product Development. Check out the full article: https://ow.ly/qBZK50TBEzB

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#Interesting and very #DESPERATE times ... if some carriers have embraced the concept of a "Loss Leader" just to keep the doors open. The concept of ... "Yea, we lose a $1 on every sale, but we'll make it up in volume" has #NEVER worked in retail and it definitely won't work here in trucking where it's #NOT $1 per load, but hundreds of dollars per load. I get it that there are some carriers that are just barely staying alive and hoping and praying the #CashFlow will keep them alive to fight another day. But losing money on loads, is #NEVER a good idea, especially when you are struggling. I personally know of one such TL carrier with over 400 trucks out of the Northwest that may not survive the month. I hope and pray that they do, for the sake of the drivers and employees. But when #Leadership is too proud to admit their mistakes, and unwilling to accept the recommendations of those wanting and willing to assist to help the carrier survive ... and even provide those services on a Pro Bono basis (for some that may not know the term, that's for #No #Charge) ... there's not much that friends or associates can do. Anyhow, enough about that ... read the article and I'm sure you'll walk away scratching your head. https://lnkd.in/gsvQDjCb

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There are three categories of carriers – LTL (Less Than truckLoad) Common, LTL Freight, and Line-haul. LTL Common carriers are companies like UPS, FedEx, DHL, and OnTrac—they bring you those packages you ordered online up to 150 lbs. LTL Freight carriers - technically common carrier freight companies - handle the next level of goods between 150-3,500 lbs. Some examples are UPS Freight, FedEx Freight, ABF, Oak Harbor, Knight, Gordon, etc. These carriers deal in large volumes of freight, can access residential areas, and typically have lift gates attached to the final delivery truck. When using an LTL carrier, the primary consideration is that from loading to delivery, your goods will be transloaded between trailers multiple times, so how the freight is packaged becomes very important. Limits on insurance claims are commonly tied to the quality of your packaging. Line-haul carriers, with which MTI primarily works, are the subject for another time. Let us know if you have any questions about common carrier freight companies!

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Let's face it. There are many terms to know in the LTL space. That's why Schneider's transportation experts created this handy LTL terms guide for you. It simplifies the complex jargon, allowing you to make informed and efficient shipping decisions without the headache. Give it a read now: https://ter.li/v7q324

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Shippers are showing an increased appetite for working with asset carriers directly. We are seeing it. Here’s what fleets can do. Call every shipper you ever worked with. It’s a “Hey, do you remember me?” call.  Maybe word it a little better than that.  We did X for you in ____. It went well. We’d love to add value to you again. When you get an RFP, ask some questions.  What’s a great carrier look like for you? Where do you actually need help? What’s causing your problems? What service do you need? Sourcing is a two way street.  It’s not just about getting freight.  It’s about getting freight that works.  Be willing to say no if you can’t service it.  Explain why you say no, you’ll get respect for it. Have your carrier documents ready to go.  Put together a packet with your authority, Safeway, W9.  Include a nicely branded PDF with your network. Explain your service offerings. And… Don’t sound desperate. It’s a huge turnoff. Happy selling. #sales #trucking #freight

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There is no truer statement Brad Hackett, Tracy Rushing, CDS is spot on. The breakdown comes when the people who should support the drivers pass the buck. I have witnessed companies with a heart for drivers, but slowly the wrong hires were made and the culture changed. I have heard if we let them go, recruiting will hire more. Here is my buzz word RETENTION WITH TEETH, meaning from the CEO down to the person detailing trucks everyone knows the driver is the heartbeat. The driver knows that the staff are holding him/her up in support. Everything has to start with the top buying in and leading the way.

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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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Yesterday's jobs report has caused an undue amount of fear that the U.S. economy is on the brink of a recession. Just as I've cautioned that demand conditions in the for-hire trucking sector are unlikely to become bullish in the 2nd half of 2024, I equally would urge caution about concluding that a recession is imminent. I say this based on data. One chart below. Thoughts: •Forget the inverted yield curve; the best predictor of normal recessions is employment in residential building construction. You will see sharp downturns ahead of the 1990, 2001, and 2008-2009 recessions. In contrast, residential construction employment continues to trend up on a seasonally adjusted basis (note, there was a bit of a scare in 2023, but as I wrote about recently, we have seen real investment in permanent residential structures and improvements increase in 2024 from 2023, consistent with 2024's employment uptick). •Historically, downturns in chemical manufacturing are a strong predictor of recessions (https://lnkd.in/gV_hhN4Y). Seasonally adjusted chemical production has been strengthening, the opposite of what we would expect. •We all agree that the balance of trucking demand and supply tightened in June. It seems highly unlikely this would happen yet, just 2 weeks later, the labor market would have weakened substantially (which is the period picked up by the surveys). Implication: as Jesse R. noted in his recent post, folks need to relax about yesterday's jobs data. Unless we have a massive energy shock in the next few weeks, we will see the FOMC cut rates in September (possibly even 50 basis points). Assuming we see about 100 basis points shaved off the federal funds rate by early 2025, we should see the improvement in demand needed to bring on the next bull market pricing cycle for truckload carriers. #supplychain #supplychainmanagement #markets #freight #trucking

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FMCSA clearinghouse rule puts bullseye on freight capacity. Enforcement of FMCSA’s drug clearinghouse could trigger major shift in freight supply and demand. When even a small percentage of tens of thousands of trucks get forced off the road, a major freight capacity shift can ensue – and that’s exactly the scenario playing out now that states have new enforcement power over roughly 179,000 truck drivers. https://lnkd.in/dpk_7bWr Credit- Freightwaves

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LTL shippers: I highly encourage you to watch the NMFTA’s Shippers Only Listening Session on NMFC changes coming in 2025. It is linked in the comments below.   Big changes are indeed coming to LTL classification.   This listening session will help you prepare. Specifically, a very large and set of proposed changes will be issued on 01/30/25. These changes will be considered and voted upon at a public meeting on 03/03/25. Approved changes will then be implemented on 05/03/25. The proposed changes provide for classifying commodities by a 13-sub class-by-density scale when density is the primary transportation characteristic. These changes will include: 🔴 132 existing 11-sub items with CL60-CL400 ratings such as Plastic Articles, Athletic Goods, and Furniture will be extended to 13 subs. The two new subs will provide CL55 and CL50 ratings which allow shippers with very-dense handing units to get a lower class than the current CL60 minimum. 🔴 3,814 single-class items such as Poker Chips CL70, Brake Drums CL60, and Greenhouses CL200 will be cancelled and move under an exiting or new 13-sub item as noted above. Classes will range from CL50 for 50 PCF and above, to CL400 for less than 1 PCF. 🔴 129 modified density scale items such as Asphalt with 3 subs (CL55 for >=30 PCF, CL65 for >=22.5 but < 30 PC, and CL85 for <22.5 PCF will be cancelled and move under an existing or new 13-sub item as noted above. 🔴 1,198 sub-provision items such as Camera Tripods (CL200 if setup, CL100 if knocked down) will be cancelled and move under an existing or new 13-sub item as noted above. 🔴 In all, roughly 75% of the 7,000 NMF items in the NMFC could potentially be impacted with these changes. The list of items potentially impacted is extensive. See the comments for a link to this list. You can search the NMFC items you ship to see if they may be impacted. The LTL industry is rapidly moving towards the day where shippers must know the weights and dimensions of their handling units (pallets, crates, etc).  While this will undoubtedly cause some disruption, the best plan of attack is to get in front of these changes and be prepared. Put in a plan now to capture accurate handling unit dimensions and weights. There are many topics to cover with these changes, and I will address them in future posts. One unexpected issue is that the NMFC’s Mixed Commodity rule will not be changed, at least not yet. That means if you ship multiple commodities on a pallet, you may still have to itemize each commodity in order to be correct. This will depend upon the carrier(s) you use. Note sure why the NMFTA chose not to modify this rule to align with their other changes. While you may feel otherwise, these are all very positive changes for shippers. Classification will be simpler, invoicing issues will reduce, and you can gain the benefit of reduced freight charges as you learn to build denser and more-squared off pallets.  

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At Tai, we understand that load volume is the clearest path to profitability in LTL. We’ve built a TMS that propels you on that path, hurdling over inefficiencies and barriers in your way. You’ll win more profitable loads with Tai TMS. Ready to scale your LTL operations and unlock new levels of profitability? Discover how Tai TMS can revolutionize your freight brokerage and take your business to the next level. #TaiTMS #FreightBrokers #LTL #CarrierNetwork #Logistics

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The LTL industry has arguably changed more in the last 2 years than it had in the prior 20 years. That change is about to accelerate in 2025. The NMFC has been a source of significant change the last 2 years, since the NMFTA announced their “Classification Reimagination” project to shrink and simplify the classification guide and move more towards density as the basis of class. And the NMFC will be a big part of that continuing change in 2025. The NMFTA just announced (see comments for link) that major changes to the NMFC will be taking place in the first quarter of 2025. These changes will have a big impact on carriers, shippers, 3PLs, and tech providers such as TMS firms. LTL Listening Sessions will be held in early August for Carriers, 3PLs and Shippers. I encourage all parties to go to the NMFTA website and register for these specific sessions. This will help you to learn of and prepare for the changes. So what are the changes? Well, we don’t know exactly yet. But the NMFTA is telling us to expect more simplification, a more standardized approach, use of a standard class-by-density table when only density matters (think boxes on a pallet), use of actual identifiers for freight with special handling/stowing/liability needs (think Length rather than is it a pipe or a pole), and condensed commodity listings. Also, expect shippers and 3PLs to be more involved in the process. What else can we expect in 2025 with these NMFTA changes? 💡     A major re-write of the Mixed Commodity rule. Hardly any LTL carrier uses this NMFC rule, and use their own instead. We need consistency here. 💡     A massive collapse to the size of the NMFC. The NMFTA has predicted that up to 3,500 single-class items like Food Processors CL100 will collapse down to one of 13 new items that will be classed strictly by density. 💡      A requirement that shippers provide the weight and dimensions of each individual handling unit (how else can you compute density??) The LTL is indeed changing. More and more, the price of what a shipper pays and the cost of what a carrier incurs for moving a pallet will be based upon knowing the weights and dimensions of each individual handling unit. LTL shippers that get in front of this will be the winners. They will control their destiny, manage their costs, and gain more favor from their carrier partners. Simply put, LTL carriers will reward those shippers who can provide them with accurate shipment data on the front end. Even those stubborn shippers who negotiated their FAK50 25 years ago and refuse to give it up will benefit by providing this data on the BOL/EBOL. If you need help navigating these changes, please reach out and I am happy to help. There are tools available today, very slick tools, that will help LTL shippers prepare for and benefit from these changes.

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