Brandon Russo

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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Its that time of year again! Are annual LTL rate increases putting pressure on your transportation budget? You're not alone. Many businesses face rising costs in less-than-truckload (LTL) shipping, driven by fuel surcharges, labor expenses, and capacity constraints. One solution to counteract these increases is consolidating multiple LTL shipments into full truckload (FTL) shipments. Here's why this strategy makes sense: ✅ Cost Savings: Combining LTL shipments into a single truckload can significantly lower per-unit shipping costs by maximizing trailer utilization and avoiding high LTL fees. ✅ Improved Transit Times: Consolidated shipments typically follow a direct route, reducing handling and transit time compared to traditional LTL that moves through multiple terminals. ✅ Reduced Damage Risk and W&I: With fewer touchpoints, your products are less likely to be damaged or delayed, enhancing customer satisfaction. ✅ Environmental Impact: Fewer trucks on the road mean reduced fuel consumption and lower carbon emissions—a win for your business and the planet. This option is not for every shipper! You need to identify your top receivers, where they are located and IF shipments can be strung into a multi-stop route. If you're considering optimizing your supply chain with consolidated shipping, let's discuss how our team at Hermann Services can help you make the transition smoothly and cost-effectively. Have you tried this strategy, or are you interested in learning more? Let’s connect in the comments or via direct message! #Logistics #Hermannservices #Shipping #Transportation

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Dry Van Freight Market Update May 27 - June 2: ~Chicago’s truckload capacity tightened following last week’s $0.01/mile increase to an outbound average of $1.68/mile. ~Atlanta saw a similar trend with rates increasing $0.02/mile to $1.77/mile average. This is up $0.20/mile in the last month on 22% lower volume of loads moved. ~Atlanta > Lakeland paid carriers $2.52/mile, $0.06/mile higher than the prior month. ~Lakeland > Atlanta paid carriers $0.83/mile and are $0.13/mile higher than the long-term average. ~That means RT is paying carriers $1.79/mile excluding fuel. At this level, carriers are operating under breakeven. #freightmarket #supplychain #transportation #logistics #trucking

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OD is the latest carrier to take their annual rate increase. Keep in mind that the stated percentage of rate increase is an AVERAGE and may not reflect what you see as a shipper/receiver. Each lane is different - so, it's hard to know how a carrier's annual rate increase will impact your company and customers. You can't just adjust your freight cost estimate by 4.9% or 7.9% and cover yourself. GLI can help. We perform freight cost analyses for companies every day and can quickly determine exactly how a carrier increase will impact your bottom line. Our job is to support your goals.

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Yesterday the largest LTL carrier in the nation essentially threw a "FOR SALE BY OWNER" sign up in it's front yard... Will another LTL carrier purchase them? Unlikely. The price tag is massive and it would likely result in a spectacular failure (e.g. Roadway and Yellow in 2003). Would PE be interested? I doubt it. Money ain't particularly cheap right now and running a profitable LTL business is incredibly hard. As mentioned in the article, a spinoff makes the most sense for everyone involved. What will be interesting to monitor is how this impacts their parcel business and the revenue hit to their tiered pricing model bands. It's anyone's guess as to what will happen but the announcement made yesterday could be the first pebble down the mountain in a landslide of change for the industry.

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Well, we've heard it from multiple sources now. The freight recession is "dead". So what now? Cost transparency 🤝 forecasting growth My (unsolicited) advice? - Lean into stability - Have really straightforward conversations with your suppliers, vendors, and carriers - Align with people/companies that value your goals J.B. Hunt Transport Services, Inc. #jbhunt #3pl #transportation

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LTL should not be viewed merely as a secondary choice but rather as a key component that bridges the voids within your transportation framework. Discover three effective strategies for incorporating LTL into your multimodal strategy to fully leverage its capabilities. I suggest checking out this guide on LTL: http://sndr.pro/5M

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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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SEVEN MONTHS… That’s the countdown, supply chain folks! The NMFTA is about to shake things up with major changes to the National Motor Freight Classification (NMFC) system, and it’s going to impact LTL shipping costs in a big way. Traditionally, NMFC classifications have used a straightforward set of classes based on density, stowability, handling, and liability. High class = high shipping cost. But now, carriers are bringing in new tech sharper than ever at calculating the exact dimensions and density of your shipments. So if that box of widgets has been enjoying a cozy, lower class rate, buckle up—it might get a “first-class” upgrade, minus the free cocktails! Higher rates are ahead for items that don’t meet the new density requirements. With this increased focus on density, shippers can expect more variable pricing, so it’s time to pack smart. To avoid any surprise shipping cost hikes, now’s the time to tighten up packaging, aim for maximum density, and work closely with carriers to stay ahead of these changes. May 1st—7 months to go. If you’re ready, congrats! If not, look forward to some “quality time” with the CFO, a frustrated sales team, and possibly some questions from customers about the spike in cost of goods. Fun times ahead!

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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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Dry Van Freight Market Update April 22-28: ~The nation’s Top 5 Dry Van Spot Markets (LA, Dallas, Chicago, Elizabeth, & Atlanta) average linehaul rate decreased to $1.50/mile.  ~LA improved to $1.65/mile, same y/y, on a 5% higher volume of loads moved last week. ~Dallas & Atlanta saw volumes of loads moved improved last week and low linehaul spot rates didn’t improve. ~Elizabeth saw load volumes flatten and linehaul spot market rates dropped $0.02/mile to $1.16/mile last week. #freightmarket #supplychain #transportation #logistics #trucking

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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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🚚 Freight Market Update 🚚 Despite port strikes and hurricanes, the freight market remains stable. Capacity absorbed disruptions, and no major shifts are expected until mid-2025. Driver shortages from upcoming regulations could tighten capacity, so planning ahead is key! #Logistics #Freight #SupplyChain

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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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C.H. Robinson slashes over 50% of its US sales team. This is a significant move in the logistics industry. Here’s what it means: 1. Workforce Reduction: A major cut in the sales team indicates a shift in strategy. Such decisions often reflect a need to streamline operations and reduce costs. 2. Industry Impact: C.H. Robinson is a big player in the logistics field. Changes in their structure can influence market dynamics and competitor strategies. 3. Employee Morale: Cuts of this magnitude can affect employee morale and productivity. The remaining staff may face increased workloads and uncertainty about job security. 4. Customer Relations: Sales teams are crucial for maintaining customer relationships. A reduced team might impact service quality and customer satisfaction. 5. Strategic Realignment: This could be part of a larger strategic realignment. Companies often restructure to focus on core competencies or to adapt to market changes. 6. Financial Health: Such cuts are sometimes necessary to improve financial health. Reducing payroll can help balance budgets and improve profitability. 7. Market Response: Investors and stakeholders will closely watch the company's next moves. The market response can affect stock prices and future business opportunities. 8. Future Outlook: The long-term effects of this decision will unfold over time. It will be interesting to see how C.H. Robinson adapts and evolves in the coming months. This move by C.H. Robinson is a reminder of the ever-changing nature of our field. https://lnkd.in/gmsgQTFD

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People + Technology yields the highest level of service. Communicating and collaborating with customers becomes difficult when the human aspect is diminished. #Freight #Logistics #SupplyChain #Truckload #FreightBroker #DryVan #ShippingSolutions #layoffs https://lnkd.in/eQ2U_j5S

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This is great information from Scooter, and consistent with what we find when we go through discovery with many shippers. Concept Logistics' 8% rebill across our network is one of the things I'm most proud of. Our LTL team provides just the right amount of human expertise alongside a great TMS (Tai Software) and great processes, which many shippers need if they want to clean up their location information and get guidance on reweigh and reclass improvements. Of course there are some shippers that have undesirable freight for LTL carriers that still get 12%-14%, but they started at 45% prior to Concept taking over. Scooter is correct, there are tools for all budgets, and there are Brokers with some of the tools to stop the "death by a million papercuts" that LTL can become. #GreatInsights #ABetterWay

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