Vivek Vanwari

Shippers ICYMI: On January 27, 2025, UPS will change the definition of the 40 lb minimum overlength penalty. Although UPS announced this change on October 21st, details regarding the dimensional calculations have yet to surface. For many shippers, if you are not getting hit with this cost today, it will be difficult to identify the impact this will have on your business based on the way UPS passes over information. Typically, UPS will only pass over information on length, width and height if it triggers a cost event.   FedEx typically provides this information 90% of the time, even if it doesn't trigger a cost event. With UPS it isn't as clear.   If you don't have a technology provider or a BI partner who can easily access this data, please make sure you are looking into the new rules around this change, so you don't get hit with penalties in January.

38

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

192

16 Comments

The freight market isn’t what it used to be. Following months of overcapacity and a weak peak season outlook, experts say the environment is ripe for more mergers and acquisitions. https://lnkd.in/g8js6PEy #LLA #Freight #Market

7

Dive into the complexities of shipping disruptions and discover innovative solutions to mitigate their effects on your supply chain. Read Ryder's blog post for expert insights and guidance. #Logistics #3PL #E-commerce

1

2024’s volatility - strikes, congestion, and unpredictable freight prices has made static contracts and lengthy RFPs harder to rely on. That’s why SHIPSTA by Freightos launched “Rate Refresh,” giving shippers the flexibility to adjust rates quarterly, monthly, or even daily to stay aligned with market conditions. PUMA Group implemented Rate Refresh earlier this year, and as Peter Stockhammer, Head of Global Logistics Procurement at PUMA Group, shared: “We can quickly adapt to changing market dynamics without extensive work required from us or our partners.” Now available to all Freightos customers, Rate Refresh helps procurement teams move from reactive to proactive, combining dynamic rate updates with Freightos’ spot pricing and booking tools. Like my colleague Christian Wilhelm likes to say, “We’re always innovating to provide our clients with tools they need to navigate today!” What’s one thing you’d innovate in the RFP process? Let me know in the comments! For more info visit: https://lnkd.in/drkv5UCg #GlobalFreight #FreightProcurement #LogisticsTechnology #SupplyChainManagement

17

2 Comments

CNBC today published the article linked below stating, "America's freight recession is nearing its end...with retail orders and rates headed higher." There are just a few problems: [1]: The article cites data from Motive showing truck visits to distribution centers of the top 5 retailers are up 30% year-over-year as evidence. While Walmart, Target, Costco, Home Depot, and Amazon are indeed large entities (assuming these are the 5 retailers mentioned), they are a small fraction of the overall freight market. And I highly question this figure's accuracy, as Census Bureau data aren't showing sharp increases in retail sales in these sectors to match. [2]: The article ignores that Cass's shipments data for June showed a steep slide to the worst reading in 4 years. Cass shipments is directionally very predictive of freight market dynamics. [3]: The article states, "Data across the retail sector shows year-over-year order increases through June, including at department stores, electronics, and apparel retailers with bricks-and-mortar locations (32.9%), home improvement (24.4%), grocery & superstores (22.1%), and discount retailers & wholesalers (13%)." These numbers can't be accurate nationally, as we aren't seeing increases in real sales or real inventories even close to these totals for these industries based on Census Bureau data. Implication: retail trade is NOT the primary driver of domestic trucking activity. Rather, its domestic manufacturing, and domestic manufacturing output continues to be weak. We are finally seeing signs that seasonally adjusted manufacturing output found a bottom in several industries in late Q1/early Q2 2024, but we still have a way to go before this freight recession ends for trucking firms. #supplychain #supplychainmanagement #shipsandshipping #trucking #freight https://lnkd.in/gAUpaa-Q

333

48 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

189

20 Comments

Follow & Visit Us www.sobelnet.com Brian C. Wills Bisham Deena Ocean Freight Bookings: Catalyst for Supply Chain Digitization, Say Software Vendors Changes in how ocean freight bookings are managed are poised to drive comprehensive digitization across containerized supply chains, according to software vendors specializing in solutions for shippers and forwarders. The prevailing belief is that as electronic bookings become more standardized among ocean carriers, the data generated can significantly enhance coordination both upstream and downstream of the booking process. Currently, booking procedures are often isolated events, but a unified electronic booking system accessible to all stakeholders—shippers, forwarders, and carriers alike—could revolutionize coordination efforts before and after bookings are confirmed. #SupplyChain #Logistics #DigitalTransformation #ShippingIndustry #OceanFreight #FreightForwarding #ShippingTechnology #ContainerShipping #MaritimeLogistics #ElectronicBooking #TradeTech #StreamlinedShipping #ShippingCoordination #SupplyChainInnovation #ShippingData #CarrierManagement #NVO #ShippingSoftware #SupplyChainManagement #LogisticsTech #FreightDigitization

2

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

275

13 Comments

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

306

42 Comments

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

204

21 Comments

"The end to one of the worst freight markets in history may be closer than it appears." As we seem to be "at the bottom of the market," when can we expect the market to look up? Check out this article to find more insights and trends on the freight market here: https://lnkd.in/gcpER3b6 #FreightWaves #Freight #Trucking

10

If you are a shipper importing into East/Gulf Coast ports during peak season, capacity that hasn't been procured already will likely be difficult - and definitely more expensive - to obtain in the coming months. Why? Planned East/Gulf Coast capacity additions have been consumed by the Asia to Europe routes because of longer shipping times due to Cape of Good Hope re-routings and congestion. Increased asset capacity was planned for West Coast ports in an attempt to alleviate the original, larger capacity and congestion problems. This maneuver by shipping lines came before the problems on the East Coast became apparent. No single solution will help shippers avoid higher ocean rates. But they can potentially reduce the risk of higher rates and maintain timely deliveries by diversifying their shipping options and being adaptable during this fluctuating peak season. For more details, see our recent blog post. https://lnkd.in/gKPPDVhG

13

Resharing the Inbound Logistics supplement on the innovations in chemical logistics. Great to see Will Schweda III's insights on optimizing logistics capabilities for a stronger future, and Maneet Singh talking about AI's role in enhancing decision-making and efficiency.

45

1 Comment

Strong results from major shipping companies like Evergreen and HMM show how the industry is thriving in Q3. With profits up, it’s clear that staying efficient, adapting to market changes, and making smart investments in technology are paying off. For us in logistics, these results highlight the importance of keeping our operations streamlined and exploring new opportunities for growth. The shipping world is constantly evolving, and by focusing on innovation and building strong partnerships, we can continue to stay ahead of the curve. There’s plenty of room for growth as we look ahead, and the key will be staying flexible and ready for what’s next.

2

So, what do you think about this?! Increasing shareholder value? At a time where we see a contraction on the number of Transcontinental LTL Carriers and a relative contraction in the LTL segment (for now) Another potential sale or spinoff. Don't get me wrong, they could stand on their own and turn a profit, a nice profit, as they absorbed the Watkins System, American freight and Viking Freight . They have the people and the equipment. They could stand alone. Would a PE Group jump in? They also see Value in the pieces and possibly the whole company, but they would want their return quickly. I don't see any of the larger forwarders jumping in. KN should have grabbed Forward Air weeks ago as that would have been a real game changer, they still can't get their road act together. This could be very interesting down the road. Business will bounce back Q3 and Q4 and their busy season starts! #LTL #roadfreight #supplychain #mergersandacquistions #Shareholdervalue #getreadytolayoff #smallpackadoesnotrelatetoLTL

8

2 Comments

A few quick thoughts about the recent FreightWaves State of Freight article for October (https://lnkd.in/gxg7tCk9). •I concur that we are at the bottom of the current rate cycle, but I'm less optimistic that, "we are about to see a great freight market." •I don't quite know what to make of the statement, “What we need to look at is a combination of volume and capacity.” And when that observation is made, Fuller said, the conclusion is “that it’s been a pretty strong market.” I would disagree with the claim that the market has been strong (certainly in 2024), as freight volumes are still down year-over-year (https://lnkd.in/gZWbFVXw), and spot rates are down from last year (https://lnkd.in/gCVMqY5T) •That Hurricanes Helene and Milton minimally affected the freight market echoes what I've been saying for months about such events (https://lnkd.in/gg5ZyJ2Z) Implication: while I've publicly stated that I could see the freight market turning more in carriers' favor by late Q1 to early Q2 2025, I'm less optimistic about 2025 looking anything like the second half of 2017 or the first half of 2018 (and certainly nothing like 2021) from a carrier standpoint. #supplychain #supplychainmanagement #freight #trucking #truckload #transportation

124

12 Comments

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

188

16 Comments