Trucking News

Noteworthy news bullets we thought you’d enjoy

• Truckers Inflation Worries Go Beyond Fuel (source: Truckinginfo.com)
  • Inflation is showing up in places besides driver wages and fuel. The most dramatic example is trailers. The Producer Price Index for truck trailers and chassis has been surging, with February seeing a 6.3% monthly increase and January seeing a 5.5% monthly increase. Surging trailer costs can be blamed on rising costs in aluminum, steel, and lumber.

• Mexican Factories Gain in Supply-Chain Revamps (source: The Wall Street Journal)
  • In 2021, large American manufacturers solicited goods from six times as many suppliers based in Mexico as they did in 2020, according to procurement software firm Jaggaer.
  • The number of suppliers in China that received procurement bids declined by 9% in 2021 vs 2020.

• March manufacturing output remains steady despite sequential decline, reports ISM (source: Logistics Management)
  • March output remained strong, with a PMI reading of 57.1 (a reading of 50 or higher indicates growth), down 1.5% from February’s 58.6 – marking the 22^nd consecutive month of growth.

•  Goldman Sachs Sees More Overstocking Than Reshoring by U.S. Firms (source: Bloomberg)
  • Two years of supply shocks have made efforts to strengthen supply chain resilience top of mind for manufacturers and retailers.
  • Economists see three solutions: reshore foreign production, diversify supplier networks, overstock inventories.
  • Overstocking appears to be the most popular strategy, especially in durable goods. Companies analyzed by Goldman Sachs are aiming for inventory to sales ratios an average of 5% higher than before the pandemic.

• Nearly 80,000 active trucks could be barred from operating in California at year-end (source: CCJ)
  • Beginning 1/1/2023 the California Air Resources Board’s truck and bus regulation will ban the use of all trucks powered by 2006 and older emissions-spec engines – affecting an estimated 76,000 trucks currently operating.

• US shippers consolidating loads to create truck capacity (source: Journal of Commerce)
  • As transportation costs in the US rise, shippers are consolidating more loads and limiting the number of partial shipments, per Dean Croke at DAT Freight & Analytics.
  • Shippers (and consumers) are seemingly shifting an emphasis towards lowering transportation costs and away from fast delivery.

• Freight industry drives hot demand for trailers as capacity stays tight (source: DC Velocity)
  • March trailer orders of 37,900 units were up 40% month over month and 28% year over year. March’s orders were the highest since December of 2020.

•  March Class 8 Sales Top 20,000 (source: Transport Topics)
  • Retail Class 8 sales of 20,359 in March hit the high point for the year and still slipped 7.6% compared to 22,031 sales in March of 2021.

• March Retail Sales Grew Despite Higher Inflation (source: The National Retail Federation)
  • Prices soared in March but shoppers remained resilient and sales were healthy.
  • Retail sales in March were up 0.5% from February, and 6.9% year over year. February was up18.2% year over year.

• U.S. Factory Output Rises More Than Forecast in Broad Advance (source: Bloomberg)
  • Capacity utilization at factories rose to 78.7% in March, the highest since 2007, from 78.1% in February.
  • The pickup in rate shows manufacturers are having more success filling open positions that will allow firms to make progress on backlogs.

• Industrial demand gassing up US LTL market (source: The Journal of Commerce)
  • An increase in US manufacturing activity in the first quarter indicates more freight will hit the highway this year than in 2021, countering fears of a sharp downturn in overall demand for the US trucking market.
  • US retail sales may decline from last year’s record-setting pace but are likely to remain above pre-pandemic levels.
  • The US Federal Reserve’s index measuring total US industrial production rose 0.9% in March from February and 5.5% year over year.

•  Contract rates set record while spot rates slide (source: CCJ)
  • In the month of March shippers paid historically high prices to ensure that more of their loads moved under a longer-term contract, reducing their need for trucks in the spot market and causing those rates to soften.
  • At the same time, carriers’ operating costs increased because of higher fuel prices. Fuel cost $1.07 more per gallon in March compared to February, and $1.95 year over year.