Trucking News

Noteworthy news bullets we thought you’d enjoy

• July manufacturing output trends down slightly but still growing, reports ISM (source: Logistics Management)
  • July manufacturing output picked up where June left off – a sequential decline in growth rate – but still growing overall.
  • The PMI reading came in at 52.8 (50 or greater indicates growth), compared to June’s reading of 53.0. New orders fell to a reading of 48.0, and Production came in at 53.5.

• Class 8 truck orders slump in July despite strong demand (source: Freight Waves)
  • July orders amounted to a paltry 10,600 units, the weakest July since 2019.
  • “OEMs could increase production by 10% over the current rate if they could get the parts, but the supply chain remains clogged,” said VP of commercial vehicles for FTR Transportation Intelligence.

•  LTL carriers expanding despite slowing US economy (source: The Journal of Commerce)
  • “Demand right now is a few percentage points higher than where it was back during the prior peak period of 2018, as well as where we were at times last year,” said Jason Miller, associate professor of logistics at Michigan State University.

• Truckload driver wages up 18% over past two years (source: Fleet Owner)
  • The median truckload driver earned more than $69,000 (including salary and bonuses) in 2021, an 18% increase from 2019.
  • This is a classic case of supply and demand, per several experts. Anytime the demand greatly outweighs the supply, prices go up.

•  Trucking PPIs drop as fuel prices, surcharges fall (source: The Journal of Commerce)
  • Overall freight demand still is high, however with truck tonnage near last year’s peak levels.

• Cass Transportation Indexes – July 2022 (source: Cass Information Systems)
  • The shipments component of the Cass Freight Index rose 0.4% on a y/y basis in July, after a 2.3% decline in June and in line with expectations.
  • Freight demand has flattened out this year with inflation near 9% and significant substitution from goods back to services.
  • Inventory to sales ratios are still below historic norms, so this major tailwind for freight demand over the past 18 months is likely fading but has not yet turned to a headwind.

• Shippers pull back from air cargo as ocean reliability improves (source: Supply Chain Dive)
  • The “dark clouds” contributing to air cargo’s slide in demand since March include the war in Ukraine, inflationary pressures limiting consumer spending, and staffing shortfalls for airlines and airports.
  • Shippers are also shifting more volume away from the fast-but-expensive transport mode as ocean freight congestion eases on some lanes.
  • Global schedule reliability improved YoY in June, the first time this has occurred since the pandemic began, per Sea-Intelligence data.

• Diesel Falls $0.082 to reach $4.911 a Gallon (source: Transport Topics)
  • The average price of a gallon of diesel has fallen for eight consecutive weeks, totaling 89.9 cents.
  • This week’s decrease was the first of less than a dime in the past six weeks.
  • Diesel still costs $1.555 more for a gallon on average than it did at this time in 2021.

• U.S. Retail Spending was Flat in July (source: The Wall Street Journal)
  • Consumers are continuing to spend, although they remain mindful of rising prices.
  • “We’re seeing a shift to lower cost options” like private-label goods at grocery stores, said Jonathan Silver, CEO of Affinity Solutions.
  • Silver noted that spending at discount stores is up 17% year over year in July, while department stores sales were down 2.4%.

• US warehousing demand shifting inland: JLL (source: The Journal of Commerce)
  • The widespread demand and growth of inland distribution facilities reflects not just higher inventory levels but changing distribution patterns.
  • Markets such as Austin, TX and Jacksonville, FL are growing quickly, fed in part by demand generated by the shift of containerized imports from Los Angeles and Long Beach to ports such as Houston and Savannah.

• Import volumes continue to climb (source: DAT Freight and Analytics)
  • According to the latest data from PIERS, imports for July are up 0.8% month over month and 2.1% year over year.
  • The ports of Charleston (+14%), Savannah (+7%), and Los Angeles (+7%) had the highest month over month volume increases for July.
  • July imports to the gulf coast are up 24.2% year over year, imports to the east coast are up 8.3% year over year, and imports to the west coast is down 7.0% year over year.