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Trucking News

MFW Musing’s – December 17, 2021

Industry Insights / December 17, 2021
MFW makes the wheels of transportation FAR less squeaky
We do this by having an extremely high give a dang level, proactive communication, and shooting straight – even if the news isn’t great

Noteworthy news bullets we thought you’d enjoy

  • November manufacturing output sees growth, reports ISM (source: Logistics Management
    • New orders, which are commonly referred to as the engine that drives manufacturing, increased 1.7%, to 61.5, growing for the 18th consecutive month
    • Production – at 61.5 – grew 2.2% from October, growing for the 18th consecutive month
    • ISM said raw materials shortages remain a constraint to production growth, along with factory floor staffing and direct-labor turnover.
  • Cass: High rates drive record freight costs (source: Freight Waves
    • The Cass Freight Index recorded a 4.5% year-over-year increase in # of shipments in November, and a 2.6% increase from October.
    • The expenditures index index established a record in the month and was 52.1% higher than in November 2019.
    • The bulk of the change has come from sharp increases in freight rates as the transportation industry grapples to meet a sustained level of elevated demand with a suppressed amount of capacity.
  • We send back 30% of what we buy online. Our return culture alters the supply chain (source: The Los Angeles Times
    • Much of the focus and frustration with delays in supply chains is towards the “forward” supply chain – the path from raw material to customer.
    • The other side of the supply chain – the process of returning a product – also plays a significant role. Across e-commerce, about 30% of purchases are returned and about half of clothing is sent back. These returns are costly and inefficient, because the economies of scale the forward supply chain utilizes doesn’t exist on the return. In the end who pays for this? The answer is always the consumer. Food for thought.
  • Diesel Continues Slow decline, drops 0.26 cents to $3.315 a Gallon (Source: Transport Topics.
    • Fuel costs $1.157 more for a gallon than it did this time in 2020.
  •  Inability to produce pushes Class 8 orders to lowest November in 26 years (source: Freight Waves)
    • The lowest # of orders in 26 Novembers are a reflection of a large backlog of unbuilt trucks rather than a lack of demand. Current backlog is at 14 months, meaning a power unit ordered in December of 2021 would be delivered in February of 2023.
  • Trucking jobs nearing pre-pandemic numbers (source: Land Line)
    • According to the Labor Department, there are nearly 6,000 more truck drivers than there were a month ago. For the first time, employment in trucking is higher than it was in March 2020.
  • General rate increases point toward higher LTL pricing (source: The Journal of Commerce)
    • LTL pricing signs are pointing upward as 2022 approaches, with trucking companies scheduling first-quarter general rate increases (GRIs) for non-contract customers.
    • Old Dominion Freight Line is the latest to announce a rate increase, announcing a 4.9% increase effective January 3rd, 2022.
    • “Pretty much all the LTL carriers saw double-digit price increases in the third quarter. Everyone is showing discipline,” says Lee Klaskow, senior freight analyst at Bloomberg Intelligence.
  • FedEx, UPS Turn Record Holiday Surge Into Someone Else’s Problem (source: Bloomberg)
    • Retailers have increasingly turned to regional couriers like LSO to help shuffle packages that delivery titans UPS and FedEx can’t – or won’t.
    • UPS and FedEx have opted to raise prices and turn away lower yielding business rather than rush to build additional capacity. It’s unclear if the smaller players are ready as they too grapple with transportation logjams and worker shortages.