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Trucking News

MFW Musing’s – January 18, 2022

Industry Insights / January 18, 2022
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

  • Manufacturing ends 2021 with sequential decline but still on a growth track (source: Logistics Management)
    • While falling sequentially from November to December, manufacturing output remained on a growth path to finish 2021, per data issued by the Institute for Supply Management (ISM).
    • The report’s key metric, the PMI, was 58.7, down 2.4% from November. A reading of 50 or higher indicates growth.
    • This marks the 19th consecutive month of growth in PMI; and is also the 19th consecutive month of growth for the overall economy.
  • Services economy finishes 2021 on the right side of grown, reports ISM (source: Logistics Management)
    • The December Services PMI, reported by the Institute for Supply Management (ISM) showed a score of 62.0 (a reading of 50 or higher signals growth), which was the 18th consecutive month of growth for Services PMI.
    • The December PMI is 0.5% behind the 12-month average of 62.5 and 7.1% below November’s 69.1 PMI.
  • Retail Sales finish 2021 on solid footing (source: Logistics Management)
    • United States retail sales had a strong end to 2021.
    • Per the National Retail Federation (NRF), December retail sales of $626.8B rose 16.9% year over year. Retail sales for the year in total saw a 19.3% annual gain.
  • It wasn’t cheap, but the freight came through (source: Cass Transportation Index)
    • The Cass Freight Index, which measures the total amount spent of freight, measured at 4.419 in December – up 44% year over year, and up 3.4% from November.
    • The index rose 38% in 2021, after a 7% decline in 2020 and no change in 2019.
  •  Forecast says shipping costs will stay “sky high” through first quarter (source: DC Velocity)
    • Sky high shipping costs are expected to continue into the new year with transportation spend rising to record levels in the first quarter of 2022.
    • The records levels are expected to be due to the combination of rate increases applied by parcel and less than truckload carriers along with ongoing strong pricing power for truckload fleets, per the January 2022 Cowen/AFS Freight Index.
  • Shippers Compete for Carriers Amid Capacity Crunch (Source: Transport Topics)
    • In this capacity constrained freight environment, shippers are competing to secure carriers.
    • Paying higher rates no longer guarantees you will win, because everyone is paying higher rates. Factors suck as speed of pickup at facilities, consistency in demand, payment terms, and digitized document processes are factors that determine who carriers want to work with.
  • Class 8 Sales in December climb to high point of 2021 (source: Transport Topics)
    • Class 8 U.S. retail sales in December rose 15.5% compared with a year earlier, and reached the high point for the year.
    • Sales in December hit 24,716, compared with 21,402 in December of 2020.
    • Sales for the full year were up 15.6% at 221,889 compared with 191,900 in 2020.
  • National Diesel average clocked in at $3.657 per Gallon as of 1/10/22 (source: US Energy Information Administration)
    • Fuel costs $0.978 more for a gallon than it did this time in 2021.
  • New UPS surcharges to take effect Jan. 16 (source: Freight Waves)
    • New delivery surcharges will take effect Jan. 16, three weeks after the company’s 2022 rate increases take effect and one day after its fees on peak-season fall away.
    • UPS will impose $0.30 surcharges on all domestic ground residential deliveries, and on parcels moving via its SurePost program with the U.S. Postal Service.
    • UPS will also impose a $3.50 per piece surcharge on shipments that require so-called additional handling and a $40 per package surcharge on “large” packages that exceed 96 inches in length or 130 inches in combined length and girth. These shipments are not able to be processed through the UPS conveyor system so must be handled manually, thus are more costly to process.
  • Logistics Hiring Surge in California’s Inland Empire Can’t Satisfy Demand (source: The Wall Street Journal)
    • The number of people working in transportation and warehousing near the ports in Southern California has surged almost 24% during the Covid-19 pandemic – but vacancies remain, with approximately 5,600 jobs still open.
  • Efforts to Recruit New Truck Drivers Moves into High Schools (source: Transport Topics)
    • An all-volunteer effort out of Louisville, KY, called the Next Generation in Trucking Associations, is working with educators to help raise awareness of truck driving careers among students.
    • The goal of the organization is to raise awareness of the trucking industry, give high school students another alternative to attending 4 year colleges and entering the work force with a large amount of student debt to pay off.
  • Feds fast-tracking controversial trucker pilot program (source: Freight Waves)
    • A long awaited but controversial initiative that will allow young truck drivers to haul freight across state lines is seeking fast track status from the White House.
    • The Federal Motor Carrier Safety Administration (FMCSA) has asked the Office of Management and Budget for review and emergency approval of a three-year apprenticeship program to allow carriers to employ drivers between the ages of 18 and 21 for hauling freight across state lines.
    • The FMCSA expects the pilot to receive 44,945 applications once approved – adding YOUNG drivers to the industry.
  • Port Tracker report targets a return to normal for U.S.-bound import volumes (source: Logistics Management)
    • A return to normalcy, as it relates to import levels, is expected in 2022 according to the most recent edition of the Port Tracker Report issued by the National Retail Federation (NRF).
    • The ports surveyed in the report include: Los Angeles/Long Beach, Oakland, Tacoma, Seattle, Houston, Jacksonville, and Fort Lauderdale.