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Noteworthy news bullets we thought you’d enjoy
- US surface transport rates jump amid capacity disruption (source: The Journal of Commerce)
- According to the latest Cass Freight Index, US transportation costs leaped 11 percent from May to June, with supply chain disruptions that also led to a 3 percent drop in shipping volumes from May to June.
- Freight expenditures measured by the index were truckload rates, which represent about half the dollars spent, followed by rail, LTL, and parcel.
- Diesel hits $3.338 a Gallon as of 7/13/21 (source: Transport Topics)
- Diesel is now 90 cents a gallon more than one year ago.
- Oil has also topped $75 a barrel, hitting a 33 month high.
- State of Logistics 2021: Less than Truckload (LTL) (source: Logistics Management)
- LTL carriers are now doing lots of “middle-mile” deliveries to warehouses for those online giants, who as a result have become big, reliable customers to shrewd LTL carriers.
- When will this LTL revival end? No time soon, analysts predict. “The only thing that could spoil this party would be the carriers adding capacity in the form of new trucks”.
- Assuming drivers could be found, doing so would allow for more volume for the LTL trucking companies, but would shift the pricing supply/demand curve towards the shippers.
- An answer for shippers coping with rising costs? “Transportation is generally not more than 7% of the cost of the product they are selling. If transportation goes up 10%, that’s less than 1% of the cost of the product. Pass it on to the consumer.”
- Estes sees no end to supply-demand imbalance (source: Freightwaves)
- Rob Estes – CEO of Estes Express, the largest privately held transportation carrier in North America, hasn’t seen demand spikes and tight capacity like this in his four-plus decades in the industry.
- The LTL business is highly concentrated, with 70% of the volume going to the top 10 carriers.
- LTL carriers have been regularly raising rates on an annual basis since emerging from the Great Recession of the late 2000’s, and this years raises have been among the largest.
- Estes told a tale of a large customer that began refusing to take the company’s calls because it didn’t want to be notified of yet another rate increase.
- FedEx Freight prunes 1,400 customers to protect service levels (source: Freight Waves)
- FedEx Freight is firing approximately 1,400 less-than-truckload customers effective immediately (June 14, 2021).
- The affected customers are a mix of manufacturers, retailers, and logistics companies – all deemed to negatively affect backlogs and constrained services centers.
- An anonymous top FedEx executive stated “I’ve never seen the LTL networks in general like they are today. Never. Not even one-time spikes.”
- NRF now says retail sales could grow as much as 13.5% this year and top $4.4 trillion (source: Retail Dive)
- U.S. retail sales could grow between 10.5% and 13.5% this year and reach between $4.4 trillion and $4.56 trillion, according to a revised forecast from the National Retail Federation. The new estimate far exceeds the organization’s February projection of at least 6.5% growth, made when there was much uncertainty about consumer spending, vaccine distribution, virus infection rates and additional fiscal stimulus.
- L.A. Port Hits Milestone for Processing Containers (source: Transport Topics)
- The Port of Los Angeles became the first port in the Western Hemisphere to process 10 million container units in a 12-month period, reaching the milestone on June 10.
- Analysts site consumer buying surge brought on by the corona-virus pandemic along with restocking of retailers and e-commerce warehouses across the country for the dramatic rise in imports.
- Home Depot now has its own ship. That’s an ominous sign (source: Freightwaves)
- Home Depot has officially reserved a ship for its sole use, indicating how tight trans-Pacific capacity has become and how worried retailers are about getting goods on shelves at any cost. Service will begin in July.
- CDL holders banned from driving due to drugs/alcohol top 60,000 (source: Freight Waves)
- The number of U.S. truck drivers sidelined due to substance abuse violations has surpassed 60,000 and continues to climb by 2,000-3,000 per month.
- The percentage of drivers who are completing the ‘Return-to-duty’ process has increased over the past year from 5.2% in May 2020 to 22.1% in May 2021.
- Drivers play a KEY role in the supply/demand shift that has elevated the price of transportation. It is not a lack of tractors/trailers that has tightened capacity, the lack of drivers is the main force. Because of the banned CDL holders, carriers have focused heavily on recruiting which has led to…
- June’s hiring gain in trucking the best in seven years: Bureau of Labor Statistics (source: The Journal of Commerce)
- The US trucking industry in June saw the highest one-month gain in employment in seven years, with the overall number of drivers returning to a level seen prior to the COVID-19 pandemic, adding 24,5000 jobs.
- June Truck Orders Moderate as Expected (source: Truckinginfo.com)
- In June, North American Class 8 orders were between 25,700 and 26,700 units, up 11-13% from May, according to ACT Research officials