West Side Transport, founded by Don Vogt over 50 years ago, has grown into a significant operation with a fleet of 550 trucks, 2,300 trailers and 700 employees. The company, based in Cedar Rapids, Iowa, offers general commodities truckload transportation and logistics services throughout the Midwest and beyond.

“With the acquisition of West Side Transport, EVO transforms itself into a diversified truckload carrier servicing a portfolio of some of the largest shippers in the nation,” said Kris Kohls
President and COO of EVO Transportation. “West Side Transport will continue to operate as its own separate and autonomous division under Ron Joseph and we are excited about the opportunity to improve costs and drive efficiencies and leverage our combined capabilities to ultimately provide a more compelling offering to our customers.”

Ron Joseph, former chief operating officer of West Side Transport, has been promoted to president of the division. Don Vogt will serve as a board observer, providing strategic guidance to the combined company.

“We are excited about partnering with EVO and believe that our complementary strengths will help both companies grow and prosper,” said Joseph.

The transaction was supported by debt and equity financing from WhiteHawk Capital Partners and Antara Capital. Finnea Group acted as financial adviser to Vogt and West Side Transport, while Simmons Perrine Moyer Bergman PLC served as legal adviser. Steven Moore provided transportation M&A consulting services, and Paul Hastings LLP acted as legal adviser to EVO.

Expanding geographic footprint

The acquisition of West Side Transport significantly expands EVO’s geographic footprint, allowing the company to better serve customers across the United States. With additional terminals in Circle Pines, Minnesota; Glenwood, Illinois; Indianapolis; Canton, Michigan; Columbus, Ohio; and Chattanooga, Tennessee, Phoenix-based EVO can now offer more comprehensive and efficient transportation solutions to its customers.

By combining the strengths of both companies, EVO and West Side Transport hope to be able to leverage their combined resources to enhance their service offerings. This includes the potential for improved freight consolidation, more efficient routing and enhanced customer support.

Strategic partnership for growth

The partnership between EVO and West Side Transport is a strategic move that both companies believe positions them for continued growth and success. By joining forces, they hope to capitalize on the increasing demand for reliable and efficient transportation services.

“From the moment we first set foot in Cedar Rapids, EVO was beyond excited about West Side Transport,” said Michael Bayles, CEO of EVO Transportation. “Don Vogt dedicated his life to building an absolute best-in-class operation and we were drawn immediately to the quality of staff, drivers, equipment and facilities. We are very excited about West Side joining the EVO family and look forward to honoring Don’s legacy.”

“I am proud of the legacy that West Side Transport has built over the past 50 years,” said Vogt. “I am confident that the partnership with EVO will ensure the continued growth and success of the company.”

The post EVO acquires West Side Transport, expands geographic footprint appeared first on FreightWaves.

The benchmark diesel price used for most fuel surcharges rose Monday, ending a string of 10 consecutive weeks of declines.

The price posted Monday by the Department of Energy/Energy Information Administration rose 1.3 cents a gallon to $3.539. It was the first increase since July 8, when the price climbed 5.2 cents to $3.865, 32.6 cents per gallon more than the latest price.

Monday’s increase comes after several days in futures and physical markets that had shown signs of a possible rebound from the slide in diesel prices that has been the feature of markets since early July, when the commodity price of ultra low sulfur diesel (ULSD) on the CME commodity exchange stood at about $2.60 a gallon.

That futures price for ULSD bottomed out Sept. 13 with a settlement of $2.0843 per gallon – the lowest settlement since late November 2021.

But after a sharp increase that added almost 9 cents per gallon to the price in just four trading days, to a settlement last Thursday of $2.172, the price of ULSD on CME has fallen two days in a row. On Monday, it dropped 1.64 cents to settle at $2.1451, just a little more than 6 cents above the recent low.

John Kemp, the former chief energy correspondent for Reuters who now provides independent commentary on markets, reviewed the data on futures holdings in the past week in both the U.S. and Europe. He described the positions by traders that are short the market – meaning they are betting on a decline – as being at record levels. 

Those short positions in diesel have been taken, Kemp said, “as inventories climb and manufacturers report a deepening slowdown in business activity across all major industrial regions.”

“Persistent selling has anticipated, accelerated and amplified the slump in both crude prices and distillate refining margins over the last two months,” Kemp added.

The reference to the refining margins reflects the fact that diesel has fallen at a faster rate than crude.

In early July, converting the per-barrel price of crude to a per-gallon price and comparing the futures prices of Brent crude to ULSD yielded a spread of about 57 cents a gallon. But that same comparison now comes in at 36-38 cents per gallon, so that about 20 cents of the decline in diesel prices can be attributed to weakness in that market rather than the overall decline in crude.

The few market bulls that are still out there have pointed to data on inventories showing that levels remain relatively tight, and certainly are not on a course that would suggest a steep fall in the price of oil is justified.

For example, inventories of ULSD in the U.S. for the week ended Sept. 13 were 125.1 million barrels, according to EIA data. While that is more than the two prior years for the second week of September, it is still less than the five-year average of 128.2 million barrels, a figure that excludes the swollen inventories of 2020.

But in his weekly commentary, economist Philip Verleger said that may be a function of storage just not being as valuable as it usually is.

Verleger quoted a report from Energy Intelligence, a publishing company with a variety of outlets covering markets. 

“Global storage levels are loosening their tight link to benchmark oil prices due to profound structural changes in the market,” the EI report said. “New forms of trading, changing crude supply flows and geographical shifts in refining hubs and demand centers have combined to reduce the influence of inventories on price formation.”

Verleger sums up the situation with an observation that should make any consumer happy: “The prospects for higher prices are dismal given limited possibilities for consumption increases, further discoveries across the world, the enfeebled oil cartel structure (technically, a failing restrictive commodity agreement), decreasing refining margins, diminished support from commodity speculators, and eroding confidence in oil producers’ ability to rectify the situation.”

Bloomberg notes another bearish factor in the market. It reported last week that the autumn maintenance season in the U.S. – when refiners undertake major projects that can require significant refining capacity off the market – is expected to be light.

Those refiners are going to take only about 529,000 barrels per day of refining capacity offline, Bloomberg said, quoting IIR Energy, an analytics firm.

Bloomberg reported that’s about half the amount taken offline last year and is the lowest since 2021.

More articles by John Kingston

Another nuclear verdict in trucking: $160M award against Daimler

Trimble and Platform Science pushed hard to get deal done before Vegas meeting

Supreme Court to hear case of truck driver who failed CBD-related drug test

The post After 10 straight weeks of declines, DOE/EIA diesel price up slightly appeared first on FreightWaves.

The weather forecasting company predicts the storm will impact areas that were affected by Hurricane Idalia in August 2023. The National Hurricane Center issued an advisory Monday about a possible tropical cyclone for parts of Mexico and Cuba but said the storm was forecast to strengthen.

“We expect this evolving storm threat to rapidly intensify into a hurricane,” said AccuWeather Lead Hurricane Expert Alex DaSilva. “Don’t wait to prepare if you’re in the path of this storm. There is a possibility that we could be dealing with a major hurricane at landfall.”

AccuWeather expects 4 to 8 inches of rain across the Florida Panhandle and Big Bend Region through Saturday, with some areas seeing 8 to 12 inches near where the storm makes landfall. 

The Panama City Port Authority in Florida is aware of the storm and monitoring it, said spokeswoman Sarah Harris. Operations will continue. Ports in Alabama and New Orleans were also closely monitoring the potential severe weather. 

Leaders of the Manatee County Port Authority in Florida were working closely with local, state and federal agencies on Monday ahead of the potential storm. The staff plans to meet with a heavy weather advisory group, which consists of a variety of entities, to discuss necessary steps, said spokeswoman Virginia Zimmermann. 

Six hurricanes have made landfall so far this year, which experts predicted to be an above-average season. Hurricane Francine made landfall in Louisiana on Sept. 11, causing an estimated $9 billion in damage and economic loss. 

The post Gulf Coast ports monitoring storm that could develop into hurricane appeared first on FreightWaves.

Alaska Air Group (NYSE: ALK) said it hired Ian Morgan as vice president of cargo at Alaska Airlines and that Jason Berry, the president of regional subsidiary Horizon Air who previously headed Air Canada’s cargo division, will oversee the cargo business after being promoted to executive vice president of the group. Berry will continue in his role as Horizon’s president.

Morgan succeeds Adam Drouhard, managing director of cargo, at the head of Alaska Air Cargo. He will lead day-to-day cargo operations and nearly 600 cargo employees. He will also be responsible for managing the continued growth of Alaska Air Group’s cargo business – operated by both Hawaiian Airlines and Alaska Airlines.

He has decades of experience working with large international cargo airlines. Morgan joins Alaska from ECS Group, a cargo handling agency where he was U.S. commercial director for the past year. The industry veteran spent the previous nine years as vice president cargo, North and South America, for Qatar Airways, the world’s largest air cargo operator by volume. He also spent 12 years as the top executive in the Americas for Cargolux, a major operator of Boeing 747 freighters, and in senior leadership roles at British Airways and defunct Centurion Airlines.

An Alaska Air spokesperson said Drouhard will continue as managing director of cargo.

Alaska Airlines operates three Boeing 737-700s and two 737-800 converted freighters acquired this year. For years the airline has operated cargo routes between Seattle and cities in Alaska. In June, Alaska Air Cargo began offering twice-weekly service to Los Angeles from Seattle. The 737s are narrowbody freighters. Qatar Airways Cargo, by comparison, operates 28 Boeing 777 freighters and manages belly shipments in more than 220 widebody passenger aircraft. The 777 freighter can carry four to five times as much cargo as a 737-700/800.

Hawaiian Airlines operates two dozen long-range A330-200 passenger jets and has started taking delivery of new Boeing 787 Dreamliners. The large aircraft are used on long-range routes to Japan and the United States but offer the opportunity for Alaska to expand into other international markets. Alaska Air’s management has said that the two cargo networks compliment each other and that the ability to connect to more destinations will help attract shippers.

The company intends to operate Alaska Airlines and Hawaiian Airlines as separate brands but under a single operating certificate. The merger also puts Alaska Airlines in charge of Hawaiian’s new venture flying e-commerce packages around the United States for Amazon. Hawaiian currently operates six Airbus A330-300 cargo jets supplied by Amazon, with four more converted A330s scheduled to join the fleet by early 2025.

Berry spent six years directing cargo operations at Alaska Airlines before joining Air Canada in early 2021 as vice president of cargo. He left Air Canada and returned to Alaska Air in February 2023 for personal reasons.

Berry helped develop the business case for Air Canada’s establishing a new freighter airline and investing hundreds of millions of dollars in an all-cargo fleet. Air Canada currently has six Boeing 767-300 freighters that it converted from passenger configuration and two factory-built 767 cargo jets. The airline recently parked the two late-model freighters because of soft demand.

Berry also was the architect of Air Canada’s freighter network, which includes destinations in the United States, South America and Europe. And he pushed for Air Canada’s expansion of a refrigerated warehouse in Toronto and the cargo terminal in Frankfurt, Germany, as well as partnerships with digital freight marketplaces.

“We couldn’t be more thrilled about this next chapter for Alaska Air Cargo,” said Group President and CEO Ben Minicucci, in the announcement. “With these leaders, we’re well positioned for unlimited future success as we grow and expand our cargo operations to deliver for everyone who depends on us.”

Alaska and Hawaiian will gradually integrate cargo operations in the coming weeks and months, Alaska Air Cargo said on its website.

Click here for more FreightWaves/American Shipper articles by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

RECOMMENDED READING:

DOT approves $1.9B Alaska Air, Hawaiian merger

Boeing quality issue delays Alaska Airlines’ converted freighters

Alaska Airlines to expand freighter service to Los Angeles

The post Alaska Air changes cargo leaders in wake of Hawaiian merger appeared first on FreightWaves.

Jon Davis, chief meteorologist for Everstream Analytics, tells FreightWaves that along with the disruptions to port operations, shipping across the western Pacific has been impacted via delays and increased congestion. He warns the Gulf Coast should be on high alert this week.

“The Gulf of Mexico will have significant issues … as a potentially strong hurricane develops and moves northward across the Gulf of Mexico impacting the U.S. Gulf Coast [late this week] or over the weekend of September 28-29,” Davis forecast. “The ports along the U.S. Gulf Coast should be on high alert for issues … .”  

But these highly destructive tropical cyclones impact more than the ports and ship arrivals. The storms can also affect the volume of bulk and freight that can be moved along the waterway superhighway.

Trade takes people and can destroy the products they make. The world of trade is reliant on the transport of products/commodities. Typhoons have impacted some of those trade volumes. For the agricultural trade, Typhoons can be devastating for crops, which means the bulk industry can be affected with less product to move.

According to the U.S. Department of Agriculture, Taiwan’s loss of crops from Typhoon Gaemi was a whopping estimated $58.3 million. With the addition of livestock and fish production, the estimated loss exceeds $86 million. The affected area spans 23,060 hectares, with a damage severity of 27%, translating to 6,305 unharvestable hectares.

“The crops most impacted include bananas, guavas, oranges, bamboo shoots, and pears. These crops were particularly vulnerable due to strong winds and heavy rains, which caused physical damage, waterlogging, and increased risk of fungal infections. Typhoon Gaemi swept through Taiwan July 24-25, 2024, causing widespread flooding and damage to agriculture particularly in the Southern part of Taiwan,” said the USDA report.

Taiwan is the United States’ sixth-largest export market for U.S. food and agricultural products, according to the USDA.

The other known fact of typhoons is the devastating impact of the gale-force winds and heavy rain. Industrial production can be halted for weeks, there are mass evacuations, and casualties are reported. Airports close. Inland transportation and cargo storage can be impacted if railway services are ever halted or if there is flooding and damage to the road and rail networks. On the water, ports are closed, vessels are anchored, and port congestion increases. 

But even with this turmoil, Ilya Preston, CEO of Paxafe, says navigating the turbulent typhoon risk is not always clear, and it’s important to quantify the risk across your mitigating options.

“You have to ask yourself, how are my 2nd and 3rd route options performing recently and have I made the best packaging decisions on this route?” said Preston. “Are there cost or CO2 considerations which could influence my decisions? These are the types of questions that need to be asked and answered quickly and can have an enormous impact on how shippers fare during weather-related disruptions. Data generated by today’s supply chains allow for enterprises to quickly assess many complex decision factors and make the best fact-based decision each time.”

The Intergovernmental Panel on Climate Change (IPCC), the United Nations body assessing the science related to climate change, has warned that while the number of tropical cyclones around the world is unlikely to increase, a storm’s intensity may increase as the world warms.

So, what does this mean for shippers? You need to make sure you have a strong business continuity plan and build your supply chain resilience. The climate challenges facing the world have created many bottlenecks worldwide.

Typhoon Yagi-related economic losses in Vietnam are in the billions. The Red River Delta — a vital agricultural region for Vietnam, is also the location of manufacturing hubs. In Myanmar, the U.N.’s World Food Program said the deadly floods the Typhoon created were the worst in the country’s recent history.

These storms impact the entire ecosystem of trade. The recovery from the storms is vital to a thriving logistics world.

The post Typhoons causing billions in agricultural losses, disrupt global supply chains appeared first on FreightWaves.

On Episode 761 of WHAT THE TRUCK?!?, Dooner is talking about global trade and tariffs with OEC Group’s Erik Rosica. Rosica discusses how tariffs are the new political weapon in industrial relations and how supply chains are being impacted. From Section 321 tariffs to Trump’s vow to raise tariffs on China, will supply chains pay the price?

You know all those videos we post of trucks getting hit by trains? Operation Lifesaver is trying to put a stop to them and all train tragedies by bringing awareness to rail safety this Think Train Week. Operation Lifesaver’s Jennifer DeAngelis gets us on the right track when considering safety around trains. 

Buske Logistics just added five more warehouses to its portfolio. We’ll catch up with Steve Schlect to find out about that strategic move, warehousing trends and what areas are hot right now. 

Plus, Tennessee Volunteers equipment truck crashes in Arkansas; rail load toppled in Texas; cargo theft surges in Mexico; how many cameras to keep a truck safe; and more.

Watch on YouTube

Check out the WTT merch store

Visit our sponsor

Subscribe to the WTT newsletter

Apple Podcasts

Spotify

More FreightWaves Podcasts

The post Tariffs: This election’s political weapon; Think Train Week; warehousing report | WHAT THE TRUCK?!? appeared first on FreightWaves.

Supply chain management is one of the least glamorized – and most important – functions of virtually every business in the world, especially for those in rapid expansion or early stages of growth.

For Leaf Home, a home solutions provider, this became evident as the company scaled from fewer than 30 locations to over 250 across the U.S. and Canada. It quickly became clear that more advanced tools were needed to keep pace with the industry growth Leaf Home was seeing, while concurrently integrating with existing technologies, such as its ERP.

Matt McKinney, director of logistics and distribution at Leaf Home, said the company used to rely on manual processes and labor-intensive DIY solutions to manage its operations. As the company grew, this approach became unsustainable.

Leaf Home was seeking a transportation management system (TMS) that could scale with its rapid expansion to a fully streamlined operation. This time, however, Leaf Home needed more than just basic functionality such as login credentials and loading carrier rates and data — it required comprehensive support tailored to its growing needs.

Supporting complex shipping needs

Leaf Home moves a variety of products – like gutter accessories, home safety solutions and water treatment systems – across its 250-plus field offices before delivering them to homeowners, the company’s final customers.

This process means that Leaf Home’s individual field offices are, in a sense, also the organization’s customers. Products must arrive at these locations on time in order to make it to the end customers. Even one delayed shipment can have a domino effect.

“We take pride in speed to install. To uphold our promise of ‘done right at every step,’ we must prioritize timely delivery,” McKinney said. “Delays can disrupt operations and impact customer satisfaction.”

Leaf Home’s wide range of products and short shipping timelines made it crucial for the company to find a logistics partner that was inherently adaptable. McKinney noted the importance of finding a partner that could work quickly and collaboratively with Leaf Home to tackle complex supply chain scenarios.

“Uber Freight felt like the obvious choice,” McKinney said. “There are plenty of systems with good reputations, but many only offer a tool, not a partnership. Uber Freight delivered both, and it’s crucial to work with a partner who aligns with your approach to problem solving and innovation.”

By leveraging Uber Freight’s TMS, Leaf Home was able to consolidate operations into a single system with automation, enabling high growth without increasing head count. 

What sets Uber Freight apart

Uber Freight manages $20 billion worth of freight across multiple industries and has a proven history of working directly with shippers to shape its technological offerings, resulting in customizable solutions. The company works with each customer on an individual basis to find the best solutions to fit their unique objectives, according to Michelle McBride, director of logistics applications at Uber Freight.

“It’s not just about technology,” said McBride. “It’s about understanding what it takes to be a true partner in a Software-as-a-Service (SaaS) environment.”

Leaf Home was drawn to the dedicated team overseeing every aspect of the implementation, from financials to freight optimization. “This comprehensive support was the key differentiator,” said McKinney. “Collaborating with Uber Freight’s IT team and driving the process forward enabled us to achieve outcomes we couldn’t before, ultimately enhancing customer service.”

Recently, Uber Freight has invested over $120 million in technological innovations designed to meet the needs of both its customers and the carriers in its network. The company offers a vast ecosystem of solutions, ranging from real-time visibility tools to workflow automation offerings. 

At the end of the day, however, Uber Freight’s true power lies in the company’s ability to meet its customers where they are and guide them into the future.

“When you look at the investment that has gone into our infrastructure it has to be intuitive, user-friendly and customizable,” McBride said. “None of it matters if the customers’ objectives are not properly understood.”

For Leaf Home, that objective is rapid adaptability. Uber Freight has worked with the company to integrate a suite of solutions that support that objective while simultaneously gathering robust and actionable data.

“Data is our north star,” McKinney said. “Without reliable data, we’re essentially flying blind. ”

With Uber Freight, Leaf Home is able to access market comparisons and go into carrier conversations with negotiating power for the first time, according to McKinney. This ability – along with features like Uber Freight’s shipment routing guide and automation tools – have fundamentally changed how Leaf Home runs its supply chain.

Click here to learn more about how Uber Freight’s TMS can help you run a more efficient operation.

Click here to access the Uber Freight and Leaf Home on-demand webinar.

The post Uber Freight and Leaf Home collaborate to support explosive growth appeared first on FreightWaves.

At the same time, port employers said they remain open to negotiations but have been unable to schedule bargaining with the longshore union.

Elsewhere, shipping lines are tacking on peak season surcharges in anticipation of extended delays if port activity comes to a standstill.

On Monday the American Apparel & Footwear Association (AAFA) in a letter to Biden expressed “deep concern” about disruptions a strike could have on East and Gulf Coast ports, and implored the administration to get the United States Maritime Alliance and the International Longshoremen’s Association back to contract negotiations.

Bargaining on a new master contract covering 45,000 union workers at three dozen ports from Texas to Maine broke down months ago over unspecified proposals on wages, benefits and job protection. Biden earlier said he won’t block a port strike by the ILA.

An array of importers and manufacturers as well as House Republicans previously urged Biden to act on a possible work stoppage.   

In the letter, AAFA President and Chief Executive Steve Lamar claimed that the three dozen East and Gulf Coast ports affected by a work stoppage “will lose business long term as importers switch to the West Coast ports. The West Coast ports will face severe disruptions as limited capacity to absorb these products will create significant strains and delays at ports on rail, and on trucks.” He added that “American families will face a surge in prices and product shortages not seen since the pandemic.

“Now that we are one week away from a major disruption, the situation is dire, and we need your help now,” Lamar wrote, addressing Biden.

The ILA ports account for 53% of all U.S. apparel, footwear and accessories imports, or more than $92 billion, according to the trade group’s data. “This disruption would occur during peak holiday shipping season and raise the price of goods even higher, sending inflation skyrocketing. This potential shipping crisis will create a scarcity of goods while goods that are still available will be costly for American families,” the group said in a release accompanying the letter.

Also Monday, the United States Maritime Exchange, representing port employers, said it has been unsuccessful in trying to restart contract talks.

“Despite additional attempts by USMX to engage with the ILA and resume bargaining, we have been unable to schedule a meeting to continue negotiations on a new Master Contract,” the employers said in a release. USMX added it has been contacted by the Department of Labor, the Federal Mediation & Conciliation Service, and other federal agencies, but both sides have to agree to work with federal mediation.

The union did not immediately respond to requests for comment.

Marseilles, France-based CMA CGM, the world’s third-largest container shipping line, notified customers it will implement a surcharge across all freight of $1,000 per unit of cargo originating from the Indian subcontinent, Middle East Gulf, Red Sea and Egypt destined for the U.S. East and Gulf coasts. The surcharge is effective Nov. 1 until further notice.

More coverage by Stuart Chirls:

Maersk: Q4 container demand to remain strong

Port of Los Angeles sees busiest month outside pandemic

Rail intermodal powers to record volume

The post Apparel, shoe importers plead with Biden to intervene in dock strike appeared first on FreightWaves.

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

As the Sept. 30 deadline for the International Longshoremen’s Association (ILA) contract renewal passed, negotiations have reached a standstill, leaving the specter of a potential strike hanging over U.S. supply chains. With little progress made in bridging the gap between union demands and the position of the United States Maritime Alliance (USMX), a work stoppage appears increasingly likely. This has already started impacting U.S. supply chains both in manufacturing and retail.

The ILA agreement affects ports along the entire East Coast and Gulf Coast of the United States. These ports span from Maine all the way down to Texas, including major hubs such as Boston, New York/New Jersey, Philadelphia, Baltimore, Charleston, Savannah, Miami, New Orleans, Houston and several more.

The repercussions of such a strike would be significant. The ILA represents 65,000 dockworkers at ports along the East Coast and Gulf Coast, responsible for handling approximately 43% of U.S. imports. A disruption in operations at these ports would ripple through the entire supply chain, affecting businesses across various sectors. Retailers, manufacturers and consumers could all feel the impact of delayed shipments, increased costs and potential shortages of essential goods.   

Several key issues remain unresolved in the negotiations. The ILA is seeking wage increases, improved benefits and job security protections. However, the primary point of contention centers on automation and its potential impact on dockworker jobs. The union is staunchly opposed to any further automation of port operations, fearing it could lead to significant job losses. On the other hand, the USMX argues that automation is necessary to increase efficiency and competitiveness in the face of growing global trade. I would further argue that automation is needed to keep pace with ports around the world, including innovations in ports such as the Netherlands, Germany, Singapore and Australia.

The potential strike has raised alarms among supply chain experts, who warn of a “catastrophic effect” on U.S. commerce. The ports affected by the ILA contract handle a vast array of goods, from consumer electronics and apparel to industrial machinery and raw materials. A disruption in operations would lead to delays in shipments, causing inventory shortages and impacting production schedules for businesses that rely on these goods.

With peak season fast approaching, this could be catastrophic for retailers counting on a strong peak season, during which they make a substantial part of their revenues. Retailers are particularly vulnerable to supply chain disruptions, especially during the crucial holiday season. A strike could lead to empty shelves, frustrated customers and lost sales. Manufacturers, meanwhile, could face difficulties procuring the necessary components and raw materials for their products, leading to production delays and increased costs.   

The impact would also extend to consumers, who could see price increases for a wide range of goods. The increased costs associated with supply chain disruptions would likely be passed on to consumers, adding to inflationary pressures already facing the economy. Moreover, certain goods could become scarce, leading to inconvenience and frustration for consumers.

Businesses are already taking steps to mitigate the potential impact of a strike. Some are diversifying their supply chains, seeking alternative ports or transportation methods. Others are increasing their inventory levels to ensure they have sufficient stock in case of disruptions. However, these measures can be costly and may not be feasible for all businesses. The federal government is also monitoring the situation closely. While it has limited power to intervene in labor disputes, it can use its influence to encourage the parties to return to the negotiating table. A prolonged strike could prompt calls for federal mediation or even emergency legislation to prevent further disruption of the economy.

Visibility, risk management and modeling solutions become key technologies to predict and anticipate any disruptions caused by these strikes and provide better insights into inventories as well as create alternative sourcing points or rerouting of products to ports not affected by the strikes. We have seen increased volumes going to West Coast ports to offset some of the risk of these strikes as well as because of the Red Sea conflict.

As the deadline approaches, the urgency to reach a resolution intensifies. Both the ILA and USMX have a responsibility to engage in good-faith negotiations and find common ground. The stakes are high, not only for the workers and businesses directly involved but for the entire U.S. economy. A successful resolution to the contract dispute would avert a potentially devastating strike and ensure the continued smooth functioning of the nation’s supply chains. Failure to reach an agreement, on the other hand, could have far-reaching consequences for businesses, consumers and the overall economic outlook. The coming days will be critical in determining the fate of the negotiations and the stability of U.S. supply chains.

Look for more articles from me every week on FreightWaves.com.

About the author

Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.

The post ILA contract negotiations: US supply chains brace for disruption appeared first on FreightWaves.

The investment is from Vista’s Endeavor Fund, which provides growth capital and support to enterprise software and data companies with $10 million to $40 million in annual recurring revenue.

Charleston, South Carolina-based Gnosis provides visibility and tracking technology through its Container Lifecycle Management platform, which allows logistics firms to track and manage their container fleets. The company was founded in 2017 and has been helping BCOs, ocean carriers, freight forwarders and 3PLs in managing the life cycle of shipping containers since.

“We’ve added significant new product capabilities and welcomed a record number of new customers to Gnosis this year – but I believe we are just getting started,” said Austin McCombs, Gnosis CEO and co-founder, in a news release. “We feel confident our platform is precisely what our industry has been asking for, and we are eager to get it in the hands of more customers.”

The company monitors more than 95% of all global shipping activity currently, according to the release.

“Gnosis is pioneering digital connectivity between logistics partners at a critical and complex juncture of the global supply chain … . [W]e could not be more excited to partner with them,” said Rachel Arnold, co-head of Vista’s Endeavor Fund.

More FreightWaves articles by Todd Maiden

• LTL earnings estimates cut following weak August updates
• RXO completes $1B acquisition of Coyote Logistics
• Freight spend, shipments soft again in August

The post Gnosis Freight takes on private equity investor appeared first on FreightWaves.

The basic per diem rate allowed by the IRS for meals and incidental expenses incurred by transportation workers will rise to $80 per day in fiscal year 2025, which begins Oct. 1.

The IRS made the announcement late last week. 

The $80 figure is for the continental U.S. It’s $6 more than that for travel outside the continental U.S.

That’s a big jump for a number that stayed flat from fiscal year 2023 to 2024. It was at $69 for the continental U.S. for the past two fiscal years and $5 more for travel outside the U.S.

The per diem figure is what an employer can claim as an expense for payments made to drivers for meals and incidental expenses per day, known in IRS lingo as M&IE.

Within the per diem rate, $5 is for incidental expenses only.

The per diem payment is not taxed as income to the driver. A company can pay more than the IRS figure, but general practice is to pay the same level that can be deducted from a company’s income tax liability.

Going from $69 to $80 is an increase of 15.9%, a big jump for one year particularly after the same rate was in effect for two years. When the 2023 rate was put into effect, it was an increase of just $3 from 2022.

If a driver is on the road 200 days and gets paid a per diem for each of those days, that’s an annual increase of $2,200 from the past two years.

But only drivers who are on the road for a substantial portion of the day, including those who spend one or more nights on the road, would be eligible. A local driver filling the full available hours-of-service limit of 14 hours, starting and ending the day at home or a depot, would not likely be viewed as eligible for a per diem.

The per diem payments also have an option called the high-low substantiation method that varies reimbursements – and by extension, payments made by transportation companies to drivers – depending on whether the transportation is incurred in a high-cost or low-cost area.

The per diem rates under the high-low substantiation method also have a figure that includes lodging, though experts on trucking and taxes have said that is rarely taken by an industry that generally has its drivers sleeping in the sleeper cab.

The per diem that includes lodging will be $225 for low-cost areas and $319 for high-cost areas. That is an increase from $214 and $309, respectively.

If a transportation company chooses to pay a per diem on a high-low basis, the payment will be $86 for a high-cost area and $74 for a low-cost area. That is up from $74 and $64, respectively.

The IRS lists an extensive number of areas that are considered high cost where the higher number could be chosen for a per diem. However, the areas do not all have that designation all 365 days per year.

For example, a transportation company could pay a per diem to a driver working the Gulf Shores region in Alabama for just two months of the year, from June 1 through July 31.

But a transportation company serving three counties in Southern California – Los Angeles, Orange and Ventura – could pay drivers the higher per diem all year and get full IRS credit.

The example of Los Angeles could not have been in effect previously; it was just added to the list this year. Other high-cost areas from California added this year are Palm Springs, Mammoth Lake and South Lake Tahoe.

A few areas were dropped from the list of high-cost areas. They are literally all over the map, ranging from Oakland, California, to Punta Gorda, Florida.

More articles by John Kingston

IRS per diem rate for truckers staying flat in 2023-24

IRS per diem rate going up by $3 next month

Marten, citing weak freight market, cuts base salaries of 6 top executives

The post Per diem rate for expense payments to truckers sees big jump for fiscal 2025 appeared first on FreightWaves.

The 2025 FreightTech 100 directory does not exist in a vacuum. This year saw the tech sector both come under renewed fire from labor and contend against adverse conditions brought about by restrictive monetary policy. Mergers and acquisitions have become a prominent theme in the space: In September, Platform Science and Trimble — both of which have been featured in the FreightTech 100 since its inception — announced that the former was acquiring Trimble’s global telematics business.

Nor was this deal unique since, in August, Korber announced its acquisition of MercuryGate (a fellow FreightTech 100 mainstay). With the industry continuing to mature, such acquisitions are likely to be a recurring theme as companies make their preparations for the next growth period.

RELATED: Autonomous trucks in the long run

Until then, however, this list represents the paragons of technological progress in the freight transportation space today.

2025 FreightTech 100

Related: See previous winners

Methodology

The FreightTech 100 list is produced by a panel of journalists, analysts and experts chosen by FreightWaves. The voting form included more than 250 companies with information condensed from nearly 900 nominations.

The list will undergo further scrutiny by third-party auditor Henderson, Hutcherson and and McCullough (HHM). The firm will conduct voting among more than 80 executives, investors and academics from across the industry to determine the FreightTech 25.

The FreightTech 25 will be determined through a points-based system, with each voter ranking the industry’s 25 most innovative and disruptive companies. The company a voter ranks first will earn 25 points, second 24 points and so on. The list will then be sorted in descending order based on total points. 

The 25 companies that earn the most points will be announced as winners at the FreightWaves F3: Future of Freight Festival on Nov. 19-24, and you can secure your spot today.

The post FreightWaves announces 2025 FreightTech 100 companies appeared first on FreightWaves.

Last week’s FreightWaves Supply Chain Pricing Power Index: 35 (Shippers)

Three-month FreightWaves Supply Chain Pricing Power Index Outlook: 40 (Shippers)

The FreightWaves Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers.

This week’s Pricing Power Index is based on the following indicators:

Tender volumes down week over week, but stabilizing

Truckload volumes have retreated from the post-Labor Day peak, but the positive sign for the market is that demand levels remain elevated compared to where they were in the back half of July and all of August. With import levels at or near record highs, the freight market is setting up for a stronger fourth quarter than a year ago from a volume perspective.

The Outbound Tender Volume Index (OTVI), a measure of national freight demand that tracks shippers’ requests for trucking capacity, is down 1.46% week over week as volumes retreated from a recent peak but have started to level out the past couple of days. The OTVI is now up 2.53% compared to this time last month and 2.74% year over year, highlighting recent and longer-term growth in the market.

Contract Load Accepted Volume (CLAV) is an index that measures accepted load volumes moving under contracted agreements. In short, it is similar to OTVI but without the rejected tenders. Looking at accepted tender volumes, we see a decrease of 1.83% w/w. The larger decrease in accepted tenders than overall tenders is due to the slight uptick in the tender rejection rate over the past week.

Last Tuesday’s release of retail sales data showed that despite a strong July that tempered expectations for August, consumers were still more than willing to spend. Economists were expecting retail sales to fall during August, but instead they increased by 0.1% month over month. Nonstore retail sales and miscellaneous retail store sales were the two categories that saw the biggest monthly increase in sales, rising 1.4% m/m and 1.7% m/m, respectively.

Bank of America’s recent credit and debit card spending report shows that spending is still higher than it was a year ago. In the most recent report, for the week ending Sept. 14, total card spending on a per-household basis was 1.4% higher than this time last year. Online sales were up 3.2% y/y, and general merchandise spending was up 4.7% y/y, according to the latest report.

As expected with an over 1% drop in tender volumes at the national level, the majority of the freight markets experienced lower volumes over the past week. Of the 135 freight markets tracked within FreightWaves SONAR, 59 experienced higher volumes compared to last week.

Much of the tender volume growth week over week was isolated to smaller freight markets like Billings, Montana, and Flagstaff, Arizona, where volumes were up over 30% week over week.

The largest markets in the country were under pressure this week. In Atlanta, tender volumes dropped by 3.64% w/w. In the largest market in the country, Ontario, California, the decline was even more severe: Tender volumes fell by 4.84%.

By mode: While the overall market has stabilized for the time being, the dry van market continues to see volume levels retreat from recent highs. The Dry Van Outbound Tender Volume Index has fallen by 2.26% over the past week and is just 1.5% above year-ago levels. 

The reefer market, on the other hand, is experiencing a sizable uptick in volumes just  a little over halfway through September. The Reefer Outbound Tender Volume Index increased by 2.41% over the past week and turned positive on a y/y basis for the first time in over a month, now up 1.18%.

Rejection rates break away from last year’s trend

After an uneventful Labor Day holiday, capacity in the freight market continues to be readily available. Now, over the past week, rejection rates have moved slightly higher, breaking away from the trend established last year when rejection rates moved lower through September. The International Longshoremen’s Association’s potential strike is set to get started in just over a week, so the impacts will likely appear throughout the week, which could expose risks to capacity across the country.

Over the past week, the Outbound Tender Reject Index (OTRI), a measure of relative capacity, increased by 36 basis points to 4.81%, approaching the highs around Labor Day. The OTRI is now 91 basis points above last year’s levels, a signal that while it doesn’t feel tighter because rejection rates are still below 5%, rejection rates are moving higher in aggregate.

The map above shows the Outbound Tender Reject Index — Weekly Change for the 135 markets across the country. Markets shaded in blue are those where tender rejection rates have increased over the past week, whereas those in red have seen rejection rates decline. The bolder the color, the more significant the change.

Of the 135 markets, 92 reported higher rejection rates over the past week, an increase from 74 in last week’s report.

The largest increases in the country continue to be across the Midwest, in smaller freight markets like Dubuque and Des Moines, Iowa, where rejection rates increased by 405 bps and 384 bps over the past week, respectively.

Arguably the most significant changes to rejection rates in the country are around the Chicago metro area. Rejection rates in Chicago and neighboring market Joliet, Illinois, increased over the past week by 164 bps and 168 bps, respectively. It marks the first time that both markets have exceeded the national tender rejection rate.

By mode: Across all modes, tender rejection rates moved higher over the past week. The dry van market has seen rejection rates reach the highest level of September, surpassing Labor Day weekend levels. The Van Outbound Tender Reject Index increased by 32 basis points over the past week to 4.47%.

The reefer market continues to see rejection rates trend higher, but not without intermittent volatility. The Reefer Outbound Tender Reject Index increased by 83 basis points over the past week to 11.38%, the highest level rejection rates have been since late January.

Those with exposure to the industrial side of the economy likely breathed a collective sigh of relief this week. The Federal Open Market Committee opted to slash the target range of the federal funds rate by 50 basis points and expects another 50 basis points to be cut by the end of the year, but it is unknown if that will be a single cut or two. The cut to interest rates won’t immediately be impactful, but it creates an environment where 2025 will be better than 2024, especially if more cuts come in 2025. Even so, the Flatbed Outbound Tender Reject Index increased by 194 basis points over the past week to 7.14%.

Spot rates move ever so slightly higher

As tender rejection rates moved ever so slightly higher this week, spot rates stopped their decline, flattening out around levels experienced during International Roadcheck. The potential for disruptions around the ILA strike could create some short-term momentum, but that remains to be seen as frankly there is still too much capacity in the market.

This week, the National Truckload Index — which includes fuel surcharge and various accessorials — erased last week’s decline, rising by 1 cent per mile from the week prior at $2.25 per mile. The NTI is now 3 cents per mile or 1.3% lower than it was this time last year. The linehaul variant of the NTI (NTIL) — which excludes fuel surcharges and other accessorials — matched the NTI’s increase, rising 1 cent per mile this week to $1.68. The NTIL is 10 cents per mile higher than it was at this time last year. The discrepancy in the NTIL and NTI is solely the changes in fuel, which was far more expensive in 2023 than currently. The average diesel truck spot price per gallon is 97 cents, or 21.1%, lower than it was last year.

Initially reported dry van contract rates remain in a fairly tight range, rising by 3 cents per mile over the past week to $2.33. Throughout 2024, contract rates have been in a tight range, an indication that the extreme cost savings are in the rearview mirror and service is now coming to the forefront. Initially reported contract rates are down 4 cents per mile from this time last year, a 1.7% decline.

The chart above shows the spread between the NTIL and dry van contract rates is trending back to pre-pandemic levels. The spread remains historically wide and has actually widened in recent weeks, diverting from the pre-pandemic average that it had been inching closer to throughout the year. Significant disruptions can quickly tighten the spread as spot rates react much faster, so seeing a narrowing of the spread in the fourth quarter, during truckload peak season, wouldn’t be a surprise. The question is how significant the narrowing is and whether it is sustainable, especially if the first quarter of 2025 is the traditionally soft period for freight demand.

The FreightWaves Trusted Rate Assessment Consortium spot rate from Los Angeles to Dallas erased all of last week’s decline and then some. The TRAC rate from Los Angeles to Dallas increased by 8 cents per mile to $2.36. Spot rates along this lane are now just 13 cents per mile below the contract rate.

From Chicago to Atlanta, spot rates recovered to levels that are more in line with where they have been for the past two months, indicating that last week was more of an anomaly than the overarching trend. The FreightWaves TRAC spot rate along this lane rose by 26 cents per mile to $2.53, just 26 cents per mile below the contract rate.

The post Steady as can be appeared first on FreightWaves.

Shopping platforms like Shein, Temu, JD.com and Alibaba have made huge inroads in the U.S. market by sending orders directly to consumers and avoiding the warehouse and distribution costs associated with a traditional container import model.

The White House this month said it would soon tighten eligibility and increase information requirements for low-value imports that qualify for duty-free status in an effort to prevent businesses from evading duty payments, circumventing safety standards and smuggling illicit products. Officials claim the exponential growth of de minimis shipments makes it difficult to target and intercept illegal or unsafe goods. In addition to strengthening trade enforcement, the action appears designed to level the playing field for U.S. retailers and manufacturers by reducing volumes moving through the program.

The proposal is expected to result in higher consumer prices for small shipments, but several industry watchers said Chinese online retailers will be able to easily adapt. The measure comes as Amazon and Walmart consider new discount fulfillment services that would ship international goods straight to customers. 

“E-commerce importers may need to reassess their logistics, pricing strategies, and compliance measures to avoid delays and extra costs,” said DSV, a top five global logistics provider, in a customer notice on Wednesday. 

The Biden administration said it intends to issue a notice of proposed rulemaking that would primarily exclude all shipments containing products covered by tariffs imposed on China during the Trump administration under Section 301 of the Trade Act from the current de minimis exemption. The 301 tariffs, which can be as high as 25% of the product’s value, currently apply to about 40% of U.S. imports, including 70% of textile and apparel imports, from China. The rule will also strengthen information collection requirements so border authorities better understand what packages contain, analyze their risk and identify patterns of concern. 

Meanwhile, the Consumer Product Safety Commission plans to propose a rule requiring importers of consumer products to electronically file certificates of compliance at the time of entry, including for de minimis shipments. The goal is to identify and block unsafe products from entering U.S. commerce and prevent foreign companies from using the low-value exemption to skirt testing and certification requirements. 

Rulemakings from CBP likely won’t be finalized until well into 2025, after comments from the public are collected and reviewed. CPSC has already issued its proposal and could set the final terms in the coming months. 

The administration also urged Congress to pass legislation to reform the exemption for small-dollar shipments. Making the changes a permanent part of the law would protect U.S. taxpayers and consumers more thoroughly than a rulemaking process, it said.

How we got here

Congress in 2015 raised the minimum value at which individual shipments are exempt from paying duties from $200 to $800. The de minimis exemption (Trade Act, Section 321) simplifies customs clearance because shippers aren’t required to provide as much information as on a formal entry. It’s also an acknowledgment that duties on low-dollar imports are so small it isn’t worth U.S. Customs and Border Protection’s time and resources to collect them. The value change was intended to help small businesses, like those that sell on Etsy and other platforms, import goods from overseas and spur the retail economy as online shopping gained popularity. 

But large online retailers, led by Shein and Temu in China, took advantage of the provision to legally skip import taxes by shipping direct to consumers instead of in bulk to U.S. importers who de-consolidate containers in a warehouse and send individual packages to customers’ doorsteps. 

The vast majority of those parcels enter the country through air cargo, express consignment and international mail facilities. Packages are physically shipped together but are listed separately on the manifest filed by the carrier with CBP, which is then cleared without going through a formal customs process. Manifest clearances don’t require 10-digit classification numbers and product descriptions are vague, making it difficult for CBP to really understand what types of products are coming through the de minimis program. 

Most de minimis shipments moved by air are filed using a so-called Type 86 entry because it is much more efficient than manifest clearance, which is a very manual and paper-based process. Entry Type 86 is a voluntary program created in 2019 as a way for customs brokers working on behalf of shippers to electronically file entries that also require clearance from other agencies with import jurisdiction, and get an electronic release from CBP for low-value parcels. 

As de minimis air volumes ballooned, sellers quickly shifted to Type 86 entries because automated CBP clearance can be completed in minutes rather than days. In exchange for speed, companies provide more data, including full product descriptions and harmonized tariff codes.

The program quickly became so popular that CBP was overwhelmed by the volumes, according to trade compliance experts..

If implemented, Friday’s proposed rule change would likely force Chinese and other e-commerce retailers to raise prices to cover any import taxes, which could dampen buyer spending.

Over the last ten years, the number of shipments entering the U.S. claiming the de minimis exemption has exploded from about 140 million to more than 1 billion a year, according to CBP figures. And the U.S. is on track to import nearly 1.5 billion parcels in the current fiscal year – 4 million per day – that ends Sept. 30. The overwhelming volume of parcel shipments has made it difficult for U.S. Customs and other agencies to enforce trade laws, health and safety requirements, intellectual property rights, consumer protection rules, and to block illicit synthetic drugs such as fentanyl and clothing made from forced labor from entering the country, officials say.

More than three quarters of the way through the 2024 fiscal year, 89% of all seizures in the cargo environment originated as de minimis shipments, including 97% of narcotics seizures and 72% of health and safety seizures of prohibited items, according to a Department of Homeland Security news release Friday.

“The majority of shipments entering the United States claiming the de minimis exemption originate from several China-founded e-commerce platforms, putting American consumers at risk, undercutting American workers and businesses, and resulting in the importation of huge volumes of low-value products such as textiles and apparel into the U.S. market duty-free,” the White House said in a fact sheet. 

New enforcement regime

Plans for tighter enforcement include requirements for additional data, such as the 10-digit tariff classification number and the person claiming the de minimis exemption, which will enable CBP to better target shipments for inspection. 

CBP needs to clarify who qualifies as the ship-to party because some retailers ship direct to a storefront for the customer to pick up there. Enforcement is currently inconsistent, with officers at some ports of entry accepting the store as the consignee and other ports requiring the name of the individual, said Marcus Eeman, senior global customs manager at freight intermediary Flexport, during a company webinar Wednesday. 

The proposed regulatory changes will also clarify who is eligible for the Type 86 administrative exemption and require filers to identify the person on whose behalf the exemption is being claimed.

The proposed rules extend the Type 86 data requirements to all de minimis shipments. 

The Retail Industry Leaders Association, which represents large store brands, applauded the administration’s action. “Improving compliance obligations with these new rules will ensure that foreign businesses cannot exploit the de minimis privilege, protecting American consumers and disadvantaged American companies,” it said in a statement. The group opposes Section 301 tariffs on Chinese goods, but said as long as they remain in place they should be applied evenly across the board. 

The administration is trying to take action while Congress negotiates which bills modifying de minimis will advance. Rep. Earl Blumenauer, D-Oregon, would bar de minimis shipments from China and Russia. The House Ways and Means Committee instead passed a bill that mirrors the Biden plan to end de minimis privilege for any good subject to the Section 301 tariff. It also prohibits use of de minimis for all goods facing trade remedies, including national security tariffs, and imposes a new $5,000 civil penalty for anyone who violates the de minimis law. Similar plans are circulating in the Senate. 

Industry pushback

The House bill never made it to the floor for a vote after being stalled by intense lobbying from freight companies and retailers that make money from cheaper Chinese goods, according to the New York Times. 

The Biden administration also encouraged Congress to pass de minimis reforms in counter-fentanyl legislation previously proposed by the administration and lawmakers. The “Detect and Defeat” bill would give border officials more tools to take action against drug traffickers and  track, target and seize drugs, raw materials and machinery used to make counterfeit pills. 

The legislation would also add a user fee for de minimis packages to help pay for the staff and equipment needed to target fentanyl shipments, as well as stronger penalties designed to deter trafficking in the de minimis environment and incentivize the private sector to self-police their supply chains for narcotics risk.  

The White House said a legislative fix should exclude quota-level products, such as textile and apparel products, from de minimis treatment because American textile and apparel manufacturers face “unfair competition from several China-founded e-commerce giants.”

De minimis supporters challenge its characterization as a loophole, saying that CBP receives manifest data (sender, recipient, value and description of the goods) before they arrive at ports and that low-value shipments are screened through CBP’s risk-assessment system like other goods entering the U.S. 

The U.S. Chamber of Commerce, express carriers FedEx and UPS, the National Association of Manufacturers and other trade organizations oppose de minimis changes circulating in Congress. They argue eliminating de minimis is equivalent to a tax hike that will disproportionately impact small businesses and low-income consumers.

The National Foreign Trade Council, a pro-trade group, said in August that eliminating de minimis would create unintended consequences. For starters, it would require a massive increase in CBP inspectors and other staff at a time when the agency has a shortfall of 4,800 officers, raising costs significantly more than collected revenue. Weakening de minimis would create backlogs at already-congested ports of entry, increase inflationary pressures felt by American families, and create complexity for shippers, it added.

A report commissioned by the NFTC and published this month by advisory firm Oxford Economics estimates CBP would need to spend $1.6 billion per year to carry out the Ways & Means bill (based on a $5 processing cost per package), which would only raise $1 billion in revenue. The legislation would result in a 55% price increase for end users, which would affect 330 million packages in 2025, it said. 

The NFTC calculates that without de minimis the average $50 package would require about $31 in paperwork, a brokerage fee of $20, plus tariffs and taxes, which would more than double the delivery cost.

The The American Action Forum, a think tank led by former director of the Congressional Budget Office Douglas Holtz-Eakin, also released a study showing that eliminating de minimis would result in $8 billion to $30 billion in additional annual costs that would eventually be passed on to consumers and would harm small businesses. A recent study by Yale Economics Professor Amit Khandelwal and UCLA Economic Professor Pablo Fajgelbaum detailed how degrading de minimis would hurt the poorest households that are struggling most with inflation. 

“In order to assess if a shipment is eligible for de minimis, CBP would need to separately determine whether the shipment contained products that are subject to Section 301, 232, 201, or anti-dumping/countervailing duty tariffs. While CBP currently has the resources to make those determinations on high-value formal entries, making such determinations on a significant portion of over one billion low-value shipments would be impossible with CBP’s current staffing levels…. Every minute CBP spends focusing on classifying low-value shipments to collect minimal duty is a minute that they are not inspecting packages that may pose a high risk” the NFTC said in a briefing paper.

Another drawback, according to the NFTC, is that small importers without an in-house customs expert are likely to make costly mistakes under a new regulatory regime. When a product enters under de minimis but is found ineligible by CBP, the import will need to be converted to an informal or formal entry. Businesses will then need to identify a person as an importer, hire a customs broker, and pay the duty before the shipment is released. If the shipment is abandoned CBP would have to dispose of the product, which is costly.

And, the trade association argued, modifying de minimis rules will shift many parcels into the postal environment, which is more difficult for CPB to monitor, resulting in bad actors smuggling fentanyl through that pathway to evade detection. To the extent CBP is able to identify shipments at international mail facilities that are ineligible for de minimis treatment, CBP officers and the U.S. Postal Service will have to manually convert them to dutiable mail, identify the recipient, and get the customer to pick up their package and pay duties in person. It’s not clear, however, whether e-commerce companies that rely on timely delivery will revert to more inefficient postal systems, especially in the origin country. 

In a March letter to the White House, a half dozen trade groups warned that degrading de minimis in the U.S. would likely trigger a response in other countries with de minimis policies, resulting in American exporters paying more to sell their products overseas. They also said de minimis shouldn’t be blamed for the fentanyl crisis, noting that the vast majority of the drug enters the U.S. in large shipments at the southern land border. Only 3% of fentanyl doses projected to be seized by CBP in fiscal year 2024 will come via air cargo, they said, citing CBP statistics. 

The NFTC and its allies say Congress and CBP should require higher quality data and upgrade screening software to separate illegal shipments from compliant ones. Funding should also be increased to buy non-intrusive imaging systems and advanced label readers that utilize machine learning to identify suspicious packages. Also of interest for many in the trade industry is a CBP pilot program in which a small group of volunteer importers electronically send extra data before shipments arrive to help CBP identify any that might need physical inspection.

Higher scrutiny

CBP earlier this year began cracking down on de minimis compliance violations, notably by temporarily suspending several intermediaries from the Entry Type 86 program for failing to properly describe and value goods, and for late filing of required data. The agency declined to identify those companies, but Seko Logistics was exposed in a media report and subsequently sued CBP for punishing it for allegedly lacking any evidence of wrongdoing. Seko Logistics recently dropped its suit, according to a filing in the U.S. Court of International Trade that was first reported by Supply Chain Dive.

Rejections of cross-border e-commerce shipments also increased after CBP’s automated trade processing system was recalibrated to prevent Type 86 transactions from being filed after products arrived at a port of entry.

In April, CBP leader Troy Miller urged the trade community to do a better job providing advanced data for low-value shipments and stop listing vague or inaccurate descriptions of the contents on the carrier’s manifest. Instead of describing a shipment as apparel, for example, CBP expects documents to provide more specifics about the item and what it’s made of (100% men’s cotton T-shirt, woman’s polyblend skirt or machine parts) and the type of inside packaging.

“CBP employs a multilayered enforcement strategy, but the fact remains we are operating under the constraints of outdated laws passed more than 30 years ago, with significant resource and enforcement limitations in a heightened threat environment,” Miller said in the DHS news release. “These executive actions are a critical first step in modernizing our enforcement mechanisms in the small package environment so we can better protect the health and safety of Americans. However, we still need to modernize and enhance our trade laws so that CBP can implement a more strenuous enforcement architecture to further crack down on the individuals and networks attempting to abuse the de minimis environment.”

Impact on international e-commerce

The pending de minimis restrictions also apply to Chinese produced goods that move through Canada and Mexico, where they are stored in logistics providers’ warehouses and then shipped to the United States. Any goods covered by the 301 tariffs would require a formal entry and payment of the China duty, customs experts said.

Izzy Rosenzweig, the founder and CEO of Portless, an international direct-to-consumer fulfillment provider, endorsed stronger data-sharing requirements to help inspectors identify suspicious packages and purge bad actors.

Entering a harmonized tariff system code, a description of the product and raw materials, and the shipment value should be prerequisite for advance digital clearance, he said. Portless provides its customs brokers with product details and hasn’t experienced slower clearances despite heightened CBP scrutiny this year.

Eliminating de minimis on Chinese products and making CBP collect duty on every small item will burden businesses and the agency, but won’t hurt the direct logistics model because it offers a much shorter order-to-cash cycle – days instead of months – and eliminates excess inventory since production matches demand, argued Rosenzweig. The biggest losers will be consumers, who will pay more for imported goods. The primary risk is the higher prices could eventually dampen demand for overseas products.

“If the de minimis gets removed it’s the American brands that will get affected. They talk about Shein and Temu, but there are hundreds, if not thousands, of American brands also using this model and they will have to raise the price to the consumer,” he said. 

Derek Lossing, a former Amazon logistics executive who advises clients on how to navigate e-commerce supply chains, said many U.S. companies are moving fulfillment to China because of the better cash conversion cycle and the ability to reduce product obsolescence. By being closer to the factory, fashion and apparel companies can react better to shifting style trends. 

Tightening de minimis isn’t going to stop the big Chinese e-tailers because insatiable consumer demand in the U.S. for low-cost fashion, apparel and household goods means the Chinese companies can absorb some higher costs or pass them onto the customer. They will comply with the new rules, logistics professionals said. 

“You might have a dress that used to cost 10 bucks. Now it costs 12 or 13 bucks. So, the prices will go up. It’s not going to stop the model,” said Rosenzweig.

Shein and Temu most likely will revert to more traditional logistics arrangements, said Tom Gould, a Seattle-based customs consultant who serves on two CBP trade advisory committees. Instead of sending 1,000 normal entries under de minimis treatment, for example, it makes sense to file one entry for a single shipment with 1,000 parcels so they only pay the broker for filing one entry. On top of that, the companies will save paying the merchandise processing fee, which is a percentage of the shipment’s value but has a cap.

“You don’t want to file 1,000 entries because then you’ll have to pay the merchandise processing fee on every single package. If you put them all in one entry, then you only pay it at the cap, so you end up paying less,” Gould said. 

Online retailers will continue to pick and pack orders in China, label each box with the customer’s address, bring them to the United States on a consolidated entry, open the container and drop the ready-to-go boxes at UPS, FedEx or other couriers to make the final-mile delivery to peoples’ homes, he and other logistics professionals explained. 

And from CBP’s perspective, it’s much easier to analyze data for a shipping container with hundreds of dresses on a single entry, even if they are individually packaged, than screening hundreds of entries, Gould added. The agency is set up to run containers run through non-intrusive X-ray machines when concerns crop up, but doesn’t have the systems and capacity to inspect hundreds of parcels.

Another option for Chinese e-commerce players is to set up warehouse infrastructure in the United States to store inventory from Chinese sellers and ship directly to households, something they already do for a limited portion of their inventory. But the warehouse scenario raises costs and introduces the risk of holding too much, or too little, inventory, something the e-commerce players aren’t fond of. 

“I don’t think from the physical movement of the goods side, there’s going to be much difference. Shein and Temu are going to still [fulfill orders] the way they do. The only real difference is the way the documentation is filed with Customs and the way Customs handles the inspections,” said Gould. “If the duty saving goes away that doesn’t mean that the business model completely goes away” because companies base sourcing decisions on many factors, including labor, transportation, manufacturing quality and geopolitics.

Requirements for more information on goods that still qualify for de minimis treatment could add friction to the shopping process in ways that discourage consumer purchases, Lossing said. Trade specialists dismissed the idea that CBP would ask buyers for their social security number as a way to better identify the consignee, but how would customers react if, for example, at checkout they had to go to a new screen and certify they hadn’t made any other purchases from China on the same day, Losing posited. 

Data from freight market analytics firm Xeneta shows e-commerce volumes out of China via air cargo increased more than 30% so far this year from 2023, as well as 37 million downloads of the Temu app alone in a single month this summer. 

“Companies like Shein and Temu have known for a long time that changes to U.S. import regulations are inevitable. I don’t think they will be overly concerned by the latest announcement,” said Niall van de Wouw, Xeneta’s chief airfreight officer, in a news release. Even if prices rise slightly on the digital marketplaces, goods will still be so much cheaper than in the U.S. that American retailers and manufacturers won’t be able to compete, he added. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@freightwaves.com

RELATED READING:

US Customs tightens enforcement on low-value e-commerce trade

Seko Logistics takes CBP to court over e-commerce enforcement 

The post Tariffs targeting Chinese e-commerce could damp demand appeared first on FreightWaves.

To view more FreightWaves infographics, click here

The post FreightWaves Infographics: FreightTech startup Aifleet raises $16M Series B to expand operations appeared first on FreightWaves.

Customers are able to use Cargado to book freight faster and more transparently, as the entire negotiation takes place on the platform, Silver said. 

“We’re excited to finally be able to share the fact that we’ve been building an invite only cross-border load board,” Silver told FreightWaves in an interview. “Our goal with what we’ve been creating is to build something that allows people to collaborate and communicate and do business together. We hope that people can kind of reframe how they think about the load board concept with what we’re introducing to the market with Cargado. It is purely for cross-border freight.”

Cargado’s platform already has more than 50 logistics customers (brokers, 3PLs and freight forwarders) posting their cross-border freight to get bids from more than 300 cross-border trucking companies. 

Freight brokers can post cross-border Mexico freight in the Cagado platform, whether it’s going from Mexico to the U.S., Mexico to Canada, or vice versa.

“As long as it touches Mexico, brokers can post it and trucking companies that have been invited through personal networks or through referrals can bid on that freight, and then they negotiate through the platform,” Silver said. “Once the match happens, the broker goes back into their TMS, sends the rate confirmation, and still runs through the normal compliance checks. But this is a very different experience than what people are used to using today when it comes to how they interact through technology.”

Customers have the ability to post both spot freight and consistent opportunities, such as request for proposals or mini-bids, known as lanes in Cargado, from Canada and the U.S. to Mexico.

Related: US-Mexico trade hits record $415B through first half of year

Brokerages, 3PL or freight forwarders, can sign up on Cargado’s website to join the waitlist and receive a demo of the load board. 

Once vetted and added to the Cargado platform, logistics operators pay a fee of $500 per user per month for anyone who wants to post freight. 

Cargado’s carrier network includes about 300 U.S.-based trucking companies, comprising 44,000 trucks and 130,000 trailers. The network includes dry vans, reefers, flatbeds, stepdecks, removable goosenecks, double drops and conestogas. 

The majority of trucking companies on the Cargado platform are either Customs-Trade Partnership Against Terrorism (C-TPAT) certified or have partner carriers in Mexico who are C-TPAT or OEA certified (Mexico’s version of C-TPAT).

Silver is the former CEO of Forager, a Freighttech startup founded in 2018. The company specialized in cross-border truckload freight matching between the U.S., Mexico and Canada. Silver sold Forager in 2022 to Arrive Logistics.

He grew up working at Coyote Logistics, the brokerage his father Jeff Silver founded in 2006 and sold to UPS in 2015.

Cargado was founded in January by Silver and Rylan Hawkins, without revealing how it would specifically operate in the cross-border space. 

Hawkins serves as Cargado’s chief technology officer. He was one of the founding engineers at Convoy, where he served as general manager for two Convoy Go and Convoy for Brokers. 

Cargado launched the first version of its load board product on April 1 to a select group of trucking companies and logistics providers. 

“I think the industry is ready for better technology. We can thank companies like Convoy for moving the industry forward, getting carriers to start using technology more effectively,” Silver said. “Another thing is that nearshoring is exploding, and as freight brokers try to diversify their business, one of the things that they look to do is to go into Mexico.”

Cargado will eventually evolve into more than a load board for Mexico freight, Silver said.

“We see it developing significantly. We see a more interconnected North American freight market, and we want to help move the industry forward,” Silver said. “Five years from now, our goal is that everybody working at a freight brokerage in some way or another is using or benefiting from Cargado for at least a component of their business, especially when it comes to cross-border freight.” 

The post Exclusive: Cargado launches first-ever load board for Mexico freight  appeared first on FreightWaves.

Organized crime groups fuel cargo theft surge in Mexico 

Mexico averaged about six cargo thefts a day in August, with most cases taking place in the country’s central region, according to the National Association of Vehicle Tracking and Protection Companies (ANERPV).

In August, 142 cargo trucks were stolen or robbed, a 2.8% year-over-year increase from the same period in 2023.

Jose Suarez, the Latin America expert for real-time visibility provider Tive, said cargo theft in Mexico is mainly carried out by organized criminal groups.

“Cargo theft in Mexico is fully organized crime to the highest level. The equipment that they use and the type of techniques and training that they have is crazy,” Suarez told FreightWaves in an interview.

Tive is a Boston-based startup founded in 2015. The company provides freight visibility solutions, such as tracking devices that provide real-time data.

“Organized criminals, their modus operandi will start with a guy in a vehicle that’s going to be slowing the traffic around a truck they want to steal. The criminals are often so advanced that they don’t even let the tractor-trailer stop. They just get it to a minimum speed,” Suarez said.

Once a tractor-trailer has been slowed down, another armed member of the criminal organization will jump onto the trailer or even try to get into the tractor through a window, Suarez said.

“They tell [the driver] to put the window down, and they get through the window,” Suarez said. “Then they stop the truck and start opening the trailer and taking stuff. Sometimes they take the truck and trailer with them.”

The highways around the states of Puebla and Mexico City, as well as other states in the center of the country, continue to be the most dangerous lanes for transporters, according to ANERPV.

Puebla accounted for 46 stolen cargo trucks in August, while the State of Mexico had 27 cases.

“Personally, I’ve traveled to visit customers and I remember driving on the highway in [the state of] Queretaro, you can literally see the tracker jammers on the highway,” Suarez said. “These organized criminals will have six or 10 jammers, which are worth $10,000 each, and they are using them on the highway to block tracking devices in trucks.”

Almost 88% of cargo thefts were made while trucks were in transit, followed by 9% of robberies committed while the tractor-trailer was parked somewhere.

Suarez said Tive’s tracking devices offer traceability solutions, as well as technology for temperature monitoring and other services.

“Our trackers are made to go with your cargo, so you know exactly what’s happening to your cargo,” Suarez said. “If there’s a temp deviation or humidity or there is light because someone opened the package, if there’s shock, if there’s a route deviation, if there’s an unwanted stop, you can measure that on our platform. Our devices work on cargo via air, via ocean and on the road.”

From January through August, cargo thefts totaled 1,135, a 1% year-over-year increase compared to the same period in 2023.

Suarez said cargo theft will continue to grow as more freight moves between Mexico and the U.S.

“In Mexico and Latin America, we have the boom of the nearshoring. There’s new manufacturing, a lot of auto parts, a lot of produce, fruits, vegetables. Also, meat and poultry trade is growing,” Suarez said. “Regionalization, nearshoring for all those companies, has made a huge impact and has increased trade with most of it going over the road, crossing through the border in Laredo. There’s always an increase in the risk of cargo theft.”

Outpost expands national truck parking network

Parking and storage provider Outpost recently announced the addition of four locations to its nationwide network. 

The new properties in the Chicago area; Fort Lauderdale, Florida; Fontana, California; and Laredo, Texas, boost Outpost’s presence in key logistics hubs across the U.S., Trent Cameron, Outpost co-founder and CEO, said. 

“As our network continues to expand, motor carriers increasingly look to Outpost as a strategic partner for positioning their fleets,” Cameron said in a news release. “Our four new properties strengthen our ability to help these fleets operate more efficiently in critical freight corridors across the US.”

Outpost’s expansion includes:

• A 30-acre facility in West Dundee, Illinois, adding more than 1,000 spaces for tractor-trailers and other heavy-duty vehicles.
• Fourteen acres in Fort Lauderdale, adding 370 truck parking spaces.
• A 4.5-acre property in Fontana, adding nearly 100 parking spaces. The facility is Outpost’s first in California.
• An 11-acre yard in Laredo, which includes 320 parking spaces. 

Austin, Texas-based Outpost is a network of truck terminals and fleet yard facilities with more than 20 locations and 11,000 spaces across the country.

Averitt opens new trucking facility in Texas

Transportation provider Averitt recently opened a service center in Tyler, Texas, near Interstate 20.

The service center is 20,500 square feet, has 33 dock doors and includes two on-site fuel islands, a secure parking area, and driver amenities such as break areas, restrooms and showers.

Tyler is about 100 miles east of Dallas.

“With improved infrastructure and increased capacity, we’re positioned to meet the growing needs of our customers,” Bryan Walters, service center director in Tyler, said in a news release. 

Averitt is a transportation and logistics provider headquartered in Cookeville, Tennessee. The company has more than 5,700 tractors and 13,000 trailers, with more than 80 locations across the country.

China-based Intretech plans $60M factory in Mexico

Electronics component manufacturer Intretech has begun construction on its first plant in North America, near the Mexican city of Monterrey.

Intretech will invest $60 million in the facility, which will produce electronic intelligent control components. The plant will create 1,500 direct jobs and is scheduled to begin operations in 2025, according to officials for the Mexican state of Nuevo Leon.

The facility aims to target markets in North America, including industries in automotive, medical, energy and consumer products.

Intretech was founded in 2011 in Xiamen, China. It has four manufacturing plants in Asia and Europe, with a global workforce of 9,000 employees.

The post Borderlands Mexico: Organized crime groups fuel cargo theft surge in Mexico appeared first on FreightWaves.

The Federal Motor Carrier Safety Administration granted a five-year exemption to Springdale, Arkansas-based Encore Building Products, a construction materials hauler, to operate trucks equipped with an electronic module manufactured by Intellistop, Inc.

When the driver applies the brakes, Intellistop’s module pulses the truck’s rear clearance, identification and brake lamps from low-level lighting to higher-level intensity four times within two seconds, then returns the lights to a steady-burning state while the brakes are engaged.

Federal regulations require that installed brake lamps, whether original or replacement equipment, be steady burning.

However, “the agency has determined that granting the exemption to Encore would likely achieve a level of safety equivalent to, or greater than, the level of safety achieved by the regulation,” FMCSA ruled in a notice posted on Friday.

The approval is a win for Intellistop, whose application for an industry-wide exemption for its braking module was denied by FMCSA two years ago.

At the time, FMCSA ruled that Intellistop’s exemption was too broad to ensure an equivalent level of safety absent the exemption, but that individual motor carrier exemptions “may be more closely aligned with FMCSA authorities.”

FMCSA’s decision to grant Encore’s exemption is based on the limited number of trucks that will operate under it – approximately 223 – as well as data showing that enhanced rear signal systems Intellistop’s could help reduce rear-end crashes.

“Initially restricting the application of this exemption to a limited portion of Encore’s fleet will allow for a comparison between the crash involvement of Encore CMVs [commercial motor vehicles] equipped with the Intellistop device, those without the device, and the overall crash involvement of CMVs operated by similarly sized motor carriers with similar operations and overall safety performance,” FMCSA stated.

Encore is also prohibited from installing the module on more than half of its power units and half of its trailers during the first year of operation under the exemption.

The most recent crash data compiled by NHTSA reveals that the rear of the truck is the second-highest frequency initial point of impact in all large truck (over 10,000 lbs.) crashes causing injury (17%) and death (22%).

The Truck Safety Coalition, which has pushed for tighter truck equipment standards to prevent deaths involving passenger cars that collide into the backs of sides trucks, supported FMCSA’s exemption to allow for limited field testing of Intellistop’s module “in order to collect data and more fully determine the potential safety benefits of this promising approach,” TSC stated.

Safety standards group: Regulations first

But the Transportation Safety Equipment Institute (TSEI), which advocates for advanced performance standards and regulations for truck safety equipment, was against the exemption.

“We do not believe FMCSA should make the leap … without a thorough consideration of safety data and research with the aim of setting standards (including those related to flash patterns) to ensure consistency across all vehicles equipped with such lamps,” TSEI stated in comments filed with the agency.

“While we believe FMCSA should deny Encore’s exemption application, we urge the agency to closely study the use of non-steady burning and pulsating lamps and, as appropriate, engage in formal rulemaking to amend [federal regulations] to provide consistency among all vehicles (or vehicle types).”

Related articles:

• Feds give tank truck owners option to enhance brake lighting
• FMCSA relaxes rules for truck driver-assist devices
• Safety groups oppose roadside warning exemption for driverless trucks

Click for more FreightWaves articles by John Gallagher.

The post FMCSA allows ‘limited number’ of trucks to use pulsing brake lamps appeared first on FreightWaves.

On episode 760 of WHAT THE TRUCK?!? Dooner is joined by Covenant driver Don Lord and his son Jason. Combined, they’ve driven for over 5 million accident-free miles! Don was just honored by Covenant with a check for $7,500 and a customized truck. We’ll find out how he’s managed to stay safe while running enough miles to circle the globe 120 times.

Plus, a National Truck Driver Appreciation Week roundup featuring Noritta Taylor at OOIDA, Kylla Lanier at Trucker Against Trafficking, Nick LaFalce at RaceTrac and Jamie Hagen at Hell Bent Xpress. A Coca-Cola Oreo review and more. 

Watch on YouTube

Check out the WTT merch store

Visit our sponsor

Subscribe to the WTT newsletter

Apple Podcasts

Spotify

More FreightWaves Podcasts

The post Trucker honored for 3M accident free miles; NTDAW roundup; OOIDA teams with TAT | WHAT THE TRUCK?!? appeared first on FreightWaves.

This year’s Future of Freight Festival takes place Nov. 19-21 in Chattanooga, Tennessee. But it’s not your average conference. Sure, there are wonderful speakers and fireside chats. But that’s only half the fun. F3 is set up with half days of speakers and amazing content. The other half we take over downtown Chattanooga, and there are events, networking and a lot of fun to be had by all. This year, subscribers to Running on Ice get a promo code exclusive to us! You can register with this link or use the code F3ROI24 at checkout for a discount.

All thawed out

It may not work quite as fast as tagging a player in freeze tag, but Blue Cube’s newly developed blast freezer with InnoBlast technology is expected to be 10%-12% faster at freezing compared to existing methods. A bonus: The freezer is also expected to save customers about 10% annually on energy costs.

And the evolution of the design isn’t over yet. Blue Cube is developing solutions to support environmental, social and governance goals that include the ability to add solar panels, wind turbines, electric vehicle charge points: You name it. And the company has taken things a step further by pledging that for every InnoBlast unit bought by customers, Blue Cube will donate one to a worthy cause across the world. 

Managing Director Alan Hunt said in a news release: “The InnoBlast will transform results for our customers across the Food, Distribution, Pharmaceuticals and Manufacturing sectors. Our trials have shown it will freeze faster, more consistently across products and use less energy. That combination will give our customers back valuable time and money which will make a significant impact to their business, today and in the future. By also supporting B1G1 charities, the InnoBlast will create life-changing results for children and families across the world, today and in the future.”

Temperature checks

A friend of the Running on Ice community, SeaCube Containers, is making waves as the first leasing company to invest in Carrier Transicold’s new OptimaLINE reefer containers. The inaugural order is for 3,000 containers. What sets Carrier’s technology apart from others is that OptimaLINE has a variable-speed compressor with a permanent magnet motor and a variable-frequency drive, all designed for optimal energy consumption. The result is more reliable units, lower operating costs and reductions in carbon footprints.

“We’re delighted that SeaCube has chosen the next-generation, future-ready, OptimaLINE reefer containers for their latest acquisition,” said Vineet Kashyap, vice president and general manager, global container refrigeration, Carrier Transicold. “The design of the OptimaLINE unit enables us to deliver a step change in efficiency, reliability and performance for SeaCube and their customers.” 

Food and drug

The Jolly Green Giant is giving consumers something new to be jolly about. The company known for a love of vegetables has announced a new line of 12 veggie-forward frozen food options. Some of the highlights include Crispy Smashed Potatoes, Corn Cob Bites and Veggie Ramen. An expansion for the Green Giant Restaurant Style line will be added to the freezer aisle as well. Green Giant is going to start giving the pizza aisle some competition for champion of the freezer section.

Kristen Thompson, president of frozen and vegetables and senior vice president of B&G Foods, said in a news release that the new options “offer fun twists to classic favorites, while remaining a convenient and affordable option that doesn’t sacrifice taste.” She added, “We’ve seen great success with our Restaurant Style sides because consumers love incorporating high-quality veggies into their meals without having to leave home … .”

Cold chain lanes

This week’s SONAR market heads to Dallas, the Pegasus City, as reefer capacity tightens after loosening at the beginning of the month. Reefer outbound tender rejections over the past week started at 5.57% on Sept. 13, dropped to 4.33% on Monday and now have risen to 6.56%. The yo-yo style of reefer rejection rates is common for the Dallas market, but this week it brought the lowest rejection rate the market has seen in four months.

Reefer outbound tender volumes are low for this time of year. The index is down 29% year over year as there is little to indicate that there will be a big influx of volume to the market. Dallas is positioning itself as a cool market for freight, but should the ROTRI continue to increase and volume decreases, it could heat up.

Is SONAR for you? Check it out with a demo!

Shelf life

‘Perfect storm’ pushes market toward Q4 reefer equipment shortages

Beautiful by Drew rolls out gourmet-inspired frozen meals

ABI Research ranks Powerfleet as the world’s No. 1 commercial cold chain solution

Operation Beef Bandit”: Four thieves caught in multi-million dollar chain of food heists spanning 3 years

Varcode launches enhanced Smart Tag VI with a Visual Indicator

Wanna chat in the cooler? Shoot me an email with comments, questions or story ideas at moconnell@freightwaves.com.

See you on the internet.

Mary

If this newsletter was forwarded to you, you must be pretty chill. Join the coolest community in freight and subscribe for more at freightwaves.com/subscribe.

The post Running on Ice: Blue Cube advances cold chain  appeared first on FreightWaves.

Boeing workers walked off the job at midnight on Sept. 12 after more than 94% of union members rejected a tentative contract offer by the company.

After joining several picket lines in Washington and Oregon on Wednesday and Thursday, Bryant told FreightWaves in a phone interview that union members were resolved to achieve fair pay and better benefits.

“The beginning of this week we wanted to visit with many of our members on the picket lines all the way from Everett [Washington], all the way down here to Portland to let them know they have the complete support of their union, the 600,000 active and retired IAM members both in the United States and Canada,” Bryant said. “… [W]hat it’s really about is, they’ve had 10 years of stagnant wages, 10 years where they’ve lost their pension, 10 years of continual increases in their health insurance. … [T]he workers here have just said enough is enough. We’ve got to go, we’ve got to get a contract that truly respects us and recognizes the value that we do for the Boeing Company.”

Bryant said support for the strike has been overwhelming.

“We’ve talked to people who have 45 years in this plant, and we’ve talked to people that just started two months ago, and they’re all on the same page,” he said.

Bryant said that while Boeing does offer a 401(k) matching program, most workers can’t contribute to retirement because their wages aren’t high enough.

“They can’t afford both their mortgages, the rent payments, the vehicle payments, the gas, the fuel to get to work, the food to feed them and their families and their other utilities,” he said. “By the time that’s all done, they don’t have enough income to be able to even participate in the 401(k). It’s on Boeing; they’ve got to correct that. What they did 10 years ago with the pension was just ridiculous and uncalled for, but they’ve got to move forward. They’ve got to do something that gives people income security when they retire.”

Bryant blasted Boeing’s announcement of furloughs in response to the strikes.

“If they want to get serious about what they’re spending on executive salaries and if they’re overstaffed, they could have been dealing with that all [along],” Bryant said. “It’s a cheap shot to make it look like they’re blaming the workers out here on strike because it’s their fault. Look, the workers are on strike here. None of Boeing’s problems have anything to do with these workers. In fact, all of the things that are wrong with Boeing right now are all attributed to bad decisions from corporate … . They’re the ones that have made the bad decisions that are putting Boeing in the position that they’re in. And it’s unfortunate that they’re trying to make this look like it’s the union’s fault. It’s just smoke and mirrors.”

He said it will take a fair contract to resolve this strike, and that members are resolved to wait as long as necessary to get that.

“I’m absolutely amazed and impressed with the solidarity and the commitment that our members of the Boeing workers have made to improve their situation,” Bryant said. “This isn’t only happening with the Boeing Company. This strike is being followed all across – not just the U.S. – but in Canada also. This is being followed because the same thing that is happening and has happened to these workers here is happening at many different corporations.”

Boeing did not immediately respond to FreightWaves’ request for comment.

The post Machinists union head joins Boeing strike lines across Pacific Northwest appeared first on FreightWaves.

“Given the devastating economic consequences of a potential strike and the Administration’s lack of engagement to date, we urge you to give immediate attention to this matter, to aid in these negotiations, and find a reasonable resolution to these contract disputes,” wrote 69 House Republicans in a letter sent to the White House on Thursday.

“We expect the Administration to provide any and all support it can offer to both parties as these negotiations continue. Furthermore, if a strike should occur, we urge the Administration to utilize every authority at its disposal to ensure the continuing flow of goods and avoid undue harm to American consumers and the Nation’s economy.”

Transportation Secretary Pete Buttigieg, Labor Secretary Julie Su, Commerce Secretary Gina Raimondo and Agriculture Secretary Tom Vilsack were copied on the letter.

The pressure from lawmakers comes after Republican members of the House Transportation and Infrastructure Committee were briefed on the situation by the American Trucking Associations, National Retail Federation, the National Association of Manufacturers, the American Forest & Paper Association, and other port customers.

It also follows pledges made by the Biden administration – which has strong union support and will need that support for Democrat Kamala Harris’ presidential bid – to not force dockworkers back to work if a strike is called on Oct. 1, when the current contract expires.

The lawmakers said it is important for the ILA and employers, represented by the United States Maritime Alliance (USMX), to remain at the bargaining table “as long as necessary” to avoid a work stoppage that potentially could grind freight supply chains to a halt.

“A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend,” wrote a coalition of trade groups on Tuesday, also calling on Biden to be prepared to step in if necessary.

“Even a short disruption could require weeks to fully resolve, leading to significant backlogs and delays,” container shipping giant Maersk [NASDAQ: MaerskB] told customers earlier this month.

But the ILA, which has been standing firm on wage demands and opposition to automation in its negotiations, asserted this week that a strike at ILA ports on the Atlantic and Gulf coasts on Oct. 1 “seems more likely as time is running out to get a new Master Contract Agreement settled with USMX.”

Related articles:

• Say it ain’t so, Joe
• Does the ILA have a point in objecting to automation?
• Could East Coast port strike spread to West Coast?

Click for more FreightWaves articles by John Gallagher.

The post Republicans push Biden to intervene if dockworkers strike appeared first on FreightWaves.

The professional organization for 3PLs said in its 12-page report that 3PLs have experienced a “dramatic” rise in fraud, prompting an increased need for countermeasures. The TIA collected 200 responses from members from February to August to analyze key trends in fraud. 

Fraud has become more sophisticated, leading to calls for action on a federal level, including for a task force to curtail the crime. 

The most common form of fraud is cargo theft, which saw a 600% increase between November 2022 and March 2023, the report said. The National Insurance Crime Bureau reports that cargo theft amounts to $15 billion to $30 billion each year.

Financial schemes are growing, including unlawful brokerage and fraudulent invoicing. Other types of fraud include identity theft, in which people impersonate legitimate companies to commit fraud; internal theft, in which employees participate in the scheme; and data theft from cyberattacks.

The average gross cost of fraud reported by respondents was about $402,000. Some companies reported over $1 million in losses, the report said. The average amount lost to fraud per load is over $40,000. 

The report highlighted stories from those in the logistics industry impacted by fraud. 

Rob Hoffman, CEO of Dedicated Carriers, received ransom demands when someone stole one of his loads and threatened to steal more unless he paid $40,000. Hackers gained access to CBT Inc.’s load board account last year from a phishing scam and posted fraudulent listings under CBT’s name.

Other things identified in the report:

• California, Texas, Illinois, Georgia and Florida reported the most incidents. Forty-eight percent of fraud incidents originated in California alone.
• The most commonly stolen items are electronics, solar panels and household goods. 
• Truckload freight is the primary target of fraud.

Companies are investing heavily in solutions to fight fraud, the report said. Efforts include technology investments.

In addition to spending money to stop theft, companies are spending significant time tackling the problem. This affects productivity, the report said. About 20% of respondents told the TIA they spend one day per quarter on fraud prevention.

The most-targeted commodities have a high and easy resale value, meaning companies should implement extra security measures for these goods, the report said. 

The report outlined these strategies to fight fraud:

• Collaborate with shippers, brokers and carriers.
• Advocate for regulatory oversight.
• Invest in enhanced technology.

The post Logistics industry must evolve to fight fraud, TIA says in new report appeared first on FreightWaves.

As BNSF Railway, CSX and Norfolk Southern continue to sign tentative contract agreements with their labor unions well in advance of the start of national negotiations, one U.S. Class I railroad has been conspicuously absent: Union Pacific.

UP executives explained on Thursday that – unlike the other railroads – it is seeking to modernize work rules as part of its contract talks.

“Some of the other railroads have started to enter into labor agreements with their unions. We, like them, agree that our employees are our most important resource and that they deserve very competitive pay and benefits, and as a matter of fact we think our employees are among some of the highest compensated in the industry,” UP President Beth Whited said at the railroad’s investor day Thursday morning.

“However, we are so focused on our strategy of safety, service and operational efficiency, we think it behooves us two spend some time with our unions in this negotiating cycle to talk about ways we can work together as part of our agreements to improve availability and modernize work rules so that as we emerge from this negotiating cycle we’re able to really ramp up our ability to provide that consistent and reliable service that our customers want and need from us. So that’s the focus that we have at UP,” she said.

CEO Jim Vena emphasized that UP is not late – the national negotiation process can’t start for another six weeks, and the current contract runs through June 30 of next year.

UP wants the flexibility to use crews differently in terminals, for example, and continues to work on implementing new work/rest schedules as part of an agreement reached last year with the Brotherhood of Locomotive Engineers and Trainmen.

The railroad also aims to make changes to the way conductors represented by the SMART-TD union are scheduled to work and have time off.

UP has sought to renegotiate the scheduling deal it reached last year with the BLET, under which engineers work 11 days and then have four days off. That prompted the union to sue the railroad this summer because it had yet to implement the scheduling agreement systemwide.

Last month, UP told The Associated Press that it needs to tweak the deal that forced it to hire additional engineers to cover the shifts of workers getting regular time off. “The amount of work we’re getting — the starts per the 11 days that they’re available — is not anywhere near where both us or the union thought it was going to be,” Vena told the AP. “So we’re just trying to figure out how we can fix or tweak it. But at the end of the day, we’ve committed to people. We signed an 11-and-four deal and we’ll live up to our commitments.”

Meanwhile, BNSF and Norfolk Southern made additional labor agreement announcements Thursday.

BNSF said it has reached tentative five-year agreements with SMART-TD, including the union’s yardmasters. It’s the eighth tentative agreement BNSF has reached, covering 46% of the railway’s employees.

“Thank you to our leaders who have worked collaboratively with us to reach these tentative agreements,” BNSF CEO Katie Farmer said in a statement. “We are proud to be able to give our employees this unprecedented certainty over enhancements to their pay, health care and vacation in advance of the next round. Today’s agreement sets our entire team up for future success in serving our customers while securing jobs for our employees.”

Norfolk Southern announced that the Brotherhood of Railway Carmen Division and the Transportation Communications Union (TCU) have voted to ratify their respective tentative agreements, becoming the first to approve new five-year contracts with the company.

“Employees have told us they are tired of waiting on a multi-year bargaining process to receive their hard-earned raises. I’m proud of the work this company has done, in partnership with our labor leaders, to address that feedback, reaching early agreements with so many of our unions,” CEO Mark George said in a statement. “Looking ahead, we will continue to collaborate with our labor leaders on critical safety, training, and quality-of-life initiatives to ensure we provide a safe and rewarding career for our craft railroaders.”

NS has reached similar deals with eight other unions covering more than half of its workforce.

CSX was the first Class I to reach tentative agreements with its unions prior to the start of national negotiations. To date, it has reached proactive agreements with 11 labor unions covering 15 different work groups, amending 20 collective agreements covering more than 50% of its unionized workforce.

The post UP explains absence from early contract agreements with organized labor appeared first on FreightWaves.

Eight months into 2024, the leading U.S. container gateway is 17% ahead of its 2023 pace, already moving nearly 1 million more containers than a year ago.

“The American consumer continues to spend and that’s helping to power our economy,” Port of Los Angeles Executive Director Gene Seroka said at a media briefing. “Some of the cargo arriving now is replenishing inventories even beyond the year-end holiday season. Combined with a steady flow of manufacturing parts and components, we should continue to see elevated volume in the near term.”

August loaded imports landed at 509,363 TEUs, an 18% increase compared to the previous year. Loaded exports came in at 121,744 TEUs, off 3% compared to 2023. The port processed 329,491 empty containers, a 22% jump compared to 2023.

Overall, the hub moved 6,631,688 TEUs through the first eight months of 2024, a 17% increase over the same period in 2023.

More coverage by Stuart Chirls

Port of Los Angeles sees busiest month outside pandemic

Report: Biden won’t block dock strike

The post Port of Los Angeles sees busiest month outside pandemic appeared first on FreightWaves.

This week at the IAA Transportation truck exhibition, Daum definitively answered the question. He’s done at the end of the year.

The Sept. 4 news release announcing Martin Daum’s successor as Chair and CEO of Daimler Truck didn’t precisely say the legendary trucking industry executive was retiring.

This week at the IAA Transportation truck exhibition, Daum definitively answered the question. He’s done at the end of the year.

A family decision

“Look, I am 65-ish. I was really debating with my wife over Christmas last year [whether] I should do another three-year term,” Daum told me following Daimler’s media night on Sunday. “Honestly, we have too many plans.”

Missing out on a recent three-week excursion with some retired Daimler executives helped convince Daum, who turns 65 on Oct. 28, the time had come to leave the company he joined in 1987.

“I’m retiring. And my wife is going to kill me if I tell you that something is coming up next.”

Trucking’s first female CEO

Daum recruited Karin Rådström from Traton Group’s Scania unit in Sweden three and a half years ago to become CEO of Mercedes-Benz Trucks sold primarily in Europe. At 45, she is two decades younger than Daum. She takes over as CEO of Daimler on Oct. 1 but will continue to run the European truck maker until her successor is named.

Rådström becomes the first woman to lead a major truck maker. Jennifer Rumsey was selected as the first female CEO of engine and power distribution provider Cummins Inc. two years ago. Mary Barra broke the glass ceiling in automotive, becoming CEO of General Motors in 2014.

‘Being first is always special’

“Being first is always special,” Daum said. “I hope there comes a time when you [don’t] have to mention that it’s special.”

Daimler Supervisory Board Chairman Joe Kaeser made the ultimate call on Daum’s successor. Daum said he would have been fine had any of his leadership team been chosen. 

“Not a single one [of them], including Karin, said, ‘If this guy gets it, I’m out.’ It’s always, ‘We are one team. Hopefully one of us gets it. And Karin got it. So wonderful.”

But for his sudden death from a wasp sting in August 2023, 52-year-old CFO Jochen Goetz joined Rådström at the top of the list to succeed Daum. The 30-year company veteran shared credit with Daum in steering Daimler Truck to independence. His successor, Eva Scherer, 40, became the first female CFO among major truck makers in April.

For her part, Rådström said she is still getting used to the idea of her selection. Despite her focus on the Mercedes-Benz Truck brand, she deftly handled questions about Daimler Truck North America in a roundtable with reporters at the IAA on Monday.

“It’s quite new. I am really humbled,” Rådström said. “I’m proud and I hope I can make a positive difference in that role for the company and for the industry in this very important, historic time we are in. I’m looking forward. But it’s a big job, so give me some time.”

Daum’s legacy: An independent Daimler Truck

If it seemed like it took a long time for Daimler Truck to separate from Daimler AG’s passenger car business to stand on its own, you need to know how long Daum was thinking about it.

“It was in 2001. I was head of strategy for the truck division inside Daimler. At one point, I went to my bosses and said, ‘I have a brilliant idea. We separate trucks and passenger cars. [I] had a vision [for] how that would pan out, and [it would] be really successful for shareholders, for customers, for people, for the company.”

Or maybe not.

Split-up idea initially panned as career suicide

“[My supervisor] looked at my concept and he says, ‘If you want to commit suicide, you just continue,’” Daum recalled with a laugh.

More than a decade later, the idea came up again. Daum teased the idea of Freightliner, which he was running at the time, merging with the Mercedes-Benz passenger car plant in Alabama. It was meant as a joke. But it led to serious discussions about Daimler AG standing up its passenger car and commercial truck units as separate businesses.

Daimler Truck AG began trading on the Frankfurt Stock Exchange in December 2021.

“The pandemic helped,” Daum said. “It was the second quarter in 2020 when we had one or two strategy sessions on the top level and said, ‘What can we do significantly differently? One of the key ones was to split the company.”

Dedication to zero emissions and autonomy

Daum led Daimler Truck North America until 2017. Later, as head of the overall company’s management board, he committed Daimler to selling only zero-emissions powertrains in its major markets by 2039. In 2020, he created a joint venture with rival Volvo Group to defray the cost of fuel cell development. A year earlier, autonomous truck developer Torc Robotics became part of the Daimler fold as an independent subsidiary.   

In retirement, Daum will split time between Germany’s Black Forest and Portland, Oregon. 

“I have three kids. Two live in the U.S. I have five grandkids. Three live in the U.S. I have one wife. She lives in Germany,” Daum told a small gathering of reporters at the IAA. “We’ll travel, but the core is Germany.”

Is Fuso’s eCanter-based refuse truck bound for Rizon?

In Europe and most global markets, Daimler’s Japan-based medium-duty electric truck brand is sold under the Fuso name. Until 2021, Fuso was a North American brand, too. Now its trucks are sold under the Rizon brand in the U.S. and Canada.

With more than 100 variants, Fuso introduced a Class 4-5 refuse truck at the IAA Transportation show. Though refuse is becoming a crowded space in the U.S., where Paccar’s Peterbilt brand holds a commanding market share, Fuso President Karl Deppen told me the refuse model could very well join a growing lineup of Rizon offerings.

“We’ve seen great interest from customers around the world,” Deppen said following Daimler’s media night before the IAA opened. “All this depends on what the local bodybuilders are capable of. So far, we’ve been quite fortunate to find good partners.”

Briefly noted …

Kodiak has integrated its self-driving technology – no room for a human driver – into a Textron Systems military vehicle intended to keep service members out of harm’s way.

Ree Automotive, developer of a full by-wire system for electric vehicles, has a new global manufacturing partner and $43 million in cash from a direct sale of stock.

Following a 1:50 reverse stock split earlier in September, Hyzon has begun production of its 200-kilowatt single-stack fuel cell for retrofitting into Freightliner Cascadias. 

Terawatt will create six truck charging depots along I-10 in the Southwest to support a shipper-carrier coalition that includes AIT Worldwide Logistics, DB Schenker, Maersk, Microsoft and PepsiCo.

Truck Tech Episode No. 83: Designing the Volvo VNL from a clean sheet of paper

That’s it for this week. Thanks for reading and watching. Send your feedback on Truck Tech to Alan Adler at aadler@firecrown.com.

The post IAA 2024: Daum’s legacy – a stand-alone Daimler Truck appeared first on FreightWaves.

Marten Transport has cut the salaries of six key executives while keeping their other compensation intact.

In a filing with the Securities and Exchange Commission, the truckload carrier said it had reduced the salaries of four executives by 7.5%. The four are Randolph Marten, executive chairman; CEO Timothy Kohl; James Hinnendael, CFO and executive vice president; and President Douglas Petit.

Chief Operating Officer Adam Phillips’ salary was cut by 5%, as was that of Executive Vice President and Chief Technology Officer Randall Baier.

In the SEC filing, the reductions were described as temporary. The move does not impact other types of compensation, Marten said.

The filing said the cuts were taken as part of Marten’s “cost reduction initiatives to mitigate the considerable duration and depth of the freight market recession’s impact on our operations with its oversupply, weak demand and inflationary operating costs.”

Those six executives were all on the “comp table” in Marten’s (NASDAQ: MRTN) latest proxy statement, a part of every proxy statement that represents the company’s highest-paid executives. 

The base salary compensation in 2023 for all the executives was approximately 4.4% more than it was in 2022, according to the comp table. However, 2022 figures for Phillips and Baier were not provided because Phillips joined Marten in late 2023 and Baier joined in the middle of last year.

The 2023 and 2022 salaries, respectively, were for Marten, $811,077, up from $776,998; Kohl, $744,654, up from $713,243; Hinnendael, $408,538, up from $391,346; and Petit, $397,539, up from $380,653. Phillips’ salary was $288,860, while Baier’s was $266,576.

None of the officers received bonuses in 2023. Stock or options awards granted to all the executives ranged from $61,470 for Phillips and Baier to $359,169 for Marten. 

In the company’s latest earnings report for the second quarter, Marten’s truckload activities net of fuel surcharge revenue recorded an operating ratio of 98.8% compared to 90.6% in the second quarter of 2023. Revenue dropped to $96 million in the second quarter, down from $101.3 million in the corresponding quarter a year earlier. Average revenue per tractor per week, net of fuel revenue, declined to $4,093 from $4,472.

In its earnings statement released at the time – Marten does not do a call with analysts – the company said it had not agreed to any rate cuts since August 2023. It made that statement in both the first and second quarter.

Marten’s stock in the last year, per data from Barchart, is down about 12.3%. It has risen just 2.25% in the past three months, a period when the overall stock market as measured by the S&P 500 is up about 7.6%.

More articles by John Kingston

Bad news at Marten: Profits miss expectations, truckload OR plummets

5 takeaways from State of Freight: Preparing for East, Gulf Coast port strike

Supreme Court to hear case of truck driver who failed CBD-related drug test

The post Marten, citing weak freight market, cuts base salaries of 6 top executives appeared first on FreightWaves.

To view more FreightWaves infographics, click here

The post FreightWaves Infographics: LA port terminal getting $52 million for on-dock rail appeared first on FreightWaves.

The express logistics provider lowered its guidance for the fiscal year, saying it now expects low-single-digit percentage revenue growth compared to the prior forecast of a low-to-mid-digit increase. It also narrowed the adjusted earnings-per-share range to $20 to $21 from the prior range of $20 to $22.

FedEx (NYSE: FDX) is undergoing a significant transformation under CEO Raj Subramaniam, aiming to cut costs and combine two distinct delivery networks to improve efficiency and customer service. But the quarterly results suggest the process will be bumpy.

Shippers choosing cheaper delivery options is a growing trend that also is afflicting UPS. Businesses are increasingly switching from express air to ground service and from ground to lower-priced hybrid service that injects parcels into the U.S. Postal Service system for final-mile delivery. Deferred package services offer lower yields than premium express service. FedEx said its operating margin fell from 7.3% to 5.6%.

Adjusted operating income for the quarter ended Aug. 31 was $1.2 billion, down nearly 24% from the same period a year ago on revenue of $21.6 billion. Revenue ticked down $100 million. Adjusted earnings per share of $3.60 was 21% lower year over year and nearly 25% below analysts’ projections. Revenue missed consensus estimates by $170 million. 

Results were also hurt by weaker-than-expected demand, especially in the U.S. domestic package market. Subramaniam added that a sluggish industrial economy suppressed business-to-business volumes in the quarter, but expressed cautious optimism that industrial production will improve in the second half of the fiscal year.

Reduced flying for the U.S. Postal Service didn’t help the top line as work transitioned to UPS, which is taking over the air cargo contract after Sept. 30. Management said it planned to reduce daytime flight hours by about 60% in October as it exits the postal business, as previously reported by FreightWaves.

Management has said it expects to achieve significant cost reductions and better flexibility as it streamlines domestic air operations in line with reduced aircraft requirements. The end of the Postal Service business is expected to deflate operating income by $500 million this fiscal year.

A key priority is eliminating excess capacity. Structural cost reductions during the quarter prevented earnings from being worse. FedEx said it realized $160 million in cost savings from reorganizing its air and international networks and $90 million from surface network improvements. It is on target for $2.2 billion in permanent savings this fiscal year after saving $1.8 billion last year. 

“Our revised outlook reflects our continued confidence in the execution of our Drive initiatives and the effects of our recent pricing actions, which we expect to help offset weaker-than-expected demand trends,” said CFO John Dietrich in the announcement. “We will continue to manage our capital prudently, and remain committed to our plan to return $3.8 billion to stockholders this fiscal year.”

Investment bank Morgan Stanley lowered its stock rating for FedEx to underweight because it said many of the headwinds – lower parcel demand, competition from lower-priced operators, e-commerce – are structural, not cyclical. Equity analyst Ravi Shankar added in a research note that integrating package facilities will get more difficult as the Drive program extends to larger metro areas. He estimated savings this year will be $500 million, not $2 billion, based on FedEx achieving $390 million in savings after about $550 million in cost cuts in each of the prior three quarters and how difficult it has historically been to streamline operations in Europe.

FedEx reported results for the first time under a new corporate structure that combines Ground and Services segments under a new Federal Express segment. Also, results for FedEx Custom Critical, a white-glove delivery service, are now reported under FedEx Freight.

Fully integrating operating units at the field level will take longer but is well underway in Canada. Subramaniam said integration of nearly 200 facilities in Canada that can handle express and ground volumes will be completed by early 2025. Facilities that have been combined so far have achieved a 10% reduction in pickup and delivery costs with service levels that meet or exceed the network average, he said. 

The integration of separate Express and Ground networks aims to deliver an additional $2 billion in savings over the next two years. Dietrich said the expiration of the Postal Service contract will help the redesign of the air network because different sizes of aircraft can be better matched to demand by freight lane. The demand changes in the market underscore the importance of streamlining air operations, officials said.  

Express revenue dipped 1% to $18.3 billion during the quarter due to lower domestic priority package volume and increased purchased transportation rates. Higher international economy package volume (+8.5%) was a bright spot for the segment.

Soft revenue was heavily influenced by a global decline in Priority volume and growth in deferred volume, which held total package yields to 1% growth, almost one point lower than the company expected, Dietrich said on the earnings call with analysts. The increase in international economy volume was a primary reason for the $124 million increase in purchased transportation expenses, which involved pickup and delivery, surface linehaul and commercial air contractors.

FedEx Freight, the less-than-truckload segment, was negatively impacted by a decline in weight per shipment and reduced priority shipments, partly offset by a higher base yield. Revenue was $2.3 billion, 2% lower than the prior year. The company said it closed seven small-market terminals last year as part of its strategy to streamline the network.

FedEx had one fewer operating day during the quarter than last year.

Officials said new international demand and fuel surcharges will help results in the coming quarters.

The results were a reversal from the previous quarter when FedEx revenue inched up 1% to $22 billion and adjusted operating income increased 5.6% to $1.9 billion. It was the first time FedEx had year-over-year revenue growth after six quarters of declines.

Earlier this month, FedEx announced a strategic alliance and investment with Nimble, an AI robotics and autonomous e-commerce fulfillment technology company. 

There was no news about a strategic realignment that would see the less-than-truckload segment sold or spun off as an independent entity, so the company can focus on its parcel and logistics business. Leadership reiterated that it expects to complete a review of FedEx Freight by the end of the year.

Click here for more FreightWaves/American Shipper articles by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

RECOMMENDED READING:

FedEx explores divestment of Freight business

FedEx and UPS must adapt to changing parcel landscape

FedEx retires one-fifth of Boeing 757 freighter fleet

The post FedEx results hurt by weak demand, fewer premium customers appeared first on FreightWaves.

The event drew more than 1,500 attendees and included several keynote conversations and hundreds of panel discussions, workshops and exhibitors focused on transportation trends and emerging technologies.

Here are several takeaways from this year’s Insight:

Trimble leaders’ keynote highlights acceleration of technology across transportation industry

Trimble (NASDAQ: TRMB) opened its 2024 Insight Tech Conference on Monday with Rob Painter, president and CEO, and Michael Kornhauser, sector vice president, transportation and logistics, unveiling product updates and relaunches focused on optimizing carrier workflows, navigation and safety.

“We will continue delivering innovation to help you do your work better, and continue investing in cybersecurity, in data and in AI,” Painter said. “The global transportation industry is experiencing a major shift as technology propels productivity.”

The product releases included updates to Trimble’s CoPilot commercial navigation solution, as well as a relaunch of its TMS Order and Road Call modules.

Other transportation technologies discussed during the keynote included Transporeon Visibility and Trimble Inspections. 

Transporeon Visibility creates a new real-time visibility tool for carriers in North America, while Trimble Inspections is designed to improve fleet safety and efficiency.

Painter was also joined onstage by Platform Science co-founder and CEO Jack Kennedy, who discussed Platform Science’s agreement to acquire Trimble’s global transportation telematics business units.

“We’re entering an exciting new chapter for Platform Science, for Trimble, and for the industry as a whole,” Kennedy said.

Navy commander says companies can achieve success by empowering employees

Former U.S. Navy Cmdr. Mike Abrashoff was the keynote speaker Tuesday at Insight.

Abrashoff, former commander of the USS Benfold, said he learned many lessons about what it takes to run a tight ship during his naval career.

Abrashoff was 36 when he took command of the Benfold, a guided missile destroyer. Within three years of taking command of the ship, Abrashoff and his crew are credited with transforming it into one of the best-performing guided-missile destroyers in the Navy fleet.

Abrashoff said he came up with the idea of interviewing every sailor on his ship and getting to know as much about them as possible as a way to create teamwork.

“That’s where the interviews came from, and they weren’t interrogations. They were just conversations. I had a photo taken with every sailor. I had an index card for every sailor. I stapled the photo to the index card,” Abrashoff said.

He asked the sailors questions such as what their goals were in the Navy and in life, as well as questions about their families, what sports their children play, and who their favorite football team is.

“Then during these interviews, I asked every single one, ‘What are you most proud of in your life that nobody here on the ship knows anything about?’ If you want us to see people’s eyes light up and talk with passion, it’s not about their work most of the time. It’s about seeing something in their lives that is really exciting to them,” Abrashoff said. “You know what I learned after almost 20 years in the Navy: If your people know you care about them, they’re going to follow you.”

Cross-border Mexico trade operators ‘deserve’ better technology solutions, experts say 

One of the panel discussions at Insight focused on how trade between the U.S. and Mexico is rapidly growing and transforming the global supply chain.

“The Rise in U.S. and Mexico Cross-Border Freight Movement” panel featured Patty Hinojosa, CargoQuotes’ vice president of Mexico sales and operations; Edward Habe, Averitt’s vice president of Mexico sales; and Matt Silver, CEO and co-founder of Cargado. The panel was moderated by FreightWaves’ Noi Mahoney.

Silver said more technology investment is needed in cross-border trade to keep up with the growing amount of freight moving between the U.S. and Mexico.

“I think the industry deserves better technology that helps people collaborate with each other,” Silver said. “Right now, there are a lot of individual tools or solutions that people are using to do different jobs. Part of my goal with Cargado, and my hope for a lot of the other technology companies out there, is that we start helping the industry move forward, instead of just trying to replace things that are kind of legacy today.”

Habe agreed and said the cross-border industry needs better technology solutions, such as visibility tools to help carriers and shippers keep better track of freight movements in Mexico.

Averitt is a transportation and logistics provider headquartered in Cookeville, Tennessee. The company has more than 5,700 tractors and 13,000 trailers, with 80 locations across the country. The company provides cross-border Mexico services such as truckload and LTL, as well as distribution and portside container drayage solutions.

“I keep going back to LTL pool distribution for door-to-door, because that’s what we do a lot of, and that’s where there’s still some major visibility issues versus truckload,” Habe said. “Basically, you pick up full trucks all over Mexico, loaded with LTL shipments that already have tracking numbers on them. In many cases, those tracking numbers have already been given to their customers in the U.S. Unfortunately, it could be two days, three days, four days, before that trailer arrives in places like Laredo, El Paso. Then those shipments get uploaded. So you have a lot of customers looking for the freight, that have no visibility, and that’s causing grief with a large number of our customers.”

Hinojosa, whose Lee’s Summit, Missouri-based full-service freight brokerage CargoQuotes specializes in cross-border shipments, said for freight brokers looking to move freight between the U.S. and Mexico, don’t forget about the importance of relationships.

“If any of you are in this industry, as a broker, you know that relationships are very important,” Hinojosa said. “Don’t go at it alone. My advice will be to find somebody that knows what they’re doing and guide you, be it a partner, or with someone that has been doing cross-border. Learn the ins and outs, or create a coalition with that person.”

The post Trimble Insight conference highlights transportation tech, freight trends appeared first on FreightWaves.

The International Longshoremen’s Association is threatening to strike East and Gulf Coast ports on Oct. 1, raising the prospect of supply chain disruptions. It became the lead topic of discussion on Thursday’s webinar as FreightWaves CEO Craig Fuller sat down with Zach Strickland, the company’s head of market intelligence.

Here are five takeaways from this month’s webinar, which can be accessed here.

Tough timing for a strike

Fuller said the potential timing of a strike is “the important thing.” “If this was going to happen in April, it can be disruptive, but we’re talking about October and a lot of those imports that are coming in October are bound for holiday sales,” he said. 

The timing of a container coming in starting in October makes delivery for the holidays a tight squeeze, he said. A container arriving on the East Coast by Oct. 10 is going to be able to get into the supply chain in time for holiday delivery. If the container arrives by Nov. 15, “now you’re pushing it, but you’ve got about a month where those products can clear customs.”

A strike would be “massively disruptive to supply chains” if it occurs, Fuller said. He specifically cited areas that might be hit hard, such as the network of warehouses in Pennsylvania’s Lehigh Valley, taking in a lot of products imported into the Port of Newark, New Jersey. “So those consumers, if this goes on for long, could see disruptions,” he said.

The big volumes coming into the ports 

Whether it’s preparing for a possible strike or the threat of big tariffs should Donald Trump return to the White House, import volumes coming into the nation’s ports already are at strong levels.

Strickland cited data from the SONAR Inbound TEU Volume Index (IOTI.USA in SONAR). “What’s shocking to me about this chart is that we are on par in the last month or so with the COVID-era shipping,” Strickland said, citing a period with massive backups of container ships waiting to offload, particularly on the West Coast. He noted the threat of the ILA strike as one possible reason but also said disruptions out of the Red Sea from Houthi attacks on shipping might have spurred an increase in imports that would have come around South Africa’s Cape of Good Hope to avoid the Red Sea.

“The facts are always a little bit more challenging to figure out whether or not this is related to labor events or geopolitical events,” Fuller said, adding the tariff threat into the latter category.

But volumes on the ground aren’t keeping up

As Strickland noted, an import that arrives in the U.S. has three options: It can go into a warehouse, get on a truck to a final destination or get on a train. The big numbers in the IOTI are not being matched in the Outbound Tender Volume Index (OTVI.USA in SONAR). For example, the OTVI.USA was at 123.78 on July 22. On Wednesday, it was 116.29.

Fuller had theories as to why. Fuller said it could be a sign of more efficient operations arising out of changes brought about by the wild freight market of 2022. “Those companies already run a pretty sophisticated logistics network, where they already have dedicated trucking, they already have their linehaul services between their distribution centers,” he said. “My theory is that eventually that volume does hit the trucking business. It just hasn’t yet.”

What constitutes normal?

Freight markets have been on a wild ride in recent years. In 2018, there was talk that it was one of the greatest freight markets ever. That was followed by a weak 2019, the short-term collapse because of COVID and the shock of a freight market that began to boom long before COVID was under control – a bull market that continued into 2022. So what’s normal these days?

Fuller suggested that the current market is trending toward normal. One reason: It has been doing what might be expected. For example, during International Roadcheck in May, capacity as measured by the Outbound Tender Reject Index tightened as many drivers stayed home. “I think Roadcheck Week was the first time we saw it move the freight market in two years,” Fuller said. There also was the normal drop in both capacity and volume during Memorial Day, the July Fourth holiday and Labor Day.

“And what that tells me is that while it’s not a great year, we are seeing a normalization of the market. When we talk about normal, are we talking about a market that was like 2021? Are we talking about a market like 2018?”

His definition of normal is that seasonality should impact markets, and that is beginning to happen. “Events do drive the market,” Fuller said. “And I think we are certainly seeing that this year.”

The possibility of another supply chain crisis

Fuller cited recent comments by an economist who looked at the ocean import volumes and saw the potential for another supply chain crisis like 2021 and into 2022, with the enormous backup of ships and the inability to keep deliveries moving. “What was causing the supply chain crisis then was the massive level of uncertainty, and everybody was ordering everything and you just had massive chaos,” Fuller said.

But to help ensure that wasn’t going to happen again, a huge amount of money has been spent on technology, “whether it’s visibility systems, robotic systems, all of that stuff,” Fuller said.

Another factor weighing against a return to the craziness of a few years ago is the fact that jobs were turning over massively, but there’s been more of a return to normal since then, Fuller said. During the COVID crisis, he said, “it wasn’t just your dockworkers that weren’t showing up. It wasn’t just your truck drivers. You were losing people who had domain expertise in logistics, and people who had never been in logistics were having to learn on the job.”

Even with a strike on the East Coast, Fuller said, “this is a much more orderly set of conditions.”

More articles by John Kingston

Another nuclear verdict in trucking: $160M award against Daimler

Trimble and Platform Science pushed hard to get deal done before Vegas meeting

Supreme Court to hear case of truck driver who failed CBD-related drug test

The post 5 takeaways from State of Freight: Preparing for East, Gulf Coast port strike appeared first on FreightWaves.

Welcome to the WHAT THE TRUCK?!? Newsletter presented by Unisys. In this issue, steamship lines react to potential port strike; tariffs targeted; exploding pager supply chains.

Work Disruption Surcharge

LinkedIn

Strike fees — Starting in October, some steamship lines will issue surcharges in anticipation of the potential port strike on the East Coast. Lars Jensen, CEO at Vespucci Maritime, advises, “Any shipper with inbound cargo on vessels therefore should by now also have a contingency plan for dealing with this.”

CMA CGM, Hapag-Lloyd and MSC have all announced work disruption surcharge fees that range from $800-$1,500 per twenty-foot equivalent unit.

“When there’s a capacity shortage, you can raise rates higher and faster than before – they learned this during the pandemic and applied it during the Red Sea crisis; rest assured, if we get a strike on the East Coast they will apply it again.” – Lars Jensen 

Analysts now warn that each day of the strike could take six days to recover from. This is especially precarious as holiday freight hits our shores for Black Friday and the Christmas shopping season.

FreightWaves

Strike and the election — The Biden administration and Kamala Harris are in a precarious situation as the strike looms. Democrats typically cater to unions and rely on their support. However, a prolonged port strike in the month leading up to the election would be horrible for Harris.

There are already enough issues with the economy; being labeled the candidate who ruined Christmas isn’t going to gain votes. 

“We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” a Biden administration official told Reuters.

According to FreightWaves, “The ILA, representing 45,000 employees at three dozen ports from Texas to Maine, has said its members will walk off the job if a new contract is not in place by Oct. 1.” Now, the Biden administration says it won’t step in if there is a strike.

Brace for impact — With less than two weeks to go before the strike and negotiations stalled, the first East Coast port strike in nearly 50 years is headed straight for the holiday season. What do you think? Will the strike happen and how are you planning around it? Email me.

321 and done

FreightWaves

Loophole – Chinese e-commerce retailers have been leveraging the hell out a loophole that allows them to import goods under $800 duty-free. Unlike U.S. retailers, who import containers of goods and pay duties, many Chinese firms sell directly to consumers, allowing them to skirt tariffs via Section 321’s de minimis exemption. Think Shein, Temu and even Amazon e-tailers.

X

1 Million a day – ShipHero’s Aaron Rubin estimates that the ruling would impact “1 million packages a day, it is a big deal.”

When will this big deal happen? It could come as soon as Q4.

This is going through regardless of whether Trump or Harris wins the election. However, a Trump administration could mean even more tariffs for China … but that’s a topic for another newsletter.

Happy Truck Driver Appreciation Week

LinkedIn

Just the other day I saw an influencer on LinkedIn suggest that we should all go to Buc-ee’s to show truck drivers our support. That’s a horrible and tone-deaf idea as Buc-ee’s doesn’t even allow semitrucks at its locations.

So, how can you give back to drivers? Appreciate their time and stop causing them to lose money at your slow a** docks.

Exploding pagers: Supply chain story of the year?

X

Sourcing – When beepers started blowing up across Lebanon this week, it became almost immediately clear that they had been tampered with at some point in the supply chain. 

MSNBC reports, “An electronics manufacturer in Taiwan said Wednesday that a company based in Hungary made the pagers bearing its brand that were used by members of the militant group Hezbollah and exploded simultaneously across Lebanon on Tuesday.”

U.S. officials say Israel was behind the attack, but it isn’t entirely clear at what point during the manufacturing and delivery process that explosives were added to the targeted devices.

Good to know

X

Forget ‘Founder Mode’

FBM – Founder Mode has nothing on Freight Broker Mode. Wear the shirt that lets them know you grind. Head on over to WTTGear.com to get our latest merch! Use code WTTFans for 10% off.

WTT Friday

Trucker honored for 3M accident-free miles; NTDAW roundup; OOIDA teams with TAT – Friday live on WHAT THE TRUCK?!? we’re joined by Covenant driver Don Lord and his son. Combined, they’ve driven for over 5 million accident-free miles! Don was just honored by Covenant with a check for $7,500 and a customized truck. We’ll find out how he’s managed to stay safe while running enough miles to circle the globe 120 times.

Plus, a National Truck Driver Appreciation Week roundup featuring Noritta Taylor at OOIDA, Kylla Lanier at Trucker Against Trafficking, Nick LaFalce at RaceTrac and Jamie Hagen at Hell Bent Xpress.

Catch new shows live at noon EDT Mondays, Wednesdays and Fridays on FreightWaves LinkedIn, Facebook, X or YouTube, or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player and at 5 p.m. Eastern on SiriusXM’s Road Dog Trucking Channel 146.

Now on demand

Cost parity with diesel is a must for semitruck electrification to get in gear

National Truck Driver Appreciation Week cynicism; spot market sputters

The rest of the noise

• Intermodal powers to record volume
• In another first, Teamsters make no endorsement for president
• LTL earnings estimates cut following weak August updates
  

Thanks for reading, and feel free to forward this to a friend.

Tweet @ Dooner

Email me

Subscribe to the newsletter

Subscribe to the show

Apple Podcasts

Spotify

YouTube

TikTok

Twitter

Or simply look up WHAT THE TRUCK?!? on your favorite podcast player. Or, if you have SiriusXM, tune in to the show Monday, Wednesday and Friday at 5 p.m. Eastern time on Road Dog Trucking Channel 146.

Exit through the gift shop: WTTGear.com 

Don’t be a stranger,

Dooner

The post Steamship lines add strike surcharges appeared first on FreightWaves.

Financial terms of the transaction were not disclosed, but the deal is a “landmark transaction” that will stabilize the company and allow it to focus on its “long-term growth trajectory,” a news release said.

“The ongoing freight recession has impacted the entire market, and by proactively addressing our balance sheet, we will be at the forefront of the industry and better equipped to navigate these challenges and provide exceptional value to our clients and partners around the world,” stated Seko CEO James Gagne in the release.

Private equity firm Ridgemont Equity Partners became the Schaumburg, Illinois-based logistics provider’s majority investor through a 2021 recapitalization. The new deal is backed by Seko’s lenders and equity sponsors, the release said.

The new capital will give Seko an improved financial position and allow the company to invest in its staff, network and technology. The nearly 50-year-old business provides end-to-end logistics services out of more than 150 offices in more than 60 countries.

The deal is expected to close in the coming weeks. The current leadership team will remain in place.

“With the recapitalization and scalable go-forward business plan, SEKO will enter an exciting new phase with the financial and strategic foundation to create the future of logistics,” Gagne added.

More FreightWaves articles by Todd Maiden

• LTL earnings estimates cut following weak August updates
• RXO completes $1B acquisition of Coyote Logistics
• Freight spend, shipments soft again in August

The post Seko Logistics gets capital infusion appeared first on FreightWaves.

And in staying with the theme of the conference, how can technology be adopted to reach that goal of more stability in a field with massive, endless turnover?

A three-person panel at Insight, the annual Trimble technology conference, offered a mixture of tech solutions as well as down-home recommendations on how to retain drivers and rein in eye-popping turnover rates.

Tim Crawford of Tenstreet provided some of the statistics on what carriers – which made up the largest percentage of attendees at Insight – are up against in trying to bring stability to their driver numbers.

Tenstreeet is a company focused on driver recruiting, onboarding and compliance. Crawford said the average person its network encounters is on the driver market once every four months, though he conceded that “there are drivers who are looking to see if there’s another job every week.”

Three million a year

The numbers informing that calculation are enormous. Crawford said Tenstreet sees applications from about 3 million individuals each year.

“The best indicator of whether the driver is going to be here in 90 days is just asking, ‘Hey, do you see yourself driving for us in 12 months?’” Crawford said. 

That question should be asked often, according to Crawford, and used to determine over time whether “there’s some smoke and there’s some fire.” 

But don’t just ask for feedback, he said. After getting drivers’ perspectives, “then do something, right?” Crawford said. “That carries a lot of water with the drivers. So I think just getting out and getting real data is really important.”

Panel member Jason DeShaw is the senior product director of driver experience and partners at host company Trimble (NASDAQ: TRMB). In that role, DeShaw supervises the technologies that support drivers and what they go through on the road. 

While no Trimble driver applications were exhibited during the panel, there were other sessions during the two-day conference on the use of some of those tools. For example: “Driver Pay Contracts: Improving Your Driver’s Experience” and “Keeping Drivers Ahead of the Storm: Predictive Hyper-Local Weather Alerts in CoPilot,” which is a Trimble product.

Before the code gets written, check out the UX

But just plowing away with the Trimble technology team is not the approach the company tries to take, DeShaw said.

“My responsibility before we write a line of code is to get out there in what we call the user experience discovery,” he said, using the term UX for user experience. The goal is to “understand what the business problem is we’re trying to solve.”

The idea should be to “make it as easy as possible. Don’t ask for things that we already know.”

DeShaw noted that as his panel was taking place, another a few doors away was looking at the topic of change management. One way to address change management, DeShaw said, is to recruit and hear from what he called “leader drivers” who have influence in the company and among other drivers.

“I think it is important to find that initial champion, working through understanding the pilots, getting feedback and tweaking things,” he said.

A particular challenge in creating technology that aids drivers is that they are “field workers,” DeShaw said, “so you can’t walk by their desk or the coffee machine and say, ‘How are you doing?’”

It requires taking an extra step to “curate their experience,” DeShaw said, which should include ride-alongs with drivers.

Mark Manera, the CEO and founder of Offshift, made a similar observation about the importance of internal leaders to drive change. Technology adoption, Manera said, is like a “bell curve.” In that curve, 10% to 15% of employees could be considered “early adopters.”

“And at a company, if you can get your road team or senior drivers that other people respect to buy in, we have found that to be really successful,” Manera said. 

Offshift works with trucking companies to improve driver health, an effort that often can meet resistance. Manera said one approach he has found can be successful is to work through driver managers or dispatchers. “We really educate people about our program and how drivers can sign up, and because that driver manager then has that personal relationship, they can bring it up in the conversation,” Manera said.

Crawford had an analogy about working to bridge the gap between drivers who might not be technology-savvy and are resistant to change and trying to improve their experience by the use of that same technology.

“Escalators never really break,” Crawford said. “They just turn into stairs.” It’s a twist on the adage that “the perfect is the enemy of the good.”

Building technology that “tries to handle everything” but then at times doesn’t work can be damaging to adoption efforts, Crawford said. The goal should be to develop a solution “that is more resilient, less fragile and is more real world-friendly.” 

But to do so takes the same sort of outreach and understanding that was discussed separately during the panel. “It comes from an initial perspective that gets right to the driver experience,” Crawford said.

The always present health problems

Manera discussed his start in creating his health-focused company after working at a clinic in St. Louis. 

“A bunch of truck drivers walked into the clinic, and it was my first time getting to know some drivers on a personal level, and the first seeing what 20 or 30 years behind the wheel can do to someone’s health,” Manera said. 

Changing that is necessary for the future of the industry, he added, and not just for keeping people who are on the road healthy. It is important for the next generation.

Truck drivers statistically are likely to live 16 years less than the average American “because of their health and the amount of obesity and diabetes, just the chronic disease that they suffer with on a day-to-day basis,” Manera said. That’s going to make it difficult for a 21-year-old to look at trucking and say, “I want to be in this industry. I want to use trucking to provide for my family but no, I don’t want to end up like those statistics.”

More articles by John Kingston

Another nuclear verdict in trucking: $160M award against Daimler

Trimble and Platform Science pushed hard to get deal done before Vegas meeting

Supreme Court to hear case of truck driver who failed CBD-related drug test

The post Trimble panelists: Great tech alone won’t keep drivers behind the wheel appeared first on FreightWaves.

Carriers forced to do more with less in lieu of market upswing

At last week’s annual FTR Transportation Intelligence conference in Indianapolis, industry leaders and market experts offered sometimes painful commentary on the current and future state of the freight industry. One topic was the impact of continued softness in the spot market. Despite 2024’s poor performance, 2025 is expected to bring growth. Avery Vise, vice president of trucking at FTR, expects truckload spot rates to increase 6.5% to 7% in 2025 compared to 1% overall in 2024. Contract rates are predicted to rise 3% after falling 3.5% in 2024.

Vise expects truckload volumes to rise next year in the dry van and reefer segment, compared to 0.2% overall in 2024. For next year, Vise expects dry van loadings to increase 1.5% while reefer loadings are estimated to rise to 2.6% in 2025.

One standout issue at the event was whether we’re in a recession of freight or rates. Eric Starks, chairman at FTR Transportation Intelligence, believes the latter. James Menzies wrote at TruckNews.com that Starks preferred to call it a rate recession, as trucking rates are being impacted not due to falling freight demand, but from excess truckload capacity that continues to exit the market at a slow rate. Additionally, analysts believe it will require both more freight volumes and less truckload capacity, with the current rate of capacity decline not sufficient enough to move the needle. 

In the meantime, absent a sustained market upswing, fleet strategies involve doing more with less and optimizing existing operations. For shippers, stability in the truckload space allows them to focus on the less-than-truckload segment, which is still in flux after the demise of LTL carrier Yellow. Yellow’s approximately 150 former terminals, 12,700 tractors and 42,000 trailers found new owners following a court-ordered auction. The Home Depot was noted at the conference to have paused bidding on its next annual contract as it waits for the dust from Yellow’s demise to settle. Part of that stems from Yellow formerly being the No. 2-ranked carrier for Home Depot. 

August preliminary net trailer orders fall 40% year over year

Following seasonally weak order numbers in the Class 8 space, trailer orders in August also saw large year-over-year declines as cash-strapped fleets hit the pause button on new equipment orders. Recent data from ACT Research shows preliminary net trailer orders increased 500 units from July to 7,700 units, an improvement, but 40% lower y/y than August 2023. August’s data brings year-to-date U.S. trailer net orders to 89,400 units, down 27% compared to the first eight months of 2023.

Jennifer McNealy, director of CV market research and publications at ACT Research, said, “Despite the sequential order improvement, August data continue to bear witness to our expectations of weaker demand against the backdrop of elevated order velocity the past few years, continuing weak for-hire truck market fundamentals, and already-filled dealer inventories. That said, it is important to remember that for orders, we remain in the weakest months of the annual cycle, suggesting stronger orders weren’t expected in August. An order uptick showcasing demand, or the lack thereof, depends on the next few months as OEMs open, or more fully open, their 2025 books.”

McNealy added that based on anecdotal industry conversations, this “pause button” is expected to remain throughout 2024, with growing concerns over the size of 2025 orders, when order books open up beginning in September. She adds the timing and size of 2025 order bookings remain a wildcard, with the current levels of elevated cancellations and lower backlogs not seen since late 2013.

Market update: Cass Freight Index and the ‘Dog Days’ of August

Freight audit and payment provider Cass Information Systems’ recently released August Cass Freight Index showed an uptick in shipments but declines in freight expenditures, inferred freight rates and its truckload linehaul index. The report, titled “Dog Days” saw its shipment index increase 1% m/m in August compared to a 3% m/m gain in July.

Tim Denoyer, vice president and senior analyst at ACT Research, wrote in the report, “These were the smallest declines in 18 months as goods demand continues to grow slowly, and slowing capacity additions reduce the pressure on for-hire shipments.”

Another standout came from the Expenditures Index, which fell 2% m/m in August, down 9% y/y versus a 6.2% y/y drop in July. The Cass Truckload Linehaul Index, which includes both spot and contracted freight, saw its fourth straight month of declines, falling 3.3% in August versus 3.2% m/m in July. Denoyer added, “With spot rates steady over the past year, downward pressure on the larger contract market is lessening, but recent slight increases in spot rates are not yet enough to turn contract rates higher.”

Providing context, FreightWaves’ Todd Maiden writes: “The update from Cass appears to be in line with comments from trucking heads at an investor conference held last week. Some of the nation’s largest truckload carriers like Schneider National and Werner Enterprises said the industry is still coming out of a protracted recession and that there has been no market inflection, just normal seasonal demand trends.”

FreightWaves SONAR spotlight: Reefer and flatbed spot rates cross streams

Summary: Following months of separation, reefer and flatbed spot market rates appear to have crossed streams, erasing a divergence as the impacts of produce season buoy reefer spot rates. Luckily for the freight market, the “Ghostbusters” rule – laid out when Harold Ramis tells Bill Murray “It would be bad” to cross the streams – does not apply. Unfortunately for the freight market, it could use a total protonic reversal as the glut of truckload capacity continues to drag out a yearslong down cycle.

Looking at reefer and flatbed in the context of the dry van segment, Labor Day brought about much-needed seasonal volatility versus continued degradation for dry van spot rates. Despite the Labor Day bounce, though, the return of capacity across all equipment types to the market sent spot rates lower compared to this time last week.

The largest weekly decline came from the flatbed segment, with FTI falling 15 cents per mile all-in from $2.82 on Sept. 9 to $2.67. Contracted outbound tender rejection rates remain depressed, down 6 basis points w/w from 5.6% to 5.54%.

The reefer segment was the second-largest decline. RTI fell 14 cents per mile all-in w/w from $2.77 on Sept. 9 to $2.63. Despite the spot market loosening, capacity on the contracted side appeared to tighten in the past week, with reefer outbound tender rejection rates climbing 139 bps w/w from 9.64% to 11.03%.

Lastly, for the dry van segment, the final weeks of summer bring continued doldrums but fewer declines, with NTI spot rates falling 2 cents per mile all-in w/w from $2.26 to $2.24 per mile. Not to be outdone, the van contracted space also saw a slight decline. VOTRI was down 6 bps w/w from 4.31% to 4.25%.

The Routing Guide: Links from around the web

RXO completes $1B acquisition of Coyote Logistics (FreightWaves)

Survey finds top truck stop amenities ensuring safety for female truck drivers (Land Line)

Report: Biden won’t block dock strike (FreightWaves)

What would a Fed rate cut mean for trucking? (Fleet Owner)

A Trucking Recovery Is Slipping Further Into the Future (Bloomberg)
How Aifleet is Growing with its AI-Driven Approach to Trucking (Heavy Duty Trucking)

Like the content? Subscribe to the newsletter here.

The post Carriers forced to do more with less in lieu of market upswing appeared first on FreightWaves.

“If you optimize the cold chain, you’re going to see a reduction in product loss. You’re going to see reductions in greenhouse gas emissions,” Preston said during the keynote discussion Wednesday at FreightWaves’ Net Zero Carbon Summit. “You need to understand the nuances and get really into the weeds on the data, on the loss rate, where it’s happening, how it’s happening, the root causes, to understand which levers and which investments to make.”

Preston was joined by FreightWaves 3PL expert Mary O’Connell.

Indianapolis-based Paxafe is an AI-enabled, device-agnostic risk-management platform that aims to help clients reduce product loss, improve operational efficiency and optimize decision making.

Paxafe’s customers include companies in industries such as pharmaceuticals and produce. In May, Paxafe closed on a $9 million Series A funding round led by Framework Venture Partners. The company has raised $14 million since its founding in 2019.

PAXAFE’s risk management and decision intelligence platform created ATHENA, an LLM (large language model) to analyze supply chain data and provide proactive suggestions aimed at cutting costs, minimizing product waste and enhancing efficiency in cold chain networks.

“We want to put the cold chain on autopilot. We envision a world where we become the most accurate arbiter of quantifying, predicting and underwriting supply chain risk, and that’s exactly what we’re helping companies in the cold chain do today, both on the shipper and on the manufacturer side, as well as the logistics service providers,” Preston said.

The United Nations Food and Agriculture Organization estimates that over a billion tons of food is lost or wasted each year – an economic loss of around $940 billion annually.

Preston said there is no silver bullet to reduce waste or cut emissions across the global cold chain.

“There are so many different factors that need to be considered — regions, modes of transport, types of products, how sensitive those types of products are to the supply chain, what temperature tolerances are there for different foods, products that emit different amounts of greenhouse gases,” Preston said.

Companies seeking to improve optimization of their cold chain management should begin by establishing a baseline of their network’s performance, Preston said.

“The best way, the easiest way and some of the most common ways to do that is to figure out which technologies you can adopt to get you a raw source of data, and in the supply chain that could be IoT devices,” Preston said.

Internet-of-Things devices, such as real-time sensors, can provide data to ensure perishable goods are delivered on time and in expected conditions.

“Before you can start to move towards optimization, again, you need to go back to the question of, what are you optimizing for? There is no silver bullet. If you’re trying to optimize for financial returns or financial gains, you’re probably going to focus on, how much does food cost? What percentage of food waste is there?,” Preston said. “You need to use that baseline to understand what you’re optimizing for, and then you need to have a method to calculate, figure out what it is that you need to invest in specifically.”

The post AI technology could help put cold chain on ‘autopilot,’ CEO says appeared first on FreightWaves.

By Maggie M. Barnett – CEO, LVK

Regardless of who wins the U.S. presidential election in November, consumers and e-commerce companies can expect to see changes to Section 321 of the Trade Facilitation and Trade Enforcement Act. While some have heralded it as an essential growth factor for the U.S. direct-to-consumer market, many others, including politicians in Washington, have posited that the $800 de minimis value allowed by Section 321 devalues competition and allows foreign companies, like Temu and Shein (both based on mainland China), an unfair advantage over U.S.-based companies.

This topic has gained a lot of attention recently, as the popularity of Temu and Shein skyrocketed, especially after Temu’s catchy “Shop like a billionaire” Super Bowl jingle became an earworm this past winter. Current numbers indicate that of the 3 million e-commerce packages shipped into the U.S. daily under Section 321 clearance, at least one-third are from China. 

How will a Trump or Harris administration disrupt the current status quo? Let’s examine how Section 321 could change under either candidate.

Most recent news

Last Friday, the Biden administration issued an executive action to prevent companies from exploiting the de minimis loophole. The administration also asked Congress to pass permanent legislation by the end of 2024 to codify these new protections.

A breakdown of the action

As stated in the brief from the White House, the “Notice of Proposed Rulemaking would exclude from the de minimis exemption all shipments containing products covered by tariffs imposed under Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962.”

Approximately 40% of all imports to the U.S. are covered under Section 301, including up to 70% of all textiles and apparel. This is in addition to the decision earlier this year to raise tariffs on certain U.S. imports, such as semiconductors, electric vehicles and more, to prevent further loss of intellectual property and technology from the U.S. to foreign entities.

These changes could happen in as little as 60 to 120 days and come as soon as Q4. However, it will probably not be implemented before the actual election. This article outlines other factors that could affect the actions taken by either a Harris or Trump administration as it relates to Section 321.

Harris: An environmental champion

With Friday’s announcement, it is evident that the Biden/Harris administration is committed to making changes to Section 321. This indicates that regardless of any other reasons, Harris will continue this action if she is elected.

Additionally, Harris has expressed concern related to Section 321 in the past and voted her convictions – primarily, that Section 321 imports are more harmful to the environment.

Almost all packages from China come via air, a transportation method exponentially increasing carbon emissions. On average, carbon emissions via air are 20 to 30 times more than ocean freight emissions. This type of pollution cannot be ignored when discussing the high volume of millions of packages daily.

Harris’ track record indicates she is a strong supporter of environmental initiatives. She voted against the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement. She has cited concerns for worker protection and environmental impact as the primary reasons for caution around international trade. 

In an X post following the vote, Harris wrote: “Our trade policies should lift up workers and grow the economy, but must also protect our environment and our future. By not confronting climate change, the USMCA fails to meet the crises of the moment.

“We can do better, and that’s why today I voted NO on the USMCA in committee.”

Trump: Harsher penalties for foreign entities

Trump raised tariffs on China during his first presidency and has been quoted as saying he will do so again should he win a second term. Numbers as high as 60% have been cited, which could deliver a harsh blow to China’s export business with the U.S. Additionally, increased scrutiny from European nations and Canada on Chinese exports places China in more of a hot seat than previously felt.

However, attention must also be paid to Trump’s tenuous relationship with Mexico. Many companies have moved operations — and jobs — from the U.S. to Mexico to take advantage of Section 321. The former president and his team have made Mexico and illegal immigration a rallying cry, which could indicate far-reaching effects on Section 321 and cross-border e-commerce. He has already pledged to reverse certain Biden administration rulings and vowed to close gaps in the border wall, which started during his presidency.

Current political ramifications for Section 321

While we have a few months to see which candidate will next steer Chinese economic policy, the current U.S. Congress has taken action to place parameters on China now. The proposed changes could offer a much more immediate impact to Section 321.

Customs and Border Protection suspends brokers

In a May 31 statement, U.S. Customs and Border Protection announced it was suspending customs brokers, which it felt “proposed an unacceptable compliance risk,” preventing them from taking advantage of the $800 de minimis exemption.

New bipartisan bill

A new bill has been proposed in Congress called the Fighting Illicit Goods, Helping Trustworthy Importers, and Netting Gains for America Act. If passed, this act would do the following to curtail Section 321:

• Close the current de minimis loophole for textile and apparel importers.
• Impose new penalties for violations.
• Increase data collection to better find and punish Section 321 offenders.
• Institute a $2-per-package fee to allow closer inspection of Section 321 goods.

This bipartisan bill has a much better chance to disrupt Section 321 in the long term.

Impact of the current announcement

The order issued on Friday did not include any of the above, primarily because Congress will have to take the lead to pass this legislation. These types of changes are not under the purview of executive privilege. Whether or not the increase in tariffs and further scrutiny will be enough to curtail Chinese imports is still unknown.

November results could bring change

It is almost guaranteed that a new administration will make changes to Section 321, including permanent ones. The increased chatter related to Section 321, the concern of Customs and Border Protection regarding illicit imports, and an increased workload have impacted these recent decisions.

Regardless, e-commerce companies that rely heavily on imports from China and Section 321 should anticipate further policy change. The best thing any company can do to prepare is stay advised of the latest news and legislation and keep your partners in the loop as changes become necessary. If your organization decides to go the proactive route and make changes before they are legally enforced, lay out an implementation plan that clearly states your steps.

Don’t underestimate the time it will take to make the needed changes or the strain it may place on your team. As with all things – whether foreign imports or presidential elections – change is possible, but it won’t be easy. 

The post Election will revamp loophole that allows lower-value imports to avoid scrutiny appeared first on FreightWaves.

FIRESIDE CHAT TOPIC: What driving an alternative fuel vehicle is actually like.

DETAILS: Truck driver AJ Savas started with a diesel truck and now drives electric trucks powered by Einride’s intelligent freight operation platform at Oatly. The Utah-based driver shares the experience of driving an alternative fuel vehicle with FreightWaves reporter Kaylee Nix.

KEY QUOTES FROM AJ SAVAS:

“[Oatly] did bring me off of over-the-road, so I get to be home every day with my family, which is amazing. Not a lot of truckers get that opportunity. Now I work about 15 days out of the month and I get the rest of the time off. I get to spend that with my kids and my wife. That’s really just changed the game entirely, because I was over-the-road, and I was gone for eight to 10 weeks at a time, so that was hard for everybody.”

“I do run an electric semi. I work 12-hour shifts, and it’s very impressive what it can do. It’s really nice because it’s quiet, and our support team with Einride has been amazing. … It was kind of hard to get used to at first going straight from a diesel into an electric because you’re going from this really loud diesel that pulls and jerks in different directions to this really smooth and quiet truck that, even when you turn it on, I couldn’t tell it was on. It’s that quiet.”

“Right now we have three trucks [and] we run 24/7 so there’s always a driver on-site driving an electric truck. With Einride, they have come up and if we have any maintenance issues, or our yearly PMs [preventive maintenances] [are due], they take care of it for us, which is really nice. I don’t even have to change tires or anything, which is really awesome. They have been so great with that. I can call one of their representatives any hour of the day.”

“I think there is a lot of hesitance when it comes to switching over [from diesel to electric trucks], and I think it was kind of the same hesitance when switching over to manual from automatic trucks. I think a lot of the misconceptions are like, they’re not going to haul as much, go as far, last long term or drive in winter. But I drive in Utah. We get some crazy snows out here, and I’d rather be in the electric truck driving it than in a diesel any day. It rides really smooth, and it can pull its weight. I haul oat milk, so my loads are always maxed out weight-wise, and it has no problems. You wouldn’t even know you were pulling a load if you didn’t see a trailer behind you.”

“As far as the battery lasting, I think right now it is going to be for mostly local runs. But it’s the local guys that use a lot of fuel, really, because you’re going in and out of cities. I think it can be really beneficial if local drivers changed over to the electric trucks as we work to get longer hauls out of them.”

The post Fireside Chat: AJ Savas shares experience going from diesel to electric appeared first on FreightWaves.

The Association of American Railroads on Wednesday reported U.S. rail traffic was 522,557 carloads and intermodal units, up 6.8% from the same week in 2023.

Intermodal volume soared to 290,403 containers and trailers, up 13% compared to the same week in 2023 and ahead of all other carloads for the week ending Sept. 14 at 232,154 carloads, unchanged from a year ago.

In the numbers behind the numbers provided by the AAR, the post-Labor Day run-up and ongoing recovery by Canadian railroads CN and CPKC following a brief shutdown powered U.S. container originations for the week to 281,011, an all-time high and breaking a record set just three weeks earlier. Total intermodal was the most since the pandemic-aided week 17 of 2021 and was the 22nd best week ever. 

Seven of the 10 carload commodity groups posted an increase compared with the same week in 2023. They included grain, up 3,048 carloads to 19,372; miscellaneous carloads, up 1,837 carloads to 10,781; and farm products excluding grain and food, up 820 carloads to 17,227.

Commodities that fell compared with the same week in 2023 were coal, down 5,797 carloads to 63,017; nonmetallic minerals, off 1,853 carloads to 32,020; and chemicals, down 310 carloads to 32,444.

For the first 37 weeks of 2024, U.S. railroads reported cumulative volume of 8,012,176 carloads, down 3.3% from the same point in 2023, and 9,641,820 intermodal units, up 9.5%. Total combined U.S. traffic was 17,653,996 carloads and intermodal units, up 3.3% from a year ago.

North American rail volume for the week ending Sept. 14 on nine reporting U.S., Canadian and Mexican railroads totaled 338,817 carloads, a decline of 0.8% compared with the same week in 2023, and 374,207 intermodal units, a gain of 9.8%. Total combined traffic was 713,024 carloads and intermodal units, up 4.5%. Volume through the first 37 weeks of this year reached 24,587,434 carloads and intermodal units, up 2.6% from 2023.

Canadian railroads reported 91,036 carloads for the week, weaker by 1.3%, and 71,170 intermodal units, down 0.3% compared with the same week in 2023. For the first 37 weeks of 2024, Canadian railroads reported cumulative traffic of 5,853,653 carloads, containers and trailers, up 0.2%.

Mexican railroads reported 15,627 carloads for the week, down 8.9%, and 12,634 intermodal units, up 2.1% from 2023. Cumulative volume on Mexican railroads for the first 37 weeks of 2024 was 1,079,785 carloads and intermodal containers and trailers, up 4.8% from the previous-year period.

The post Intermodal powers to record volume appeared first on FreightWaves.

Two new terminals in Bismarck and Fargo, North Dakota, will be the carrier’s first locations in the state. A new terminal in Sidney, Montana, will be its fourth in that state. Earlier this year, Saia (NASDAQ: SAIA) opened its first Montana location in Missoula. The Bismarck location appears to be one of the 28 terminals it acquired from bankrupt Yellow Corp. (OTC: YELLQ).

Saia opened six former Yellow locations across Montana, South Dakota and Wyoming last month.

“Every facility we open is an opportunity to create long-term value by strengthening our network and enhancing our ability to serve our customers better,” said Patrick Sugar, Saia’s EVP of operations, in a news release. “Our expansion into North Dakota is particularly significant, as it allows us to provide a higher level of service in this market.”

Even with the cost drag associated with launching the terminals, the company expects to see a normal change rate in margin (100 to 200 basis points of deterioration) from the second to the third quarter this year. The company has a longer-term goal of delivering 100 to 200 bps of annual margin improvement.

More FreightWaves articles by Todd Maiden

• LTL earnings estimates cut following weak August updates
• RXO completes $1B acquisition of Coyote Logistics
• Freight spend, shipments soft again in August

The post Saia to open 3 terminals in September appeared first on FreightWaves.

The decision comes after the union’s executive board reviewed several months of membership polling on which candidate to endorse. The results of this poll along with several others were published by the union on X.

From April 9 to July 3, nearly 300 Teamsters locals nationwide conducted first-of-their-kind presidential town halls to solicit endorsement preferences from members via straw polls. The in-person voting was held prior to President Joe Biden’s withdrawal from the race. The Teamsters’ polling data shows members backed Biden 44.3% to Donald Trump 36.3%.

Following the Republican National Convention and Biden’s exit, the Teamsters commissioned a national electronic poll of its 1.3 million members, overseen by an independent third party. During a voting window from July 24 to Sept. 15, rank-and-file Teamsters voted 59.6% for the union to endorse Trump, compared to 34% for Democratic candidate Kamala Harris.

In the past week, following the Democratic National Convention and recent presidential debate, the Teamsters commissioned independent polling firm Lake Research Partners to conduct the union’s final national survey. This phone poll resulted in Teamsters selecting Trump by 58% for endorsement over 31% for Harris.

“For the past year, the Teamsters Union has pledged to conduct the most inclusive, democratic, and transparent Presidential endorsement process in the history of our 121-year-old organization — and today we are delivering on that promise to our members,” said Teamsters General President Sean O’Brien in a news release from the union sent before the decision not to endorse was made. “Our members are the union, and their voices and opinions must be at the forefront of everything the Teamsters do. Our final decision around a possible Presidential endorsement will not be made lightly, but you can be sure it will be driven directly by our diverse membership.”

The Teamsters union is made up of over 1.3 million members across the U.S., and is widely considered a powerful voting bloc for politicians to court. While the Teamsters endorsed the Biden-Harris ticket in 2020, the 2024 decision not to endorse comes late in an already tumultuous election season.

The Teamsters made history earlier this summer when O’Brien spoke at the Republican National Convention, marking a first for the usually Democratic-leaning labor union. O’Brien had also requested to speak at the Democratic National Convention a month later but never received a response from the DNC.

Harris eventually agreed to meet with O’Brien and Teamsters members for a roundtable discussion on Monday. The same opportunity to meet with the union was given to then-Democratic candidate Biden and Republican Trump earlier this year.

In a news release published Wednesday afternoon, O’Brien stated that no candidate for president had earned the endorsement of the Teamsters. 

“The Teamsters thank all candidates for meeting with members face-to-face during our unprecedented roundtables. Unfortunately, neither major candidate was able to make serious commitments to our union to ensure the interests of working people are always put before Big Business. We sought commitments from both Trump and Harris not to interfere in critical union campaigns or core Teamsters industries — and to honor our members’ right to strike — but were unable to secure those pledges,” O’Brien said in the release. “Our mission as union representatives is clear: to be honest and upfront, to be inclusive and, above all, to be transparent with our membership. As the strongest and most democratic labor union in America, it was vital for our members to drive this endorsement process. Democrats, Republicans, and Independents proudly call our union home, and we have a duty to represent and respect every one of them. We strongly encourage all our members to vote in the upcoming election, and to remain engaged in the political process. But this year, no candidate for President has earned the endorsement of the Teamsters’ International Union.”

The post In another first, Teamsters make no endorsement for president appeared first on FreightWaves.

FIRESIDE CHAT TOPIC: The evolution of fossil-free fuel in refrigeration units. 

DETAILS: Paul Kroes, the trailer innovation leader at Thermo King, discusses the future of sustainability and innovation in refrigeration transportation. 

KEY QUOTES FROM PAUL KROES:

“I would say it’s probably no secret that the biggest hurdle for any sort of transition to electric, whether it’s consumer or trucking or anything, is infrastructure, right? We see it everywhere. … The trucking industry also needs that, but the power needs are 10 times what you need in your vehicle at home, so that infrastructure is just a much, much harder problem to tackle.”

“Hybridization, without getting too deep into it, in the refrigerated transport space, really happens for the same reason that it’s happening in the cars and trucks that you can buy or in the consumer space: Range anxiety is a real thing. … The bigger problem is — with electric refrigeration for example, am I going to make it through with my load cold? And that’s arguably a much bigger deal and a much more expensive problem.”

“What hybrid electric allows industry to do is … to dip their toes or their ankles or to their knees into the EV space, to really decarbonizing their fleet without really, ultimately, risking load losses and operational disruptions that can have big impacts — on not just their bottom line — but to their customers, and ultimately to us as consumers.”

“What fleets are finally understanding, after having a lot of demonstrations out there and sometimes failures on electric systems, is ‘I can actually meet my decarbonization goals by just running a diesel engine less,’ and a great way to do that is with a hybrid battery electric system.”

The post Fireside Chat: Infrastructure main hurdle to transition away from fossil fuel appeared first on FreightWaves.

“As we exit 3Q, we’ve been right on pricing holding up so far, but wrong on demand as underlying LTL volumes trended sideways-to-softer instead of sequentially strengthening,” analyst Bascome Majors said in a Tuesday evening note to clients.

Majors cut third-quarter and fourth-quarter estimates on average by 10% and 14%, respectively, for the LTL carriers he follows: Old Dominion Freight Line (NASDAQ: ODFL), Saia (NASDAQ: SAIA) and XPO (NYSE: XPO). Canadian transportation conglomerate TFI International (NYSE: TFII), which has LTL exposure through its TForce Freight subsidiary, saw estimates revisions of down 4% and up 1%, respectively.

Full-year 2025 estimates for the three U.S. carriers were cut by an average of 18%, with TFI getting a 5% cut. Majors issued 2026 estimates, which assume a more than 30% average year-over-year growth rate for the LTL-only group and 25% growth for TFI.

The near-term estimates assume the industrial economy remains soft with “fairly seasonal performance off this lowered base that builds gradually” throughout 2025. A full-blown recovery is forecast for 2026.

“In short, 2026 looks like the new 2025 for a freight recovery,” Majors said.

The call is based on the expectation that carriers will remain rate-disciplined. Public carriers said on second-quarter conference calls that they expect to continue to get mid-to-high-single-digit y/y contractual rate increases in the back half of the year. Also, no company has signaled a need to cut rates to fill the terminals acquired from Yellow Corp. (OTC: YELLQ), many of which have been recently relaunched.

Majors added that cooling inflation, interest rate cuts and an eventual exit from “a deep 2.5-year freight recession already long by historical standards” support his outlook. He said he has also been encouraged by “very early signs of price stability in the much larger truckload market.”

Why Q3 intraquarter updates disappointed

Midquarter updates issued earlier this month by public carriers showed y/y tonnage declines were worse on average in August (down 3%) than in July (down 2%). Saia was the lone outlier as its tonnage grew 8% y/y in August after a 5% increase in July.

The carrier was very active following Yellow Corp.’s demise last summer, aggressively taking on its abandoned shipments and later acquiring 28 of its terminals. However, its recent growth has favored lighter, retail shipments and more business from large, national accounts, which tend to have a weaker margin profile.

Excluding Saia’s third-quarter trends, tonnage among the other public LTL carriers providing updates was off 7% y/y in August, following a 4% decline in July. August faced tougher prior-year comparisons as August 2023 was the first month to fully benefit from Yellow’s exit. 

Weight per shipment was largely negative again in the first two months of the third quarter. Lower shipment weights are usually a headwind to margins. Yields remained positive, but only two carriers disclose this metric intraquarter.

“While we expect carriers to continue pricing rationally, we model moderating yield growth for all LTLs with the onset of more difficult Y/Y comps (as carriers begin to cycle YELL’s demise in mid-2023) and ongoing softness in industrial demand with no foreseeable short-term catalysts,” Majors said.

Shares of ODFL (up 1.8%), SAIA (up 2.5%) and XPO (up 0.6%) were higher at 2:14 p.m. EDT on Wednesday compared to the S&P 500, which was up 0.3%. Shares of TFII were flat on the day.

More FreightWaves articles by Todd Maiden

• RXO completes $1B acquisition of Coyote Logistics
• Freight spend, shipments soft again in August
• Delaware bankruptcy court says Yellow owes pensions, stock drops 90%

The post LTL earnings estimates cut following weak August updates appeared first on FreightWaves.

Maersk in a quarterly review and outlook on Wednesday projected a more balanced supply and demand across the global shipping market despite disruptions in the Red Sea and from a potential U.S. East Coast port strike.

“There will still be trade-specific and port-specific bottlenecks, particularly in high-traffic regions, where congestion and delays may persist,” the Danish carrier stated. “Ports like those on the U.S. East Coast and key transshipment hubs could experience challenges as they adjust to the evolving landscape.” 

Global container volumes grew by 6.6% year over year in the second quarter, Maersk noted, citing FBR research, highlighted by import gains of 10.5% and 15.6% to North America and Latin America, respectively. Intra-Asia trade has gained momentum, up 9.6%. Exports from the Far East region were 8.6% ahead, while outbound traffic from the U.S. and Europe lagged at 2.4% and 0.4.

Export-import data are key predictors of how shipping rates and capacity might fluctuate in the near term. 

The ocean carrier industry is experiencing “elevated net deliveries” of new vessels alongside a declining orderbook. Maersk, quoting Alphaliner data, said its orders for newbuildings account for 9% of its second-largest total fleet capacity compared to market leader MSC, 20%, CMA CGM in third, 30%, followed by Cosco, 20%, Hapag-Lloyd, 9%, Ocean Network Express, 31%, and Evergreen, 40%. 

The price of bunker fuel based on Brent crude oil edged up 4.4% in July from the same month in 2023, on assorted geopolitical issues, strong demand and cuts in production capacity.

The post Maersk: Q4 container demand to remain strong appeared first on FreightWaves.

FIRESIDE CHAT TOPIC: Keeping cold: The evolution of solar TRUs.

DETAILS: Keeping ice cream cold by using the sun is now the way of the future. Robert Koelsch, co-founder and CEO of Advanced Energy Machines, joins FreightWaves’ Mary O’Connell to break down the company’s new SolarTech reefer unit solution.

KEY QUOTES FROM KOELSCH: 

“The idea was to go 100% zero emission, not a hybrid, no diesel backup … in this brutal environment.”

“We all know transport and refrigeration of food is a very challenging task. And so it’s not so much, can you do it, but can you do it and make it reliable in the field?”

“I think our database right now is, can we operate as efficient and as trouble-free as a diesel, as everybody’s come to love their diesels over the last 60 years? And can we change the industry’s mind to get away from diesel, get away from black carbon, and that’s really what our mission is today.”

The post Fireside Chat: Keeping food cool with solar-powered reefer units appeared first on FreightWaves.

FIRESIDE CHAT TOPIC: Decarbonizing the cold chain by addressing energy intensity with Ndustrial

DETAILS: Jason Massey, CEO of Ndustrial, an AI-powered energy intensity platform for the $60B industrial market, and FreightWaves group lead Brielle Jaekel will discuss the cold chain challenges that are contributing to the industrial market’s high energy usage including transportation costs, Scope 3 emissions, and coincident peaks.

KEY QUOTES FROM Jason Massey:

“The reality is, we often find a triangulation it ends up being two to three KPIs that you’re watching the relationship to. In the cold chain COP, coefficient of performance, is a really important KPI. We would tell you that that’s necessary but not sufficient. And that you need other data in there such as production — the blast freezing, the products going in and out — to understand the relationship between production, the work that’s being done and that thermal energy that’s going in that out of that facility. So COP is really important for cold chain but then you want to offset that and look at other other types of KPIs that are that are you know tangential making as much profit at the cost of the planet’s health.” 

“I think sometimes people are looking for a silver bullet with that technology [AI] to solve problems. So we want to be careful not to overhype that but give it it’s its proper use. It’s just another tool in the toolbox to do things. And then I think the other challenge often times is it’s easy to get the first 20%, it’s really hard to get the next 5, 10 and even the next 20% of energy efficiency or energy intensity reductions. So it’s it’s really, really important to to do the measurement verification to help the decision makers prove that these things are actually working and that they’ll invest more and more money into those projects. So we’ve seen kind of a cheat that you’ll see in the marketplace — we do believe there is a place for carbon credits in the marketplace. But a lot of times people just rush to purchase carbon credits to try to accelerate their path to Net Zero. In reality you need to do the harder things do the things inside of your facility work on the transportation side of the equation.”

The post Fireside Chat: Going green in the cold chain requires numerous KPIs appeared first on FreightWaves.

The Justice Department filed a claim in the U.S. District Court for the District of Maryland on Wednesday against Singaporean companies Grace Ocean Private Ltd. and Synergy Marine Private Ltd. The suit hopes to recoup costs incurred in reopening access to the Port of Baltimore.

Container ship Dali, bound for Sri Lanka, smashed into the Key Bridge on March 26 after losing power. Within seconds of the collision, the bridge crumbled into the water below, killing six construction workers. The bridge’s collapse shuttered the shipping lanes for the Port of Baltimore, which is a hub for vehicles, including light trucks, as well as various bulk goods. The closure dealt a blow to the state’s economy.

“The Justice Department is committed to ensuring accountability for those responsible for the destruction of the Francis Scott Key Bridge, which resulted in the tragic deaths of six people and disrupted our country’s transportation and defense infrastructure,” Attorney General Merrick B. Garland said in a statement. “With this civil claim, the Justice Department is working to ensure that the costs of clearing the channel and reopening the Port of Baltimore are borne by the companies that caused the crash, not by the American taxpayer.”

The United States coordinated with local, state and federal agencies to remove some 50,000 tons of debris from the shipping channel, as well as the Dali itself. 

Dali catastrophe was ‘entirely avoidable’

Principal Deputy Associate Attorney General Benjamin C. Mizer said in the announcement about the suit that the Dali’s owner and operator “were well aware” of vibration issues on the vessel that could cause a power outage.

“Out of negligence, mismanagement, and, at times, a desire to cut costs, they configured the ship’s electrical and mechanical systems in a way that prevented those systems from being able to quickly restore propulsion and steering after a power outage,” he said. “As a result, when the DALI lost power, a cascading set of failures led to disaster.”

The ship should have had a working propeller, rudder, anchor or bow thruster to steer the vessel — but none worked, the suit says. Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said the catastrophe was “entirely avoidable.” 

The disaster also brought a substantial risk of oil pollution. 
The owner and operator of the Dali is seeking to cap liability at $44 million.

The post DOJ seeking over $100M from owner, operator of ship that struck Key Bridge appeared first on FreightWaves.

FIRESIDE CHAT TOPIC: The technology that keeps food fresh while lowering emissions.

DETAILS: In this fireside chat, Oria Malka, vice president of sales at Evigence, talks about how Evigence is helping companies reduce their carbon footprint through food freshness tracking technology.

KEY QUOTES FROM MALKA:

“[Our sensors] mimic the degradation of any perishable products. What we currently do is actually combine sensors with data analytics and leverage that data into driving our customers with a smarter decision-making process.”

“Our sensors are providing to the customers the ability to determine, in real time, the level of freshness of the product, and by that, I mean the real remaining shelf life of the product. … They can basically decide how to manage [that product’s inventory better]. So if you’re getting an indication from the sensor that there is an aging case or that a case in the next city actually has more shelf life than you’re expecting, you’ll manage your inventory in a more efficient way.”

“If you leverage the data to make more data-driven decisions, you can reduce your costs and your carbon footprints and become more sustainable. … [For example] by taking that data and deciding to use a different gel pack that is more efficient and more environmentally friendly.”

Fireside Chat: Sami Khan talks misconceptions about electric vehicles

Fireside Chat: Link Logistics touts sustainable utility management offering

Cost parity with diesel is a must for semitruck electrification to get in gear | WHAT THE TRUCK?!?

The post Fireside Chat: Leveraging tech to improve perishable food inventory management appeared first on FreightWaves.

This comes after over 30,000 workers with the International Association of Machinists and Aerospace Workers (IAM) rejected a contract renewal with the company and went on strike last week.

The furloughs were anticipated earlier this week as the aerospace company attempts to stop the financial bleeding caused by the strikes. A Bloomberg Intelligence analysis predicted Monday that Boeing could be out $3.5 billion in cash in Q3 if the strike continues through September.

In a memo sent to employees on Wednesday by Boeing CEO Kelly Ortberg, workers were notified that production was paused across many key programs in the Pacific Northwest due to the strike.

“… [O]ur business faces substantial challenges and it is important that we take difficult steps to preserve cash and ensure that Boeing is able to successfully recover,” Ortberg stated in the memo. “As part of this effort, we are initiating temporary furloughs over the coming days that will impact a large number of US-based executives, managers and employees.”

Ortberg stated that all benefits will continue for affected employees. The company is planning for selected employees to take one week of furlough every four weeks on a rolling basis for the duration of the strike.

Along with these steps, Ortberg stated that he and his leadership team will take pay cuts for the duration of the strike. Ortberg is currently one of Washington’s highest-paid CEOs. The Seattle Times reports his compensation package could reach $22 million in 2025. He did not specify in the memo how much his pay will be reduced during the strikes.

“Most important, we won’t take any actions that inhibit our ability to fully recover in the future,” Ortberg stated. “All activities critical to our safety, quality, customer support and key certification programs will be prioritized and continue, including 787 production.”

The post Boeing furloughs workers as strike halts key programs in Pacific Northwest appeared first on FreightWaves.

The trucking industry has seen the devastating impact of nuclear verdicts play out over the past several years. In order to avoid this fate, carriers must focus on hiring qualified drivers – and keeping pristine paperwork.

Carriers are operating in an environment where every new driver hire could result in a productive driver tenure or a multimillion-dollar negligence lawsuit. At the same time, Federal Motor Carrier Safety Administration audits can happen at any time. 

Paperwork can be easy to overlook during the day-to-day operations of running a trucking company. Unprepared fleets, however, are subject to violations and hefty penalties in the face of an audit.

It is imperative for carriers to maintain flawless driver qualification (DQ) files for every person who will operate a commercial motor vehicle (CMV) in any area open to public travel. This includes individuals who exist outside the parameters of a typical driver.

The Federal Motor Carrier Safety Regulations (FMCSRs) require files for not only company drivers, but also for every temporary agency driver, independent contractor under the company’s USDOT number, casual fill-in driver, mechanic and office employee – including the owner. 

A lack of knowledge of the DQ or other regulations is not a valid excuse during an audit or a defense during litigation. In fact, while simple compliance may be acceptable during an audit, even perfect adherence to FMCSRs will not automatically protect a carrier during post-accident litigation.

“Plaintiffs’ attorneys scrutinize the DQ file to uncover compliance gaps or exceptions made – allowed by FMCSA or not. Making exceptions and non-compliance can sink your ship in court,” according to a J. J. Keller spokesperson. “FMCSA regulatory minimums are the equivalent of a C- in grade school. To earn an ‘A,’ carriers should adopt and follow practices that exceed the regulations.”

In today’s legal environment, carriers definitely want to earn an A. Carriers can reduce the risks of poor compliance and vetting practices by adopting best practices and training their hiring and qualification team.

Best practices to maintain audit-ready DQ files

The first and simplest step carriers can take toward improving their DQ files is utilizing a driver qualification checklist at hire. Fleets should also set standards above FMCSA minimums in their own company policies and procedures.

Maintaining files is an ongoing process. Carriers should conduct regular motor vehicle record (MVR) file reviews with a detailed checklist. Companies that find this level of monitoring daunting can consider  outsourcing DQ file management to a trusted third-party expert.

Using a third-party DQ file management and MVR monitoring service can help carriers reduce risk and allow internal employees to focus on the core mission of their companies. Safety leaders with multiple compliance responsibilities can be overtaxed on both time and expertise in all accountable areas. Outsourcing can reduce stress and eliminate the risk of noncompliance due to insufficient time for thorough reviews or keeping up with regulations. 

No matter how a carrier chooses to handle file management and monitoring, fleet managers should consider digitizing DQ files. Carriers can unlock multiple advantages by converting hard-copy documents and files to electronic files.

The benefits of electronic files include:

• Online recruiting allows background checks to start sooner due to consent and disclosures obtained without an in-person visit.
• Driver hiring process steps are monitored with alerts to missing or late documents.
• DQ file auditing is ongoing and easier, not event-driven and painstakingly long.
• Remote, secure access to files is available via the internet.

Finally, carriers should use annual mock audits to identify where compliance gaps are and generate an action plan for the future. With mock audits conducted by an expert third-party service or an unbiased internal expert, audit readiness is not an unknown.

“Using a third-party or regular mock audits is like wearing a watch that shows your compliance health score at all times,” according to a J. J. Keller spokesperson. “They allow you to sleep better with audit-ready files.”

Regular mock audits earn carriers an understanding of potential violations,  a chance to rectify issues and improve compliance, a process of continuous improvement, and ongoing strategies for maintaining DQ file compliance.

Common DQ file errors

There are several areas of DQ files that commonly have compliance errors and risk management gaps. The most frequent issues typically involve the driver application, background investigations, MVRs, proof of medical certification and/or road test evaluations.

Carriers should be extra prudent in these areas when hiring drivers – and when continuously maintaining their files.

Additionally, when rehiring drivers, carriers must be just as diligent in creating the new DQ file. Carriers cannot reuse the old DQ file in whole, but some items can be reused, like a road test certificate in the last three years or a current medical certification. Despite these exceptions, to reduce risk, carriers should treat rehired drivers as if they were brand new to the company.

Carriers should also take special care when it comes to temporary drivers. Auditors often look for drivers who are not on the driver roster from the carrier, like temporary agency drivers. Auditors know that qualifying “temp” drivers on short notice can result in improperly qualified or unqualified drivers.

A full DQ file is required for temporary drivers unless they qualify as a multiple employer driver, which means that they work for two or more DOT carriers in seven days and are fully qualified by one of the carriers, not the temp agency.

All-in-all, most DQ errors result from either a lack of knowledge or a lack of time on the part of the carrier. These errors are not worth the perceived convenience of lax or unqualified management and monitoring.

“It takes time and expertise to do DQ file compliance right,” a J. J. Keller spokesperson said. “Treat every driver file like it’s worth a million dollars, because a bad one can cost a whole lot more.”

Audit penalties

Carriers often end up facing steep penalties when DQ file recordkeeping errors are found during FMCSA audits.

FMCSA outlines the maximum fines for recordkeeping errors and other violations. If a carrier fails to maintain a DQ record or maintains a required record that is incomplete, inaccurate or false, the company is subject to a maximum civil penalty of $1,544 for each day the violation continues. The total fine can climb to $15,445.

The top 5 FMCSA DQ audit violations between 2021-2023 include:

• Incomplete or no employment application.
• Inquiries into driving record (MVR) not kept in DQ file.
• Failing to maintain a DQ file on each driver.
• Failing to investigate a driver’s background.
• Failing to maintain a notation of annual review.

For carriers looking to get more serious about file compliance, ensuring that their own DQ files do not contain any of the most common violations is a good place to start. Click here to learn more about how J. J. Keller can help your fleet achieve better compliance.

The post FMCSA auditors are always ready. Are your DQ files? appeared first on FreightWaves.