Hannah Testani

Why does the current freight recession in the trucking sector feel so steep, yet truck transportation payrolls have declined only 2% from their mid-2022 peak (as compared with 6% drops during the 2001 freight recession and a staggering 15% during the 2007 - 2009 freight recession)? In this analyst article published yesterday in Journal of Commerce, I try to provide some answers to this question. Some key things to consider: [1]: This freight recession is middle of the road in terms of percent decline in trucking demand (measured using the trucking ton-mile index) compared to those over the last 50 years. For example, it is 33% the size of the 1973-1975 freight recession and just 25% the magnitude of the 2007-2009 freight recession. That said, the max drop in demand from March 2022 (recorded in January 2024) of 4.9% is double the depth of the 2019 freight recession. [2]: The perceived depth of the current freight recession seems to be more driven by the very sharp pull back in freight rates, with 2023 seeing record year-over-year declines in the dry van truckload sector. But important context: freight rates saw record increases in 2021 and the first half of 2022. [3]: The fact trucking demand remains weak, yet containerized imports are up high single-digit or low double-digit percentages requires a realignment of our understanding of trucking freight demand. As shown by the Commodity Flow Survey, domestic manufacturing output is much more impactful in shaping trucking freight volumes. Implication: to understand trucking demand, focus less on containerized imports and retailers' inventories to sales ratios and, instead, focus on industrial production in freight-intensive manufacturing sectors. Unfortunately, I'm seeing few signs of a demand surge coming in the second half of 2024. #supplychain #supplychainmanagement #shipsandshipping #freight #trucking https://lnkd.in/gSRgwUPj

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Looks like the United States Postal Service is asking for a 25% increase in Parcel Select. Shippers can't absorb this kind of increase. How does a 3PL go to a client and say I have to raise your rates 25% in July. When 3PLs typically give an increase at the beginning of the year. How is this going to affect all the resellers like DHL ecom, ACI, UPS MI and the others? Maybe they will launch their own product to compete under 1lb.

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#Interesting and very #DESPERATE times ... if some carriers have embraced the concept of a "Loss Leader" just to keep the doors open. The concept of ... "Yea, we lose a $1 on every sale, but we'll make it up in volume" has #NEVER worked in retail and it definitely won't work here in trucking where it's #NOT $1 per load, but hundreds of dollars per load. I get it that there are some carriers that are just barely staying alive and hoping and praying the #CashFlow will keep them alive to fight another day. But losing money on loads, is #NEVER a good idea, especially when you are struggling. I personally know of one such TL carrier with over 400 trucks out of the Northwest that may not survive the month. I hope and pray that they do, for the sake of the drivers and employees. But when #Leadership is too proud to admit their mistakes, and unwilling to accept the recommendations of those wanting and willing to assist to help the carrier survive ... and even provide those services on a Pro Bono basis (for some that may not know the term, that's for #No #Charge) ... there's not much that friends or associates can do. Anyhow, enough about that ... read the article and I'm sure you'll walk away scratching your head. https://lnkd.in/gsvQDjCb

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If 4PL fulfillment centers are going to succeed, I can't figure out why none of these providers have taken systems infrastructure nods from regional LTL carriers. Interline LTL shipments are the closest thing we have in our space to successful "Fourth Party Logistics" and yet no one's gone down this path? P.S. before anyone chops my head off for nuance: Shipper > 3PL > Carrier > Partner Carrier= 4th party.

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🚨Attention Shippers🚨 Reminder: UPS is moving the goal line again Starting next Monday, June 17, 2024, UPS will change the applicable zone for certain origin/destination ZIP code pairs. What does this mean for you? You'll find out exactly how this impacts you on the same day the changes go into effect. (Yes, the constant changes are challenging.) Between the ongoing changes in fuel surcharges, delivery area surcharges, and now zones, it's crucial to reassess your revenue commitment tiers. 🔍 Opportunity Alert: This is a great time to leverage the strength of carrier diversification. Avoid the punitive pricing models of UPS and FedEx by exploring other carriers. #DeliverDirect is ready to be a long-term partner for your company. Stay proactive and stay ahead! P.S. What strategies are you using to navigate these changes? Share in the comments below. ♻️ Repost this to keep your network informed. Thank you! #ecommerce #parcel #finalmile

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