Welcome to the WHAT THE TRUCK?!? bulletin. In this issue, What Carriers Are Doing With Capacity, How SMBs Cope with the Freight Storm, Knight-Swift takes on AAA Cooper and more.
Trucking – With more than one in four contract dry vans rejected, the question is whether the trucking industry is doing enough to increase capacity. Craig Fuller, CEO of FreightWaves tweeted, âThe fleets have added 42,000 new trucks for hire since the start of the year. Capacity up 2.6%. Volume up 13%. So how does the industry create more capacity?
- Jobs – According to the June BLS employment report, released Friday morning, the total number of jobs in truck transport on a seasonally adjusted basis increased by 6,400, the biggest gain this year. The optimism can end there, however, as Jason Miller, associate professor of logistics at the State of Michigan, says, âWhile the overall figure for the industry as a whole is certainly encouraging, the data up to May is not. provide no evidence that long-haul carriers can employ jobs to meet demand that is reaching or approaching record levels. What about this pilot shortage? According to ATA Quarterly Employment Report, the annualized turnover rate for large full-lot carriers averaged 90% in 2020, down one point from 2019. Another minor bright spot, but not keeping pace with demand.
- Equipment – Don Ake, vice president of commercial vehicles for FTR Transportation Intelligence, told a webinar last month: âMost fleets have ordered all the trucks they need for 2021. They are frustrated because production is running low. unable to meet demand. Carriers need more trucks on the road now, but shortages of semiconductors and other components continue to restrict production. While all indicators point to a prolonged trucking bull market, in a cyclical business like freight, when capacity arrives and when it’s needed rarely line up.
For 2022, IHS Markit forecasts demand growth of 4.9% and capacity growth of 3.2%. This is bad news for the customer. In 2023, demand growth once again exceeds capacity growth by 3.1% against 2.1%. – Patrik Berglund, CEO and co-founder of Xeneta
ocean – Although the imbalance between demand and capacity is not as severe with ocean freight as it is with domestic freight, shipping has experienced its own tsunami of problems. Steve Ferreira of OceanAudit nicknamed it “containergeddon” for a reason. In March, the Port of Los Angeles had broken all previous congestion records, as more than 20 container ships were at anchor per day. Also in March, the Ever Given, which will finally be out wednesday, boomed traffic to Europe and the east coast of the United States. In June, an OOCL vessel overturned a gantry crane in Kaohsiung and Yantian canceled more than 300 port calls due to COVID restrictions. It might not be Christmas in July, but for smart importers, securing slots for holiday freight is already underway – and some pay up to 600% more per container to do so.
How do small businesses weather the storm?
It’s a small business after all – Small and medium-sized enterprises (SMEs) are often the hardest hit in markets like these. They generally do not have the advantages that large companies have of supplier diversity or the same volumes to operate with carriers. Noi Mahoney of FreightWaves reports: “About 64% of the 2.4 million SMEs surveyed in May by KfW Research are still grappling with the consequences of the coronavirus pandemic, according to a recent study.” The numbers are even bleaker for manufacturing SMEs, 75% of which have experienced supply chain disruptions.
Dealing with the slowdown in global maritime transport, being able to get into a container and then get it out of the port has been a challenge. At the moment, we are absorbing the cost of the shipping containers. This means higher costs and longer delivery times. This is an industry wide problem, not just one that Zoomo faces. – Mina Nada, CEO and co-founder of Zoomo
Nomenclature – It’s not just about moving freight. For many shippers, even completing a bill of materials can be a challenge. Electric bike company Zoomo struggled to match components like parts for cranksets, brakes, shifters, cassettes, and cables. Thomas Healy of Hyliion shed some light on the subject during FreightWaves Insiders: âIf you launch productsâ¦ let’s say you have a BOM of a thousand partsâ¦ it will be like three parts that will end up preventing you from getting that product. over there.”
Lead me on – So what can an SME do when you feel like a cat being scolded in front of a plate of vegetables? Ned Lilly, CEO of xTuple, a software manufacturing and distribution company, suggests that SMEs familiarize themselves with the details of their supply chain. âWhat are my raw material costs? How long does it take for vendors 1, 2, and 3 to get these things to me? What does it cost me? What are my production costs? What are my labor costs? How fast are these things moving around the factory? It’s that visibility every step of the way that helps you make the right decisions, âLilly told FreightWaves’ Mahoney. Right now, that also means moving freight forward weeks or even months in advance to meet extended delivery times.
Why does Knight-Swift need AAA?
Cleaning on AAAisle 5 – Todd Maiden of FreightWaves reports: âThe nation’s largest full-load carrier, Knight-Swift Transportation, announced on Tuesday that it has acquired lower-weight carrier AAA Cooper Transportation in an enterprise-value transaction of $ 1.35 billion. Why does Knight-Swift need an average LTL transporter? After losing an offer for Roadrunner in March, it appears the carrier still wanted to participate in the LTL action. John Paul Hampstead of FreightWaves notes that the key to this answer may lie in the name of the carrier.
Not Taylor Swift – “Remember back in 2017 when Knight merged with Swift, Swift was a decidedly underperforming transporter in the TL space”, Hampstead tweeted. “Now, of course, Swift is looking great, as evidenced by the astonishing recovery in its operating ratio.” Under the leadership of Knight-Swift, AAA may look like a empty space for a turnaround. While AAA Cooper’s overall weighted performance score (99.59) is lower than regional competitors, Knight-Swift might say, âI knew you were in trouble but we can shake as there is no bad blood and you belong With Me. ”
Alexa, can you change your name?
Intimidate – Whether it’s glasses, weight, clothes, or even your name, unfortunately children can often be cruel before they are kind. Fox32 Chicago reports, âParents are asking Amazon to [change Alexaâs name] after a teenage girl named Alexa legally changed her name after being bullied to have the same name as Amazon’s smart speaker assistant.
She started not wanting to show up because of the jokes and backlash. – Alexa’s mom on the BBC
What’s in a name? – Britain’s Fox 32 family have opened up to claims their daughter has gone so far as to legally change her name, cut her friends off and move school systems. Massachusetts-based Lauren Johnson started a letter-writing campaign called âAlexa is a Humanâ because her daughter was being bullied at school and at camp. Amazon told the BBC in a statement: âAs an alternative to Alexa, we also offer several other wake-up words for customers to choose from, including Echo, Computer, and Amazon. We value customer feedback, and like everything we do, we will continue to look for ways to give them more choice in this area. Of course, that would only really work if everyone manually changed their Alexa’s name to Computer and everyone started calling it that. It seems unlikely TBH.
The Karen Riddle – Alexa is not the only name that children have used against their peers. Many petitions and Facebook groups such as Karens Who are Against Karen Memes have appeared on the internet after the Karen meme went viral last year. Karen has even been turned into a controversial horror movie. In fact, only 325 Karens were born last year in the United States. For comparison, there were 6,052 Alexas born in 2015 but only 1995 born in 2019.
ATTENTION: Send me your dogs and win a ticket for F3
Freight dog days – It’s officially the summer heatwave and in honor of it we will be presenting the dogs of the people who do the freight. Want to see your best friend in an episode of WHAT THE TRUCK?!? Simply reply to this email with a photo of your dog (s), their name and a fact about them. The first litter of puppy photos will be on Wednesday’s episode of the show. By submitting your dog, you will be registered for win a ticket for the F3!
Speaking of dogs – According to the Oklahoma Highway Patrol, a quick-witted truck driver rescued a lost dog caught in the rain on the Turner Turnpike. The incident happened last Thursday when the truck driver saw the husky wandering around. Stopping, the frightened dog crawled under the driver’s trailer before a soldier managed to convince the good boy to get into his car. CDLLife reports, “The dog was brought back to the central expedition for care until they could locate its owners.”
Wednesday – Edmund Zagorin, founder and CEO of Bid Ops; KJ McMasters, Founder and Chairman of Talent Solvers; and Grace Sharkey, FreightWaves reporter.
Friday – Glynn Spangenberg, CCO of Locomation; Kristy Knichel, President and Owner of Knichel Logstics; and Jon Cox, senior director of solution design at DHL Supply Chain.
Watch new live shows at noon ET on Mondays, Wednesdays and Fridays on FreightWavesTV, FreightWaves LinkedIn and Facebook or on request by searching for WHAT THE TRUCK?!? on your favorite podcast player.
Now on demand
We have a truck for that
Who is most at risk in the global supply chain? – We asked the CEO and co-founder of Xeneta, Patrik Berglund. Listen.
Subscribe to the show
Or just search WHAT THE TRUCK?!? on your favorite podcast player.
All FreightWaves Podcasts can also be found on a feed by searching for FreightCasts wherever you get your podcasts.
Want a new WHAT THE TRUCK?!? shirt or hat? Check booty store.