Memorial Day, graduations, and flowers blooming remind us that summer is right around the corner. Will we see the freight market shake off the recession and heat up alongside summer temps? Find out in this month’s newsletter as we explore expert insights into the freight market to explore if the freight recession is as bad as it feels. We dive into how technology continues to drive the industry forward and how global supply chains are adapting to shifting demands.
With no real end in sight to our current freight recession, shippers are bypassing long-term carrier contracts and reaping the benefits of excess capacity. Why wouldn’t they? Everyone loves a good deal, right? Once the pandemic ended, I hoped we would never have to utter the term “the new normal” again, but let’s face it, these are unprecedented times. Shipping lanes are changing, technology is integrating into every facet of the supply chain, while the nearshoring and reshoring boom continues to gain steam.
Avoiding long-term contracts is a short-term strategy, and like any market, timing is everything.
It could backfire in terms of market correction or substandard service. Another option is to lock in carriers that align with your vision. Don’t just use this time to save a few dollars; test the waters to identify avenues of collaboration that support long-term growth.
In what’s shaping up to be one of the best money-collecting chase scenes involving a bike since Better Off Dead, Peloton recently took legal action against freight darling Flexport. They are accusing Flexport of leaving Peloton’s stationary cargo…. stationary. As reported by FreightWaves, the claim states that while Flexport was in charge of inland transport for Peloton, their inaction resulted in millions of dollars in related charges. Flexport vehemently denies these claims, while Peloton argues that invoices lacked details to challenge, let alone understand, these charges.
In a letter to shareholders earlier this year, Peloton CEO & President Barry McCarthy reminded shareholders of his promise to “stop the bleeding and return the business to growth.” Perhaps this is the first step.
As reported by Supply Chain Dive, Union Pacific recently expanded intermodal capabilities between Los Angeles and Chicago. This premium option is attractive for shippers as it cuts transit time while offering “faster freight interchanges” for destinations further east of Chicago. Rail offers greener logistics benefits and is less prone to some of the disruptions associated with over-the-road. However, expanding capabilities doesn’t spell great news for the trucking industry, which is already dealing with overcapacity.
FleetPulse, originally part of Great Dane, is now an independent company specializing in trailer telematics. It has raised $11 million to enhance its telematics technology and further advance trailer safety, security, and efficiency. This comes as the industry continues to see cargo theft escalate.
Led by former Uber Freight executive Carl-Christoph Reckers, FleetPulse aims to work with various trailer manufacturers and tech partners. The trailer is often neglected as an asset, but FleetPulse plans to digitize trailers from simple steel assets into connected devices. While other companies like Range Energy look to electrify them, others strive to automate the unloading process. FleetPulse's independence allows it to innovate faster and better support fleets, making trailer operations more efficient and effective.
In a recent article, author Jason Miller points out the optics of the current freight recession are skewed by “the very sharp pullback in freight rates.” The record increases during COVID, followed by record declines, make this freight recession seem worse when in comparison to previous ones, his data shows it as “middle of the road.”
The market for used and new truck sales remains solid despite lower freight rates. Data from Transportation Topics conveys a 7.4% year-over-year increase in Class 8 used truck sales, while new Class 8 truck orders increased 34%. While Miller doesn’t see many signs of demand surging in 2024, the consistent demand for Class 8 is positive news for the freight industry.
Raguel Buenrostro hails Mexico as "the greatest attraction in the world for investments." The recent shift in global trade patterns is proving her right. FreightWaves reports that major global ocean carriers MSC, CMA CGM, and Cosco launched new shipping services connecting Asia to Mexico.
These new lines offer direct connections from Asia to Mexican ports like Manzanillo and Lazaro Cardenas. Other investments from the U.S., Germany, and Argentina, focusing on the manufacturing, media, commerce, and transportation sectors, are expected to generate over 39,100 new jobs by 2028 for the Mexican economy. Buenestro adds, "We have to see how we integrate and how we take advantage of these opportunities at this moment."
We hope you found this month’s newsletter insightful and valuable for navigating the rapid pace of change in the freight industry. Throughout our 70-year history, there isn’t much we haven’t seen. The possibilities for continuing to drive efficiencies in freight transportation are endless, and the promise of technology to deliver makes this an incredibly exciting time to provide transportation services.
We offer complete logistics and transportation services customized to meet your needs and support your growth strategy.
In these uncertain times, you need a reliable logistics provider. Contact Continental Logistics today to see how we can help deliver shipping solutions that drive growth and efficiency.
