Kyle Bertin

With the 4th of July holiday fast approaching, I wanted to take a look at where June’s dry van truckload spot market rates stand to get a sense if the market is showing any signs of turning. Two charts below using data from DAT Freight & Analytics. Thoughts: •Top chart shows dry van spot rates as well as dry van broker buy contract rates. Dry Van spot rates, while up $0.06 per mile from the April low, are down $0.03 per mile from June 2023. Given diesel prices are down just $0.08 per gallon from a year ago (https://lnkd.in/g5sUVM8V), fuel isn’t driving this difference. •June 2024’s $0.03 increase over May is quite weak relative to what we have traditionally seen in dry van TL bull markets. In 2014 the increase was $0.11 per mile; in 2017 it was $0.10 per mile; and in 2018 it was $0.17 per mile. For that matter, the increase was $0.10 in 2019 (a down year)! As such, spot prices so far are a sign of a cruel summer—my daughter is obsessed with Taylor Swift—from a pricing standpoint. •Bottom chart shows the dry van spot market cycle indicator (DVSMCI), calculated as the broker buy rate less the spot rate, with the difference divided by the average of the two measures. That ratio is currently 16.6%. While better than last year’s 19.9% reading, we are well away from the 10% threshold where we have tended to see markets flip. Implication: dry van spot market data suggest that folks who made predictions of the dry van truckload market flipping from bear to bull in late Q2 or early Q3 likely made an overly optimistic forecast. I increasingly believe the earliest the market could meaningfully flip is Q2 2025, and this will require many things to go right from carriers’ vantages for this to occur. #supplychain #supplychainmanagement #freight #trucking #truckload

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The June trucking ton-mile index continues to suggest that for-hire trucking freight demand is moving along the bottom of a trough, with no sign yet of an unseasonal uptick. One chart below. Thoughts: •This chart shows seasonally adjusted trucking ton-miles back to January 2013 (to capture the past several freight market cycles). On a seasonally adjusted basis, June 2024 was down 0.4% from May 2024 and down 0.7% from June 2023. The “good” news” is that this is one of the smallest negative seasonally adjusted year-over-year readings since the start of the current freight recession, providing more evidence that we are indeed at a bottom regarding demand. •Concerning sectors driving the year-over-year weakness, we continue to see negative year-over-year readings for quarrying and oil & gas well drilling, nonmetallic mineral product manufacturing, machinery manufacturing, fabricated metal product manufacturing, primary metal manufacturing, furniture manufacturing & wholesaling, lumber & construction supplies wholesaling, metal wholesaling, and machinery wholesaling. The common theme is these sectors all are interest rate centric regarding demand. •Even if the FOMC cuts interest rates by 50 basis points in September, as was noted in Bloomberg recently (https://lnkd.in/e2cbrjYD), it’s too late to turn around the housing market. Q2 2025 is when effects will meaningfully materialize (not coincidentally the same period I’ve repeatedly noted is the first realistic time frame for the dry van truckload market to turn bullish from a pricing standpoint). Implication: the seasonal tightening of capacity we saw in the truckload sector in June wasn’t due so much to strong overall demand, but rather capacity exit since last year. This said, bull markets don’t begin because too much capacity exits; they begin because of sharp increases in demand. I don’t see such increases occurring in 2024. #supplychain #supplychainmanagement #freight #trucking #markets  

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‘Delivery carrier SpeedX pursues growth with zone-skipping service’ Another alternative carrier is expanding its coverage. Seemingly defying soft market conditions. SpeedX launched a 2-3 day zone skipping service. A few highlights/callouts from Supply Chain Dive’s article. ➡️ SpeedX package volume = 30M [since 2022 launch] Most early volume was cross-border. [e.g. China inbound … sound familiar?] SpeedX expects 3x-4x growth over 2-3 years. Focused on domestic shippers/volume. ➡️ Service reaches 20 states and ~10K zip codes Expansion is planned in 2024. According to SpeedX, its coverage will overtake OnTrac this year. That’s aggressive expansion. As OnTrac is at 70%+ population coverage. ➡️ SpeedX partners with USPS for part of final mile delivery Most volume is in/near dense metro areas. [delivered by its own drivers+partners] But additional volume is delivered by the USPS. And inducted at the SCF, not the DDU. In the article, this was positioned as an advantage. [referencing pending USPS Parcel Select changes] Time will tell if that’s true. USPS performance from the SCF hasn't been as consistent as from the DDU. And I don’t expect DDU injection to disappear overnight. Changes will take time and will vary by provider. [based on negotiations with the USPS] ----- Alternative carriers aren’t exiting the market. [as many thought they would] But instead are expanding coverage. This time, it’s SpeedX. With plans to rival OnTrac’s coverage in 2024. #logistics #retailing #ecommerce

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"There's a truckload market flip brewing, but it's currently on the ocean" 🚢 Using data from FreightWaves SONAR, Henry Byers has identified some key factors that could predict a volatile transportation market in the second half of the year. Ocean containers are piling up, and the rails may soon have difficulty keeping up with the higher demand as shippers seek a quicker form of transportation. What happens to the truckload market as a result? Watch the full episode of Shifting Gears to find out! 📺 https://lnkd.in/eMUJhKf8 #Ocean #Rail #Trucking #Transportation #SupplyChain #Logistics #Freight #Cargo #Shipping

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TRADE ALERT- we have seen a lot of stories on the soaring ocean freight rates. I used FreightWaves SONAR to review ocean freight bookings and demand and yes we all know there is a disconnect since demand is not soaring yet prices are heading upward. I dive into the metrics of what's driving the costs. Container crunch is here. DHL Global Forwarding Goetz Alebrand was one of the early logistics companies warning about this in my reports. Data and outlook from Xeneta Emily Stausbøll and Judah Levine Freightos. #logistics #logisticsmanagement #containers #trade #peakshipping #redsea #containers #maritimenews #businessnews

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I have long suspected FreightWaves data on truckload tender volumes and accepted loads are strongly weighted towards consumer-centric freight, especially containerized imports. Their most recent market update provides more evidence for my claim. Consider the following: •Accepted tenders have been up ~7% in 2024 from 2023. Do you know what else has been up by a similar amount in 2024 from 2023? Metric tonnage of containerized waterborne imports from Asia, which are up 14.5% year-over-year for 2024 from 2023 on a year-to-date basis. •The article mentions that tender volumes are up 15.8% today than in 2019. As tender rejection rates in 2019 and today are similar, tender volumes and load volumes would result in similar conclusions. I'm very confident that this isn't the case when you look at all of trucking freight (my trucking ton-mile index's most recent readings are within 2% of 2019 levels). However, containerized imports have steadily increased since 2019 and are following the pre-COVID trendline (and are up by roughly the amount FW's is reporting for their trucking volume data). Implication: you need to look closely at different data sources for trucking freight volumes to try and infer what industries receive the most weight. I've long felt Cass is industrial-heavy. FreightWaves appears to be the opposite. My own trucking ton-mile index is heavily slanted towards domestic manufacturing (specifically food, chemicals ex pharma, nonmetallic mineral products, paper, and primary metals) because of the Commodity Flow Survey. Things to keep in mind as you select which indexes to give more weight when undertaking strategic planning (e.g., if you are a carrier with lots of exposure to containerized imports, FreightWaves' data would likely be your preferred metric). #supplychain #supplychainmanagement #shipsandshipping #freight #trucking https://lnkd.in/giQiCCHf

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