Tuesday, March 12th 2024

Note to Readers: A small team, Jeff, Mike, and Amit, writes the Unleaded Newsletter. Please excuse our computer-generated images; with fuel prices so high, we skipped hiring a designer.

FREIGHT MARKET UPDATE 

What you need to know

• ↗️ First time in 1 year there was a +178 net increase in carriers, then left the market 
• 🚛 Dry Van Rates are trending down $1.85 (Average)
• ❄️ Reefer Rates are trending down $2.15 this week (Average)
• 🏗️ Flatbed Rates are up by 2 cents to $2.42 this week  (Average)

Farewell February, as parts of California, Utah, and Nevada got walloped with heavy snowfall, winter still grips the roads. As we spring into the warmer months, we see a capacity shift in the southern states. This could be one reason we saw net authorities increase in the market for the first time in one year. Cause for concern? It’s too early to tell if new entrants will further hurt the oversupply conditions. Rates continue to struggle to break past profitable averages, given the cost of operations for the average trucking company. Though the rumors of an electric and autonomous truck era ushering into the industry continue to be trendy, diesel still rules as fuel. And it continues to float frustratingly above $4/Gal. 

Produce season is starting in the southern states, and the primary volume will be out of Texas and Florida. If you want to capture some transactional freight demand from these regions, now is the time to position your trucks. Remember that McAllen and Laredo, Texas, will be hit hardest by the influx of carrier capacity looking for opportunities to haul freight. 

Take a look at this regional planning map:

FROM THE PUMPS

This week's fuel prices

• ⛽ Diesel price stays high but stable; the National average is $4.07/ Gal. (3.6.2024)
• 🙂 Sheetz Discounts fuel by 25 cents a Gallon for March

• • You need a mysheetzrewardz card
  • No Gallon Limit
  • DEF not included; there are 43 Sheetz Locations Nationwide

• 💸 Most Expensive Fuel: $5.22 / Gal in (does this ever change?) California
• 🌊 Cheapest Fuel: $3.73 / Gal (down 3 cents) in the gulf coast region

NUMBERS DON'T LIE

Labour Market Data | Trucking Treads Water while Warehouse Jobs Across the Board Ugly

According to the latest Bureau of Labour Statistics report, the trucking industry remained afloat after treading water in February. Labor data is typically lagging by about a month, and January showed us a drop in seasonally adjusted numbers:

• 1,524,500 jobs in Feb, down 5,100 from Jan.
• Revised figures showed that Jan. dropped 28,200 jobs from Dec.

Now, this figure seems high, but the seasonal adjustment from peak season speaks to a cyclical trend that impacts trucking annually. Combined with the flat and depressed spot rates in the industry, the sharp cut in job numbers could be a result of trucking employers laying off workers to save costs until a seasonal shift brings better rates.

The warehouse figures tell a different story, with losses in 11 out of the last 13 months. February showed a loss of 6,800 jobs.

• The warehouse sector is down 183,500 jobs from its high of 1.9 Million in Feb. 2022

So why does this matter? Warehouse employment numbers are indicative of what is happening in the supply chain. A decline in consumer demand impacts the labor force in warehousing. Because the supply chain is connected, there are consequences to other operations in the system. For example, as labor forces decline, we see things like detention impacted as warehouse operations could be more sub-optimal. Another consideration is that warehousing has significant turnover as people seek more stable, less grueling work. The nature of labor-intensive work like trucking and warehouse jobs opens up discussions about the future of work as people make alternative career decisions.

• 🔮 Will we see labor robots hit the scene and help create a stable workforce in warehousing?

• Watch this promo video from Tesla’s Optimus Program.

EYES FORWARD

Collecting Payment From Convoy | Know Your Rights with Broker Payment

Convoy’s sudden demise as a freight broker left many trucking companies surprised and in limbo with payments owed. The story has been covered across logistics media over the past few weeks. Convoy took a loan from Hercules Capital (a venture capital bank) and had strict rules about how the loan would be enforced. Unfortunately for Convoy, the freight market took a significant downturn while interest rates climbed.

• Hercules foreclosed on all Convoy’s assets but failed to pay carriers.

This might also be due to the records of payments being hard to pull therefore, Hercules might not be aware of the magnitude of payments being owed. According to Alexander Winton and Associates, a freight debt collection agency and interpleader in the Ikea case, carriers might be able to seek payment directly from shippers.

• Hold on to your BOLs, which directly connects you to shippers, allowing for recovery.

For now, Mangini estimates Convoy owed millions to carriers, as his firm "alone has been assigned over $600,000 in unpaid Convoy invoices."

Know Your Rights Video by Overdrive Online:

• See the agency relationship between brokers and the shipper (if possible)
  
  • If they’ve outsourced their shipping operations, you should be able to recover payment
• Make sure you are listed on the Bill of Lading
• You can find a broker trust bond on FMCSA’s SAFER database
  
  • A claim can be made up to $75,000

IN THE HEADLINES

Owner Operator Profits Decline | Mileage Pay Sees Moderate Gains

As the magic 🎱 ball continues to roll in an attempt to predict when the downturn will shift toward better rates, operating costs remain high. The industry has been hammered in the past 18 months with rolling rate declines and rising fuel costs. All of this has eaten into owner-operator profits, with many operators reminiscing about the high rates of 2 years ago. The cost to operate has not seen much relief, and this has eroded profitability across the board for many owner-operators. Companies have been surviving through selective practices, like not hauling below a specific rate marker and getting cozy in delivery destinations by extending their stays until a decent backhaul has been found.

Things could be changing, though, as we see the start of a seasonal shift in demand for transport capacity. Alongside this, the per-mile rate being paid by larger fleets is slowly increasing across all experience types beyond 1 year. So, those operators who have parked their trucks have a viable temporary option until the market shifts in their favor.

With a market upturn and more profitable times still somewhere over the horizon, our question to you this week is:

🔊 EMPWR YOUR VOICE

If you’ve got a strategy we didn’t list, reply to this email to let us know what it is!

IN OTHER NEWS

Ice Pick Bandit Resurfaces

Lurking in the shadows in parking lots and off-ramps along the I-75 in south Georgia and northern Florida is the ‘Ice Pick Bandit.’ Perhaps renaming him the ‘leaky pin-hole’ is more appropriate, as he likes to place pin-hole punctures in tires, causing slow leaks. A recent victim of his attack was a Canadian trucking company, W.R. Barry and Sons Trucking, which found its airlines cut and steer tires punctured. There is a theory that this guy is a plant from tire shops, driving trucks toward replacement. This has been disproven, though, by the Canadian truck only noticing significant air loss when they got back to Canada.

If you are in this area, keep your eyes peeled for the ‘leaky pin-hole’ bandit and call the police if you encounter him.

TECH STACK

Edison Motors Starts Road Legal Testing

TL;DR

• Electric Hybrid Truck Startup launched with retrofits now builds fully operational units
  
  • Diesel and Full Electric Motors
• Claim to fame is the easiest to maintain and most durable electric trucks
• Buy it once, keep it for ~ 50 years
• Check out this 1 minute tour

EMPWR INSIGHTS

Your answers from last week

Last week, in response to detention statistics released by OOIDA, we asked how often you receive detention pay from shippers and brokers.

In an ideal world (which we know this industry is far from) 100% would have responded with ‘Every time’, unfortunately only 18% responded with this while 63% responded with either ‘Rarely, if ever’ or ‘Sometimes’. 

That's nearly two thirds of you who are regularly not being fairly compensated for your time!  These results were unfortunately unsurprising for us as we’re all too familiar with the challenges truckers face in getting paid for detention.