News
Reviving the Freight Market: Slow Rebound Ahead
The freight market is experiencing a decline in capacity after the rapid growth seen during the COVID-19 pandemic. The surge in consumer spending, which drove up the demand for freight, has tapered off due to economic factors such as rising interest rates, inflation, and a drop in personal savings rates. This, combined with sluggish growth in the services sector, weak manufacturing, a challenging housing market, and limited spending on goods, has contributed to an overall sluggish freight market.
There is hope on the horizon, though. Avery Vise, vice president of trucking at FTR Transportation Intelligence, shared that a rebound, albeit slow, is on its way. Speaking at a recent Transportation Intermediaries Association regional meeting, Vise indicated that the market is expected to pick up starting in the first quarter of next year.
According to forecasts, GDP in the goods transport sector, which is directly linked to freight transportation, decreased by 3% in the second quarter of 2023. It is predicted to show growth in the third and fourth quarters, with only a 0.6% and 0.7% decline respectively. This upward trend is anticipated to continue throughout 2024, with projected growth rates of 1.6% (Q1), 2.8% (Q2), 3.4% (Q3), and 2.9% (Q4).
As we look to the future, cautious optimism surrounds the freight market, hinting at a gradual recovery.
“GDP goods transport sector, that’s pretty ugly. It’s getting less ugly, I guess, is the best spin to put on it,” Vise said. “For the last five quarters, it has been negative on an annualized basis – the worst one being the second quarter of last year, but the second quarter of this year was nothing to write home about either. (GDP) is really flat. That’s what we’re looking at for the next couple of quarters. Then we start to see growth … but it’s going to take a long time to get there.”
Vise doesn’t view this as robust growth. In fact, he describes it as “modest” and “stagnant.” According to him, the market would require significant freight growth or experience a substantial decrease in capacity or drivers (which he believes is the most probable outcome) to witness a faster upturn.
“We’re losing capacity, but so far, the larger carriers have been picking that capacity up because the overall freight market has not collapsed; it is still pretty stagnant,” he said. “So, we’re not losing enough capacity to change that dynamic yet.”
Vise disputes the claim that the Bureau of Labor Statistics data indicates a decline in capacity. The data includes all employees in the sector, not just drivers, and there are many carriers who are not employees but sole proprietors. Additionally, the data does not consider smaller carriers, who are a significant part of the industry.
In the first seven months of 2021 and 2022, approximately 20 carriers with 101 or more trucks went out of business, while the industry lost a total of 49 carriers during the same period this year.
Although many carriers going out of business are small operations with only one or two trucks, larger carriers are also being affected. This is not just a problem for small carriers.
According to Vise, the industry has experienced a significant loss of drivers. In the first seven months of this year, 138,000 drivers left the industry, and from July 2022 to July 2023. approximately 280,000 drivers were lost. The larger carriers have not yet fully recovered their driver population from before the pandemic, and the long-distance specialized sector, particularly flatbed, has still not reached pre-pandemic levels. The local general freight sector is growing, however, thanks to increased demand for final mile delivery and e-commerce.
“So, we are still seeing a disrupted market although it is getting less and less disrupted, which is one reason why in the last more than a year, spot has been weaker and contract has been stronger,” he said.
Spot rates have hit their lowest point but are projected to slowly improve. While contract rates have not hit rock bottom yet, they are approaching that point. According to FTR’s forecast, rates will increase, but the growth will be moderate and not overly dramatic until 2025.
“We’re still well above the levels in 2018, which was the highest we’ve ever seen before. That’s good for carriers,” Vise said. “On the other hand, this is nominal data; this is not inflation adjusted. Carrier costs have gone way up. Their equipment costs are a lot higher. Driver pay is higher.”
The local general freight sector is experiencing growth, but overall volume is lacking, according to industry experts. This shortage in volume is affecting various sectors, including flatbed, short-haul, dump, and bulk, resulting in lower rates across the industry. Furthermore, dry van and refrigerated sectors are currently experiencing weak volume and rates compared to earlier this year, although the situation is not as dire as in 2019.
“Our outlook right now is really pretty flat, not just for this year but for next year as well,” he said. “Our overall outlook is that we will be just under flat this year in total loadings versus last year. Next year, we’ll be up two-tenths of a percent, and that’s for the entire truck market.”
Source: CCJ Digital
Supply Chain Turmoil Hits Drivers as Costs and Shortages Persist
“Due to the exorbitant cost of shipping, we have had to raise prices to our customers as well as order eight months’ worth of inventory, eight months in advance.” — Hanna from The Crown Choice
The anticipated recovery year turned into ongoing supply chain disruptions, with raw material shortages and factories in China operating on limited schedules. The cost of shipping containers has skyrocketed, impacting small businesses and their ability to order inventory effectively.
What This Means for Your Wallet and Your Miles
Shipping costs are at an all-time high, which could mean higher operating costs for you as a driver. If you’re hauling goods for small businesses, expect them to pass these costs along in the form of higher order rates or delayed payments.
Fuel costs are also likely to be affected as ripple effects from supply chain disruptions impact pricing. Keep an eye on fuel surcharges and budget accordingly to avoid surprises in your expense sheet.
If you’re relying on contracts with big retailers, be prepared for potential delays. Mass retailers are struggling with empty shelves, which might lead to fewer loads as they adjust to the new normal.
Load availability may shift as businesses look to diversify their supplier base. Stay flexible and ready to adjust your routes based on changing demand and supply scenarios.
How are shipping costs affecting my job?
High shipping costs are driving businesses to increase prices, which may lead to fewer shipments or altered contracts. Be prepared to adjust to these changes.
Will this affect fuel prices?
Yes, supply chain disruptions can influence fuel prices, so keep an eye on trends and potential surcharges that may affect your operating costs.
What about load availability?
Load availability could fluctuate as businesses adjust their supply chains. Flexibility in routes and contracts will be crucial to maintaining steady work.
How can I prepare for potential delays?
Keep in close contact with your logistics partners and clients. Understanding their challenges can help you anticipate delays and adjust your schedule accordingly.
Is there anything I can do to mitigate these costs?
Consider renegotiating rates and contracts to account for increased costs, and explore new markets and clients who may offer more stable opportunities.
Key Strategies for Effective Remote Worker Time Management
Remote work has become increasingly popular in recent years, thanks to technological advancements and changing attitudes towards work-life balance.
The article discusses various strategies and tools to enhance time management for remote workers. It covers setting expectations, choosing appropriate time tracking tools, and maintaining accountability to improve productivity in a remote work environment.
What This Means for Your Wallet and Your Miles
For drivers who also manage remote workers or work remotely themselves, the right time tracking tools can streamline operations and improve productivity. This could potentially reduce overhead costs and increase efficiency.
Setting clear expectations regarding availability and communication can help avoid misunderstandings and reduce downtime, ensuring you stay on top of your tasks and deadlines.
Establishing a routine can help you make the most of your work hours, allowing more time for driving or managing logistics without affecting performance.
Regularly reviewing and adjusting your time management practices can help identify inefficiencies, allowing you to make changes that enhance productivity and ensure a steady flow of income.
How can I improve time management for my remote workers?
Set clear expectations for work hours and communication, use effective time tracking tools, and establish routines to optimize productivity.
What are some recommended time tracking tools?
Popular options include Toggl, BuddyPunch, RescueTime, and Harvest, each offering different features suited to various needs.
How often should I review my time tracking practices?
Regular reviews, ideally monthly, can help identify areas for improvement and ensure your practices remain effective and aligned with goals.
Why is accountability important in remote work?
Accountability helps maintain productivity and motivation, ensuring that tasks are completed efficiently and on time.
What should I do if my current routine isn’t working?
Be flexible and willing to adjust your routine or try new tools and strategies to find a setup that maximizes productivity and fits your work style.
An Illinois-based trucker, Moath Musamih, from Orland Park, has been formally indicted in Ohio on grand theft charges for allegedly avoiding nearly $22,000 in turnpike tolls. The indictment, filed on April 21 by a Williams County grand jury, accuses Musamih of a fourth-degree felony relating to unpaid tolls, with potential penalties including up to 18 months imprisonment, a $5,000 fine, and restitution.
Prosecutors assert that Musamih’s truck was monitored with open-road tolling technology for close to two years. Despite receiving multiple payment notifications, the tolls remained unpaid. The indictment also includes a clause to confiscate the 2012 Freightliner Cascadia allegedly used in these offenses.
County Chief Investigator Andrew Skiles noted that the Ohio State Highway Patrol had been keeping tabs on Musamih for some time due to the unpaid tolls. According to Skiles, Musamih is an owner-operator whose vehicle, reportedly registered under his wife’s name, was regularly tracked traveling extensive distances on the Ohio Turnpike using an E-ZPass transponder.
An Ohio State Highway Patrol officer encountered Musamih at a service plaza on eastbound Interstate 80, where an incident report was filed for “Theft by Deception.” The report included accusations of theft without consent and engaging in corrupt activities.
Williams County Prosecutor Katherine Zartman opted for criminal proceedings against Musamih due to the significant total of approximately $21,991 in unpaid tolls over an extensive period from April 2024 to April 2026. The decision to pursue a fourth-degree felony charge was influenced by Musamih’s alleged repeated offenses and the proposed forfeiture of his semi-truck as it was deemed contraband linked to the criminal activity.
The Ohio Turnpike and Infrastructure Commission, through its advanced open-road tolling system launched in April 2024, identified Musamih. Executive Director Ferzan Ahmed emphasized the aim to maintain optimal conditions on the turnpike while highlighting the challenges posed by companies that fail to settle their toll liabilities, despite numerous reminders and collection attempts.
In a broader context, the commission recently disclosed a list of 315 trucking companies accused of evading $5.2 million in tolls over the past two years, indicating a widespread issue with rogue operators.
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