?? Rail Strike: Freight Crunch

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Good morning. A major Canadian rail strike could be on the horizon, which might push more freight to trucks and lead to higher spot rates. Meanwhile, Circle Logistics just hit a big milestone, making over 100,000 calls with the help of AI.

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?? WHAT’S COOKIN’ IN FREIGHT

?? Truck Driver Sentenced in Deadly Crash. Danny Glen Tiner has been sentenced to over 22 years in prison for the fatal crash that killed five people in Arizona after digital evidence showed he was using TikTok seconds before the collision. He was also going 68 mph in a 55 mph construction zone. MCAO Attorney Rachel Mitchell stated Tiner had accessed four separate TikTok videos before the accident, “As a driver, you have an obligation to pay attention to the road. To choose to access social media while driving, placing the lives of others on the line, is reckless.”

?? 100,000 Robo Calls for Freight Brokerage. Circle Logistics has reached a pretty cool milestone, completing over 100,000 AI-driven calls, according to Andrew Smith, SVP at the company. Smith credits this success to their partnership with Happyrobot.ai and Transport Pro. He states that the integration reduced manual calls by 80-100%, improved carrier relationships, and boosted profit margins by 10%. With 24/7 call handling and zero hold times, the AI system also created jobs and reduced fraud risks. Circle Logistics plans to scale this success, aiming for 5-10 times the current call volume next year, providing a clear example of voice AI's impact on freight brokerage.

?? Tesla EV Semi Crash, I-80 Shut Down. A Tesla EV Semi (no trailer) crashed on I-80 in California's Sierra Nevada, which led to a lengthy shutdown as firefighters battled the intense heat and toxicity from the electric truck's massive battery pack. Investigation into what caused the crash is still underway. Craig Fuller mentioned on X that this situation, “This is going to become a major challenge in the future as EV Semis become more ubiquitous.”

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Canadian Rail Strike: What You Need to Know

A major rail workers' strike in Canada might start Thursday, August 22. This would be the first time both Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) face a strike at the same time.

Nearly 10,000 workers could walk off the job, stopping the movement of important goods like grains, timber, and petroleum across North America. The effects could be felt far beyond Canada, with potential disruptions to U.S. freight and transportation.

Impact on U.S. Freight

If the strike happens, it could cause several issues for U.S. freight operations:

• Increased Demand for Trucks: Freight that usually moves by rail might need to be transported by truck instead. This could lead to a boost in demand for trucking services, especially for shipments between Canada and the U.S.
• Potential Rate Increases: With more freight shifting to trucks, spot rates could rise. For an industry currently experiencing a capacity glut, this might actually help balance the market by tightening capacity and pushing rates higher.
• Supply Chain Delays: On the downside, industries that rely on just-in-time deliveries, such as those needing timber, grain, or auto parts, might face delays, which could disrupt their production schedules.

The Current Freight Market

Meanwhile, Arrive Logistics has released its August 2024 Freight Market Update, so let's look at the interplay between the potential strike and current market conditions.

Demand has slowed down a bit since the peak earlier this summer, and there are more trucks than needed to meet current demand. However, there are some key points to consider:

• Stable Rates: After dropping slightly post-July 4th, spot rates for trucks have leveled out. A shift in freight from rail to truck could lead to rate increases, which would be positive for the market.
• Capacity Glut: The current excess capacity has been a challenge, with too many trucks chasing too few loads. A tightening of capacity due to the rail strike could be a welcome change, helping to stabilize rates and improve profitability for carriers.

"Now that a strike notice has been declared, some of our Canadian export customers are starting to ship time-sensitive goods to the ports by truck to avoid containers being stuck at rail terminals during a strike," – C.H. Robinson's Canada VP Scott Shannon, via Reuters.

What Could Happen Next?

If the strike continues, it could have both positive and negative effects on the market:

• Positive Impact: Higher demand for trucks could reduce the current capacity glut, leading to better rates and more balanced market conditions.
• Negative Impact: However, this shift could also create delays in supply chains, particularly for industries that depend on rail transport for timely deliveries.

TOGETHER WITH HIGHWAY

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?? AROUND THE FREIGHT WEB

?? The Noncompete Ban. The FTC ban on worker noncompete deals was blocked by a federal judge. Matthew Leffler tweeted his prediction about a lengthy appeal process is upcoming.

?? Recession Outlook. Goldman Sachs has reduced the likelihood of a U.S. recession to 20%, citing stronger economic resilience (for example, a drop in filing for unemployment benefits).

?? Port Traffic Surge. Despite looming recession fears, U.S. port activity remains strong, with the busiest ports seeing volumes near COVID-19 peaks.

?? Veterans in Trucking. Companies like Melton Truck Lines are providing veterans with new opportunities, helping them find purpose and stability after their military service.

?? Activist Investor Shift. Forward Air's investor Clearlake Capital has turned activist, joining other ‘activists’ to potentially push the company to explore new strategic alternatives to enhance shareholder value.

?? THE FREIGHT CAVIAR CORNER

Building a massive, sustainable business takes time, especially when it's bootstrapped. It took Artur Express, Inc. 26 years to get to where they are today.

I remember the first time I heard about Artur Express, Inc. It was 2015, my first year as a Carrier Sales Rep. I immediately knew they were Polish, and I wanted to work with them, but I couldn’t because they already had a Carrier Sales Rep assigned at the company I was with. When I moved on to another brokerage, Artur Express was always the first carrier I contacted whenever I had lanes going outbound or inbound through St. Louis. I loved working with them.

On Monday, I had the opportunity to visit their headquarters in Hazelwood, MO, and finally meet the founders in person (Artur Wagrodzki & Tom Tokarczyk). They have been building Artur Express for the past 26 years, and today they operate with over 850 trucks and 3,750 trailers. Hearing their story over lunch was truly fascinating—it’s unbelievable what they’ve built, all bootstrapped from the ground up.

They also have a brokerage, TAB LLC, where they primarily bring on freight agents. Brian AuBuchon and his team have done a remarkable job growing that side of the business.

I absolutely loved visiting them and can’t wait to record a podcast about their journey to share with all of you (hopefully soon!).

-Paul

FREIGHT MEME OF THE DAY