?? Sunny Ahead? Freight Market Outlook
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TGIF. Today's feature focuses on what experts are saying about overcapacity, driver demand, and freight dynamics for Q4 and beyond.
Plus: Uber Freight's new program draws scrutiny, ILA negotiations hit a wall, and FMCSA's Operation Protect Your Load takes aim at unlawful freight brokerages.
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?? WHAT’S COOKIN’ IN FREIGHT
?? Uber Freight's Broker Access Stirs Up Debate. Uber Freight's new program, Broker Access, is offering freight brokers a sleek load management system and access to Uber's carrier network without heavy tech investments. Designed to enhance load execution through automation, the platform centralizes pricing, tracking, and payments while leveraging fraud mitigation tools. However, Andrew Silver, Co-Founder of MoLo, critiques the offering as “double brokering” under a new name. He suggests Uber focus on a “pure SAAS solution" and give up its brokerage department.
? Automation Standoff Stalls Port Negotiations. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are at an impasse over automation at East Coast ports, with a critical Jan. 15 contract deadline approaching. Efforts to resume negotiations failed after USMX proposed "semi-automation," contradicting previous assurances, according to the ILA. The union supports tech improvements that maintain human oversight, while USMX argues automation is essential to meet future supply chain needs. Trade groups, including the American Apparel & Footwear Association, have expressed frustration over the halted talks, fearing prolonged delays and economic impacts if an agreement isn’t reached.
?? FMCSA Crack Down on Freight Fraud. The FMCSA has launched Operation Protect Your Load, its first-ever enforcement initiative targeting unlawful freight brokerage practices, active across 17 states. Announced by Enforcement Director Tom Liberatore, the operation focuses on entities with repeated violations in insurance, bonding, or authority, aiming to curb double brokering and payment fraud schemes plaguing the trucking industry. Liberatore emphasized filing complaints via the National Consumer Complaint Database to aid investigations. Concurrently, FMCSA is cracking down on non-compliant hotshot car haulers along I-70, stressing the need for regulatory compliance to address growing issues in auto transport operations. These efforts aim to bolster industry integrity.
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Freight Market Stabilizes Amid Mixed Q3 Trucking Results
With Q3 earnings wrapped up, the freight sector is revealing a mixed picture of challenges and opportunities. While FreightWaves has declared the "Great Freight Recession" over, other industry voices suggest the road to recovery is far from straightforward. Overcapacity continues to weigh on the market, but some early indicators of improvement are beginning to emerge.
Key Data Highlights
Expert Perspectives: Signs of Stability or False Dawn?
Shelley Simpson, J.B. Hunt CEO
Simpson described the current freight recession as the "longest and toughest" of her career but acknowledged improvement in overcapacity. While she remains cautious about predicting a rebound, Simpson emphasized J.B. Hunt’s investments in equipment and long-term growth opportunities. Her forecast suggests market normalization could take until late 2025.
Bruce Chan, Stifel Analyst
Chan sees the market stabilizing but warns against over-interpreting early signals:
“We’ve passed the trough; the market is stable and not getting worse. But neither is it getting materially better.”
He noted some positive momentum in contract renewals and pricing discussions, with shippers shifting from negotiating rate decreases to considering increases. However, excess truckload capacity continues to weigh heavily on the market.
Ariel Rosa, Citi Analyst
Rosa highlighted the disconnect between market hopes and economic realities:
“The question is more about what does the outlook look like. I think fourth-quarter outlook was still pretty weak.”
Weak industrial production continues to limit demand for LTL freight, and Rosa expects a full rebound to stretch into 2025 or 2026.
Jonathan Chappell, Evercore ISI Analyst
Chappell pointed out that unusual import patterns in early 2024 gave false hope:
“June and July were counter-seasonal in a good way, but August and September were counter-seasonal in a very bad way.”
He attributed this volatility to external factors like port labor disruptions and fears of a rail strike, which pulled freight demand forward earlier in the year.
LTL Freight and the Retail Advantage
Retail freight continues to outperform industrial, with carriers like Old Dominion and XPO benefiting from the shift. As XPO’s Chief Strategy Officer Ali Faghri says, "On the net, we characterize [industrial demand] as soft but stable.”
The shift toward retail has disrupted the traditional two-thirds industrial, one-third retail freight mix for LTL carriers. Companies like Saia are seeing a tilt toward retail shipments, which are generally lighter and less profitable.
The Driver Market: A Balancing Act
Driver demand ticked upward in Q3, with some experts noting early signs of improvement in recruiting trends. Darin Williams, president of CDLjobs.com, remarked:
“For the first time in a long time, the jobs posted increased at a higher rate than the applications submitted, perhaps signaling that carriers will need more drivers soon.”
However, industry dynamics remain in flux as companies exiting the market put drivers back into circulation, keeping supply and demand mismatched. Tom Bray of J.J. Keller added, “Conditions will improve again when rates and rejections start going up enough to impact the industry overall.”
Looking Ahead
While the freight market shows some stabilization, the recovery will be slow and uneven. Overcapacity remains a challenge, industrial demand is sluggish, and driver recruitment is only starting to regain momentum. Analysts agree that patience will be essential as the industry works toward sustainable improvement in the years ahead.
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?? AROUND THE FREIGHT WEB
?? Triumphant Rise. John Kingston posted on his X about Triumph Financial's ($TFIN) 52-week?record?high?share price?on Tuesday, up 58.6% in a year (30.4% in a month).
?? Ex-Customs Chief Murdered. Former customs director Fernando Guerrero was tragically murdered at Mexico’s Port of Manzanillo. Armed assailants shot and killed him while he driving his vehicle. Authorities are still investigating at this time.
?? Yellow's $6.5 Billion Pension. A judge is expected to rule on whether Yellow Corp.'s $6.5 billion in pension claims by retirees will be honored following the company’s bankruptcy.
??? A Spicy Bust. US Customs intercepted $31 million worth of meth hidden in a truck carrying serrano peppers at a Texas border crossing.
?? Greenlane's EV Charging Expansion. Greenlane announces plans to further develop its EV charging network. Despite President-elect Trump’s plans on rolling back emission rules, CEO Patrick Macdonald-King remains confident EV charging will “reinvigorate” the trucking industry.
?? Orderful AI Improvements. Orderful raised $15 million with NewRoad, with aims to enhance API and EDI data interchange for supply chains, all with the aid of AI.
?? Panama Canal Trade Rebounds. After a challenging period, the Panama Canal reports a promising resurgence in trade. More containers on fewer vessels, a solid water forecast, and a “fully booked system” are the causes of this turnaround.
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