?? What to Expect in 2025

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Good morning. The Q3 earnings season is on, and J.B. Hunt managed to see a stock surge despite a profit drop. Meanwhile, Arrive Logistics is gazing into its 2025 crystal ball to reveal climbing freight rates.

??AI in Carrier Sales: Check out this week's FreightCaviar Podcast with Paul Singer, CEO of Fleetworks.ai, on how AI is reshaping carrier sales.

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?? WHAT’S COOKIN’ IN FREIGHT

?? J.B. Hunt Sees Profit and Revenue Drop in Q3. J.B. Hunt Transport reported a 3Q profit decline, with profits dropping to $152.1 million ($1.49 per share), down from $187.4 million ($1.80 per share) last year in Q3. Despite a 3% revenue decrease to $3.07 billion, the results surpassed Wall Street expectations. CEO Shelley Simpson pointed to challenging market conditions but highlighted a return to typical seasonal demand. By segment: Integrated Capacity Solutions (brokerage) remained flat, Truckload revenue fell 7%, and Dedicated Contract Services (DCS) saw a 5% year-over-year decrease. Despite these declines, shares jumped 6.6% to $186.18 after the earnings report.

?? Top 2024 LTL Carrier Rankings. A 2024 LTL survey named Daylight Transport the top overall carrier, with Old Dominion Freight Line ranked No. 1 among national carriers. The survey, based on 1,600+ shipper interviews, also placed Averitt Express, Old Dominion, Peninsula, and Dayton Freight in the top five overall. The rankings evaluated 164 carriers on factors like on-time performance, service quality, and technology. Daylight was also named the top inter-regional carrier. Ward Trucking and ABF Freight were the biggest risers in the ranking, moving up six spots to No. 6 and No. 12, respectively.

?? Walgreens to Close 1,200 Stores. Walgreens will be closing 1,200 US stores over the next three years, with 500 closures in the current fiscal year, as part of a turnaround plan to stabilize its struggling US business. The company reported a $3 billion quarterly loss, impacted by weak US retail and pharmacy performance, as well as opioid litigation charges. CEO Tim Wentworth acknowledged the challenging path, stating, “This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term.” Walgreens faces growing competition from Amazon, Walmart, and CVS, which is also closing stores. Shares rose 4% after the announcement, despite a two-thirds drop in value this year.

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What to Expect in 2025: Truckload Rates Rising Steadily

The Arrive Logistics 2025 Truckload Freight Forecast paints a detailed picture of where the trucking industry is heading in the next year.

Arrive Logistics predicts steady growth in trucking rates next year. Van spot rates are set to climb by 12% year-over-year by Q3 2025, and reefer rates will follow the same trend. Contract rates will rise more slowly—around 5% for vans and 4% for reefers.

The main takeaway here is that there will likely be a steady upward climb rather than any sharp spikes. Arrive explains:

"Seasonal demand will continue to drive any regional or nationwide rate volatility and should make rate trends relatively easy to anticipate...rate growth and disruption duration during the next inflationary cycle will likely be muted."

Why?

• Seasonal demand will drive small rate increases.
• Retail and construction are keeping demand steady.
• Capacity is balanced, despite some trucking firms leaving the market.

The market won’t see huge spikes. Instead, rates will gradually go up, and disruptions should be short-lived. Even though trucking employment has dipped slightly, there’s still more than enough capacity to handle these shifts.

Key Trends to Watch:

• Private fleets: Up 7.5% YoY, and 72% of shippers plan to expand. This is keeping capacity higher and spot market demand lower.
• Automation: Robots are recapturing everyone's attention, especially since they were a major reason for the recent dockworker's port strike, which is on pause until January 15th.

What Could Shake Things Up? Global tensions, weather events, and fuel prices could create unexpected volatility. Smaller carriers may also struggle if financial pressures grow, but larger players will likely be fine.

Bottom Line: Rates will go up slowly, capacity is stable, and tech advancements will keep things moving smoothly. Watch out for global events that could throw a wrench in the works, but otherwise, 2025 looks like a year of steady growth.

Read the full 2025 forecast from Arrive here.

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?? AROUND THE FREIGHT WEB

?? 2024 AI Logistics Top Players? After initially mistakenly including the now-defunct Convoy in the Planning & Route Optimization category, Foundation Capital has released its updated list of top AI logistics players for 2024.

?? Halloween Shrinkflation. Candy and chocolate prices are spiking due to cocoa shortages. David Branch (Agri-Food Institute) noted, “Warehouse stocks are at a 50-year low, and production has been declining the last 15 months.”

?? Descartes Acquisition. Descartes has purchased Sellercloud, a platform for inventory and order management, for $110 million. Up to $20 million is up for consideration if combined target revenue is met.

?? Daimler's New Freightliner. Daimler has introduced the fifth-generation Freightliner Cascadia. Production is set to being in mid-2025. It is being billed as “more than just a truck” and meeting the needs of everyone's “unique businesses.”

? Clearinghouse Deadline. 177,000 commercial drivers are at risk of losing their licenses as a November deadline approaches due to the new FMCSA Clearinghouse II rule taking effect.

?? THE FREIGHT CAVIAR CORNER

• Conferences We Are Attending:?F3 Future of Freight Festival?in Chattanooga, November 19-21. Receive $1395 off with our special link!
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