Your Gateway to Logistics Excellence - February 13

Welcome aboard Evans Transportation's Weekly Newsletter, your go-to source for the latest developments, insights, and trends in the dynamic world of logistics. As your trusted partner in transportation solutions, we are thrilled to bring you a curated digest of industry updates, company news, and exclusive content designed to keep you informed and inspired.

Transportation Updates

BLS says fewer truck transportation jobs in ’23 than first estimated

????????????? Freightwaves: February 2nd

• Trucking jobs in 2023 were overestimated by 33,000. The peak was in August 2022, and they have only slightly risen since then.
• Warehouse jobs also revised down, 77,000 fewer in December. Peak shifted from June to May 2022.
• Long-distance trucking jobs decline, and local freight positions increase. Potential industry shift towards local demands.
• Market conditions may stay tough despite rising trucking jobs. Oversupply in the long-distance sector could persist.
• Annual revision highlights data fluctuations. Consider these changes when interpreting BLS data and industry trends.

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Logistics Hiring Ticks Up Despite Soft Freight Demand

????????????? The Wall Street Journal: February 2nd

• Logistics added 10,700 jobs in January despite a year-over-year decline.
• Uptick suggests "normalization" after pandemic surge, says economist.
• Warehousing added 5,500 jobs; sector still down 181,000 year-over-year.
• Package carriers added 2,800 jobs, but the sector was down 7,500 year-over-year.
• Despite January gains, experts say freight demand remains weak.

U.S. Container Ports Preparing for Cargo Surge Due to Red Sea Disruption

????????????? gCaptain: February 2nd

• Cargo Surge Expected: U.S. ports may experience increased cargo volumes as shippers reroute shipments to avoid Red Sea disruptions.
• Stakeholder Call: The U.S. Department of Transportation's Office of Multimodal Freight discussed supply chain issues due to Red Sea disruptions.
• Anticipated Congestion: Industry participants foresee heightened congestion at U.S. container ports in the next 4-6 weeks as shippers divert cargo.
• Preparing for Challenges: Experience from COVID-19 bottlenecks aids in preparing for potential congestion at the Ports of Los Angeles and Long Beach.

Viewpoint: Why it pays to be a Shipper of Choice

????????????? Freightwaves: February 5th

• The article emphasizes the value of being a "Shipper of Choice" in the U.S. freight ecosystem, highlighting the changing priorities in freight procurement from a focus on price to a more holistic approach.
• Shippers of Choice aim to balance service, costs, and relationship management, documenting their guiding principles for consistent behavior across different transportation management teams.
• The three key circles for Shippers of Choice are service, costs per load, and relationships, with the optimal approach achieved where these circles overlap.
• Service is crucial for shippers, especially in tight markets, as it helps secure capacity at contracted rates, while misbehaving or unreliable service may lead to difficulty obtaining capacity.
• Shippers of Choice also focus on understanding costs per load, considering inefficiencies in lanes, and establishing strong, strategic relationships with carriers, emphasizing trust, consistency, and mutual benefits.
• Learn more about developing a?Shipper of Choice Mentality .

US Container Import Volumes Surge Amid Global Supply Chain Challenges

????????????? gCaptain: February 8th

• January 2024 saw a 7.9% growth in U.S. container imports, the highest in seven years, fueled by a 14.9% rise from China.
• West Coast ports gained a 3.3% share, reaching 43%, while East and Gulf Coast ports decreased by 2.5% to 42.4%.
• Panama's drought and Middle East conflict impact transit times, with potential labor disruptions at South Atlantic and Gulf Coast ports.
• ILA/USMX contract expiration in September 2024 may lead to a coast-wide strike in October, posing trade flow risks.

Economic Updates

January 2024 Logistics Managers' Index

??????????????Logistics Managers’ Index: February 7th

• The Logistics Managers' Index (LMI) shows expansion in all metrics for the first time since September 2019, indicating a potential end to the freight recession.
• Transportation Prices exhibit significant growth (+12.7), returning to expansion after being in contraction since June 2022. This is driven by retailers' increasing Inventory Levels (+8.4) post-busy holiday season.
• Warehousing metrics maintain steady expansion, albeit at slightly slower rates.
• The LMI reads at 55.6 in January, a notable increase (+5.0) from December, driven by an uptick in inventory restocking, especially in the downstream sector.
• Consumer sentiment in the U.S. spiked by 13.1% in January 2024 to 79.0, contributing to overall economic growth and prompting the U.S. Federal Reserve to consider interest rate reductions.
• While the U.S. economy looks robust, the global recovery is uneven, with the Eurozone facing stagnation. China is dealing with Evergrande's liquidation and disruptions in ocean shipping due to geopolitical events.

Jobs Growth of 353,000 Blasts Past Expectations as Labor Market Stays Hot

??????????????The Wall Street Journal: February 2nd

• Added 353,000 jobs, doubling economists' expectations and showcasing a resilient job market.
• Bond yields surged, S&P 500 hit a record high, signaling investor confidence in sustained economic strength.
• Positive revisions in December's payroll gains challenged the view of a tightening job market; wages rose by 4.5% YoY.
• Unemployment held at 3.7%, defying forecasts of a rise to 3.8%, influencing the Federal Reserve's stance on interest rates.
• January's job gains spanned various industries, indicating a widespread economic recovery and defying concerns of a slowing labor market.

Layoffs Hit 10-Month High As Financial And Tech Companies Slash 39,000 Jobs .?????????

??????????????Forbes: February 1st

• 82,307 US job cuts in January, the highest since 2009 except 2023.
• Tech and finance hit hardest, followed by food and retail.
• Hirings down significantly compared to January 2023.
• Unemployment claims rise, but the unemployment rate remains low.
• Fed rate hikes contribute to slowdown; future cuts may impact jobs.

Stocks Fall After Powell Says Caution Is Needed on Rate Cuts

????????????? The Wall Street Journal: February 5th

• The S&P 500 retreats from a record high, and bond yields rise as hopes for a Fed rate cut in March diminish.
• Fed Chair Powell indicates caution on rate cuts, citing recent economic strength in a "60 Minutes" interview.
• Investors recalibrate expectations, reducing the likelihood of a March rate cut from 52% to 15%, impacting stock and bond markets.
• The benchmark 10-year Treasury yield rose, signaling investor belief in a delayed Fed rate cut; it has been up almost 0.3% since Thursday.
• Despite strong economic data and falling inflation, concerns persist about the economy, particularly in the tech sector, as interest rates may impact future earnings.

Company-Specific

Saia’s $1B growth plan to test LTL’s tight capacity structure

????????????? Freightwaves: February 2nd

• Ambitious growth plans for 2024, $1 billion capital expenditures, acquiring 28 terminals from Yellow Corp.’s bankruptcy.
• Saia will open 15-20 acquired terminals and invest $244 million, enhancing direct coverage and replacing existing facilities.
• The real estate outlay is $550 million, and expecting a 12%-14% higher door count by the end of 2024.
• Fleet expansion, trailer focus for efficiency, equipment spend $400-450 million, reducing equipment leases.
• Increased headcount by 1,500 (12%), had a strong Q4 2023 financial performance, earning per share $3.33, and had revenue of $751 million.

Roadrunner makes swift expansion to Canada

????????????? CCJ Digital: February 6th

• Roadrunner, a less-than-truckload services provider, has implemented its largest expansion in five years, introducing 135 new lanes to its network.
• The expansion includes service to Portland, Oregon, and Toronto and Montreal in Canada via Detroit, emphasizing major metropolitan areas and enhancing connectivity throughout the U.S.
• Roadrunner's strategic move to enter the Canadian market aligns with post-COVID market conditions and the trend of nearshoring, driven by increased demand for products in Canada.
• The expansion aims to provide direct, long-haul, metro-to-metro service, optimizing the network with technology to ensure seamless operations for shippers and positioning the company for future growth into Mexico, starting with Vancouver.

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