Transportation Updates
???????????????? Journal Of Commerce: Jan 30th
- A significant revision to the LTL freight classification system will take effect on July 19, impacting pricing for shippers nationwide.
- Shippers must accurately measure dimensions and weight to avoid potential cost increases from freight reclassification.
- The new system aims to simplify classifications, adding two density-based classes (50 and 55) and reducing redundant commodity listings.
- NMFTA will review feedback starting Feb. 25, with a public meeting on March 3 before finalizing the changes.
- Experts urge shippers to engage with carriers now to understand and adapt to new classification requirements.
???????????????? SupplyChainDive: Jan 28th
- UPS and FedEx continue discounting, but rising surcharges could limit shippers’ cost savings in 2025.
- Lightweight e-commerce packages (sub-three pounds) are seeing price increases due to USPS rate changes.
- Mid-weight shipments (five to 10 pounds) have more competitive pricing as carriers shift focus to profitability.
- Heavy packages face rising surcharges, sometimes exceeding base shipping costs at major carriers.
- Shippers should leverage data and strategic negotiations to manage costs amid an evolving pricing landscape.
???????????????? ACT Research: Jan 28th
- Freight volumes dipped slightly to 51.0 as private fleet expansion continues to limit for-hire carrier growth.
- Freight rates rose to 55.3, with truckload spot and contract rates increasing modestly amid FMCSA regulatory changes.
- Fleet capacity remained steady at 49.7, with carriers holding off major expansions due to weak profitability.
- Driver availability improved to 56.3 as private fleets gained market share and owner-operators exited the industry.
- Fleet purchase intentions dropped to 46%, signaling constrained demand for new equipment amid ongoing financial pressures.
???????????????? TruckingDive: Jan 28th
- LTL trucking is expected to improve in 2025, driven by rising manufacturing and nonresidential construction investments.
- Factory construction spending has surged to $235 billion annually, potentially boosting freight volumes in coming years.
- Consumer spending growth, aided by wage increases outpacing inflation, may revive retail shipping demand.
- Potential tariffs under the Trump administration create uncertainty, though past exemptions suggest flexibility.
- Shippers are prioritizing trustworthiness in carrier relationships, possibly influenced by Yellow’s bankruptcy.
???????????????? SupplyChainDive: Jan 28th
- Ocean spot rates from Asia to North America fell in late January as seasonal demand cooled after pre-Lunar New Year shipments.
- Rates from Asia to the US West Coast dropped 7% to $4,938 per FEU, while East Coast rates fell 1% to $6,656 per FEU.
- Red Sea diversions continue to absorb capacity, keeping rates elevated compared to 2019 despite recent declines.
- Maersk and CMA CGM are still avoiding the Red Sea, maintaining longer routes around Africa due to security concerns.
- Potential US tariffs on Chinese imports are driving shippers to frontload cargo, which may sustain demand in early 2025.
???????????????? TruckingDive: Jan 27th
- FedEx Freight plans to spin off its LTL division within 18 months, impacting market competition and leadership structure.
- TFI International is eyeing a $4B-$5B US LTL acquisition, potentially targeting ArcBest for industry consolidation.
- Knight-Swift is expanding its LTL network, aiming for nationwide coverage by 2026 despite integration challenges.
- Carriers are reopening former Yellow terminals, with over 100 properties still up for auction.
- Trump’s FMCSA leadership choice could influence regulations on speed limiters, broker transparency, and autonomous trucking.
Economic Updates
???????????????? The Wall Street Journal: Jan 24th
- US existing home sales in 2024 dropped to 4.06 million, the lowest level since 1995, due to high mortgage rates.
- Average 30-year mortgage rates ranged from 6% to 8%, significantly limiting affordability despite a strong consumer spending environment.
- Home prices increased by 6% year-over-year, with inventory remaining tight as homeowners avoid selling at higher mortgage rates.
- The Federal Reserve cut rates three times in 2024, but mortgage rates still climbed, constraining market activity.
- Builders and buyers face challenges from rising costs, though sales showed some improvement in late 2024.
???????????????? SupplyChainDive: Jan 24th
- Mexico launched a $1.4B nearshoring incentive package to strengthen its role in North American supply chains.
- Up to $1.35B will support new fixed asset investments, while $75M is allocated for training and innovation.
- Funds will be awarded through a federal committee and available until Sept. 30, 2030.
- Plan México aims to increase domestic production, replace imports, and drive regional economic growth.
- The initiative aligns with US efforts to localize manufacturing, particularly in response to China trade shifts.
???????????????? The Wall Street Journal: Jan 29th
- Conflicting regulations in California are slowing electric truck adoption, leaving manufacturers and dealers uncertain about sales mandates.
- California withdrew a key mandate forcing fleets to buy electric trucks but still requires manufacturers to sell increasing EV volumes.
- Limited charging infrastructure and shorter battery ranges (around 200 miles) are major obstacles to widespread adoption.
- Truck dealers face pressure to sell electric trucks or risk losing access to new diesel models under current regulations.
- The trucking industry expects regulatory relief from the federal government, delaying the transition to zero-emissions fleets.
???????????????? CCJ: Jan 28th
- Sean Duffy was confirmed as US Secretary of Transportation with strong bipartisan support in a 77-22 Senate vote.
- Duffy aims to focus on infrastructure investment, streamlining project delivery, and supporting core transportation programs.
- Trucking industry leaders welcome his leadership, expecting collaboration on safety, efficiency, and regulatory relief.
- Key industry priorities include truck parking expansion, freight fraud prevention, and rolling back burdensome regulations.
- Next steps include nominations for DOT agency heads, such as FMCSA and Federal Highway Administration.
Specific Articles
???????????????? The Wall Street Journal: Jan 30th
- UPS plans to cut over 50% of its business with Amazon by June 2026, impacting nearly 12% of its revenue.
- Stock dropped 14% to $115, its lowest since 2020, following weaker-than-expected revenue guidance of $89 billion for 2025.
- UPS aims to focus on higher-margin markets like healthcare, B2B shipping, SMBs, and international deliveries.
- The company expects $1 billion in savings by optimizing labor hours, fleet size, and efficiency measures.
- Despite revenue rising 1.5% in Q4, UPS missed analyst expectations, with earnings of $2.75 per share vs. expected $2.53.
???????????????? SupplyChainDive: Jan 27th
- USPS restructured agreements with package consolidators to increase network efficiency and profitability.
- Eliminated ounce-based Parcel Select rates, shifting consolidators toward handling heavier shipments.
- Ended broad contract rate discounts for final-mile delivery unit drop-offs, requiring earlier entry into the network.
- USPS aims to grow direct shipper contracts and expand services like Ground Advantage and Next Day Priority.
- DeJoy expects USPS performance to improve, ensuring on-time delivery for partners aligning with the agency’s strategy.
???????????????? FreightWaves: Jan 27th
- The Port of Los Angeles handled 10.3M TEUs in 2024, a 20% YoY increase, marking its second-best year ever.
- Ongoing infrastructure projects include expanded on-dock rail and the Universal Truck Appointment System to improve efficiency.
- The port is advancing decarbonization, aiming for zero emissions with over $640M in ZE truck and equipment investments.
- New workforce training centers and university partnerships will support clean technology and logistics careers.
- International collaborations on Green Shipping Corridors are driving the development of zero-carbon container ships by 2030.
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