Your Gateway to Logistics Excellence - Week of July 15th

Transportation Updates

June 2024 US Transportation Sector Unemployment

???????????????? Bureau of Transportation Statistics: July 5th

• In June 2024, transportation sector unemployment rose to 4.8%, up from 3.3% in June 2023 and above the pre-pandemic June 2019 level of 4.1%.
• US unemployment in June 2024 was 4.3%, with transportation employment at 6,593,700, a 0.1% increase from the previous month and year.
• Notable changes include a 1.9% decline in truck transportation and a 7.5% rise in water transportation from June 2023.

?

US-bound imports see gains amid global supply chain challenges, notes Port Tracker

???????????????? Logistics Management: July 9th

• According to the Port Tracker report by NRF and Hackett Associates, US-bound import volumes increased despite ongoing supply chain challenges.
• Ports covered in the report saw a 7.5% annual increase in import volumes for May, reaching 2.08 million TEUs.
• June through November forecasts show continued growth, with peak volumes expected in July and August.
• High shipping rates, unresolved port labor negotiations, and Red Sea disruptions pose ongoing challenges.
• The first half of 2024 saw a 14.4% annual increase in import volumes, indicating strong retail expectations.

?

Transportation a top 10 target of cyberattackers, cases nearly triple last year

???????????????? CCJ: July 8th

• The transportation sector experienced 101 data breaches in 2023, an 181% increase from the previous year.
• This matches the total number of breaches from 2020 to 2022 combined.
• Cybersecurity firm Trellix reported that transportation and shipping sectors accounted for 53% and 45% of global ransomware detections.
• The rise in cyberattacks highlights the urgent need for improved cybersecurity measures in the transportation industry.
• Experts stress the necessity for operational threat intelligence to stay ahead of increasingly sophisticated cybercriminals.

?

Small Mexican domestic intermodal market sees big growth

???????????????? Journal of Commerce: July 8th

• The Mexican intermodal market grew 35.6% year-over-year, surpassing North America's 9.4% growth in 2024.
• Domestic intermodal moves in Mexico reached 246,000 in 2024, 3.4% of the North American market.
• Private rail fleets in Mexico saw a 270% increase in activity, while rail-owned fleets grew 47%.
• Domestic container revenue moves in Mexico rose 139%, compared to North America's 4.7% gain.
• Near-shoring trends contribute to Mexico's intermodal growth, with domestic market expansion likely to continue.

?

Trucking's youth movement lagging, but no retirement in sight for most drivers

???????????????? CCJ: July 9th

• Trucking's youth movement is slow; 74% of surveyed drivers are 55 or older.
• The average age of surveyed truck drivers is 59.5 years, above the industry average of 47 years.
• Many drivers have been in the industry for over 20 years; saving for retirement is less prioritized than paying monthly bills.
• Despite nearing retirement age, 58% of drivers haven't decided when to retire or plan to drive as long as health allows.
• Industry recruitment challenges persist due to an aging driver population.

?

California’s electric- truck mandate could affect Mexican transporters

???????????????? FreightWaves: July 7th

• California's electric truck mandate may impact Mexican transporters, potentially pushing some fleets out of business.
• Starting January 2025, fleet owners must replace internal combustion trucks with electric vehicles.
• High costs and insufficient EV infrastructure in Mexico present challenges for compliance.
• The Isthmus of Tehuantepec Railway completed its first freight movement, part of Mexico's $2.8 billion corridor project.
• Texas EV startup Canoo secured an order for electric delivery vans, and the Korea International Trade Association opened a new office in Dallas.

?

Class 8 truck orders fall below '23 level for first time this year

???????????????? CCJ: July 9th

• North American Class 8 truck orders fell to 14,800 units in June, a 37% decrease month-over-month and 12% year-over-year.
• Preliminary FTR data showed 13,100 units, down 33% month-over-month and 6% year-over-year.
• Despite the decline, orders remain in line with seasonal expectations and historical averages.
• Vocational market demand significantly dropped, though replacement levels for incoming orders remain stable.
• Consumer services spending has bolstered demand for medium-duty trucks, with Class 5-7 orders up 3.3% year-over-year.

?

Regulators nervous about rail freight decline

???????????????? FreightWaves: July 12th

• Federal regulators summon major freight railroads to explain investment and growth plans amid declining volume concerns.
• The Surface Transportation Board cites a 28% drop in carload traffic over the past decade as the hearing's basis.
• The STB seeks short, medium, and long-term growth plans from railroads, encouraging input from shippers and short lines.
• The Association of American Railroads reports low consumer confidence, driven by high prices and global instability.
• The hearing aims to push railroads to grow and align with the Biden administration's environmental goals.

Economic Updates

?

Inflation falls 0.1% in June from prior month, helping case for lower rates

???????????????? CNBC: July 11th

• June's CPI declined 0.1% from May, bringing the 12-month rate to 3%, the lowest in three years.
• Core CPI, excluding food and energy, rose 0.1% monthly and 3.3% annually, the smallest increase since April 2021.
• A 3.8% drop in gasoline prices offset 0.2% increases in food and shelter costs.
• Stock futures rose, and Treasury yields fell, with expectations of a Fed rate cut in September.
• Traders anticipate multiple Fed rate cuts by year-end, with a 40% chance of three cuts by December.

?

Unemployment Rises To 31-Month High—Here’s Why Market Isn’t Too Spooked

???????????????? Forbes: July 5th

• June's unemployment rate rose to 4.1%, the highest since November 2021, surpassing the expected 4%.
• Job growth for June was 206,000, but prior months' estimates were revised down by 111,000.
• Investors reacted positively, expecting a Fed rate cut in September, with futures contracts showing increased confidence.
• Government jobs contributed significantly to June's job growth, adding 70,000 positions.
• Despite the rise in unemployment, the overall economic outlook remains stable, avoiding a recession.

?

Powell Inches the Fed Closer to Cutting Rates

???????????????? The Wall Street Journal: July 9th

• Federal Reserve Chair Jerome Powell indicated a potential rate cut, citing significant progress in reducing inflation toward the Fed's 2% target.
• Powell noted the labor market has cooled, reducing inflationary pressures, and discussed the balanced risks of high rates.
• Despite progress, Powell refrained from specifying the timing for rate cuts.
• The unemployment rate rose to 4.1%, and inflation fell to 2.6% in May.
• The Fed's next meeting in late July may provide more hints about future rate cuts.

?

The Noncompete Clause Moves Deeper Into Limbo

?????????????????The Wall Street Journal: July 7th

• Two court rulings may delay the FTC's noncompete clause ban set for September.
• A federal judge supported a challenge to the ban, citing the FTC's lack of statutory authority.
• A second ruling on a similar lawsuit is expected by July 23, potentially leading to conflicting decisions.
• Employers are advised to comply with state laws on noncompete clauses while awaiting final rulings.
• The FTC argues that noncompetes suppress wages and stifle business growth.

Specific Articles

WisBusiness: the Podcast with Ryan Keepman

???????????????? WisBusiness: July 11th

• Evans Transportation Services' CEO Ryan Keepman discusses significant revenue growth from $80 million to $400 million since 2018.
• The company projects 24% growth this year, driven by cultural evolution and new technologies.
• Nearshoring trends boost demand for shipping capacity in Mexico, with a 7:3 ratio of trucks returning to the U.S.
• The company's new project logistics division, handling large shipments, is expected to generate $15 million in revenue this year.
• Keepman emphasizes building a strong company culture and leadership to empower employees and support growth.

?

Nikola's hydrogen fuel cell trucks surpass Q2 sales expectations

???????????????? Clean Trucking: July 2nd

• Nikola Corporation exceeded Q2 expectations, delivering 72 Class 8 hydrogen fuel cell trucks, surpassing their target of 60 units.
• Total sales for the first half of 2024 reached 112 FCEV trucks, indicating growing demand.
• The company has gained new customers like Walmart Canada and maintained repeat business with firms like 4GEN.
• Nikola continues to expand its hydrogen refueling infrastructure, recently opening a station at the Port of Long Beach.
• Nikola's stock rose 3.2% following the announcement, reflecting increased investor confidence.

Stay ahead of the logistics curve and receive exclusive industry insights – subscribe to our weekly newsletter now for a firsthand look at the future of transportation with Evans! Keep moving!