Transportation Updates
???????????????? Journal of Commerce: June 4th
- LTL carriers are expanding terminal networks and investing in trucks and trailers to meet future demand.
- Companies like Estes Express Lines, XPO, and Saia have significantly increased their equipment fleets, including acquisitions from Yellow.
- Some new equipment replaces older vehicles, enhancing efficiency and reducing maintenance costs.
- Not all carriers are expanding aggressively; Old Dominion Freight Line cut its tractor count in 2023 but continues to invest strategically.
- The US long-haul LTL producer price index rose 8.2% year over year in April, reflecting sustained rate increases.
?????????????????CCJ: June 5th
- The freight industry struggles with weak rates, low volumes, and high costs, showing 6-10% declines in key categories in April.
- For-hire trucking volume dropped 9% in April due to shifts to private fleets, but this trend is expected to be temporary.
- Pricing fell nearly 10% month-over-month, with capacity dipping 6.5%, driven by challenging market conditions and high costs.
- Class 8 truck sales and capacity additions by private fleets are slowing, which may reduce overall capacity and rate pressure.
- Used Class 8 truck sales dropped 1.9% in April, with prices expected to stabilize and grow by late 2024.
???????????????? The Wall Street Journal: June 3rd
- Transport and logistics operators are exploring IPOs after a period of tight funding and weak freight demand.
- Lineage Logistics, a major cold storage operator, is targeting a $30 billion IPO, potentially one of the largest this year.
- Kenan Advantage Group is considering a $3.5 billion IPO, highlighting renewed interest in public listings.
- The logistics industry has seen two smaller IPOs this year amid a broader resurgence following a 2022-2023 slowdown.
- Tech-focused logistics companies face challenges in the current IPO market, favoring firms with profitability and specialization.
Economic Updates
?????????????????Institute For Supply Management: June 4th
- The Manufacturing PMI? dropped to 48.7% in May, indicating contraction for the second consecutive month.
- The New Orders Index fell to 45.4%, showing a further decline in demand, while the Production Index slightly decreased to 50.2%.
- The Prices Index dropped to 57%, indicating slower price increases, and the Backlog of Orders Index fell to 42.4%.
- Employment Index rose to 51.1%, suggesting a slight improvement in manufacturing employment despite overall industry contraction.
- Seven manufacturing industries reported growth in May, while seven others, including Machinery and Food Products, reported contraction.
?????????????????Logistics Managers’ Index: June 4th
- The Logistics Manager’s Index (LMI) increased to 55.6 in May 2024, marking its sixth consecutive month of expansion.
- Transportation Prices surged from 44.1 to 57.8, their highest since June 2022, outpacing Transportation Capacity, which decreased slightly.
- Inventory Levels contracted to 46.5, driven by upstream firms, while downstream firms saw slight inventory growth.
- Warehousing Utilization rose significantly to 64.0, with downstream firms showing higher utilization than upstream firms.
- Despite economic uncertainties, the overall logistics industry shows signs of recovery, driven by transportation and warehousing metrics.
???????????????? Wolf Street: June 3rd
- In April, $18.4 billion was invested in US manufacturing plant construction, hitting a record annual rate of $212 billion.
- The construction boom began in late 2021, boosted by the CHIPS Act, and involves various industries beyond semiconductors.
- The CHIPS Act has led to massive semiconductor investments, with companies like Intel, TSMC, Samsung, and Micron planning multi-billion-dollar projects.
- Factory construction costs are a fraction of total investments, with significant spending on advanced manufacturing equipment.
- Recent investments include Toyota's $1.4 billion in Indiana, Kohler's Arizona facility, and several new plants in North Carolina and Georgia.
???????????????? Business Facilities: June 3rd
- The USA logistics industry is projected to reach $1.5 trillion in revenue by 2026, driven by online commerce growth.
- Infrastructure investments, government funds, and technological advancements in the logistics sector will support increased demand.
- Key logistics hubs for 2024 include Anchorage, Atlanta, Chicagoland, Dallas-Fort Worth, Detroit, and others, with strategic locations and facilities.
Specific Articles
???????????????? Transportation Topics: June 4th
- Yellow Corp. may use a real estate investment trust to raise money for creditors from its remaining properties.
- Chief Restructuring Officer Matthew Doheny aims to determine if retaining properties raises more cash than liquidation.
- Yellow Corp. previously sold about 130 locations for nearly $2 billion after filing bankruptcy last year.
- The company seeks to extend its bankruptcy plan filing deadline by 90 days despite opposition from unsecured creditors.
- Yellow Corp. faces $10 billion in claims, and success in raising funds could potentially benefit shareholders.
?????????????????The Wall Street Journal: June 5th
- Transfix sold its brokerage unit to NFI Industries, repositioning it as a software provider due to the challenging freight market.
- NFI will absorb over 100 Transfix employees and become the first client of Transfix's software business.
- The logistics sector has faced a downturn, and high interest rates and increased competition have impacted digital freight startups.
- Legacy logistics companies have improved technology, closing the gap with tech-focused firms like Transfix and Uber Freight.
- Transfix aims to leverage its software expertise, which is supported by new venture investments, despite some workforce reductions.
???????????????? FreightWaves: June 4th
- FLS Transportation acquired Anderson Transportation and Logistics, expanding its TL brokerage and adding flatbed expertise to its network.
- The acquisition raises FLS' revenue to approximately $600 million, enhancing service offerings and market coverage.
- ATL, founded in 2005, adds two branches to FLS, increasing its total to 21 across the U.S. and Canada.
?????????????????FreightWaves: June 3rd
- APL Cargo Inc., with 122 drivers and 142 power units, filed for Chapter 11 bankruptcy in Indiana to reorganize.
- The company hauls general freight, produce, and meat and lists assets and liabilities between $1 million and $10 million.
- APL Cargo faces a class action lawsuit alleging driver misclassification and restrictive leasing practices by Indy National Leasing.
- APL Cargo has a higher-than-average out-of-service rate for trucks and disputes significant debts to several New York-based lenders.
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!
