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Logistics Intelligence Brief
Thursday, October 13, 2022


US LTL costs rose in September after summer decline

The Journal Of Commerce William B. Cassidy October 12, 2022


The fork in the road for the LTL and truckload PPIs indicate LTL carriers are for the moment better positioned to hold a line on contract pricing than their truckload carrier counterparts. The LTL sector is highly concentrated, with the top 25 US LTL trucking companies ranked by 2021 revenue holding 91.5 percent of the sector’s $50.7 billion in revenue, according to SJ Consulting Group data.
That concentration coupled with continuing industrial and retail demand and limited capacity has buoyed LTL pricing, which also is not connected to a transactional spot market. Anecdotally, LTL carriers say their sector still has “pricing discipline,” and that they are still winning higher replacement rates in new contracts, although those increases may range from low- to mid-single digit percentages.

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DOE methodology for determining diesel prices sees 2 key changes

Freight Waves John Gallagher October 11, 2022


The methodology change for producing the weekly average retail diesel price published each week by the Department of Energy has taken the survey base up to 590 outlets, according to a spokesman for the agency.
In response to a series of questions submitted by FreightWaves regarding the methodology shifts, Chris Higginbotham of the Energy Information Administration’s media relations team identified two major changes in how the weekly price, which is the basis for most fuel surcharges, is now calculated. The new methodology went into effect June 13.
The previous survey was based on the reports from 403 outlets, Higginbotham said.
The second significant alteration involves the weighting of volumes, which is necessary so the the price of a station selling large volumes of diesel will carry more weight in the final number than a smaller station.

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In-cab technology investments may not be enough to prevent accidents

CCJ Angel Coker October 12, 2022

A total of 4,014 people died in large truck crashes in 2020, 15% of which were truck occupants and 68% were occupants of cars and other vehicles, according to the Insurance Institute for Highway Safety. Average nuclear verdicts in the U.S. trucking industry skyrocketed from $2.3 million to $22.3 million between 2010 and 2018, according to a study conducted by the American Transportation Research Institute, and they continue to rise.
What’s the answer to resolving this problem?
As the daughter of a former truck driver, my mother taught me – and annoyingly continues to teach me today as a passenger-seat driver – how to share the roadways with trucks and the good ole Smith system.
I don’t have a fancy newer car with a bunch of technology, so I do actually have to pay attention to the road. I also homeschooled in high school and therefore didn’t have to take a driver education course, so I don’t entirely know what’s included in that training. But I have a younger sister who shared that her teacher simply had his students drive him around our small, three-redlight town to run errands with very little actual instruction.
But I think driver education in high schools could be key to helping resolve the issue.

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September plunge in US imports from Asia signals more declines ahead

The Journal of Commerce Bill Mongelluzzo October 12, 2022


US imports from Asia in September plunged 10.4 percent from August to the lowest monthly volume of 2022, pointing to the likelihood of further declines in import volumes for the remainder of the year as forecasted by retailers.
Retailers are forecasting continued year-over-year monthly declines in imports. According to Global Port Tracker (GPT), which is published monthly by the National Retail Federation and Hackett Associates, imports are forecasted to decline 9.4 percent in October, 4.9 percent in November, and 6.1 percent in December from the same months last year.

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Logistics Deal Making Falters as Freight Demand Slows

The Wall Street Journal Paul Berger October 12, 2022


Evan Armstrong, president of research group Armstrong & Associates, said there have been hundreds of deals in the less than $10 million range in the third-party logistics sector during the past 18 months, while last year saw 25 deals of over $100 million apiece, the highest number since Armstrong & Associates started tracking such deals in 1999.
Mr. Armstrong said the first half of this year saw 14 such deals, putting 2022 on track to be another strong year. But the market has cooled since then, just as shipping volumes have declined and warnings about a broader global economic downturn have spread.

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Port Leaders to Meet Amid Rapidly Changing Environment

Transport Topics Dan Ronan October 12, 2022

Within the sea change in the industry, the Port Authority of New York and New Jersey last month overtook the ports of Los Angeles and Long Beach as the nation’s busiest.
“New York is, you know, now the biggest cargo port in the country,” Connor said. “There is some hedging going on by importers who rerouted cargo that probably historically has gone into Southern California or other gateways and they’ve rerouted it to East Coast ports. The expansion of the Panama Canal in 2016 is another factor why cargo is picking up on the East Coast. But Southern California has an advantage in terms of its location, and it has a lot of economic advantages and logistics advantages.

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U.S. Supplier Prices Increased in September, Maintaining Pressure on Inflation

The Wall Street Journal Gabriel T. Rubin October 12, 2022

Some economists say the impacts of interest-rate increases can take time to show up in the economy, a dynamic that the Fed should take into account when making decisions. Wholesale prices of used cars have been dropping in recent months, for example, but that shift isn’t yet fully reflected in government figures. Calculations for housing prices and residential rents can also lag.

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Mexico replaces Canada as No. 1 US trade partner in August

Freight Waves Noi Mahoney October 12, 2022

Mexico ranked as the United States’ top trading partner in August, accounting for $70.3 billion in cross-border commerce according to the most recent data from the U.S. Census Bureau.
It marks the first time Mexico has been the No. 1 trading partner of the U.S. since January. Canada ranked No. 2, as its total trade with America was $70.04 billion in August, and China rated third with $63.2 billion.

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