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Logistics Intelligence Brief
Thursday, July 13, 2023


Monthly Cass report suggests freight market bottom may be near

Freight Waves John Kingston July 12, 2023

In a freight market where the seemingly permanent prevailing question is, “Are we at the bottom, and if not, when is the bottom?,” Cass Freight Index data continued to report weak numbers but with some suggestion that a bottom may be near.
The headline on this month’s report is “Bouncing Along the Bottom.” “The volume downturn appears to be in the later innings, and after a long soft patch, we see the U.S. freight transportation industry on the cusp of a new cycle,” Tim Denoyer of ACT Research wrote in commentary accompanying the release of the June Cass data.
But the period that Denoyer said the freight market is moving into is what he calls “cycle bottoming.” In the graphic that accompanied the report, that cycle is marked by several features: loose capacity, pricing power to the shipper, low Class 8 tractor production, rates falling more slowly and order cancellations increasing. Overall, the biggest features highlighted on the “wheel” for cycle bottoming are that “demand declines and capacity growth slows.”
Link: Cass Information Systems Transportation Index Report June 2023

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NMFTA council developing API road map for end-to-end data

Freight Waves Mark Solomon July 12, 2023

The Digital LTL Council, a division of the National Motor Freight Traffic Association Inc. (NMFTA), said Wednesday that it is developing an end-to-end application programming interface road map to cover the full shipment data stream from freight “quote to cash.”
When complete, the APIs will enable shippers, carriers and 3PLs to digitally transact every function within the less-than-truckload data stream, the group said. APIs provide a digital method for multiple computer programs to communicate with each other. The API protocols in this effort will facilitate various LTL players’ interactions with each other through their respective computer systems.
The new program will establish seven operational APIs and two administrative APIs. The seven operational APIs are rate quotes, electronic bills of lading, pickup requests and pickup visibility, in-transit visibility, preliminary rate charges, financial rate disputes, and cargo loss and damage claims.
Once implemented industrywide, the initiative will eliminate wasteful phone calls and other inefficiencies, the council said.

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Knight-Swift landed a $250M credit line to aid US Xpress purchase

Transport Dive David Taube July 12, 2023

To help with the acquisition, which took effect July 1, Knight-Swift obtained an unsecured credit facility for up to $250 million before the closing.
The carrier secured the term loan through multiple banks to pay fees, commissions and expenses connected with the over $800 million acquisition.
The credit line followed a significantly larger one that Knight-Swift previously reached: On Sept. 3, 2021, the carrier obtained a $2.3 billion unsecured credit facility to replace a 2017 debt agreement and 2021 term loan.

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Wholesale weakness slowing US inventory destocking, freight demand

The Journal of Commerce William B. Cassidy July 12, 2023


There is growing conviction among US companies that inventory destocking is working, thinning stockpiles of goods built up in 2022 — but just not fast enough.
“The peak of inventory is behind us,” Harmit Singh, chief financial and growth officer of apparel maker Levi Strauss & Co., told Wall Street analysts during a July 6 quarterly earnings call. The clothing maker expects to end the year with inventories below 2022 levels.
On a broad level, however, destocking is not happening rapidly. Early second-quarter earnings reports paint a picture of gradual inventory reduction and ongoing adjustment, with inventories still high in many sectors.
“We are seeing that retailer inventory rebalancing has largely normalized following the significant adjustments affecting nearly all consumer discretionary categories over the past year,” Julien Mininberg, CEO of consumer goods manufacturer Helen of Troy, said during an earnings call Monday.
“Our retail partners are now increasingly matching their orders to consumer demand,” Mininberg said.

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June Class 8 Orders Continue Rebound

Transport Topics Connor D. Wolf July 12, 2023

ACT preliminary data showed orders increased 4.5% year-over-year to 16,200 units from 15,500. It was the second consecutive year-over-year increase with the only other positive month this year being February. Orders also increased 4.5% from the previous month at 15,500 units. ACT noted orders still were seasonally soft despite the gain.
“Given robust Class 8 orders into year-end 2022 and the ensuing backlog support, coupled with normal seasonal order patterns, orders were expected to moderate into Q2 and remain at relatively soft levels into mid-Q3,” said Eric Crawford, vice president and senior analyst at ACT. “June orders were in line with this view.”

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