The domino effects are just starting to hit. Plus: FedEx dethroned UPS, Mexico truck production plunges, another $26M AI supply chain raise, and more.
Freight margins are razor-thin. The brokerages surviving it built nearshore teams that actually work.
Flatbed rejections hit a record 48.7%, broker numbers stop falling, and diesel jumps 30 cents overnight.
Happy Monday Morning. Are you not making money in trucking or brokering? According to a former prisoner-turned-double-broker on TikTok, you're simply not following his 100% guaranteed methods to become a boss in freight. In other news, Yellow has avoided a catastrophe and received the green light for no teamsters strike at this moment. Self-driving trucks have raised an additional $800M to support future deployment, while Knight-Swift's profits took a nosedive. Lastly, out of the 40 trucking companies that existed in 1979, can you guess which ones still exist today?
In today's email:
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๐ WHATโS COOKINโ IN FREIGHT
๐ Teamsters Pull Back Strike Threat at Yellow. The Teamsters union has withdrawn the threat of a strike at Yellow, averting a potential company liquidation. After a pension fund agreed to continue to extend health benefits to unionized workers and give Yellow an additional 30 days to make a missed payment, the union pulled back. This decision follows a federal judge's denial of Yellow's request to block the strike. Yellow, one of the largest trucking companies in the U.S., is grappling with a heavy debt burden and falling cash reserves. A strike could have sent the 99-year-old company into Chapter 7 liquidation proceedings, affecting its 30,000 employees, including 22,000 union members.
๐ฐ Aurora Secures $820M for Autonomous Trucking Launch. Aurora Innovation, a self-driving tech company, secured $820 million in a combined public and private funding round. The funding will aid Aurora in its autonomous trucking launch, set for 2024, and support operations into 2025. Aurora's self-driving trucks have piqued interest from FedEx, Paccar, Schneider, Werner, and Xpress. The funding will be used for working capital, potential acquisitions, and other corporate purposes.
๐ Knight-Swift Q2 Report. Knight-Swift Transportation, the largest North American truckload carrier, reported a sharp fall in Q2 profit to $63.3 million, down from $219.5 million year-over-year, due to reduced U.S. freight demand. Revenue fell 21% to $1.55 billion, with the core truckload segment dropping 15.5%. The company's freight brokerage logistics business revenue also declined by 52% due to a decrease in shipper loads. Amid this downturn, Knight-Swift reduced its full-year earnings guidance, also factoring in a projected loss from U.S. Xpress, which it acquired earlier in the year. CEO David Jackson expects a normalization of imports and seasonality in coming quarters following an inventory destocking phase.
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A TikTok user, known as @g_face_did_it, has come under scrutiny in the trucking and brokerage industry for promoting questionable practices. He claims to offer guidance to help others "become a BOSS in the trucking & brokerage industry with a 100% guarantee".
His videos often feature him handling large amounts of cash, and recounting them using his money-counting machine. Interestingly, he shares his narrative of being a former prisoner, aiming to educate others with criminal records on making money in trucking.
However, some industry insiders are less than impressed. Justin Martin from FreightWaves and Michael Lombard from Lombard Trucking have labeled him a scammer. Their main contention is his practice of advising people to open a trucking company and a brokerage for the purpose of "double-brokering" loads.
This concern was publicly addressed when Lombard accused the TikToker of fraud. In a twist of events, Yuri humorously admitted to double-brokering in his response video. This video was subsequently deleted from his TikTok account following comments highlighting the illegality of his activities. Luckily, Justin Martin managed to save the video before it was removed.
Earlier this year, in March, Justin Martin had also labeled Yuri a scammer, further escalating the ongoing controversy.
Bonus: We had a firsthand experience of the malpractice of double brokering during our visit to Armenia in November 2021. We ran into trouble with the owners of offices engaging in this practice. The whole ordeal was chronicled in a funny video meme on a TikTok video by the account @doublebroker.
STAY COMPETITIVE IN A CRAZY MARKET
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AROUND THE FREIGHT WEB
๐ The Vanishing Giants of the Trucking Industry. Many of the top 40 U.S. trucking companies in 1979, including leaders like Roadway Express and Consolidated Freightways, have ceased to exist.
๐ฐ Selling A Freight Tech Company For Millions. Brad Hollister shares the journey of SwanLeap, from rapid growth to sale during a pandemic, in the latest episode of The FreightCaviar Podcast.
๐ง Freight Train Derailment in Montana. A freight train carrying paint thinner derailed in Le Havre, Montana, resulting in 25 overturned wagons but no leaks or casualties.
๐ July 2023 Arrive Market Update. The July 2023 edition of the Arrive Market Update features key market trends insights from VP of Market Intelligence David Spencer.
๐ฌ Please Advise. A double broker from Ukraine is seeking to become a legit dispatcher; however, his message lacks a simple, please.
FREIGHT MEME OF THE DAY
The domino effects are just starting to hit. Plus: FedEx dethroned UPS, Mexico truck production plunges, another $26M AI supply chain raise, and more.
Flatbed rejections hit a record 48.7%, broker numbers stop falling, and diesel jumps 30 cents overnight.
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
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