Happy Hump Day. Georgia-based Big J Express has thrown in the towel and filed for Chapter 7 bankruptcy. Meanwhile, DAT and Convoy have confidentially settled their disputes. Phoenix is beginning to melt under a record-breaking heatwave, and the demand for frozen food is creating a surge for more cold storage. British Columbia dockworkers have resumed their strike. In FreightTech's latest acquisition news, Truckstop has purchased FreightFriend for its AI-powered freight-matching tech. Lastly, can you guess why drop trailer volumes were up 32% year-over-year in June?
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In today's email:
Three Freight Headlines: J.B. Hunt's Q2 earnings dip, Yellow Corp risks strike over unpaid pensions, and Big J Express files for bankruptcy.
Beverage Season 2023: Market Trends & Freight Volume Growth
Around the Freight Web: Phoenix hits heatwave record, DAT & Convoy settle disputes, Truckstop acquires FreightFriend, plus more.
Freight Meme of the Day
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🐔 WHAT’S COOKIN’ IN FREIGHT
🤔 J.B. Hunt's Q2 Earnings Report. J.B. Hunt Transport Services reported Q2 earnings per share of $1.81, falling short of expectations due to soft demand, and indicated uncertainty around the impact of the 2023 peak shipping season. While intermodal volumes outpaced the industry, the company's brokerage revenue and truckload segment saw declines, but the dedicated unit reported its highest-ever operating income.
🪧 Yellow Corp Faces Strike Threat Over Missed Pension Contributions. The risk of a strike increases as Yellow Corp fails to meet over $50M in required health and welfare and pension fund contributions for June and July. The company cited avoiding a cash shortage as the reason behind the decision. This delinquency could prompt a work stoppage by the Teamsters Union. Despite these issues, Yellow remains committed to negotiating a new contract with the International Brotherhood of Teamsters. Experts suggest the financial struggles could signal a potential business closure for Yellow Corp.
🚛 Georgia-based Big J Express Files for Chapter 7 Bankruptcy. Norcross, Georgia-based trucking company Big J Express has filed for Chapter 7 bankruptcy following a significant drop in revenue this year. The firm listed its assets and liabilities as between $1 million and $10 million, and cited up to 49 creditors. Big J Express' revenue dropped from nearly $6.1 million in 2022 and $5.6 million in 2021 to around $1.5 million until its filing date of July 14, 2023. The bankruptcy filing revealed that the company owes over $2 million to Volvo Financial Services and nearly $1.1 million to Amur Equipment Finance Inc.
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BEVERAGE SEASON 2023: MARKET TRENDS
Freight Volumes and Operations
The 2023 beverage season, running from mid-May to mid-July, is reportedly seeing increased freight volumes compared to previous years. According to Ronnie Davis, VP of North American Surface Transportation at C.H. Robinson, freight volumes with food and beverage customers are up about 3% year over year. Additionally, drop trailer volume in June was up 32% year-over-year, reflecting a shift back to pre-pandemic operation efficiencies.
Increased Beverage Demand and Consumption
This year's beverage season has seen a surge in demand. Beverages such as water, sports drinks, power drinks, beer, malt beverages, hard seltzers, and hard cider are experiencing significant sales growth, with beer shipments spiking up to 50% in some regions during the summer.
Inventory Management and Market Entry
Beverage manufacturers, having to navigate through post-pandemic inventory correction - the biggest in decades - and facing product expiration dates, have used promotions and price reductions to right-size their inventory. By early spring, new beverage volume started entering the market, with one example being a beverage customer adding 1,100 more truckloads of product. Currently, several key customers have indicated they are now at normal summer inventory levels.
Future Predictions and Carrier Perspective
Looking ahead, Davis predicts beverage volumes will be slightly up, influenced by factors like extreme heat in certain states leading to increased consumption, and Canadian wildfires limiting outdoor activities in some regions. From the carrier perspective, while the U.S. trucking market overall is soft, certain markets like the Mexico border and California have seen tightening and upticks in load-to-truck ratios, respectively. However, Davis doesn't expect a significant squeeze in capacity this summer despite a record-setting influx of new carriers in the past year.
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AROUND THE FREIGHT WEB
Farmworkers in Salem, New Mexico, harvested onions at night to avoid working in the heat of the day on Tuesday. Credit: Paul Ratje for The New York Times.
☀️️Phoenix Hits Record-Breaking Heatwave. Phoenix, Arizona has broken the record for consecutive days over 110 degrees, marking 19 days.
❄️ Cold Storage Crunch. Frozen food demand surge strains cold storage supply chains, necessitating innovation to protect the $265 billion global market.
🤝 DAT and Convoy Settle Legal Disputes. DAT and Convoy have mutually dropped their lawsuits, settling their disputes confidentially out-of-court.
📢 Dockworkers Strike Resumes in British Columbia. A tentative labor deal in British Columbia has been rejected by ILWU, leading to the resumption of a strike and potential delays in American supply chains.
🚛 Truckstop Buys FreightFriend. Truckstop has acquired AI-powered freight management solution FreightFriend, bolstering freight-matching outcomes and simplifying operations for brokers and carriers.
💵 Bogus Accessorial Charge Reimbursement. John A. Rogers shares a successful strategy for disputing and obtaining reimbursements for unjust accessorial charges from Capstone.
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