200,000 drivers didnāt disappear overnight. Plus: Dalilahās Law targets foreign dispatch, a broker ran a $1M USPS scam, the dashcam war escalates, and more.
B1 visa drivers and illegal operators are not the same thing. Here's the difference and why conflating them is hurting the industry.
Happy Hump Day. US Xpress has officially been acquired by Knight-Swift, China turns up the heat and restricts critical manufacturing minerals vital to US technology, certain logistics stocks are soaring, and in our latest podcast we address the elephant in the room - how to stop double brokers.
In today's email:
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š WHATāS COOKINā IN FREIGHT
š Knight-Swift Completes Acquisition of U.S. Xpress. The Knight-Swift's acquisition of U.S. Xpress has officially closed, marking the end of the latter's five-year stint as a publicly-traded company. The $808 million deal, which was effectively sealed as U.S. Xpress delisted its stock from the NYSE, is set to significantly boost Knight-Swift's assets, adding approximately $2.2 billion in revenue and around 7,200 tractors and 14,400 trailers. The truckload carrier Knight-Swift now anticipates an annual run rate close to $10 billion post-acquisition.
š Pandemic-Driven Warehouse Hiring Boom Fizzles Out. The warehouse hiring boom that took place during the pandemic is ending. Factors like a more relaxed US labor market, slower online sales growth, and wider economic uncertainty have caused many companies to pause their hiring processes, despite the logistics sector being one of the fastest-growing job markets. In a stark shift from previous years' aggressive recruiting methods, employers now choose to wait for the right fit rather than hastily filling positions. Nevertheless, the average hourly wage for a warehouse worker in the US remains at a pandemic-era high, with no signs of reverting to pre-Covid levels.
ā½ļø Diesel Prices Drop as Global Oil Market Stumbles. Diesel prices see a significant decline due to weakening spot market differentials and reduced oil exports from Russia and Saudi Arabia. Amidst China's shrinking oil demand and economic challenges, the global oil market faces a period of uncertainty. John Kingston writes, "You have to go back to the price of January 17, 2022 to find a DOE/EIA average retail diesel price this low."
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POLITICS & SUPPLY CHAIN: CHINA'S EXPORT RESTRICTIONS
China's Tech Leverage in the Global Supply Chain
In a strategic move, China has imposed export restrictions on gallium and germanium, essential to U.S. tech industries, especially semiconductors. This action is viewed as a counter against U.S. curbs on China's tech sector, highlighting China's leverage in the global tech industry. These critical minerals, vital in high-tech manufacturing and used in various applications like phone chargers, electric vehicles, and fiber-optic systems, demonstrate the interconnectedness of international trade and technological advancement.
Escalating Tensions and International Response
The export restrictions underscore the escalating trade tensions between the U.S. and China. Both nations resort to similar measures to hamper each other's tech advancements, citing national security. The timing of the restrictions, coinciding with scheduled U.S. official visits to China, is perceived as a clear message to the Biden administration. This move stirs global apprehension, especially regarding potential future restrictions on rare earth exports, another sector dominated by China.
Looking Forward: Impact and Trade Relations
The new measures are predicted to disrupt the global supply chain for high-performance chips, affecting manufacturers not only in the U.S. but worldwide. The restrictions could also hinder progress in emerging technologies in various sectors. This evolving scenario underscores the complex intertwining of politics, international relations, and global supply chains. The future of U.S.-China trade relations likely depends on their approach to this escalating tech rivalry.
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AROUND THE FREIGHT WEB
šHow to Stop Double Brokering. In our latest podcast episode with Cassandra Gaines, we talked about how her software, prevents double brokering. Listen on YouTube or Spotify.
š Fatal Truck Accident in Tennessee. A semi-truck crashed into a Tennessee house, killing two people, with the driver arrested for criminally negligent homicide.
š Dry Van Truckload Contract Rates Plummet. Due to an oversupply and declining demand, contract rates in the dry van truckload market continue to decrease, indicating a highly competitive environment for carriers.
ā Conversation with Double Broker. Jason Rabine, Founder & President at Max Freightlines, shared a conversation he had with a double broker on LinkedIn.
š Logistics Stocks Reach 52-Week Highs. Logistics companies GXO, EXPD, and CVLG hit their 52-week highs, showing significant year-over-year growth of 44%, 24.7%, and 78.2% respectively.
FREIGHT MEME OF THE DAY
200,000 drivers didnāt disappear overnight. Plus: Dalilahās Law targets foreign dispatch, a broker ran a $1M USPS scam, the dashcam war escalates, and more.
FMCSA cracks down on MC numbers. A $158M trucking Ponzi. Middle East surcharges.
The domino effects are just starting to hit. Plus: FedEx dethroned UPS, Mexico truck production plunges, another $26M AI supply chain raise, and more.
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