🎣 Hurricane Milton

Good morning. While still under clean-up and recovery efforts from Hurricane Helene, Florida urges millions of residents to evacuate before Hurricane Milton makes landfall. Meanwhile, trucking capacity continues toward stabilization, FMCSA data shows.

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🐔 WHAT’S COOKIN’ IN FREIGHT

🌀 Florida Braces for Hurricane Milton as Helene's Aftermath Lingers. Hurricane Milton rapidly strengthened into a Category 1 storm and is expected to make landfall on Florida’s Gulf Coast as a Category 3 by Wednesday. With winds reaching 120 mph, Milton will bring heavy rainfall, with some areas expecting up to 15 inches. The state is still recovering from Hurricane Helene, which caused widespread destruction just days earlier. Florida officials have declared a state of emergency, urging residents to evacuate – the first time since Hurricane Irma in 2017. Evacuations and storm preparations are underway, with widespread power outages and significant storm surges anticipated. Schools and facilities are being converted into shelters. The impact Milton will have on the freight industry remains at large.

📈 STG Logistics Secures $300M for Expansion and Growth. STG Logistics, a Chicago-based provider of transloading and containerized freight services, closed on a $300 million debt and equity financing package to drive expansion and operational improvements. Backed by private equity sponsors Wind Point Partners, Duration Capital Partners, and Oaktree Capital, the funds will support their growth, including potential future acquisitions. In 2022, STG acquired XPO’s intermodal operations for $710 million. CEO Paul Svindland expressed confidence in overcoming freight market challenges. Last year, STG’s President and COO Geoff Anderman discussed the company’s vision in an interview with Freight Caviar which you can watch here.

🌉 Gulf Ports Oppose Tariffs on Chinese Container Cranes. US Gulf Coast ports are protesting the new 25% tariffs on Chinese-made container cranes, citing higher costs and potential project delays. The cranes, previously scrutinized by the US government over spying concerns, face increased tariffs. Port Houston, which ordered eight cranes for $113 million from Zhenhua Heavy Industries, must pay an additional $28.5 million. These cranes are key to completing Project 11, an expansion of the Houston Ship Channel. Other ports, including Freeport and New Orleans, face similar impacts on major projects. Port officials and industry groups warn the tariffs will hurt efficiency, strain supply chains, and burden the economy, especially with no US manufacturers. Despite some exemptions, ports are still lobbying for relief.

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Trucking Capacity On Path to Stabilizing

Trucking capacity has been on a winding road as it seeks balance. Recent Q3 data from the FMCSA indicates that the trucking industry's exits are still outpacing new entrants, yet the pace of exits has begun to slow, showing signs of stabilization.

Here’s what you need to know:

Carrier Exits: Signs of Stabilization

• According to FMCSA data, the third quarter saw a net decrease of 2,636 for-hire carriers, which is the fewest since the downturn began in late 2022.
• Avery Vise, VP of Trucking at FTR, noted: “[We] seem to be stabilizing despite some monthly volatility.”
• Jonathan Starks, FTR CEO, shared optimism on LinkedIn, stating that there’s “nothing in the current data to suggest that another mass exodus is upon us.”

Capacity Still Above Pre-Pandemic Levels

The pandemic saw a huge influx of new carriers into the market, and a sizable chunk have managed to stick around. Even though there have been some temporary gains, such as in March and August, these gains haven’t yet led to broader, sustained growth.

Data Tells Part of the Story

• FMCSA data focuses on operating authority changes, but doesn't have insight into the numbers of drivers per carrier, so we can't see the full impact of the capacity changes.
• Beyond the FMCSA numbers, factors like spot rates, seasonal demands, and operational costs are important pieces of the overall puzzle.

Job Market Struggles

With exits rising, trucking jobs are also on a downward trend:

• 5,100 trucking jobs were lost in September
• Warehousing jobs saw an even sharper drop of 27,000 jobs

These reductions reflect the ongoing contraction of the industry, suggesting that both trucking companies and their employees are feeling the economic squeeze.

Is This Enough to Boost Rates?

The spot premium ratio remains negative, as highlighted by Chad Kennedy, Group Product Manager at DAT Freight & Analytics. We need to see spot rates rise above contract rates to turn the market.

What’s Next?

As Q4 unfolds, all eyes are on the continued exits and job reductions to see if they will finally lead to the long-anticipated rate recovery. The trends now point to a slow but steady capacity correction and a return to a healthier market. However, fewer exits could lessen the likelihood of a major market flip or quick rate rebound.

As Vise suggests, “The current level of carrier population decline could continue for a long time.”

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🌎 AROUND THE FREIGHT WEB

😬 The Brutal Truth About Flexport? Brittain Ladd shares his thoughts after the company announced they will be laying off 2% of their staff.

🚚 AI in Logistics. Pallet raised $18 million in their bid to merge TMS and WMS, using AI to optimize workflows and cut costs.

⚠️ AZ Trucking Company Loophole Exposed. After a fatal crash caused by a meth-impaired driver, an Arizona trucking company rebranded under a new name to bypass a failed safety audit, raising concerns about regulatory loopholes in the trucking industry.

🔪 Mass Tire Slashing at Tennessee Truck Stop. Over 80 semi-trucks had their tires slashed at a TA Travel Center in Madison County, TN.

🤖 Gatik to Expand Driverless Freight in Texas. Autonomous trucking company Gatik plans to launch driverless freight operations in north Texas by early 2025.

🌀 Logistics Support. The logistics industry are rallying after Hurricane Helene to deliver crucial supplies to affected areas.

🎣 THE FREIGHT CAVIAR CORNER

• Conferences We Are Attending: F3 Future of Freight Festival in Chattanooga, November 19-21.
• Latest Freight Jobs: See all the latest freight job listings by clicking here.
• The FreightCaviar Podcast: Ari Levy joins us on the latest episode, where he discusses his experiences as a broker at Coyote & MoLo Solutions, his role at FreightCaviar, and starting his new recruiting company, Landing Talent. Tune in on Spotify, YouTube, or Apple Podcasts.

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