200,000 drivers didn’t disappear overnight. Plus: Dalilah’s 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.
Question of the Day: Which logistics company has experienced a 30% stock price increase since the beginning of the year? Find the answer in our main story.
Good Friday Morning. Today, we're looking at the transport sector's Q3 earnings reports for 2023 in our feature story – spoiler alert: we're off track. Stay informed with our stories on freight brokerage trends, Convoy's tech stack sale, and the delayed peak season for intermodal. Finally, don't miss our briefs on former Convoy employees speaking out and the valuable role of freight brokers amid tech disruptions.
Question of the Day: Which logistics company has experienced a 30% stock price increase since the beginning of the year? Find the answer in our main story.
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
🧑💻 Brokerage Boom. Last week, we highlighted the largest percentage of brokerages closing since 2014. However, there's still a record-breaking number of active brokerages. Kevin Hill from Brush Pass Research revealed that during the pandemic, an astounding 10,006 brokerages opened—a 47% spike in just three years. Despite the record closures, a historic number of brokerages operate today. Many in the industry question whether a significant portion of these are merely double brokers or legitimate entities.
🚚 Convoy's Tech Stack Sold. Convoy Inc., the shuttering digital freight brokerage, has sealed a deal for its influential tech stack, which includes a popular driver app and automated freight systems. The buyer's identity remains a mystery. CEO Dan Lewis teased the transaction on LinkedIn, suggesting a notable shift involving "tech/services" and some team transfers. Over the years, Convoy's goals aimed at automating fleet operations and transport management processes.
🚂 Unexpected Intermodal Rise. North America's intermodal transport is witnessing a surprising surge in 2023. Traditionally peaking around Week 39, data this year shows a strong boost extending into Week 42. This unexpected rise isn't just U.S.-driven; Canadian and Mexican carriers have helped enhance the growth. Noted freight transportation analyst, Lawrence Gross, highlights this unanticipated peak season, with recent weeks nearly matching the prior year's volume. However, he urges caution, suggesting it's too early to label this as the "new normal" for the sector.
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It is once again that time of the year when publicly traded companies report their previous quarter earnings. We dive into six logistics powerhouses to tell you how their quarters went.
Q3 Insights:
Summary: Landstar reports a significant decrease in revenue, attributing this to weak demand and a soft freight market. The upcoming quarter also doesn't seem promising as they project below-average figures.
Q3 Insights:
Summary: Ryder's net income and revenue have seen a decline. Despite the dip in the fleet management and supply chain solutions sectors, the company remains hopeful, citing strengths in some areas. They have adjusted their full-year forecast, and the CEO expects a recovery in the latter half of the next year.
Q3 Insights:
Summary: Covenant Logistics faced a decrease in earnings per share and total revenue. Though the warehousing segment saw growth, the overall freight revenue dipped. Despite the downturn, the company remains optimistic, with management citing potential restocking by retail clients. Their acquisition of Lew Thompson & Son Trucking has also been highlighted as a potential growth area.
Q3 Insights:
Summary: Hub Group's revenue saw a decline due to lower demand and an oversupply of truckload capacity. The company's logistics segment contributed to nearly 70% of the operating income despite the downturn, indicating strategic diversification efforts. While the company faced pricing competition, there's an anticipated intermodal volume growth in 2024, driven by higher diesel fuel costs and more truckload capacity exiting the market.
Q3 Insights:
Summary: Heartland Express experienced a net loss in the third quarter of 2023 due to a weak freight environment and challenges arising from integrating the operations of acquired fleets. Cost reductions across all operating brands are on the horizon to align with historical operational expectations.
Q3 Insights:
Summary: Old Dominion witnessed a volume boost in the third quarter, partly due to Yellow's exit from the market. Despite the economic challenges, the company's consistent investment in service center capacity, equipment, and technology has ensured it could respond to volume increases. They emphasize the importance of maintaining available capacity for their customers, even if it comes at a cost during slower economic periods.
Overall, many companies have reported declines in revenue, earnings per share, and other metrics. However, there remains an undercurrent of optimism from leaders highlighting strengths in certain areas and expecting recoveries on the horizon.
Source: FreightWaves
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AROUND THE FREIGHT WEB
🚨 Walmart DC Alert. Truck drivers were sent warning messages amid an intense search for Robert Card, accused of killing 18 in a shooting spree at various locations, including a Walmart distribution center.
💌 A Love Letter to Brokers. MVMNT's VP of Product, Andy Tomka, highlights the irreplaceable value of freight brokers in the age of tech disruption.
🗣️ Employee Outcry. Speaking out on social media, former Convoy workers express disappointment at CEO Dan's response to nearly 500 left without severance and support.
🚚 Convoy's Collapse. Despite technology and funds, Convoy's shutdown showcases the deep complexities of revamping the trucking and logistics space.
🚀 Omni Deal at Risk. Forward Air might cancel its merger with Omni Logistics. Reasons include Omni’s alleged failure to meet the merger agreement's conditions.
🚛 ABF's New Hires. After Yellow Corp's shutdown, many of its former employees looked for new opportunities. ABF Freight took this chance to hire between 300 and 400 ex-Yellow employees, capitalizing on the chance to bring in experienced staff.
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