🍣 Sushi

Good Friday Morning. Convoy contemplates a sale amidst escalating challenges, while the Panama Canal backlog intensifies, potentially delaying Halloween merchandise deliveries. As Texas border towns like Laredo and McAllen thrive, the broader question emerges: Is the overall freight market on the brink of improvement? Dive deeper with our latest freight market insights below. In other news, iPhone 15 production kicks off in India, and Freightos faces its own set of market hurdles.

Did you know? A major U.S. supermarket chain is the country's largest seller of sushi, moving over 40 million pieces annually. Can you guess which one? Can you guess which one it is? Scroll to the bottom to find out.

In today's email:

• Three Freight Headlines: Convoy Inc. weighs strategic options, Panama Canal backlog grows, and Texas border towns rise as freight hubs.
• Freight Market Update: August 2023
• Around the Freight Web: Andrew Silver moves to Freight X, Freightos reports losses, two found dead at a Lebanon truck stop, plus more.
• Freight Meme of the Day

TOP LANE MOVERS POWERED BY GREENSCREENS.AI

*Greenscreens.ai, forecasts real-time truckload buy prices that are suited to each freight brokerage's purchasing power using AI and machine learning. Its engine takes into account over 130 attributes and data points in each rate forecast.

🐔 WHAT’S COOKIN’ IN FREIGHT

🚚 Convoy Inc's Future: Sale or Strategic Merger? Seattle-based digital freight brokerage, Convoy Inc., facing challenges from a downturn in the U.S. truckload market and amid dwindling valuations, has hired Goldman Sachs to explore potential strategic decisions that might include a sale, merger, or significant investment. As the trucking sector witnesses declining volumes and rates, leading logistics platforms like Convoy and Uber Freight are struggling to meet growth and revenue targets, prompting industry observers to speculate on possible acquisitions. Rumor has it that Convoy is upset with FreightWaves for their report on the company's hiring of the banker.

🚢 Panama Canal Drought: Backlog Continues. Traffic congestion at the Panama Canal has worsened, with a vessel backlog reaching 140, up from 130 the previous day, and waiting times stretching to 10-11 days from 6-7 days last month. Shippers are grappling with increased costs, distributing cargo across multiple vessels, while energy shipments are being rerouted. To alleviate this, the Panama Canal Authority permits more non-booked ships, yet daily transits are capped at 32, four less than the usual. Despite recent rains, weight restrictions persist due to a 44-foot draft limit, affecting many vessels including tankers and bulk carriers. This is impacting goods from Halloween items to fuels and chemicals.

📈 Freight's New Frontier: Border Towns Drive Demand. Border towns like Laredo and McAllen in Texas have evolved from mere transit points to vital hubs in the U.S. freight system, with truckload demand nearly doubling since 2018. This surge has prompted infrastructure enhancements, including new roads and expanded warehouses, while global challenges post-pandemic have driven companies to diversify supply chains. As a result, these towns are experiencing significant job growth in logistics and warehousing, potentially boosting their socio-economic landscapes.

SCALE YOUR FREIGHT BROKERAGE WITH OTR SOLUTIONS

Stop spending hours on carrier pay. With OTR Solutions Broker Services and Open API, you can pay all your carriers in a single transaction. Need help with cash float issues? OTR can help with that, too. You can even start offering quick pay and generate revenue from OTR, helping you stay competitive in the market.

OTR Solutions is focused on helping the everyday freight broker choose the services you need and OTR will handle the rest. Get started today by visiting their website at and see the difference they can make for your brokerage.

Freight Market Update: August 2023

Is the freight market truly on the road to recovery? All signs point to an upswing, but it may be premature to say we're in the clear, with some predicting a significant turnaround only by 2024. We're exploring a ton of data from market experts from around the web.

Freight Market's Reaction to Changes

• Higher Freight Volumes and Tender Rejections: Trucking capacity is reacting to the higher freight volumes with tender rejections exceeding 4% as of August 24.
• Implication: This suggests a stabilization in the freight market with a likely upward trend.
• Used Truck Prices: These high tender rejection rates are anticipated to impact used truck prices, signaling a potential bottoming out in the market.

Economic Factors

• Consumer Spending and Economic Indicators: Healthy consumer spending, especially in the goods sector, hints at a softer landing amidst disinflationary pressures. We're also seeing a clearing of excess inventories from retailers.
• Spot vs. Contract Rates: Increases in spot rates fell short of seasonal expectations in June, post the 4th of July. This mismatch between spot and contractual rates, which are on a downward trend, will likely persist.
• US Economy’s Influence: Data shows a 0.8% rise in truckload demand in May, but it's still 3% down from the previous year. Considering the shrinking carrier contract margins, supply growth is anticipated to moderate in the coming months.
• Diesel Prices dropped by approximately 11 cents per gallon in June but recently shot up beyond $4.1/gallon. Now that rise is slowing.

Challenges in the Less-than-Truckload (LTL) Sector

• Yellow Shutdown Impact: The bankruptcy of Yellow, a significant LTL player, momentarily spiked LTL shipping costs. However, the long-term view foresees a milder impact.
• Workload Dynamics: Despite a 5% reduction in employment since 2022, LTL employees now work fewer hours (37.9 per week in June) than before the pandemic. Distributing Yellow’s load might raise these weekly hours but will still be below the historical average.

Peak Season Predictions and Consumer Demand

• Muted Peak Season Expected: J.B. Hunt's insights from the Deutsche Bank’s 2023 Transportation Conference suggest a lack of significant peak season anticipation among customers. This sentiment is echoed by Werner Enterprises, indicating that a significant peak season might not be in the cards for 2023. Yet, Arrive asserts the market is behaving as expected from a seasonal perspective.
• Implication: While some freight carriers expect modest market improvements this peak season, a more significant upturn might only be witnessed in 2024.
• Market Uncertainties: Consumer behavior remains a pivotal factor for J.B. Hunt. They have a mix of growing and stagnant customers, indicating volumes are likely to normalize. Werner experienced a challenging Q2 but feels the worst of the downturn is past. However, uncertainties for the holiday season remain high.

Carrier Responses and Market Adjustments

• Capacity Expansion: Even in a loose freight market, carriers added more tractors and long-distance drivers in the last two months, absorbing excess capacity from smaller fleets.
• Carrier Authority Revocations: Revocations declined sharply in June, yet outnumbered new authorities. Even with a record number of revocations in recent quarters, the market remains oversupplied.
• Employment Shifts: With truckload employment shrinking, especially in long-distance truckload, large carriers may not absorb all failing carriers in the coming months. This might boost spot rates by 15% – 20%.

Other Sources: Arrive Logistics August Freight Market Report

The Latest Lane Trends and Insights - Powered by Greenscreens.ai

THE WORLD'S MOST POPULAR TMS

AscendTMS is the world's most popular & best-rated TMS. Use our referral code RA-FreightCaviar! to receive 3 months of AscendTMS Premium for free. It only takes 20 seconds to sign up and no credit card is required. Click here to learn more.

AROUND THE FREIGHT WEB

🐦 Andrew Silver Joins Freight X. Andrew Silver, founder of MoLo Solutions, recently joined X/Twitter, sharing a funny observation about transitioning from ".com" to ".ai" to be the latest standout in the freight industry.

📉 Freightos Faces $5.3M Q2 Loss Amid Market Struggles. Despite increasing online marketplace usage, Freightos reported a significant quarterly loss and aims to adjust with new digital tools and partnerships.

📱 iPhone 15 Production Begins in India. Apple is ramping up iPhone 15 production in India as part of its strategy to diversify manufacturing beyond China.

🌧️ Tropical Storm Hilary Halts Rail Operations in SoCal. Tropical Storm Hilary caused significant disruptions to Union Pacific's railway network in Southern California due to heavy rains and flooding.

🚢 Shipping CEO Salaries Surge in 2022. In 2022, the average disclosed compensation for top ocean shipping CEOs increased to $4.7 million, a 19% rise from 2021.

🚛 Truck Stop Tragedy. Two individuals were found dead inside a truck at a Lebanon truck stop, with no immediate signs of foul play.

FREIGHT FEST IN HOUSTON, TX

Don't miss the biggest transportation and logistics conference of the year: Freight Fest, taking place in Houston, TX from September 28th to October 1st. Join industry experts, network with peers, and discover the latest in transportation and logistics.

Use our code, FC15, to receive a 15% discount on your ticket today. Learn more by going to FreightFest.com.

FREIGHT MEME OF THE DAY

Answer: The supermarket chain that sells the most sushi in the U.S. is Kroger. Source

The FreightCaviar Podcast: Listen to this week’s podcast on Spotify, & Apple Podcasts.