Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
Good Friday morning. Looking to ignite a huge controversy in freight? Look no further - simply repost a misleading graph made by a major public trucking company CFO without providing any context! A federal court ruling has declared that freight brokers can no longer be sued for carrier negligence in most cases. In the last 14 months, nearly 510,000 truck drivers have exited the industry, while the 'great Yellow purge' continues, with numerous companies declining to work with Yellow due to fears of bankruptcy. Lastly, Taylor Swift seems to have secured a spot on the Federal Reserve's speed dial - can you guess how many billions of dollars her Era's Tour added to the economy?
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
📊 Response to Wednesday's Misleading Graph. Our recent sharing of a graphic from JB Hunt in our newsletter and on social media sparked controversy due to perceived misrepresentation. The graph compared yearly revenues from 2013 to 2022, and then juxtaposed Q2 of 2022 with Q2 of 2023, suggesting a significant drop-off. Critics, including former MoLo Solutions CEO Andrew Silver, deemed this misleading. This critique was based on the graph's pivot from annual to quarterly numbers, and the fact that even the lower Q2 2023 income was still higher than the quarterly average of preceding years. We wish to clarify that this was JB Hunt's presentation, and we merely shared it for informational purposes.
👩⚖️ Court Says Freight Brokers Aren't Always at Fault for Accidents. The 7th Circuit Court in the U.S. has agreed with the freight broker industry that they can't be sued for negligence because of federal law, matching an earlier decision by the 11th Circuit Court. This could influence similar cases in other courts. The court said a specific "safety exception" rule didn't apply in these cases. Although this is a big win for freight brokers, there's still some confusion about when this federal law applies and what the "safety exception" means until the Supreme Court gives a final say.
💸 US Warehouse Rents to Rise. Prologis CEO, Hamid Moghadam, expects warehouse rents to keep rising, despite other supply-chain costs declining post-pandemic. Though rent increases are slowing as the market stabilizes, Prologis projects a 5-10% growth in rental rates this year, down from almost 30% last year. Warehouse vacancy rates have risen slightly to 2.5% from 2% in the previous quarter, due to cargo rerouting to East Coast and Gulf ports to avoid potential West Coast labor disputes.
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Taylor Swift's Eras Tour is a tribute to all her ten studio albums and serves as a grand comeback after a four-year hiatus. Featuring a unique set and costumes for each album, Swift delivers a performance of 44 songs, making the tour one of the most expensive and revenue-generating ones to date.
The cost of logistics and transport for the tour is a staggering $30 million. A fleet of at least 90 trucks stays with the tour, costing up to half a million dollars per week. However, this accounts for only one aspect of the logistical expenditure. The costs for backup singers, support staff, production team, roadies, their transportation, accommodation, and meals triple the weekly logistics cost.
A dedicated logistics team manages the transportation, assembly, and coordination aspects of the tour, ensuring nothing is left to chance. The team maintains duplicates and backups for every single item, ensuring a seamless and uninterrupted concert experience.
The monumental stage, spanning beyond the width of a football field, takes 2-3 weeks to assemble in each city. As such, 90 semi-trucks are needed to transport everything from the stage itself to the costumes, microphones, LED screens, speakers, lights, props, and instruments. Denver-based Shomotion manages these intricate logistics.
Swift's Eras Tour has significantly boosted local economies. Her performances have spurred tourism and hotel revenues, aiding post-pandemic recovery. Notably, the Federal Reserve Bank of Philadelphia linked a record month for hotel revenue to her concerts. Overall, Swift's tour could potentially infuse $5 billion into the global economy, highlighting her influential economic role.
Fun Fact: Shomotion LLC, the company handling the logistics for Taylor Swift's tour, uses AscendTMS, a sponsor of FreightCaviar.
Sources: Commercial Truck Trader & Craig Fuller's Twitter Thread.
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AROUND THE FREIGHT WEB
🚚 Capacity Crunch. Over the past 14 months, more than 50,000 fleets have stopped operating and around 510,000 drivers have left the industry.
🤝 Visiting MigWay Inc in Charlotte, NC. In March, Paul and Bogdan visited MigWay Inc, a trucking company in Charlotte, NC, reconnecting with podcast guest David Voronin.
💸 Pam Transportation Reports 60% Drop. Despite service increases, Pam Transportation's Q2 income plunged 60% YoY due to an 18% drop in revenue per loaded mile.
🚚 Uber Freight, Walmart, & More Won't Work With Yellow. Fearing disruptions from a potential Teamsters strike, freight brokers are shifting business away from the financially-troubled trucking company, Yellow.
📉 Wall Street Worry. Poor quarterly results from Knight-Swift & CSX cause investors to sell their stock.
📈 Semi-Truck Orders Defy Expectations. Class 8 truck orders remain consistent, hinting at robust Q4 production, contrary to predictions.
🌾 8.5% Surge in Grain Prices. Following Russia's aggression on Ukrainian ports and threats towards cargo ships, grain prices have spiked by 8.5%, leading to potential global supply concerns.
FREIGHT MEME OF THE DAY
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
The Supreme Court just heard arguments in the broker liability case we’ve been tracking. Plus: oil shipping costs explode, trucking insurance is stuck in 1980, regulators brace for a carrier crackdown, and more.
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