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.
Happy Monday Morning. Yellow Corp has closed its doors, bringing an end to nearly a century of operations and causing quite a stir in the LTL market. However, as the saying goes, one person's misfortune can be another's opportunity. Three non-union LTL carriers are now poised for significant gains due to Yellow's bankruptcy. Could you guess which three? The stocks of two of these companies have increased by over 100% this year alone.
In other news, a cargo ship carrying EVs has ignited in the North Sea. A Western Express truck driver is planning to sue the Ohio Police following a K9 attack. In the sun-baked state of Texas, an unusual heatwave could potentially lead to an economic meltdown. Meanwhile, USPS has released data showing significant migration trends from major US cities.
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
😪 Yellow Corp. Shuts Down, 30K Jobs Lost. After almost 100 years of service, Yellow Corp., a leading less-than-truckload (LTL) company, has ceased operations. Yellow, which ranks No. 13 on the Transport Topics Top 100 list of largest for-hire carriers in North America, has been grappling with severe financial difficulties. A catastrophic loss of volume due to shippers diverting freight to other LTL carriers, fears of a Teamsters strike, and a crushing debt of at least $1.5 billion have contributed to the company's downfall. Yellow's shutdown has resulted in immediate job losses for its 30,000 employees and the closure of company-owned properties.
🚢 Fire Engulfs Cargo Ship Carrying EVs. A cargo ship in the North Sea, carrying over 3,500 vehicles, including nearly 500 electric vehicles (EVs), has been ablaze for days, leading to the death of a crew member and uncertainty about the fate of the vessel. The Freemantle Highway was en route from Germany to Egypt when the fire started, the cause of which remains unclear although there are unconfirmed reports it originated in an EV battery. The crew was evacuated, some sustaining injuries, and efforts are ongoing to prevent the ship from sinking near an essential migratory bird habitat.
🚔 Western Express Truck Driver Attacked By K9 Looking to Sue Ohio Police. Jadarrius Rose, a 23-year-old Black man, was attacked by a police dog during a traffic stop in Ohio on July 4, 2023. The incident occurred after Rose failed to pull over for an inspection due to a missing mud flap on his semi-truck, leading to a police pursuit. After pulling over and attempting to surrender, Rose was attacked by the police K-9 despite repeated warnings from a state trooper not to release the dog. The officer who released the dog, Ryan Speakman, was later fired. Rose, who feared for his life during the incident, is now represented by civil rights attorney Ben Crump.
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Yellow, who had a 10% share of the LTL market, halted operations on Sunday and is expected to file for Chapter 7 bankruptcy today. This anticipated move is poised to cause a significant shift in the market share of the industry. Among the companies expected to reap the benefits are non-union LTL carriers XPO Logistics, SAIA, and Old Dominion Freight Line, owing to their flexible cost structures and recent gains in market share.
Already in late June, analysts from the Bank of America had projected a potential bankruptcy for Yellow and identified the companies most likely to profit from such a development. Their top picks were XPO, SAIA, and Old Dominion Freight Line. These predictions seem to be aligning with reality as the Year-to-Date (YTD) share prices of these companies have shown exceptional performance since the release of the report.
In the last 30 days since the release of the report, XPO has seen a surge of 21% (an impressive 121% YTD) while SAIA has grown by 24% (104% YTD). Similarly, Old Dominion's shares have risen by 15%, marking a 54% increase YTD. This exceptional growth could be the first indicator of the positive market effects these companies are likely to experience as a result of Yellow's bankruptcy.
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AROUND THE FREIGHT WEB
🚚 Changing U.S. Migration Patterns in 2023. Data from USPS shows a significant migration trend from major US cities like Houston and Miami towards smaller towns like Northbrook, Illinois, and Katy, Texas.
🚢 Cargo Ship Orders Soar. With a record $90 billion in new cargo ship orders, there's growing concern over a potential overcapacity crisis in the shipping sector, as freight rates approach below-breakeven levels.
🚛 Unseasonable Surge in Trucking Demand. The domestic trucking sector is experiencing an atypical rise in demand, with a 7% increase in the Outbound Tender Volume Index (OTVI)
🔥 Texas Heatwave Drains Economy. The ongoing heatwave in Houston is impacting the local economy, potentially causing a $9.5 billion loss in Texas' gross state product if conditions persist.
FREIGHT MEME OF THE DAY
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.
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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