Transportation Updates
- The National Motor Freight Traffic Association postponed LTL classification changes to July 19, 2025, for industry preparation.
- Updates focus on density-based classifications to streamline freight pricing and reduce process complexity.
- Industry feedback influenced the delay, allowing carriers and shippers to adjust systems for smoother transitions.
- ClassIT+ platform launches on January 15, 2025, improving usability with API connections for enhanced functionality.
- Changes aim to improve accuracy and transparency, reducing misclassification costs for stakeholders.
- LTL carriers are adjusting after Yellow’s exit, with volume gains stabilizing and awaiting new demand catalysts.
- Manufacturing contraction continued in November, impacting LTL volumes, though new orders showed slight growth.
- Mid- to high-single-digit increases in contractual rates persist, but pricing has softened from earlier highs.
- Operating ratios worsened for most carriers in Q3, with mixed expectations for Q4 performance.
- A modest recovery in LTL demand is expected in mid-2025, supported by improving manufacturing indicators.
Journal of Commerce: Dec 4th
- LTL volumes, tonnage, and revenue are declining in Q4, influenced by weak US industrial output.
- Carriers continue pushing for high single-digit rate increases in 2025 freight bids despite market challenges.
- Saia outperformed peers with shipment growth of 3.5% in October and November, compared to declines at other carriers.
- Industrial freight, particularly in electric equipment and machinery, lags behind retail in recovery.
- US manufacturing PMI improved to 49.7 in November but remains in contraction, indicating ongoing industrial stagnation.
- Trucking jobs increased by 2,900 in November, marking the largest monthly gain in over a year.
- Employment levels remain steady, fluctuating within a narrow 3,700-job range since May 2024.
- Spot freight demand and disruptions at ports drove increased hiring in November.
- Long-distance trucking jobs declined, and wages remain below peak levels despite inflation in other sectors.
- Warehouse jobs dropped by 1,400, reflecting weaker-than-expected holiday season hiring.
- North American Class 8 net orders reached 30,600 units in October, reflecting strength in vocational truck demand amid EPA regulations.
- US dry van spot rates increased 4¢ in October to $1.62 per mile, up 5.8% year-over-year.
- Used Class 8 truck prices declined slightly by 0.4% month-over-month but were 13% lower compared to October 2023.
- Net trailer orders grew 40% from September but remained 52% below October 2023 levels, with cancellations dropping below 1%.
- The truckload supply-demand balance is expected to tighten in the coming months after three years in loose conditions.
Economic Updates
- Nonfarm payrolls grew by 227,000 in November, surpassing expectations and recovering from October’s revised 36,000.
- The unemployment rate increased to 4.2%, with labor force participation declining to 62.5%.
- Job growth was highest in health care, leisure and hospitality, and government, while retail lost 28,000 positions.
- Average hourly earnings rose 0.4% for the month and 4% over the year, beating forecasts.
- Economic data supports the likelihood of a Federal Reserve interest rate cut in December.
Institute for Supply Management: Dec 3rd
- Manufacturing PMI® rose to 48.4%, marking eight consecutive months of contraction but slower declines than in October.
- New Orders expanded slightly to 50.4%, ending seven months of contraction and signaling moderate demand improvement.
- Employment and Production indices contracted, though Employment improved to 48.1%, and Production edged up to 46.8%.
- Prices increased marginally, with the Prices Index at 50.3%, while inventories contracted more slowly at 48.1%.
- Supplier deliveries accelerated, with the 48.7% index reflecting improved capacity and faster lead times.
The Wall Street Journal: Dec 5th
- OPEC+ extended voluntary production cuts of 2.2 million barrels per day until the end of March 2025.
- The group’s total production cuts now amount to 5.85 million barrels per day, including long-term reductions by key members.
- The delay prioritizes price stability amid weaker global demand and potential oversupply concerns from increased American output.
- Brent crude and West Texas Intermediate prices have declined 17% since July, trading at $72 and $68 per barrel, respectively.
- Compliance issues persist, with some members exceeding quotas, complicating efforts to stabilize the market.
Logistics Manager Index: Dec 3rd
- The Logistics Manager’s Index was 58.4, reflecting consistent expansion in logistics for 12 consecutive months.
- Inventory costs and warehousing prices increased significantly, driven by higher downstream retail activity during the holiday season.
- Transportation capacity expanded slightly, while transportation prices remained elevated near two-year highs.
- Smaller firms reported faster growth in inventory levels and transportation prices compared to larger firms.
- Strong retail sales during "Cyber Week" indicate robust consumer demand, validating inventory movement through supply chains.
Specific Articles
- FedEx, UPS, and USPS announced final shipping dates, with Dec. 13, 18, 19, 20, and 21 marking key deadlines.
- High shipping volumes and labor shortages could delay deliveries, especially around Black Friday and Cyber Monday.
- Consumers are increasingly concerned about delays, with 54% citing fears of late package arrivals this holiday season.
- Rising demand for faster delivery intensifies pressure on carriers, leading to risks like damages, losses, and theft.
- Early planning and selecting guaranteed delivery services are advised to ensure the timely arrival of holiday packages.
- Logistics mergers and acquisitions remain steady despite a freight recession, with 36 deals completed globally in October.
- Heniff Transportation Systems recently acquired Wisconsin-based Hagen Johnson Group and food hauler Weinrich Truck Lines.
- Hagen Johnson, a food-grade tank truck operator, will integrate into Heniff’s existing transport, cleaning, and logistics operations.
- Private equity trends indicate high capital reserves, with $2.8-$3.1 trillion available for investments, suggesting potential 2025 growth.
- Firms are using more equity in deals, with expectations of returning to historic leverage levels supporting future M&A activity.
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