Transportation Updates
- The International Longshoremen’s Association (ILA) halted contract talks over proposed automation at East and Gulf Coast ports.
- Employers, represented by the United States Maritime Alliance (USMX), proposed semi-automated equipment, which the ILA rejected, citing job elimination concerns.
- A prior October strike by the ILA halted operations at 36 ports, costing billions, until negotiations resumed with government intervention.
- The ILA agreed to a 62% pay increase but remains firm on opposing automation due to potential job losses.
- USMX argues that limited technology upgrades are needed for safety, efficiency, and supply chain resilience without eliminating jobs.
- Effective Monday, FMCSA's Clearinghouse II rule will suspend the driving privileges of nearly 200,000 CDL holders with drug or alcohol violations.
- Affected drivers must complete the return-to-duty process, involving treatment and testing, before resuming safety-sensitive functions.
- States have 60 days to record CDL downgrades, allowing some flexibility in implementation and potentially affecting safety and freight capacity.
- Trucking companies are cautiously monitoring the rule's impact on capacity, uncertain about its enforcement and scope.
- FMCSA estimates that 82% of affected drivers will complete their return-to-duty process before CDL downgrades, minimizing income loss.
Logistics Management: Nov 11th
- October US-bound imports increased 5.8% year-over-year to 2.79 million TEUs but declined 3.3% from September.
- Early shipping to avoid the October port strikes and hurricanes contributed to the unseasonal monthly decline.
- Year-to-date imports reached 26.86 million TEUs, an 11.8% increase from the same period in 2023.
- Import trends varied by commodity, with declines in capital goods and autos, while apparel imports rose 20.8%.
- Shippers may continue front-loading imports ahead of potential East and Gulf Coast port disruptions in January.
SupplyChainDive: Nov 15th
- Rising container volumes at West Coast ports, driven by peak season and strike-avoidance efforts, are causing increased rail dwell times.
- The Port of Los Angeles reported average rail dwell times near eight days, while the Port of Long Beach maintained a four-day dwell.
- Rail operators like BNSF and Union Pacific are adding capacity with staging yards and managing increased international volume.
- Shippers are using cross-dock facilities, alternative ports, air freight, and trucking to mitigate delays and maintain flexibility.
- Experts predict rail congestion may ease in Q1 2025, contingent on stable operations and no further disruptions.
- The global logistics outsourcing market is projected to grow to USD 1,637.8 billion by 2033 at a 4.7% CAGR.
- The US market is forecasted to reach USD 378.5 billion by 2033, driven by e-commerce growth and complex supply chains.
- Key market segments include supply chain management and highway transportation, with e-commerce expected to dominate by revenue.
- Sustainability trends are prominent, with firms adopting green logistics, alternative fuels, and energy-efficient practices to reduce environmental impact.
- Asia Pacific is expected to lead the market by 2024, holding a 35.5% share due to rising demand in the region.
Economic Updates
- US annual inflation rose to 2.6% in October, up from 2.4% in September, driven by high housing costs.
- Gasoline prices declined 1% monthly and 12% annually, while grocery inflation remained minimal at 0.1% monthly.
- Auto insurance premiums surged 14% year-over-year, impacted by previous car price increases and regulatory delays.
- Housing costs remain the largest driver of inflation, with shelter inflation increasing 0.4% in October, slowing overall progress.
- Economists forecast inflation could stabilize around 2.1% in 2025 without policy changes but could reach 3% if new policies are enacted.
The Wall Street Journal: Nov 12th
- OPEC reduced its oil demand growth forecast for the fourth month, now expecting 1.82 million barrels per day (bpd) growth this year.
- Forecasts for China’s demand growth were lowered to 450,000 bpd, reflecting weaker consumption data in September.
- Demand remains above pre-pandemic levels despite the revisions due to strong air travel, road mobility, and industrial activities.
- OPEC+ has extended production cuts through December, prioritizing price stability over market share amid global supply concerns.
- Economic growth estimates were raised to 3.1% in 2024, bolstered by positive US, Brazil, and China trends.
The Wall Street Journal: Nov 11th
- Private-equity firms expect tax cuts and regulatory easing to stimulate dealmaking and boost fundraising efforts.
- Major players like Blackstone, KKR, and Ares have deployed billions this year, preparing for increased deal activity.
- The Federal Reserve’s recent rate cuts are expected to drive more investments, particularly in IPOs and buyouts.
- Executives report heightened interest in transactions, with nondisclosure agreements rising and IPO discussions advancing.
- Despite optimism, some caution remains over inflationary pressures and potential limitations on further rate cuts.
Specific Articles
Transportation Topics: Nov 13th
- TFI International acquired Manitoba-based Keystone Western, a TL and LTL carrier, enhancing its North American service network.
- This acquisition is one of nine smaller deals for TFI in 2024, supporting its strategic expansion goals.
- Keystone Western operates with under 100 tractors and has terminals in key Canadian locations, including Winnipeg and Vancouver.
- CEO Alain Bédard confirmed TFI’s continued focus on acquisitions, projecting $200–$300 million in M&A investments annually.
- TFI is also targeting major US LTL acquisitions, aiming to strengthen its position in the competitive US LTL market.
- Kuehne+Nagel acquired 51% of IMC Logistics, a US-based marine drayage specialist, strengthening its North American market position.
- IMC Logistics, headquartered in Tennessee, manages 2 million TEUs annually and recorded $800 million in revenue in 2023.
- The acquisition aligns with Kuehne+Nagel’s strategy of organic growth through targeted acquisitions, particularly in Asia and North America.
- Kuehne+Nagel will retain the IMC brand, combining IMC’s inland logistics expertise with its global network.
- The deal, subject to regulatory approval, is expected to close in early Q1 2025.
American Journal of Transportation: Nov 11th
- PS Logistics' subsidiary, Blair Logistics, acquired Fluker Transportation, a flatbed and heavy-haul trucking company in Louisiana.
- Founded in 2011, Fluker specializes in transporting steel, construction equipment, and defense-related freight across the Southeast US.
- This acquisition expands Blair's geographic reach and freight capacity, aligning with PS Logistics' growth strategy.
- Fluker will operate under the Blair Logistics name, with both companies emphasizing driver support and customer service.
- PS Logistics has acquired 27 trucking companies and five non-asset logistics firms since 2016, targeting family-owned businesses for expansion.
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Very informative