Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
The rebuilding efforts in the Northeast and mid-Atlantic following the Sandy mega-storm
in November will push up truck rates through the first half of the year. What happens beyond
that is a matter of educated opinion.
There is little doubt that pricing will firm considerably in the near term as the market
responds to increasing demand for construction equipment, especially now that Congress has
approved $9.7 billion in emergency funding
for post-Sandy rebuilding. Lawmakers are expected to take up a measure on Jan. 15 to funnel another $51
billion in aid to the stricken area.
Nöel Perry, founder of transportation consulting firm Transport Fundamentals and principal
in fellow consultancy FTR Associates, said the post-Sandy cleanup will generate higher-than-normal
demand for transportation for the next six to nine months. Perry, writing in late December in an
FTR newsletter, said the cumulative effect of the rebuilding will add $13 billion of transportation
revenue, with $5 billion coming from an increase in volumes and $4 billion from a tightening in capacity.
Another $3 billion in revenue, Perry said, will be generated as shippers use more expedited trucking services,
time-definite deliveries that are priced at a premium relative to other trucking services. An additional $1 billion
will come from truckers charging more for being taken out of normal routes and pulled into the New York market.
Trucks normally operate on predictable routes to minimize the effect of so-called empty miles; taking them out of
their normal routes will reduce productivity but will result in higher rates, Perry wrote.
Trucking will reap most of the benefits from the increase in demand, though rail intermodal will share in
the bounty because it has abundant capacity in the New York metro area, Perry wrote. The peak impact of the
post-Sandy rebuilding, he said, will be felt in the second quarter. The spring months are historically the
high seasonal demand period for flatbed services as warmer weather allows for more construction in markets
like New York, Chicago, and Philadelphia.
Mark Montague, analyst for consulting firm DAT (formerly known as Transcore), said capacity for flatbed services,
which are used to move construction materials, should tighten somewhat in the early part of 2013 due to the effect of
post-Sandy reconstruction. In response, flatbed rates, which traditionally spike in the second quarter, could jump even
higher in 2013, he said.
However, Montague said that beyond a short-term spike, flatbed and refrigerated rates should only rise, on average,
about 2 to 3 percent in 2013. Much will depend on the performance of segments of the economy like autos, lumber, and
construction that rely heavily ton flatbed services, he said.
Rates for dry van services, which make up the bulk of trucking operations, will be extremely volatile this year, with
no clear upside or downside trend, Montague said.
Charles W. Clowdis Jr., head of supply chain advisory services at the consulting firm IHS Global Insight, said rates for
all trucking services have risen about 8 percent since Sandy. A similar impact was seen in the immediate wake of Hurricane
Katrina in late August and early September of 2005, according to Clowdis.
Clowdis echoed Montague's forecast that all truck rates will end 2013 a little higher than where they started and that a
short-term surge will give way to a fallback in prices through the year.
"The market will sort itself out over the next seven to 12 months with no huge, long-term rate spikes," Clowdis said in an
e-mail.
The American Trucking Associations (ATA), the trade group representing large truckers, said its seasonally adjusted tonnage
index in November rose 3.7 percent from October's seasonally adjusted tonnage figures. The November data was largely impacted
by Sandy, which hit early in the month. The November gain was the first since July 2012, the group said.
Bob Costello, ATA's chief economist, said in late December that most of the projected increase in flatbed activity will not
occur until the spring. Costello warned, however, that overall tonnage growth will be slower this year than last as paychecks
shrink for all households due to the end of the payroll tax holiday and an increase in tax rates for high-earning individuals
and households.
Additionally, slowing factory output and reduced consumer spending will have an impact on tonnage during 2013 because trucks
account for most of the deliveries in the retail supply chain, Costello said. Improved housing starts and auto sales will not be
enough to offset a drop in factory activity and domestic consumption, he said.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”