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.
Another one of the transportation's industry's virtuous cycles is upon us, at least if recent
data points and anecdotes are accurate.
A monthly index that measures line-haul truckload pricing rose 4.2 percent in September
from the same period in 2016, hitting the highest level since the index was introduced in January 2005.
Meanwhile,
a monthly index of per-mile intermodal rose 4 percent year-over-year in September. The truckload index does not
include the impact of fuel surcharges on pricing trends, while the intermodal index does.
Both indexes are published by
Cass Information Systems Inc., an audit and payment company, and
Broughton Capital LLC, an investment firm. Donald Broughton, who runs the firm that bears his name,
said that truckload and intermodal rates have risen for the past 6 and 12 months, respectively, and the
pace of expansion for each shows no signs of slowing.
Perhaps more striking is how quickly rate fortunes have turned. For example, within the past
three months Broughton revised his 2017 forecast for truckload prices to rise by 2 to 4 percent.
Earlier in the year, he had predicted a range of between -1 percent and +2 percent. The truckload
index had declined for 13 consecutive months before breaking to the upside in March.
Broughton's upward revisions were prompted by the impact of a yearlong increase in noncontract,
or spot, truckload prices. After a weak 2016, spot rates reversed course at the start of the year
and have not looked back. They strengthened considerably in the second quarter, and then surged to
multiyear highs last month. This surge is due to an increase in freight demand and the disruptions
caused by Hurricanes Harvey and Irma, which siphoned truck capacity into the affected regions, leaving
a shortage of trucks in parts of the country that badly needed them. In parts of California that
experienced a late and strong harvest, there were, at times, six available loads for every truck,
a very wide ratio. Spot rates in the state have spiked as high as 40 percent. Spot demand and prices
have settled back somewhat but still remain elevated.
Spot rates for
dry van and
refrigerated truck services declined last week for the third week in a
row, according to data from load board provider DAT Solutions.
However, rates for all three equipment types (which include flatbed) are historically high for this time of year, DAT said. The consultancy
said spot rates may rise again before Thanksgiving due to strong holiday retail sales and continued
high demand for capacity.
Bradley Jacobs, chairman and CEO of transport and logistics giant
XPO Logistics Inc., said truckload fleets
and drivers have been pivoting from contract business to chase higher rates in the spot market. Jacobs, whose
company operates a freight brokerage unit, said the unit tenders about half its freight to carriers through the
spot market and the other half under contracts. In the second quarter and into the third quarter, the ratio was
close to 80 percent contract and 20 percent spot, Jacobs said in an interview yesterday.
In addition, XPO's "tender acceptance" rate, a measurement of shipper tenders accepted by their carriers,
has declined dramatically from a level of 96 percent in the first quarter and into a part of the second, Jacobs
said. This indicates shippers and their brokers are finding it harder to procure capacity from their contracted
carriers and are increasingly being forced onto the spot market. XPO, which has a big European ground transport
business, is experiencing similar capacity tightness there as well, Jacobs said.
"A lot has changed in the past several months," Jacobs said.
Still, XPO's brokerage unit has maintained a profitable spread between what it pays the carriers
and the marked-up prices to its shipper customers, Jacobs said. The unit's customers today are more
concerned with capacity assurance and reliable service than with price and are willing to pay more
for both, he said. Earlier this year, customers were more focused on price.
Greenwich, Conn.-based XPO's intermodal business also grew in the third quarter from what Jacobs
called a "spillover effect" from traditional truckload shippers who may have found it hard to get
capacity. The company reported third-quarter results late yesterday that set quarterly records for
revenue, net income, and free cash flow.
In another sign of strength in freight demand,
a separate monthly index of freight shipments and spending also published by Cass and Broughton
showed year-over-year gains in September. Shipments across multiple modes rose 3.2 percent over
September 2016, while expenditures rose 4.6 percent year-over-year, according to the index.
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
The Florida logistics technology startup OneRail has raised $42 million in venture backing to lift the fulfillment software company its next level of growth, the company said today.
The “series C” round was led by Los Angeles-based Aliment Capital, with additional participation from new investors eGateway Capital and Florida Opportunity Fund, as well as current investors Arsenal Growth Equity, Piva Capital, Bullpen Capital, Las Olas Venture Capital, Chicago Ventures, Gaingels and Mana Ventures. According to OneRail, the funding comes amidst a challenging funding environment where venture capital funding in the logistics sector has seen a 90% decline over the past two years.
The latest infusion follows the firm’s $33 million Series B round in 2022, and its move earlier in 2024 to acquire the Vancouver, Canada-based company Orderbot, a provider of enterprise inventory and distributed order management (DOM) software.
Orlando-based OneRail says its omnichannel fulfillment solution pairs its OmniPoint cloud software with a logistics as a service platform and a real-time, connected network of 12 million drivers. The firm says that its OmniPointsoftware automates fulfillment orchestration and last mile logistics, intelligently selecting the right place to fulfill inventory from, the right shipping mode, and the right carrier to optimize every order.
“This new funding round enables us to deepen our decision logic upstream in the order process to help solve some of the acute challenges facing retailers and wholesalers, such as order sourcing logic defaulting to closest store to customer to fulfill inventory from, which leads to split orders, out-of-stocks, or worse, cancelled orders,” OneRail Founder and CEO Bill Catania said in a release. “OneRail has revolutionized that process with a dynamic fulfillment solution that quickly finds available inventory in full, from an array of stores or warehouses within a localized radius of the customer, to meet the delivery promise, which ultimately transforms the end-customer experience.”
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.