Skip to content
Search AI Powered

Latest Stories

Shippers face tight market for moving goods due to high diesel prices and delays in truck manufacturing

Index of shipping conditions for March sinks to most negative reading ever, FTR says.

FTR Screen Shot 2022-05-24 at 4.53.21 PM.png

Retailers and manufacturers have faced ferocious market conditions for months as they ship goods around the country, and the situation is getting even tougher thanks to high diesel prices, according to a transportation analyst firm report released Monday.

The group’s Shippers Conditions Index (SCI) continued to tumble in March falling to -23.1, the most negative reading ever for the index and its second consecutive record low after sinking to -17.9 in February, Bloomington, Indiana-based FTR said.


The sharp decline was caused by the record surge in diesel prices and by extremely tight capacity utilization of trucks and trailers, FTR said. Looking ahead, the near-term outlook is “highly negative” even before factoring in a new surge in diesel prices occurring in early May.

FTR calculates the SCI number by tracking the conditions of four variables in the U.S. full-load freight market, including freight demand, freight rates, fleet capacity, and fuel price. Combined into a single figure, the number represents good, optimistic conditions when positive and poor conditions when negative.

“Fuel costs, labor costs, and ongoing congestion across the supply chain are going to keep the pressure high on shippers as we move into the summer months,” Todd Tranausky, vice president of rail and intermodal at FTR, said in a release. “There is little relief in sight, though there is the potential for downside economic pressure to reduce demand in the second half. But that is far from certain and also not the ideal way for shippers to experience better conditions and more capacity in their supply chains.”

Part of the reason that capacity is so tight is that truck manufacturers are struggling to build enough new vehicles, thanks to rising inflation and to uncertain supply chains that have created an undersupply of essential components like semiconductors and wiring harnesses, according to a report from the management consulting firm Berylls Strategy Advisors.

Those market forces drove order intake in the first quarter to sink into a 11% year-over-year drop at global truck building companies including Daimler, Traton, Volvo, and PACCAR, Berylls said. That slump came after truck buying demand had recovered quickly from the Covid-19 crisis, pumping up order intakes and average book-to-bill ratios to high levels during 2021, according to the firm’s analysis.

Despite those tumultuous conditions, truck builders are doing just fine financially, having increased revenue in industrial business lines by nearly 25% compared to the first quarter last year, and increased cumulative operating profit (adjusted) by 8.6%.
 
 "The situation on the global truck markets remains unusual," Martin French, Berylls' U.S. managing director, said in a release. "Demand is much higher than supply, and inflation is impacting the sales side of the business. While there are vehicle production hurdles to overcome, these are not the worst conditions to boost profits."

The Latest

More Stories

photo of laptop against an orange background

Companies need to plan for top five supply chain risks of 2025

The five most likely supply chain events that will impact business operations this year include climate change/weather, geopolitical instability, cybercrime, rare metals/minerals, and the crackdown on forced labor, according to a report from supply chain risk analytics provider Everstream Analytics.

“The past year has been unprecedented, with extreme weather events, heightened geopolitical tension and cybercrime destabilizing supply chains throughout the world. Navigating this year’s looming risks to build a secure supply network has never been more critical,” Corey Rhodes, CEO of Everstream Analytics, said in the firm’s “2025 Annual Risk Report.”

Keep ReadingShow less

Featured

chart of employment levels in transportation sectors

Unemployment rate stayed flat in December for transportation sector

The unemployment rate in the U.S. transportation sector was flat in December 2024 compared to the same month last year, coming in at 4.3% (not seasonally adjusted), according to the latest numbers from the Bureau of Transportation Statistics, part of the U.S. Department of Transportation.

That number is low compared to widespread unemployment in the transportation sector which reached its highest level during the COVID-19 pandemic at 15.7% in both May 2020 and July 2020. But it is slightly above the most recent pre-pandemic rate for the sector, which was 2.8% in December 2019, the BTS said.

Keep ReadingShow less
frigo-trans truck hauling healthcare cargo

UPS acquires two German healthcare logistics specialists

Parcel carrier and logistics provider UPS Inc. has acquired the German company Frigo-Trans and its sister company BPL, which provide complex healthcare logistics solutions across Europe, the Atlanta-based firm said this week.

According to UPS, the move extends its UPS Healthcare division’s ability to offer end-to-end capabilities for its customers, who increasingly need temperature-controlled and time-critical logistics solutions globally.

Keep ReadingShow less
screenshot of map of shipping risks

Overhaul lands $55 million backing for risk management tools

The supply chain risk management firm Overhaul has landed $55 million in backing, saying the financing will fuel its advancements in artificial intelligence and support its strategic acquisition roadmap.

The equity funding round comes from the private equity firm Springcoast Partners, with follow-on participation from existing investors Edison Partners and Americo. As part of the investment, Springcoast’s Chris Dederick and Holger Staude will join Overhaul’s board of directors.

Keep ReadingShow less
Report: Five trends in AI and data science for 2025

Report: Five trends in AI and data science for 2025

Artificial intelligence (AI) and data science were hot business topics in 2024 and will remain on the front burner in 2025, according to recent research published in AI in Action, a series of technology-focused columns in the MIT Sloan Management Review.

In Five Trends in AI and Data Science for 2025, researchers Tom Davenport and Randy Bean outline ways in which AI and our data-driven culture will continue to shape the business landscape in the coming year. The information comes from a range of recent AI-focused research projects, including the 2025 AI & Data Leadership Executive Benchmark Survey, an annual survey of data, analytics, and AI executives conducted by Bean’s educational firm, Data & AI Leadership Exchange.

Keep ReadingShow less