November is National Diabetes Awareness Month, and today, November 1, is T1Day, “a day to raise awareness of type 1 diabetes (T1D) and celebrate the lives of those affected by the disease.”
In that spirit, as a member of the Greater New England Breakthrough T1D board, I am kicking off a new video talk show called “Living the Breakthrough: T1D Stories,” where we have conversations with people who break through the challenges of living with T1D to achieve whatever they want in life, both big and small.
And I couldn’t think of a better guinea pig to be my first guest — especially since she used to have guinea pigs when she was a kid — than my own daughter, Hannah Gonzalez.
Here is the world premiere of Season 1, Episode 1 of “Living the Breakthrough.”
If after watching you enjoyed the episode, share it with your family and friends. And if you’re “living the breakthrough” with T1D and want to share your story, feel free to contact me and maybe you can be my next guest on Living the Breakthrough!
Moving on, here is the supply chain and logistics news that caught my attention this week:
- Truckers Are Projecting an Upturn in Freight Rates (WSJ – sub. req’d)
- Truckload Prices Are Primed To Increase In 2025 (JBF Consulting)
- ATA contests new report questioning existence of driver shortage (CCJ)
- US shippers avoid East Coast ports on risk of second strike (Reuters)
- Biden announces $3B to reduce carbon emissions at US ports, ‘the linchpin to America’s supply chain’ (AP)
- EU slaps tariffs on Chinese EVs, risking Beijing backlash (Reuters)
- Supply Chain Woes Carry High Risks, Big Rewards for Some Companies (WSJ – sub. req’d)
- Volvo Group and Daimler Truck sign binding agreement for joint venture to develop software-defined vehicle platform
- Outrider closes $62 million Series D financing to drive growth of yard automation
- Four arrested in Poland following claims Russia shipped explosive parcels (The Loadstar)
Predicting the 2025 Trucking Market
There is no game more fun to play in the industry today than predicting what will happen in the trucking market next year. Will freight demand pick up? Will available capacity come down? How quickly will both happen? By how much will rates increase?
You have pessimists, optimists, realists, and everyone else in between looking at their crystal balls (or preferred data sets) and making their predictions for 2025. The market rebound is either right around the corner, won’t happen until Q2 at the earliest, or won’t happen at all until 2026. We’ll just have to wait and see what actually happens.
“Truckers ODFL, Knight-Swift See Earnings Drop on Weak Freight Demand” was the headline of a Wall Street Journal article last week. This week the newspaper published an article with this headline: “Truckers Are Projecting an Upturn in Freight Rates.”
So, demand is weak, but rates are on the rise?
Here are some quotes from trucking executives, per the WSJ articles referenced above:
“While we remain cautious on the market, we continue to observe positive signs, including a continuation of seasonal patterns with some project activity underway in the fourth quarter,” said [Knight-Swift] Chief Executive Adam Miller. The carrier has also seen rate increases in its latest bid awards, he said, following a long period of weak pricing for truckload carriers.
Werner Enterprises, one of the country’s biggest truckload carriers, said it sees signals that the market is turning after the company’s revenue and earnings retreated sharply in the third quarter.
Werner CEO Derek Leathers told an earnings call Tuesday that the company has won some contractual rate increases and that excess capacity is leaving the market. “We’ve seen through recent events that we’re closer to tightness than we’ve been in a long time,” Leathers said.
In a recent blog post, Chris Doersen at JBF Consulting writes:
Truckload costs and the associated market prices are—for three years in a row now—still at or near the lowest threshold that the market can support. Last year we predicted a gradual rise in truckload rates due to demand increasing incrementally and capacity slowly-but-surely keeping pace. Rates have remained relatively stable, with reduced fuel prices playing against rising Driver wages and equipment costs.
We see the current situation as a turning point, where total costs have jumped to record highs and any significant increase in fuel will drive truckload prices upward, as Carriers and Owner Operators are not in a position to absorb even moderate increases in costs.
According to JBF’s research and analysis, “Truckload Breakeven Price Per Mile is now at $2.72 — a 4.4% increase from our estimate in September of 2023.” At the same time, “current market Contract Rates have been moving the other direction, declining slowly over the past year and hovering around $2.40 per mile.”
“Even excluding empty miles, Contract Rates below $2.30 per mile are unlikely — which indicates that we are quickly approaching the price bottom for Contract Rates.”
In short, when contract rates are below carrier operating costs, there is only one direction rates can go if carriers are to stay in business.
Finally, another favorite game to play in the industry is debating whether a truck driver shortage really exists. This debate has been going on for as long as I’ve been an industry analyst (25+ years), and it’s a topic I’ve written about many times:
- OOIDA: The ‘Mythical’ Driver Shortage
- Truck Driver Shortage: Different Year, Same Headlines
- Truck Driver Shortage: Myth or Reality?
- Truck Driver Shortage: Getting Better, Worse, or No Problem at All?
- Driver Shortage in Trucking: Time for Plan B
Now comes Exhibit 1,975 in the debate. As Matt Cole reports in CCJ, “A new study commissioned by the Federal Motor Carrier Safety Administration (FMCSA) looking into the impacts on safety and driver retention of various methods of truck driver compensation called into question a long-held belief among motor carriers that the trucking industry is plagued with a persistent driver shortage.”
You can read the article for more details, but the bottom line is that “using what it called ‘traditional economic principles,’ the study further concluded that the truckload sector’s long-asserted ‘persistent shortages of drivers’ simply can’t be supported.”
As expected, “The American Trucking Associations (ATA) challenged this finding, noting that the study’s authors ignored certain aspects of the trucking industry.”
It’s a miracle that for 25+ years shipments have been picked up and delivered despite this driver shortage. Are there any physicists in the room who can explain this apparent violation of nature’s laws?
And with that, have a meaningful weekend!
Song of the Week: “Favourite” by Fontaines D.C.
