Wall Street may be underestimating a difficult beginning of 2023 for trucking
Good morning! It’s Sunday Funday. Ready to recharge? ⚡️
“Why do we fall, sir? So that we can learn to pick ourselves up.” – Alfred, Batman Begins
While falling shipping rates have provided businesses some form of relief after consistent supply chain issues, the unfortunate act is that freight carriers are likely to feel the brunt of it in their profit margins. Citi Research analysts are sounding the alarm that Wall Street is underestimating just how detrimental falling trucking demand will be to shareholders.
Check out today’s featured article from Market Watch to read about the trucking forecast as we barrel into 2023 with freight trend deceleration and falling shipping rates signaling what some say… will be a difficult new year. ☕️
Featured Article:
‘New Year hangover’ seen for trucking, as costs risk piling up into 2023 | MarketWatch
“Roughly a week after one analyst warned of a “trucking winter,” another is saying to brace for a possible “New Year hangover” in the industry, as falling demand collides with higher labor and other costs next year following the holiday rush.”
Network Association 🤝
Amazon and UPS might be finally getting a divorce
Many have speculated that the day would come when Amazon and its largest vendor, UPS Inc., would part ways. Amazon had already liked FedEx to the curb in 2019, and UPS quickly filled in. But Amazon Logistics is expanding rapidly and it really is only a matter of time before it brings the traffic in-house instead of outsourcing. Currently, Amazon accounts for about 11% of the company’s annual revenue which rounds out at about $102 billion.
The real kicker is customer volume figures. UPS will not disclose the accurate numbers, but Ravi Shanker, a Morgan Stanley & Co. transportation analyst, is estimating that Amazon accounts for nearly 40% of UPS’ domestic volumes.
Midterm Elections 🇺🇸
OPEC+ move reignites Americans' top worry ahead of November midterms | Reuters
Reuters contributors Jason Lange, Joseph Ax, and David Morgan write about the recent OPEC+ decision to cut production targets and what it may mean for gas prices as midterms round the corner.
Driver Issues & Shortages 🚛
Driver shortage grows after 11k jobs disappear in September
In August, there were approximately 1,592,00 jobs in the trucking transportation sector. In September, that number dropped to 1,580,000, signaling a loss of over 11,000 jobs, according to the U.S. Labor Department.
Well before the early days of the pandemic, industry experts were warning of an impending driver shortage. American Trucking Associations President and CEO Chris Spear warned that there was already an existing shortage of 80,000 drivers in early September.
Let’s Get Global 🌎
🚗 Automakers are stressed. Supply chain issues have caused major issues in manufacturing and selling cars over the last few years, but the persistent backlog of supply issues is due to cars just “sitting around”. Whether it be low sales or a lack of parts for manufacturing purposes, automakers are doing what they can to bounce back. Tesla, Ford, and GM have all been in the headlines recently due to declining sales.
💵 Give us money… actually, give us more money. Venture capitalists are pouring the bucks into the supply chain, but is it earning a return? Well, that remains to be seen. Funding isn’t slowing down at all though, and examining Crunchbase data global supply chain-related venture investment has remained high for years. The big winner so far this year is Flexport, which raised $935 million in February.
🇨🇳 When will the chip war end? Maybe never. The United States and China are squaring off for the top-dog position of manufacturing chips and semiconductors. But this rivalry is changing the global landscape when it comes to sourcing and developing these chips.
iLevel With You
More topics for the average American household to consider…
🏥 Amazon is branching into healthcare. After shutting down its first-ever online service Amazon Care, Amazon is acquiring the primary care group One Medical for $3.9 billion. The acquisition is still in review but is set to be the company’s third-largest purchase to date. Online Healthcare seems to be one of the more likely pillars of business Amazon is looking to launch alongside Amazon Web Services, Amazon Prime, and amazon Marketplace.
GET SMART
Ramp up that brain power for these advanced topics…
💨 Welcome to the Windy City. Chicago is home to over one hundred Logistics Tech company headquarters with over 34,000 employees on the roster. The tech scene has begun to boom in the city already known for distribution and transportation and while companies look to enhance operations with the latest tech available, Chicago benefits.
🐟 Cold Chain is here to stay! Estimates are putting growth at a whopping $65 billion over the next four years, launching the cold chain sector into a top transportation market in North America.
🚛 Uber Freight is here to let you know what’s up. The Head of the company, Lior Ron, spoke with McKinsey in an exclusive interview about what he is calling an aging industry: trucking. But he wants to change that. Uber Freight is a spin-off of the famous Silicon Valley tech start-up Uber and the team has raised over $1 billion from external sources to launch their autonomous trucking division. Currently plagued with growing fuel prices and a rapidly depleting workforce due to the Baby Boomer generation entering retirement, Ron is taking a radical approach to trucking.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 28, 2024, from iLevel Logistics Inc.