Hot Take
We all know that feeling of hope and “new year, new me” that January brings. While we might not be rushing into the gym right away, we can certainly look at some things to get excited about in the new year. We have to be optimistic now so we can throw shade at 2022 in December just like we did to 2021 earlier in the week. Fair is fair.
Some of the things I’m looking forward to are a result of major changes and acquisitions from this year so 2021 can’t be all bad. Without further ado, here is another top 10 list in no particular order.
- Knight-Swift got into the LTL game by acquiring AAA Cooper and Midwest Motor Express. Both are solid LTL carriers. Never completely horrible on service and reasonably priced. The bottom line at Knight-Swift is going to reflect some hefty revenues; it’s interesting to see if they can keep up the level of service that is synonymous with AAA Cooper and MME.
- I personally am very excited about the potential loosening of the overall capacity in the country. We’ve seen the Outbound Tender Reject Index drop below 20 multiple times in the past few months, meaning that we could have our first light at the end of the tunnel.
- ArcBest is a top 15 broker. It acquired MoLo Solutions and reached that position overnight. MoLo was on a rocket ship straight to the moon and ArcBest hitched its wagon to that star, which will continue to serve both companies extremely well into 2022.
- I don’t know yet if the LTL market is exciting or terrifying. With the demise of Central Freight Lines, an already overextended network has the potential to collapse in on itself — or like coal, the pressure will turn it into a diamond.
- The COP26 Summit in Glasgow, Scotland, in November reaffirmed the commitment the U.S. made to rejoin the Paris Climate Agreement. We can expect to see a higher priority on sustainability and net-zero emissions coming to the supply chain.
- Those ships off the coast of LA/Long Beach have to go eventually, right? I’m optimistic that port congestion will ease. Some ships are routing themselves to New York and New Jersey instead of waiting off the West Coast. That opens doors for other ports absorbing a touch of the overflow. That balancing act is delicate but should help a little bit getting things moving and keeping drivers from having to waste time sitting.
- Cleaner ocean shipping is on the way. The Panama Canal and 160 other organizations signed the call to action for shipping decarbonization. This plan calls for governments around the world to act on climate change and commit to decarbonizing the shipping sector by 2050. All parties involved say that the shipping industry possesses the technology and sustainable fuels to achieve this goal.
- Some shippers (Amazon, Ikea, Unilever and Patagonia) have already started living out this promise by starting the Ship it Zero campaign. That means they will only purchase ocean freight services powered by zero-carbon fuels by 2040.
- We may see a return to “normal.” Whatever that means, I’d like this time in transportation to be a funny story we talk about in five years, not something we’re still living through. These inflationary rates and absurd capacity levels can’t hang on forever. Trucking is cyclical in nature and I think I’m ready for a new cycle.
- The whole world knows the phrase “supply chain.” While most transportation work is done in the background as things are just delivered on time and no one experiences major shortages, your auntie officially thinks that you are the only savior of the supply chain because “You know the trucks.”
Quick Hits
Optimus Prime would be jumping in his Michelins for the success autonomous trucks had this week. TuSimple claims it has completed an 80-mile nighttime run on Interstate 10 in Arizona with no driver in the cab, going from a rail yard in Tucson, Arizona, an hour and 20 minutes north to Phoenix. The Arizona Department of Transportation and law enforcement worked closely with TuSimple to ensure no direct interference with the vehicle, but still monitored it closely should unforeseen circumstances arise.
The plan for TuSimple is to continue these driverless runs throughout 2022. With high-definition maps from Arizona to Florida and North Carolina, TuSimple is committed to putting its technology through the paces in the new year. Currently it is clocking in at over 160,000 miles of driver-supervised autonomous freight runs. Meaning it’s time for the next test: real-world conditions, weather, unpredictable travel patterns and everything else we see on the roads.
Many people had Santa help this year through the magic of online shopping, myself being no exception. Amazon currently holds 41% market share of the online shopping space. That said, certain parts of the country are a little more Amazon-obsessed than others. The Northeast and the South were the most obsessed on a regional basis. The top 10 states are North Carolina, Texas, Virginia, Kansas, Florida, Alabama, New York, Ohio, Georgia and Illinois.
Those who are more likely to pass on Amazon tend to live in Utah, Washington, North Dakota, Oregon, Rhode Island, Colorado and Montana. However, nationwide only 16.5% of people surveyed said they could go the rest of their lives without ordering from Amazon. As someone who loves the convenience of not having to leave the house to get something, the instant gratification of pressing a button and everything you need is on its way has definitely conditioned me to expect the same of other retailers. And if you have a customer/shipper that is Amazon or connects into its network, you might see an uptick in loads headed to those states highest rated over those that aren’t as obsessed.
TRAC Thursday
That autonomous truckload that TuSimple moved from Tucson to Phoenix. Let’s take a look at that going rate. For 120 miles, currently an all-in rate should be $617, or $5.14 a mile.The rate is a little high for this lane over the past month, but it has been climbing since the holiday. I’m not entirely sure what the future of rates will look like with autonomous trucks in play, but for now we can assume their effect on rates won’t be significant.
Who’s with whom?
The Federal Motor Carrier Safety Administration is once again looking for a new acting administrator. Meera Joshi, who recently underwent a confirmation hearing for the position, has decided to leave before being confirmed by the U.S. Senate. Since Joseph Clapp became the agency’s first administrator in 2001, there have been 11 nonconfirmed leaders of the FMCSA. Joshi will return to New York City as one of five deputy mayors appointed by Mayor-elect Eric Adams.
FMCSA administrators are in the unfortunate position that no matter what decision they make, someone is going to be upset. The trucking industry complains that you’re always throttling them with regulations. When you try to give the industry a little breathing room — e.g., truck driver hours-of-service changes that went into effect in 2020 — you get sued by the safety people. It’s a politically frustrating situation, and hopefully Joshi’s successor, Jack Van Steenburg, is up for the challenge.