Cybersecurity and large fleets: Risks of cyberattacks on the rise
Cybersecurity is becoming a major topic in trucking due to recent publicized ransomware attacks against motor carriers. Ransomware is a type of malware, with users locked out of their systems or files and data held hostage unless the company or user pays a fee to regain access. The time Sensitive nature of trucking, customer expectations for deliveries and high costs associated with disrupted operations make trucking an attractive target for ransomware attacks. Cyberattacks in general can be especially devastating to trucking companies, as many rely on their transportation management systems for tracking, load tendering, driver messaging, customer communication and back-office support such as payroll and human resources systems.
Below are a few examples of 2021 cyberattacks:
- Wisconsin-based Marten Transport’s October ransomware attack affected employee data and disrupted operations.
- Manufacturer Utility Trailer’s ransomware attack impacted sensitive employee personal data, payroll and human resources information.
- Colonial Pipeline’s cyberattack caused massive disruption to the U.S. gas and diesel supply chain, shutting down pipeline operations.
- Truck maker Navistar sued over a data breach affecting current and former employees.
Prevention and mitigation center on three key questions:
- Who’s accessing your data?
- What data are they accessing?
- How much data are they able to access?
Mitchell Jones, a software developer at a major logistics company, told FreightWaves, “A lot of systems will use simple sign-ins, but with the way the world moves today we don’t really get the benefit of simple sign-ins. Sensitive data needs to be protected by robust authentication and authorization if a system wants to be able to compete in the modern climate of cybersecurity.”
He added, “I think a critical part a lot of people miss is that when you design a system you have to ask these questions, and you have to be ready for the debt that will add more complexity to the overall project as security is critical to a system’s longevity.”
Schneider expands dedicated fleet with trucking acquisition
Schneider announced Tuesday the purchase of Midwest Logistics Systems (MLS), a dedicated truckload carrier valued at approximately $263 million. MLS is based out of Ohio and operates a fleet of 900 tractors in 30 locations across the central U.S. In a press release, Schneider CEO Mark Rourke said, “Preserving the MLS identity is essential,” and added that “the carrier’s family-owned nature combined with its strong culture and customer service make it a valuable contributor for growing Schneider’s dedicated operations.”
Data reported at the end of Q3 2021 indicated Schneider’s dedicated segment has 4,240 trucks, which is approximately 46% of its overall truckload fleet and 42% of TL revenue. This acquisition furthers Schneider’s goal of having both over-the-road and dedicated truckload fleets be similar in size.
Reading between the lines:
Enterprise carriers are accelerating deployment of excess free cash flows to grow fleets amid the backdrop of record demand and rates. Continue to keep an eye on mergers and acquisitions in the trucking space, as large carriers are leveraging economies of scale and technology to grow truck count quickly through acquiring smaller fleets. Smaller fleets will remain attractive options for large carriers, as the time it takes to grow their fleets organically is often much slower than purchasing a 500-1,000 truck carrier and immediately reaping the benefits on earnings and the bottom line.
Market update: Workers quit jobs at record levels in November
The labor market remains tight, with the U.S. quits rate reaching 3% in November. The Labor Department reported 10.6 million job openings and a total number of quits reaching 4.5 million. Nick Bunker, an economist at Indeed, said, “Workers continued to switch jobs in light of the many opportunities the current labor market provides.” He added that the “low-wage sectors directly impacted by the pandemic continued to be the source of much of the elevated quitting.”
An increase in worker quit rates will continue to place pressure on trucking fleets to increase total compensation, in addition to offering other perks to attract new drivers. The payroll increases are expected to cause rising contracted rates, as carriers pass on the costs of driver retention onto shippers. An ongoing challenge is the imbalance between job openings and available workers. In November, 6.9 million people were unemployed but stated they wanted work, equating to roughly two workers for every three openings.
FreightWaves TRAC lane spotlight: Seattle to Chicago
Commentary and analysis courtesy of the FreightWaves Daily Watch
Summary: Both dry van and intermodal capacity are tight for outbound Seattle loads to start the year.
- The holiday season has made it more difficult for shippers to secure truckload capacity for outbound Seattle loads, particularly for longer lengths of haul. The Seattle outbound tender rejection rate is 35%, compared to 19.4% for all outbound Seattle loads.
- The latest change in the domestic door-to-door intermodal spot rate in the lane suggests that intermodal capacity has become scarcer as well — it increased 24% in the most recent week to $2.72 per mile, including fuel.
- The SONAR Capacity Trend indices show that the Chicago market is expected to tighten, while the Seattle market is expected to loosen in the coming one to two weeks.
What does this mean for you?
Carriers: While the Chicago Van Headhaul Index of 19 indicates that it is less of a headhaul market than it typically is, that is likely due to both the Chicago outbound and inbound tender volumes being depressed around New Year’s Day. Therefore, the Chicago Van Headhaul Index will likely recover in the coming days and it should still be easy for carriers to get reloaded in Chicago after making the long journey from Seattle.
The Routing Guide: Links from around the web
The chaotic early days of Amazon. (The Wall Street Journal)
Tech questions for 2022. (Benedict Evans)
Global shipping worries heading into 2022. (Supply Chain Shaman)
FreightWaves’ supply chain predictions for 2022. (FreightWaves)
Bison Transport acquires US trucking firm Hartt Transportation. (FreightWaves)