It’s all in the numbers for Nikola

Three numbers tell the desperate state of fuel cell truck maker and hydrogen fuel provider Nikola. Dozens of others apply, but these three suggest the clock is ticking faster on whether the company can survive.

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By the numbers …

Nikola’s notable numbers: 135, 29.07% and 88.

135

The Phoenix-based company on Wednesday laid off about 135 employees, roughly 15% of its workforce, amid a persistent cash crunch with little room to sell more stock as its price slides. Nikola laid off 270 employees in June 2023 and 100 in November 2022.

“To extend our runway, we are adjusting and rescaling our staffing needs,” CEO Steve Girsky said in a statement. “This is a difficult, but necessary, decision and we thank those team members who helped build Nikola and wish them the best moving forward.”

29.07%

At 29.07%, Nikola has the third-highest percentage short interest – investors betting the share price will fall as it has consistently since Nikola executed a 1:30 reverse stock split on June 25. The cosmetic move to artificially boost the share price fended off delisting from the Nasdaq, which requires a price of $1 or higher for 30 consecutive days.

Such moves rarely succeed. Before the reverse split, Nikola traded at around 30 cents a share. On a split-adjusted basis, it sells for about half that.

Short selling occurs when an investor borrows a security and sells it on the open market, planning to repurchase later for less money. It is a high-risk, high-reward strategy that has plagued Nikola almost since it went public in June 2020 during the SPAC frenzy. Girsky led the special purpose acquisition company that brought Nikola public.

88

The one number that could be considered a positive – at least in isolation – is that Nikola delivered 88 fuel cell electric trucks at wholesale in the third quarter. No one else delivered any.

The number fell within the company’s predicted range of 80 to 100 sales. It gave a shot of adrenaline to the stock price, which jumped nearly 20%. The next day, it dropped 6.5% and has been mostly declining since.

Nikola sold 88 fuel cell electric trucks at wholesale in the third quarter, bringing to 235 the total of the alternative fuel vehicles sold since production began in 2023. (Photo: Nikola)\

The company posted record revenue in the second quarter. Generous purchase incentives for zero-emission trucks – mostly from California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project – juiced interest in the only hydrogen-powered fuel cell truck currently for sale.

But Nikola’s costs of making and selling the Class 8 Tre cabover trucks – estimated at more than $1 million each – far outstripped the $380,000 in revenue per copy.

“Nikola needs around $500 million per year to fund its operations. Every year it needs to find new investors to finance its operations. So far, either through share issuance or private investors, the company has been able to cope and survive,” long-term and dividend growth investor Luca Socci wrote on the investor site Seeking Alpha.

Ongoing dilution and burning the furniture for warmth

Dilution of shareholders, most recently through the reverse split they approved in June, has left Nikola bereft of options to raise capital. Banks are not an option. Citibank collects a 2.5% commission for backing at-the-market stock sales. With only its Coolidge, Arizona, plant property, machinery and equipment as assets, insufficient collateral exists to borrow against.

Nikola sold its Phoenix headquarters building and leased back the property. (Photo: Nikola)

Nikola sold and leased back its plant and Phoenix headquarters in earlier cash-raising moves. Nikola has some intellectual property. But it mostly assembles key components purchased elsewhere. The Iveco S-Way is the basis of the truck. Robert Bosch makes the fuel cells. Batteries come from Proterra, now part of Volvo Group following Proterra’s bankruptcy.

That makes an acquisition of Nikola on favorable terms unlikely because so little is unique from a technology perspective.

Girsky’s comment when Nikola announced Q3 unit sales on Oct. 2 was intended as a positive. But it pointed to Nikola’s greatest challenge. It cannot sell enough trucks at prices to support a viable business.

“Despite overall market headwinds, Nikola remains focused on our mission to pioneer solutions for a zero-emission world, and we’re doing it one truck at a time,” Girsky said.

Rolling tech lab Shell Starship may have run its course

BIRMINGHAM, Ala. – The Shell Starship 3.0, the pointy-nosed, sleekly styled technology test bed built on a Navistar International chassis in 2018, took trucking media for ride-and-drives on Tuesday at Barber Motorsports Park, demonstrating at slow speeds its latest powertrain advance – the Cummins X15N natural gas engine.

The Shell Starship 3.0 test truck has a Cummins X15N natural gas engine. (Photo: Shell)

“Going to the natural gas engine, fuel economy went down just a little bit, but natural gas is cheaper and it burns cleaner so that’s a huge benefit,” Starship driver Brian Rector told me during a couple laps. “It didn’t lose any power, switching between the natural gas and the diesel.”

Cummins thinks the 15-liter big bore X15N could create a breakthrough in natural gas adoption following tepid adoption of its 9- and 12-liter natural gas offerings criticized for lacking the power and torque needed for long haul. The engine runs on petroleum-based compressed natural gas or renewable natural gas made from landfill gasses and dairy waste.

Off-the-shelf technologies push efficiency

The Starship 3.0 NG achieved 9 miles per gallon during an 840-mile loop of California under a full-80,000-pound load. Aggressive aerodynamic enhancement including tire-covering body skirts, automated gap-closing wings between cab and trailer, and video mirror cameras in place of bulky side mirrors all contributed. A typical diesel truck averages 6.4 mpg.

More importantly, the third – and possibly final – version of the Starship continued to improve freight ton efficiency, a measure of how many tons of freight have been moved from one spot to another against how much fuel was used.

“From the second-generation truck to the third-generation truck, it was a little bit of improvement but not as huge as the previous ones,” Kevin Otto of the North American Council for Freight Efficiency told me. NACFE has analyzed runs on each of the Starship iterations.

The Shell Starship 3.0 NG achieved 9 miles per gallon fuel economy during an 840-mile run in California using compressed natural gas and renewable natural gas. (Photo: Shell)

Otto pointed to the use of lightweight materials and low-rolling resistance tires for the most recent gains.

Shell not competing with SuperTruck

Unlike the SuperTruck programs sponsored by the Department of Energy in cost-sharing arrangements with truck makers, Shell uses combinations of off-the-shelf technologies to improve truck performance, which translates to lower total cost of ownership.

But its interest is not completely selfless. With each update of the Starship, Shell assesses the effectiveness of its latest oils and fluids such as its Rotella natural gas engine oil and Spirax transmission and axle oils.

With the more modest gains from Starship 3.0, Shell is noncommittal to a fourth generation. The path to big efficiency gains would come through an alternative powertrain, either a battery-electric or a hydrogen fuel cell. Truck OEMs participating in SuperTruck 3.0 are testing fuel cells to reach 75% reduction in greenhouse gas emissions.

Among the Shell Starship’s aerodynamic innovations are jet-style foldable steps for entry and egress. (Photo: Alan Adler/FreightWaves)

Since Shell has no intention of making trucks, has the Starship run its course?

“That’s one of the questions we ask ourselves with every iteration of the Starship,” Heather Duffy, a Shell marketing specialist, told me. “I think we’ve learned a lot over the six years of the program. There’s a lot more to learn. One of the things we’re learning is that some of that technology is just not there yet.”

Briefly noted …

Volvo Trucks North America has delivered 570 battery-electric Class 8 trucks since starting production in late 2020.

Mobile generator maker ANA Inc. intends to purchase six Hyliion fuel-agnostic generators, the latest sign that Hyliion may succeed in its pivot to low-emission stationary power.

International Truck is offering its S13 integrated powertrain in its HV Series of work trucks, expanding the new engine from on-highway to vocational uses.

Republic Services is purchasing 100 McNeilus Volterra electric-powered refuse trucks from Oshkosh after successful tests of a small number of the trucks.

Truck Tech Episode No. 86: Daimler Truck creates a full-scale hydrogen station for pilot versions of GenH2 fuel cell trucks

That’s it for this week. Thanks for reading and watching. Send your feedback on Truck Tech to Alan Adler at aadler@firecrown.com.

Editor’s note: An item about autonomous trucks in the Oct. 2 Truck Tech should have mentioned that Plus spun off its China operations into a separate entity in 2023.

FreightWaves Infographics: Texas trucking company owner gets 25 years for Mexico-Chicago drug pipeline

To view more FreightWaves infographics, click here

Georgia’s Brunswick port expands ro/ro capacity

Images shows three ro/ro ships, harbor, and parking lots.

So what’s a port to do after it adds 120 paved acres to support its growing roll-on/roll-off (ro/ro) vehicle business?

That’s easy. If you’re the Port of Brunswick, Georgia, you add 50 more acres.

The Georgia Ports Authority Board approved the measure for expansion of more vehicle storage at Brunswick, a move that will enable the authority to more efficiently accommodate increased trade crossing the docks at Colonel’s Island Terminal.

“The combination of space to grow, global and domestic reach, and quality of service make the Port of Brunswick the nation’s premier gateway for ro/ro trade,” said Griff Lynch, Georgia Ports Authority president and chief executive, in a release. “With the significant infrastructure investments we’re making at the nation’s largest auto port, GPA is prepared to handle future growth from new and existing customers. This move comes in response to requests from auto manufacturers seeking to expand their cargo volumes through Georgia.”

Hyundai, Kia, Mercedes-Benz and a number of automotive components makers have production facilities in Georgia. Mercedes-Benz operates an auto processing terminal at Brunswick.

The expanded auto processing capacity approved at the GPA’s meeting Sept. 24 will go online in the summer of 2025 and follows the recent addition of more than 120 like acres, part of $262 million in capacity enhancements for auto storage and warehousing recently added at Colonel’s Island.

Brunswick has more than 200 additional acres for expansion when the time comes to scale up.

Colonel’s Island Terminal handled more than 870,000 units of ro/ro cargo in fiscal 2024, which ended in June. That would put it ahead of the Port of Baltimore, which handled 847,000 cars and trucks on 710 acres in 2023.

At the same time, Brunswick will receive nearly $38 million in federal funding for maintenance dredging and harbor improvements in legislation passed by Congress earlier this year. That includes $26.6 million to return the federal waterway to its full authorized depth. Dredging work by the U.S. Army Corps of Engineers is expected to start in late 2024.

An additional $11.35 million in federal funding and $6 million in state money have been allocated to the Corps’ Brunswick Harbor Improvements project. The plan includes an expanded area for vessels to pass, a bend widener and an expanded turning basin for ships docking at Colonel’s Island.

In August, Georgia’s Brunswick and Savannah handled 74,630 units of ro/ro cargo, an increase of 21.4%, or 13,175 units, compared to the same month a year ago.

Find more articles by Stuart Chirls here.

Related coverage:

Analysis: Biden, ILA score wins in port strike, but larger issues remain

Port strike ends as ILA, USMX agree on hefty wage hike, contract extension

Frequently asked questions: The ILA port strike

‘Lt Dan’ rides the storm

Welcome to the WHAT THE TRUCK?!? Newsletter presented by Nikola. In this issue, “Lt Dan” becomes Milton’s main character; Elon Musk’s bold prediction; logistics companies deliver hurricane relief; more.

Sponsored by Nikola: Clean. Quiet. Smart. Sustainability delivered today. Nikola’s Class 8 battery-electric and hydrogen fuel cell electric trucks are available now. Learn more about incentives in your area.

‘Lt Dan’s’ wild ride

Riders on the storm — Just as Tampa Mayor Jane Castor was telling viewers on CNN that, “I can say this without any dramatization whatsoever: If you choose to stay in one of those evacuation areas, you are going to die,” an unlikely star emerged from the storm coverage who has captivated social media for the past few days.

GCaptain’s John Konrad reports, “Joseph Malinowski, nicknamed “Lieutenant Dan” went viral after defying both a massive hurricane and authorities’ pleas to evacuate, choosing to stay aboard his tiny 22-foot sailboat SeaShell as Hurricane Milton battered Florida’s Gulf Coast.” Lt Dan also rode out Helene on his ship.

GFM

“If we can get Lieutenant Dan to go to a shelter we can get anybody to do that.” – Tampa Mayor Jane Castor

Yesterday, concerns grew that Lt Dan would die in the storm and was just remaining in his boat as a stunt for online clout and clicks. The mayor even said he was taken to a shelter. That proved to be false as NewsNation uncovered.

In fact, not only did he not go to a shelter but he completed his goal of channeling his inner Noah by riding out Hurricane Milton in his boat.

Konrad says, “We hope that when the next major hurricane hits, other boaters won’t ignore warnings and follow his dangerous example.” Read his incredible breakdown of the whole series of events here.

Not all fans – Not everyone was cheering on Lt Dan. Mena Ganey posted a video on X with over 6.4 million views calling him a grifter. The problem is, he did actually ride out the storm. As for his GoFundMe and TikToks, those were set up by content creator Tampa Terrance. That said, his problematic past has also surfaced.

An article published by WUFT claims that Lt Dan punched a police officer and urinated in his cruiser back in 2022. He served a one-year prison sentence over that incident.

Last year he was arrested for setting a park bench on fire. During the incident, a woman claimed she was splashed with some of the gasoline that he used to ignite the bench. That case was dropped.

Sound off – What do you think? Was Lt Dan an inspiration, a menace, crazy or the smartest guy in Tampa? Email me.

Logistics community delivers hurricane relief

Bat Cave – While Taylor Swift and Dolly Parton may get the press for multimillion-dollar donations, they’re not the only ones stepping up. The devastation from Helene hit especially close to home for Transflo’s Bill Vitti as his parents live there. Vitti has worked tirelessly for the past nine days.

The Transflo president assembled a crew and heavy equipment, and has raised over $47,000 via a GoFundMe.

Apex delivers the macros – Marina Ivanov and her team at Apex Transit & Logistics brought in a truckload of protein shakes and delivered 46,000 meals to Hendersonville, North Carolina.

Learning while giving – Trucksafe’s Rob Carpenter says his “Daughter, Gracyn, and son Gavin have been with me on the relief trail in Virginia, Tennessee and North Carolina the past couple days.” He took the opportunity to show his kids what giving back means. He was concerned about receiving flack for keeping the kids out of school for two days but says the experience was more than worth it.

Walmart sends the convoy – Walmart’s Mike Keller and his team have spent the past week and a half organizing and sending a relief convoy to the Asheville area.

In addition, he says, “Looking to help? Walmart is matching donations to the American Red Cross 1:1, up to $2.5 million, when donations to support hurricane relief are made at the registers in stores and clubs and on Walmart.com until Oct. 13.”

To read about more logistics companies that have answered the call, go here.

To watch Operation Airdrop on the show, go here.

Prediction

No license – Tesla’s Elon Musk predicted today that all transport will be fully autonomous within 50 years.

It may have to be with the rapidly growing rate of young people forgoing the ritual of getting a license when they come of age.

Within 50 years, the pool of people who even know how to drive may be incredibly small. While this prediction may be much harder to achieve with trucks, I have little doubt a lot of passenger vehicles will be fully self-drive (and not just the kinda sorta FSD Tesla has now.)

Not everyone is buying it, and Katya brings up a great point. Who wants autonomous trucks in a situation like we have in North Carolina? One thing to also keep in mind is that Musk’s timelines for nearly everything tend to be overestimated.

What do you think? Is Elon right? Email me.

Our first documentary looks at WHAT THE TRUCK?!? is up with the SoCal ports

Now playing – The ports of Los Angeles and Long Beach. Just a few short years ago they were ground zero for the supply chain crisis. Today, the ports of Los Angeles and Long Beach are seeing record import levels.

Those will only grow as ports from Maine to Texas could go on strike again, leaving Los Angeles and Long Beach as two of few major ports in the country open for business.

Along with that, the ports as well as the drayage community are tasked with hitting some very real zero-emissions goals by 2030. Are we seeing an end to the freight recession in real time? Can the shipping community meet its environmental goals? Who are the players and what is the tech paving the way for this future?

We had to jump a plane from Chattanooga, Tennessee, to LAX to see what the truck is up with the gateway to the USA: the Southern California ports.

Featuring Port of Long Beach’s Noel Hacegaba; Talon’s Emmanuel Carrillo and Isaac Castaneda; Harbor Trucking Association’s Matt Schrap; Swire’s Iain Stewart; Braid Theory’s Ann Carpenter; Forum Mobility’s Ron Hunt; Long Beach Container Terminal’s Charlie Doucette and Bonnie Nixon; PortPro’s Walker Banks; Vendorflow’s Eric Rodriguez; and WHAT THE TRUCK?!?’s Dooner (aka me).

Watch it here.

Friday on WHAT THE TRUCK?!?

Truck costs, paid parking debate, AI for operations – Friday live on WHAT THE TRUCK?!?, I’m joined by freight analyst Tanner DeHart. We’re breaking down the market and how it impacts truck cost. We’ll also look at how breakeven can vary wildly between carriers.

Truck Parking Club’s Reed Loustalot gets into the paid versus free parking debate and how they’re expanding their services across the nation.

Lexmark’s Brant Nystrom shares the latest on their deployment of AI in truck operations. What are they doing with it? We’ll find out.

Plus, the latest headlines and weirdness going down in this wild industry.

Catch new shows live at noon EDT Mondays, Wednesdays and Fridays on FreightWaves LinkedIn, Facebook, X or YouTube, or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player and at 5 p.m. Eastern on SiriusXM’s Road Dog Trucking Channel 146.

Forget ‘Founder Mode’

FBM – Founder Mode has nothing on Freight Broker Mode. Wear the shirt that lets them know you grind. Head on over to WTTGear.com to get our latest merch! Use code WTTFans for 10% off.

STP x F3

Get your tickets to the logistics event of the year, F3 right here. (That’s my discount link.)

Hurricane Milton hits Florida and freight markets; Waffle House Index

Port strike ends; J.B. Hunt’s Shelley Simpson; University of Arkansas

The rest of the noise

Thanks for reading, and feel free to forward this to a friend.

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Don’t be a stranger,

Dooner

Levi Strauss shifts Ohio logistics work to Maersk

Levi Strauss & Co. is outsourcing operation of a huge omnichannel fulfillment center in Ohio to logistics giant Maersk, part of the retailer’s transition to a hybrid distribution strategy.

Maersk announced Wednesday that its warehouse and distribution services unit in August began operating a 1.2 million-square-foot distribution center in Groveport, Ohio, for the apparel company. Maersk recently leased the building and took over processing wholesale, retail and e-commerce shipments that were previously handled at another location by Levi’s (NYSE: LEVI) itself, according to a Maersk spokesperson.

The facility is a key cog in Levi Strauss’ push to make direct-to-consumer its primary sales channel and modernize supply chain operations. It is the 10th global facility operated by Maersk for the retailer. Maersk, one of the world’s largest ocean shipping companies, has expanded to become an integrated logistics provider to multinational businesses like Levi’s. Among the services it provides Levi’s is consolidating orders at overseas points of origin for air and ocean transport.

D2C, both through its own stores and e-commerce site, is Levi’s fastest growing segment as the company deemphasizes its wholesale business.

Management said on the second-quarter earnings call that it has decided to move from a primarily self-owned and -operated distribution and logistics network in the United States and Europe to one that is more balanced between company facilities and those of 3PLs. The D2C strategy also requires investments to upgrade existing capacity with omnichannel capabilities. Outsourcing fulfillment activity will reduce per-unit costs and deliver more than $90 million in savings this year, primarily by not having to build a planned distribution center in Germany, said Harmit Singh, the retailer’s chief financial and growth officer.

In Europe, Levi’s has contracted with GXO Logistics as a 3PL.

“We are in the process of re-aligning our network to better position LS&Co. to meet customer demands, drive our DTC-first ambitions and sustain future growth,” said Craig Jones, the company’s senior vice president of global distribution and logistics operations, in a news release. “This Maersk-designed and operated facility is an important step in our strategy to transition to a hybrid distribution and logistics network that balances omni-capable owned-and-operated facilities with technologically advanced 3PL facilities like this one. Collectively, this will improve customer experience, capacity, on-time performance, and efficiency across our business.”

The new facility will help lower Levi’s costs while reducing container handling time and enhancing speed and efficiency, according to the announcement. Groveport is near Columbus, Ohio, an area with a heavy concentration of retail distribution centers and good access to highway networks that allows the company to reach more U.S. consumers faster.

During the next several months, Maersk will install high-speed sortation systems from EuroSort capable of processing 100 million outbound units annually. The facility will feature the latest implementation of Maersk’s proprietary warehouse management system to improve efficiency.

Maersk operates more than 85 warehousing facilities across North America.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@www.freightwaves.com

Air Canada pilots approve new $1.9 billion contract

This story originally appeared on AirlineGeeks.com.

Air Canada pilots voted in favor of a new collective bargaining agreement Thursday that includes several pay increases and quality-of-life improvements. Described as the airline’s largest-ever labor contract, the deal moves pilot compensation more in line with that of their U.S. peers.

The agreement, which was reached between Air Canada and the Air Line Pilots Association, International (ALPA), representing over 5,200 pilots, was ratified by 99% of the workforce. According to the union, 67% of Air Canada’s pilots voted in favor of the agreement.

Pilots are set to receive a 26% retroactive pay increase to September 2023, followed by additional 4% raises each year through 2026. This adjustment aims to bring their compensation closer in line with what their counterparts earn at U.S. airlines, addressing long-standing concerns over wage disparity.

“This contract is the largest labour agreement in Air Canada’s history and reflects contributions that our pilots bring to the success of our airline. This agreement helps restore what Air Canada pilots have lost over the past two decades and creates a strong foundation from which to build on,” said First Officer Charlene Hudy, chair of the Air Canada ALPA Master Executive Council, in a news release. “We look forward to working under these improved pay rates and working conditions while continuing to connect our passengers to Canada, North America, and the world.”

According to The Globe and Mail, the contract is valued at approximately $1.9 billion.

“We are very pleased this new collective agreement has been approved by our pilot group. The agreement is mutually beneficial and it will keep our pilots the best compensated in Canada and provide the work-life balance improvements they were seeking. At the same time, the agreement gives our company flexibility and creates a framework for future growth of the airline and its network. We look forward to working with our pilots under this renewed partnership,” said Michael Rousseau, president and chief executive of Air Canada, in a news release from the airline.

In September, the airline and its pilots averted a potential strike, reaching the last-minute deal just hours before scaling down the carrier’s operations.

Nonprofits in logistics space speed medical supplies, other aid to Florida

Nonprofit groups loaded with crucial disaster-relief and medical supplies are parked at staging areas in Florida after Hurricane Milton, which was a Category 3 storm when it struck Florida’s Gulf Coast Wednesday night, spread destruction across the state.

Kelby Marlin, transportation director at Convoy of Hope, said the faith-based organization has two tractor-trailer loads of supplies at its staging area in Perry, Florida. That location could change depending on the hurricane’s trajectory.

FedEx driver Scott Osborne is delivering a truckload of relief supplies in Florida for Convoy of Hope. (Photo credit: COH)

Springfield, Missouri-based Convoy of Hope has been partnering with FedEx Corp.(FDX), for the past three years. Marlin said Memphis, Tennessee-headquartered FedEx flew two of its top truck drivers to Springfield to drive Convoy of Hope’s disaster-relief supplies to Florida. Scott Osborne, a 31-year trucking veteran who works out of the FedEx Freight terminal in Jackson, Mississippi, was behind the wheel of one of Convoy of Hope’s red Kenworths as he made his way to Florida.

FedEx Freight previously sent three drivers to haul provided hygiene kits, food, water and tarps to staging areas to help survivors in six Southeastern states that were devastated by Hurricane Helene. The Category 4 storm made landfall on Sept. 26, pounding Florida’s Gulf Coast, before churning its way inland, leaving a 500-mile path of devastation.

“Volunteer drivers are the backbone of our driving team. Especially during high-volume times like these,” Marlin told FreightWaves. “We are always in need of volunteers who believe in the mission of Convoy of Hope and have a passion and a skill for driving.”

The organization, founded in 1994, has delivered relief supplies to more than 250 million people over the past 30 years.

So far, Convoy of Hope has sent over 100 truckloads, and its volunteer drivers have delivered approximately 2.5 million pounds of supplies to Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia. In its daily briefing Thursday, the Federal Emergency Management Agency reported that 210 people have been confirmed dead in those states, with the number expected to rise in the coming days and weeks.

Global logistics giant FedEx has offered to send seven more drivers over the next few weeks to haul Convoy of Hope supplies, Marlin said, after the nonprofit group assesses the areas where relief supplies are most needed.

The organization is looking for volunteer truck drivers to haul relief supplies from its locations in Springfield as well as Sacramento, California, and a future location in Atlanta.

“Our team will remain out of harm’s way until the storm passes, then we will move in as quickly as possible to get relief supplies to people in need,” Marlin told FreightWaves. “Most of our volunteer drivers have responded to these kinds of natural disasters before, and like most truck drivers, who spend long periods in their trucks, are capable and prepared for these types of situations.”

Medical mobile units head to Florida

In the wake of the second major hurricane to strike Florida in less than two weeks, Lenexa, Kansas-based Heart to Heart International, a nonprofit medical and logistics organization, is preparing to send its advance teams to the state to coordinate with local, county, state and federal entities.

Hurricane Milton is blamed for six deaths in St. Lucie County and two in St. Petersburg, Florida. (Photo credit: Convoy of Hope)

As of publication Thursday, Milton has been blamed for six deaths so far in Florida, including four in St. Lucie County and two in St. Petersburg.

Dan Neal, senior vice president of HHI, said its volunteer roster includes around 150 physicians, nurses and logistics professionals from across the country. He said HHI has enough medical personnel to operate multiple teams in different areas that are devastated by natural disasters.

“We’re just sort of on standby to see what’s happening with Milton. We don’t know where we will deploy yet,” Neal said.

While not all of its medical and logistics volunteers deploy at the same time, doctors and nurses typically work in teams of 10. For the past 13 days, HHI teams have been treating up to 30 victims of Helene each day in the hardest-hit parts of North Carolina using the organization’s 45-foot RV, which has been converted into a mobile doctor’s office. The medical vehicle comes equipped with two exam rooms, a pharmacy and bathroom facilities.

After Helene, HHI partnered with the Haywood County Department of Health and staged its mobile clinic just south of Asheville, North Carolina.

“We can take it anywhere around the country and pull it into a parking lot, open up the door, and treat those with non-life-threatening medical conditions or those in need of their blood pressure medication, insulin, or treat cuts, minor injuries, even poison ivy, to ease some of the pressure from hospitals’ emergency rooms,” Neal told FreightWaves.

The mobile clinic doesn’t have an X-ray machine, and those needing oxygen are referred to a nearby hospital. Neal said HHI medical volunteers can fill patients’ daily medications for a short term or around 30 days as most of the pharmacies in the hardest-hit areas of some states are still closed or gone.

Many Helene survivors lost their medications as they rushed to evacuate during the devastating flooding and mudslides that left 88 people dead in western North Carolina, according to FEMA. That number is expected to rise. Some rural communities are still cut off from emergency personnel getting to them as hundreds of roads and bridges were wiped out after Helene dumped 17 to 31 inches of rain in some communities in the Appalachian Mountains, according to the National Weather Service.

Hurricane aftermath

Respiratory illnesses are on the rise in western North Carolina as Helene survivors return to formerly flooded homes that are now filled with mud because they have nowhere else to stay, Neal said.

“Now, it’s October and it’s getting cool at night in the Smoky Mountains and there’s mold developing in their homes, and folks are also lighting fires to stay warm at night,” Neal said. “With the smoke and mold, we’re seeing a lot of respiratory illnesses.”

Ingrid Brown, a 45-year trucking veteran, lives in Zionville, North Carolina, which borders Tennessee. As Helene headed toward Florida on Sept. 26, Brown said she was delivering freight near Tampa and was picking up another load of refrigerated produce near Plant City, Florida, to deliver near Memphis.

Helene’s torrential rain and mudslides washed away a building near Ingrid Brown’s farm in Zionville, North Carolina. (Photo credit: Ingrid Brown)

Despite receiving news reports from family members who live near her farm in Zionville that the area was getting slammed by torrential rainfall, mudslides and flooding, Brown said she had to force herself to focus on delivering her load and navigate traffic jams as Florida residents scrambled to flee Helene before she could think about the damage to her farm.

“Working and driving is a completely different world than being at home and seeing this devastation happening and not being able to do anything about it,” Brown told FreightWaves. “I haven’t really been able to talk about this before. It’s just so sad. I have to stay busy.”

Brown said she wasn’t able to see the storm damage to her farm until days later because all the main and back roads to her home were washed out. She and five other families on Rich Mountain still don’t have electricity.

While her roof sustained damage from fallen trees and a bedroom on the first floor of her house flooded, Brown said things could have been much worse. Brown, who is 63, said her family has lived on Rich Mountain their entire lives.

“I am lucky that I have my life and a place to go home to because many people here do not,” she told FreightWaves. “I can’t imagine losing my life because I was trapped by water with no way out. All of the roads around here follow the creeks and rivers. Bridges that have been here forever are completely gone.”

She also volunteered and delivered pallets of water and bags of ice to neighboring communities in western North Carolina.

After meeting with her insurance adjuster on Monday to survey the damage to her roof and property, Brown said she couldn’t sit still long because one of her customers was in the crosshairs of Milton’s path and asked if she could drive down and pick up a final load of produce before the hurricane hit.

A former owner-operator, Brown now drives for Blackjack Express of Proctor, Arkansas. She runs its only refrigerated trailer while the carrier’s remaining fleet of around 25 drivers haul heavy equipment and oversize loads.

“I asked the owners if I could deadhead about 750 miles to take care of this customer before Hurricane Milton hit and potentially wiped them out of business and off the map and they said, ‘Of course. Do what you need to do,’” Brown said. “It’s just not in my nature to sit still and not try to help and take care of people and my customers if I can.”

Steve Brown of Zionville, North Carolina, attempts to cut down a fallen tree from his cousin Ingrid Brown’s roof after it was heavily damaged in Hurricane Helene. (Photo Credit: Ingrid Brown)

Ingrid Brown’s cousin, Steve Brown, who also lives in Zionville, is using his own backhoe and excavating equipment to build culverts on roads washed out by massive flooding so that emergency vehicles can get to some residents previously surrounded by water.

“Steve, who is more like my brother to me and takes care of my property when I’m on the road, is using his own money to buy the supplies and fuel for his equipment to build these culverts and open these roads for some of these people,” Brown said.

After picking up her load of produce near Tampa, Brown said it took her eight hours to go 200 miles as thousands of motorists and their families attempted to evacuate before Milton struck.

Brown said families in her area were being stung by yellowjacks after their underground nests were flooded during Helene, which was confirmed by The Associated Press.

“Folks back home are having a heck of a time finding EpiPens or allergy medication because the stores and pharmacies are closed.”

Neal confirmed that HHI’s mobile medical clinic carries EpiPens after a situation years earlier when a man who was repairing power lines in another disaster area was stung and had a severe allergic reaction.

“Our team was able to save this man’s life because we had EpiPens on site,” Neal said.

While HHI is shifting some of its resources to Hurricane Milton as it coordinates with more than 70 partners in Florida, Neal said the organization plans to continue dividing its resources and assets between North Carolina and Florida.

He said FedEx is a huge supporter of HHI’s relief efforts and that the organization has a charitable account with FedEx that allows it access to the shipping giant’s entire network to ship critical medical supplies overnight, if needed, from its warehouse in Lenexa.

“We just shipped out a resupply order today of asthma-related drugs, including inhalers and similar types of medications, for some patients in North Carolina,” Neal said.

While most of the medication that HHI dispenses is donated by large pharmaceutical companies, including free flu shots, tetanus vaccines and insulin, along with blood pressure and cholesterol medications for hurricane victims, Neal said the group had to use its own funds to buy more asthma medications.

Former truck drivers with active Class A CDLs as well as retired school bus drivers often volunteer to drive HHI’s mobile RV and some of organization’s other equipment.

“We have some volunteers who retired from other professions who decided it would be cool to get their CDLs, and we pay for them to do that in exchange for volunteering their services,” Neal said.

HHI also has a Mercedes Sprinter van, which Neal describes as a one-room doctor’s office that is equipped with an exam table and refrigerator to store medication like flu and Tdap vaccines. The smaller vehicle allows the medical teams to navigate traffic much more easily than the 45-foot RV in disaster areas.

HHI, which began in 1992, has delivered over $3 billion of medical supplies and aid to more than 130 countries.

The nonprofit medical organization also partners with Clinic in a Can (CIAC), which is headquartered in Bel Aire, Kansas. CIAC turns 20-foot intermodal containers into one-room medical clinics equipped with solar panels for power and diesel generators. Neal said HHI tested out one of CIAC’s first prototypes during Hurricane Katrina in 2005.

Michael Wawrzewski founded CIAC in 2002 after volunteering with an international organization that provided medical services in impoverished countries around the world. Besides serving as CIAC’s CEO, Wawrzewski has worked as a nurse practitioner for over 27 years, according to the organization’s website.

HHI can order more CIAC containers as needed, Neal said. They are placed on flatbed trailers and delivered to staging areas during natural disasters.

As of Thursday, Neal said HHI plans to stage its mobile clinic at Florida’s Emergency Operations Center in Tallahassee, then the organization’s teams will deploy to that location and set up health care operations.

As for Brown, she’s back on the road and won’t be home for a few weeks. Her rig was one of 50 custom Peterbilt trucks chosen in the U.S. and Canada to participate in Peterbilt’s annual Pride and Class Parade on Oct. 18 in Denton, Texas, to raise money for the United Way.

“Some people pulled their trucks off the road weeks ago to paint and polish their Peterbilts before the event,” Brown said. “I’ve got to get my stuff together. I am dealing with all of this mess and trying to drive, but I will pull it together before the event and get the truck looking pretty. This is something good to look forward to after this massive tragedy.”

Do you have a news tip or story to share? Send me an email or message @cage_writer on X, formerly known as Twitter. Your name will not be used without your permission.

10 ports remain closed in Hurricane Milton’s aftermath

Distribution centers in Hurricane Milton’s path recalibrate ahead of landfall

Driving safety with Battaglia Communications – Taking the Hire Road

On this week’s episode of Taking the Hire Road, Lisa M. Battaglia, founder and president of Battaglia Communications, sat down with Jeremy Reymer, founder of DriverReach and Project 61, to discuss the importance of developing and executing an internal marketing and communications strategy to drive employee engagement, retention and safety.

In 2022, Battaglia founded her company because she saw a need for freight companies to shift their marketing and communication efforts from the outside to the inside. “I am a strong believer that communication is key for safety,” she said. “Safety has profound bottom-line results, more so than almost any other element of operation.”

Battaglia now works with transportation and trucking organizations around the country to develop and execute strategic marketing and communication plans that focus on employee engagement.

Her goals are to drive retention, promote safety and ultimately improve results. “These were all needs I saw having worked in the trucking industry for a long time,” Battaglia said.

Why is internal marketing so crucial? According to Battaglia, it comes down to meeting fundamental goals and keeping perspective.

“External marketing is of course necessary,” Battaglia said. “You’ll always need to communicate with clients and reach out to potential new clients.

“I think what’s missing is that the people who are driving that interaction with clients, people who are your producers, people who are responsible for safety, those are your employees, and good communication with those people has to come before external messaging can ever be successful.”

Battaglia often asks companies to think about who their most important clients are, and what it would mean to lose any of them. Then she asks what those same companies would do if they lost employees – which would be a much more devastating loss.

“The fact is, if you don’t have a good relationship and good communication with your employees, you can never have success with external clients,” Battaglia said. “So what are you doing to communicate with them and form a culture? What’s the message you put out there?”

According to Battaglia, safety is driven by behavior, and behavior in a corporate sense is driven by leadership setting an example and opening lines of communication with front-line employees, especially drivers.

“One safety failure – one catastrophic incident – can wipe out an entire company,” Battaglia said. “Not to mention the impact any incident has on employees and families.

“How are you communicating with front-line employees about safety policies and procedures with consistency, and have you made sure that your drivers understand the importance of safety?”

Attaching safety messages to an emotional hook and helping employees understand what it takes for everyone to go home safely to their families, according to Battaglia, is what’s most effective.

“We need to communicate the what, the why and the how,” Battaglia said. “What the expectations are from a procedural perspective, why it’s vital and how we can all work together to get that done.

“Once that line of communication is open and executives are talking with front-line employees, everyone can establish the most important goals top to bottom within an organization.”

The reason talking to drivers is so important, Battaglia says, is that all truck drivers on the road need to understand that not only their safety, but that of the whole motoring public is in their hands. “Innocent people are hurt every day on the road, and the trucking industry has a real responsibility to work together on best practices to ensure we all stay as safe as possible,” she said.

Book recommendation: “Leading People Safely”

Click here to learn more about Battaglia Communications.

Sponsors: DriverReach, The National Transportation Institute, Career Now Brands, Carrier Intelligence, Infinit-I Workforce Solutions, WorkHound, Asurint, Arya By Leoforce, Seiza, Drive My Way, F|Staff, Trucksafe Consulting, Seated Social, Repowr

Brittain Ladd returns to The Stockout

Start your week with Brittain Ladd

On Monday at 10 a.m. EDT, Grace Sharkey and I will again interview one of our favorite guests: outspoken independent consultant Brittain Ladd. The depth of Ladd’s expertise is impressive and spans companies and topics throughout the retail space and far beyond.

On his prior The Stockout appearance, his Starbucks comments were prescient. Ladd described the company as being “in a world of hurt” and said its board had appointed the wrong CEO. It instead needed an executive who can improve the customer experience. Not long after, Starbucks appointed Brian Niccol, the former head of Chipotle, as CEO. That resulted in an immediate bounce in the share price.

(Chart: Barchart.com Inc.)

Ladd also has plenty of strong thoughts on Kroger’s potential acquisition of Albertsons. In a recent LinkedIn post, he pokes numerous holes in Kroger’s argument that the deal is not anticompetitive. Ladd doubts customers would see any relief in retail prices and doesn’t think that C&S Wholesale Grocers will be a strong competitor. In short, he did the Federal Trade Commission’s homework for them.

Ladd follows e-commerce companies closely as well. Expect him to share his views on Amazon, Shein and Temu as well as the implications for the parcel carriers. He will also tell you what’s wrong with Whole Foods Market.

The show will be available live on FreightWaves.com at 10 Monday and on The Stockout YouTube channel thereafter.

FreightWaves and SONAR have hurricanes covered

I encourage supply chain professionals to take advantage of a free trial of SONAR that is available until Oct. 18. All that’s required is filling out the form here.

After signing up for the free trial, I encourage users to check out Tony Mulvey’s article, which goes through which SONAR datasets provide the most insight into the degree of regional disruption caused by Hurricane Milton.

The markets that will most clearly be impacted are those near where the storm made landfall. In our truckload data, the Lakeland granularities (e.g., VOTRI.LAL) include Tampa and Central Florida. In our rail intermodal data, the Tampa granularities (e.g., ORAIL.TPA) cover that region.

While the impact to those areas is critical, many supply chain professionals need instead to see how the locations and lanes where they have operations are being impacted. After signing up for the SONAR free trial, SONAR Customer Success – which can be reached at cs@gosonar.com – can show you how to find that.

Refrigerated carriers are reluctant to send equipment and drivers into Central Florida, rejecting 41% of inbound tenders. (Chart: SONAR)

After reviewing all your most relevant locations, I recommend coming back to FreightWaves.com for additional commentary on the freight market and the latest updates.

Currently, there is a debate whether Hurricane Milton will be impactful enough to tighten the freight market. Zach Strickland says in his latest article that it might.
Not out of the woods following the International Longshoremen’s Association returning to work: 10 ports remains closed following Hurricane Milton.
Hurricanes shut down railroads as the carriers move assets out of harm’s way and take time to inspect/repair tracks before service resumes. The impact of Hurricane Helene may turn out to be an extreme case. The Norfolk Southern line into Asheville, North Carolina, is set to be closed for at least three months.
Warehouses and distribution centers in Milton’s path, including for Amazon, Publix and Walmart, were recalibrating ahead of landfall.

The Stockout show featuring EAIGLE

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(Image: FWTV)

On Monday’s The Stockout show, Grace Sharkey and I interviewed Amir Hoss, founder and CEO of EAIGLE. EAIGLE provides an AI and computer vision solution in logistics yards, including those utilized by retailers, CPG companies, manufacturers and transportation companies. In fact, Hoss did the interview live from the active logistics yard of a Toronto-based CPG company.

Leveraging low-cost security cameras that companies already have in place, EAIGLE offers proprietary software and algorithms that interpret collected images and recommend efficiency-improving actions. A typical result is streamlining necessary but menial tasks, which allows employees to focus on responsibilities that require more brainpower.
Watch the episode here and click here for the full The Stockout playlist.

Great expectations or paper rates?

Great expectations or paper rates?

(Source: Production and Operations Management)

The term “paper rates” is getting a fresh look with recent research by researchers from the MIT Center for Transportation & Logistics. Angela Acocella, Chris Caplice and Yossi Sheffi divided into how shippers, carriers and market dynamics play into freight contract performance. The recently released paper defines this relationship interplay as a buyer-supplier relationship. To translate this into trucking terms, the buyer refers to a shipper who is buying transportation capacity from a seller, which is either an asset-based carrier or a third-party brokerage that buys capacity from other asset-based carriers.

Current research on shipper-carrier relationships shows that more frequent interactions, longer relationships, and consistency in either sending agreed upon volumes or accepting those tender volumes predict better service. What the report notes and examines is what happens to those relationships when market characteristics change, and if external factors can change those relationships. The report notes that this is new territory, as little research exists on impacts from the latter.

The for-hire truckload space is unique, as nonbinding, relational contracts between shippers and carriers dominate the industry, yet “Incomplete and relational contracts are the norm.” For the study, researchers examined a large transactional dataset from major transportation buyers in the U.S. truckload sector over five years, including the supplier’s decision to accept or reject the load, prices involved for each contracted load, and information about the shipper in the market. Spot market data was also examined to determine which loads were exchanged on the spot market compared to the contract space.

One big takeaway from the research was that 3PLs were better able to handle operationally difficult transportation demand than asset-based providers. Part of this came from the dataset, which included the pandemic-inspired freight demand spike. That datasheet showed that despite carriers and shippers having a long relationship, “we do find that market condition impacts relational factors: during a tightly constrained market when the outside financial option is high, suppliers are pulled from customers with which they have long-term relationships.” To put it more simply, market forces like short-term demand surges in the spot market that spike rates there can pull a carrier away from contracted relationships, making the rate “worth less than the paper it’s printed on” to steal Chicago commodities trader parlance.

For asset-based carriers, constrained by the number of trucks they have, this research helps explain why non-asset-based freight brokerages were able to grow their market share during and following the pandemic. From being a backup service provider with a reputation of overcharging, the brokerage space has exploded in growth and now competes with asset-based carriers on network capability and service.

At the end of the day, the price to move a load remains king. The research adds, “The impact of market conditions on relationship duration and supplier acceptance suggests buyers should not expect to rely solely on long relationships during tight markets. Instead, they should emphasize keeping contract prices competitive.”

Walmart becomes largest private fleet in North America

When looking at reasons behind the ongoing freight market doldrums impacting the for-hire truckload space, private fleet growth and its ramifications require additional attention. Large truckload carriers service large Fortune 100 shippers, which appear to increasingly look inward for their own transportation needs.

According to Transport Topics, Walmart is now the largest private motor carrier in North America after increasing its fleet to 12,633 power units, up 1,300 units from last year. This growth appears to be in part from the successes tied to its associate-to-driver training program, which launched in January 2023. This is a continuation of its private fleet development program launched in 2022.

Another large shipper heavily tied into the for-hire truckload space that is expanding its private fleet is Home Depot, whose June acquisition of SRS Distribution put it at No. 50 of the largest 100 private fleets. SRS Distribution is a roofing material and building supply distributor that has a private fleet of around 4,000 tractors and 750 branches and warehouses. The reasoning appears to be growth-related. Don Davis of Distribution Strategy Group writes that as of mid-2023 half of Home Depot’s sales were to business buyers, with SRS’ $10 billion in annual sales being 53% business-to-business.

For Home Depot, Davis added that part of this strategy of in-house distribution comes from a more aggressive Federal Trade Commission, which has challenged several proposed mergers under FTC Chair Lina Khan. Ian Heller, co-founder and chief strategy officer of Distribution Strategy Group, said, “Home Depot can’t buy anybody in the home center industry because the FTC isn’t going to let it go through. If Home Depot or Lowe’s want to grow, it will be by going into the highly fragmented distribution industry.”

Another for-hire turning private shipper is Dollar General, which works with for-hire fleets for both over-the-road and dedicated distribution center management. It recently increased its fleet count to more than 2,000 tractors from 1,800 as it seeks to gain more control over costs and its internal supply chain. CEO Jeff Owen said on a Q2 earnings call that the company now handles nearly half of its own outbound transportation needs. Dollar General launched its private fleet back in 2016.

FreightWaves SONAR spotlight: Dry van spot rates see small upswing, reefer rates thaw

Summary: Dry van spot market rates finally saw a small positive upswing following a monthslong decline after the July Fourth weekend. In the past week, the FreightWaves National Truckload Index 7-Day Average rose 2 cents per mile all-in from $2.21 on Sept. 30 to $2.23. Dry van outbound tender rejection rates also saw an uptick in the past week, with VOTRI up 40 basis points w/w from 4.4% on Sept. 30 to 4.805%.

Compared to the dry van segment, reefer all-in spot market rates had a mild thaw over the past week. RTI fell 5 cents per mile w/w from $2.67 on Sept. 30 to $2.62. Compared to this time last year, RTI is down 11 cents per mile. Despite a softening in the spot market, reefer outbound tender rejection rates fared batter, increasing 169 bps w/w from 9.45% to 11.14%.

For a truckload space in search of an inflection point, the impacts following Hurricane Milton’s landfall in Tampa extending through central Florida will be the next test. Federal Emergency Management Agency and disaster relief shipments disproportionately impact contracted carriers and freight brokers as FEMA tenders loads to its approved transportation service providers.

Depending on the extent of the damage, an increase in nationwide outbound tender rejection rates may be likely, as contracted truckload capacity is rerouted for disaster relief shipments. For those unlucky shipments being rejected, a big question will be whether it filters down into the spot market or if shippers’ carrier routing guides hold fast. This behavior could be observed first by a spike in outbound tender rejection rates followed by a delayed rise in spot market all-in rates.