The Weekly Freight Report for October 15, 2020
The Top 7 Stories in Freight
Broker transparency is challenged… a nuclear verdict illustrates the insurance conundrum… new truck orders break records… the HOS rule change receives mixed reviews… carrier closures creep back into the mix… and the capacity imbalance continues to be the #1 talking point.
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. Broker transparency challenged
Tension between carriers and brokers was raised to new levels this year, including allegations raised by trucking companies that brokers were taking advantage of them through price gouging. As a result, carriers are calling for a new level of broker transparency… and now they have their day in court. The FMCSA has agreed to hold a listening session on the topic on Oct 28… Plenty of finger-pointing going on, but will this really gain momentum? Given this is a business built on supply and demand and the current market is much in favor of carriers right now, we think it’s a long shot. Get the details.
2. Insurance plays a huge role in carrier demise
Another nuclear verdict closing down another carrier. But this time, a single-truck carrier had to pay out more than $400M to one person. This is the largest ever one-time payout ever recorded… and insurance didn’t even cover a fraction of it. It’s well understood that hiked insurance prices continuously plague carriers… the question now is, how will verdicts like this change things moving forward? Get the details here.
3. Class 8 truck orders skyrocket
Capacity imbalance has truck orders at levels not seen since 2018. Even with record bankruptcies in 2019 this is a strong indication that carriers believe in a healthy market moving forward. Shippers may have some hope in sight as these trucks hit the street and put capacity back into the market. Get the full details here.
4. HOS changes bring in a range of opinions
The public has spoken out regarding the FMSCA’s 14-hour driving window pause… and the consensus is all over the place. Of the 200 comments received they range from complete support to absolute opposition and everything in between. Check out what the people have to say here.
5. Ceases operations due to ‘lack of work’
102 drivers and 150 power units were removed from the market as Trinity Logistics Groups closed its doors due to ‘lack of work’. All drivers were paid and no one was left stranded- but major carrier closing in a time where carriers literally have all the pricing power? Seems there’s more to the story… Keep up as this further develops.
6. Shippers modify their bidding approach
“Every shipper wants the lowest price every day of the year, but in today’s market that’s not possible.”… “The COVID pandemic has been six years of economic cycles in six months.”… just a couple knowledge bombs dropped by a Senior Director of Logistics at a major shipper. And it’s this dynamic that has shippers modifying their approach to bidding, using short-term “mini-bids” to respond to the volatile market swings. Get the details on this smart RFP trend here.
7. Consumers push volume and rate increases
Consumer demand is up… way up. And that’s had a cascading effect on freight markets. As such, LTL and parcel volumes are soaring and TL rates just continue to climb. Contracted rates are expected to hike next as carriers attempt to attract more drivers. There’s a clear supply and demand imbalance that looks to stay in the market for a long time. Get the full story.
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