Freightwaves’s SONAR app has a lot of excellent data that it makes readily available. This post by the CEO shows some clear trends in freight, particularly ocean freight.
One of the interesting graphs shows that recently the number of containers per shipment has dropped a lot. It’s based on the number of bills of lading, and the container volumes in twenty-foot units (TEU) in green.
The most obvious fact predicting this number is that order size for containers is dropping. Perhaps the shippers need less stuff.
Or perhaps they are finding other ways to get them. Walmart and Home Depot, for instance, are running their own liner services, so perhaps shipments moved on them are not showing up. Or perhaps they are ordering domestically.
The service on the container lines and alliances has been so horrible that supply chain managers who really need reliability are becoming squeamish about using them.
I think we can look for these ratios to stay similar till the container lines and alliances start regularizing their schedules and improving their on-time delivery rates.
SONAR is a good place to look for an overview. Now there needs to be some analysis. Visibility is only so valuable. It needs analytics to determine causes and relationships.
Craig Fuller, CEO at FreightWaves Follow on TwitterTuesday, June 21, 2022
Truck tonnage saw a slight increase in May, according to the latest American Trucking Associations (ATA) survey of its members.
This index is considered quite reliable. Its base year is 2015, so a value of 117.1 shows the percent gain since 2015. On the graph below you can see the big plunge in early 2020 due to COVID, the rapid recovery, and the more recent upward trend. There’s nothing to make you believe the general upward trend over the last 6 months is broken yet.
The index is dominated by results from contract trucking. The ATA release proposes a theory about the relation with the spot freight market, which has been slowing.
If a recession arrives, we can predict a tailing off of the need for trucking. We hear that inventories are replenished at most big box stores, so demand for refilling may be down. At the supermarket we still see spot shortages, but not like over the winter. The threat to trucking volumes would be if consumers slow down their buying, forcing outlets to reduce inventories.
We hear anecdotally almost that the driver shortage is much less severe than it was over the winter. We also hear that more drivers are exiting ownership, which is affecting used truck auction prices. We don’t know if these drivers were captured in the ATA survey.
Perhaps there’s a downturn coming. Transportation is often a reliable index of the quality of the economy.
ATA Truck Tonnage Index Rose 0.5% in May | American Trucking Associations
An excellent interview with a top exec in the forwarding field. Notice his comments near the end on the technology based new breed of forwarders coming from Silicon Valley and elsewhere.
His position is that shortly everyone will have the technology. It’s the rest of the business that is hard to replicate. Thus he sees much more consolidation ahead.
I tend to agree with his view– much of the new tech is simply more visibility of what’s going on in reality. That can, over time, be duplicated; though with substantial risk. Most of us know that IT projects have a 70% risk of unsuccessful implementation. This makes buying tech often look attractive. But people, particularly execs, tend to underestimate the difficulty of integrating tech into the existing business and tech processes. It’s a good story worth following, and will provide many object lessons for IT pros and scholars in the years to come.