News

Jan 23, 2024

Will ocean rates sink below $4K?

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Welcome to the WHAT THE TRUCK?!? newsletter. In this issue, ocean rates sink; Walmart inventory woes; Amazon adds peak season fee; and more.

A bold prediction

Headed below $4K? — Things change quickly in freight, especially when you’re not paying attention. FreightWaves CEO and founder Craig Fuller offered up this bold prediction on Twitter: "Container rates from China to US West Coast will be down to $3900 by November, off more than 80% from their peak of $20,586 set a year ago." By the time you take off your Halloween costume, will rates be more treat than trick? With some shippers already paying under $4K on 20s, saving a fortune may favor the bold … prediction.

Industries are flagging inventory flushing or new order cancellations while the busiest port in the country hangs a "we’re open" sign. The EU, UK, and China all signal duress and they will face exorbitant energy costs starting Oct. Vacations will slow and housing is turning over.

The R word — Talk of a freight recession is nothing new around Freight Alley; we’ve been watching the downward slide of both trucking and ocean rates for months now. We’ve also considered the obvious: Consumers only have so much money and when rents, housing, fuel, food and nearly everything else costs more money, there is less left to buy junk. A freight economy buoyed up by retail sales is bound to suffer.

"At many other ports around the country, ships are waiting for space, yet here our terminals have capacity. So, for cargo owners looking to rechart their course, come to Los Angeles. We’re ready to help." — Gene Seroka, executive director of the Port of Los Angeles

Meanwhile in Los Angeles — Shippers gave the West Coast ports a bad case of whiplash when they began diverting freight to the Atlantic. Now they want it back, but as Sal Mercogliano points out, "There is still no contract between the ILWU and West Coast ports. Everyone still remembers the massive logjam off the port … even after the ships were sent out to sea."

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Telling comments from Walmart on earnings call:*WALMART HAS CANCELED ‘BILLIONS OF DOLLARS’ IN ORDERS, CFO SAYS*WALMART CFO SEES NEW PRICE CUTS ON SOME GOODS TO PARE INVENTORY

Peak that already peaked? — Modern Shipper reports: "Walmart Inc. said Tuesday that it has canceled billions of dollars in orders as part of a continued effort to align inventory levels with projected demand and to reduce its exposure to certain products that have fallen out of favor with budget-conscious consumers." The big box behemoth added that it would still take a couple more quarters before it managed to rightsize its inventory.

Meanwhile

Amazon adds PSS

➡️ @amazon to charge first ever peak season surcharge for #AmazonFBA during the holiday season, following a practice common among other carriers and #logistics companies.👉 🔗 https://t.co/ewXW9PVa9i#ecommerce #smallbusiness pic.twitter.com/fJGuq2MQdo

Join the club — Amazon FBA sellers are losing their peak season surcharge shelter as Bezos’ baby adopts the common practice. The move will cost shippers an average of 35 cents per domestic shipment fulfilled via FBA. Amazon says the fees "remain an average of 30% less expensive for slower standard shipping methods than other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives." Earlier this year, FBA sellers were hit with a 5% fuel and inflation surcharge.

‘It's like we won the lottery, I’m thrilled to death’

Thank a trucker, just don't get too close — The message from the residents of Ramsay, Montana, has been heard loud and clear: "About that truck stop? Not in my backyard." Love's has ended its five-year-long battle to open a truck stop in the tiny hamlet near Butte. Back The Truck Up reports, "Love's had planned to build a rather large facility, with a convenience store, Arby's-branded diner, 111-space parking lot, tire care shop and casino." Ramsay resident Roland Rees told KXLF, "It's surreal, we fought from 2017 until now and you don't think you’re going to win against corporate America."

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"Professional truck drivers identified the location along Interstate 90 as an underserved part of Montana for safe, clean and well-maintained places to stop as they deliver essential goods." — Love's spokesman

Idling — Despite winning approval 5-0 to build the truck stop, the company ultimately bent to the town's will. FreightWaves reports, "Caitlin Campbell, a spokeswoman for Love's, told FreightWaves the decision to not pursue the truck stop in Ramsay would not affect its other growth plans." Rachel Premack points out that "almost half of commercial truck stops operate at more than 100% capacity on weeknights." According to ATRI, the average trucker spends 56 minutes a day looking for parking. For now, drivers on I-90 through Ramsay are going to have to keep on truckin’.

The people of Ramsay must not have heard this one before: If you bought it, a truck brought it.

Family of trucker crushed by load seeks help

Road to recovery — Last Friday a load of posts rained down from Steve Blanchard's trailer directly on top of him. His son, Dustin Blanchard, wrote on Facebook, "He broke both legs, fractured two ribs, has fractures in his C7 vertebrae and a couple other vertebrae fractures as well." Blanchard was transported to Providence St. Patrick Hospital in Missoula, Montana, where he's now recovering. Being an owner-operator, his truck is going to stay parked until he recovers. If you’d like to help the family out during this tough time, they’ve set up a GoFundMe here.

WTT Friday

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Fantasy sports supply chains and double-brokering bandits — With fantasy football season set to kick off, it's time to get TrophySmack's Matt Walsh back on the show to talk about the supply chain behind the awards for the greatest office competition known to man.

Freight Caviar's Paul-Bernard Jaroslawski takes us inside the world of double brokering and he may even have Armchair Attorney Matthew Leffler by his side to keep it all legal.

Reliance Partners’ Robert Kaferle gets us up to speed on everything you need to know about brake safety week.

Plus, the latest news fit to make you say WHAT THE TRUCK?!?Catch new shows live at noon ET Mondays, Wednesdays and Fridays on FreightWavesTV, FreightWaves LinkedIn , YouTube , Facebook or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player.

Now on demand

Mo’ money, less problems? WTT Live from Supply Chain Meets FinTech

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Importers digging themselves deeper holes

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