Spot market rates for dry van services, the most widely used form of truckload delivery, spiked at the end of
2013 to near-historic levels, according to truck consultancy DAT.
As of the week ending Dec. 28, average spot rates hit $1.95 a mile, according to data from DAT, a Portland, Ore.-based
concern that analyzes trends in truckload pricing. That was the highest weekly level DAT has recorded since it began tracking
spot rates in 2009.
The year-end rate levels are unprecedented in that they were reached during what is normally a quiet seasonal period for
demand, said Mark Montague, DAT's senior rate analyst, who has worked in the field for decades. Even after volumes tapered
somewhat after Thanksgiving, rates continued to climb, he said. The spot rate calculations include the cost of fuel surcharges
imposed by carriers.
The average dry van spot rates ended the year 22 cents a mile higher than they began, according to DAT's numbers. That
represents a near 23-percent jump from the average levels DAT reported for 2012.
Spot rates for refrigerated and flatbed traffic also picked up strength as the year ended, according to DAT. In the last
full week of 2013, the average flatbed rate stood at $2.15 a mile, a 4-cent increase from the prior week. Rates for refrigerated
traffic climbed 3 cents to $2.12 per mile. For the year, "reefer" rates increased over 2012 levels. Flatbed rates, however,
declined year-over-year.
SECOND-HALF SURGE
The recent surge in dry van spot rates took root in the last two months of 2013. From May to October, rates oscillated
between $1.80 and $1.84 per mile. In November, though, rates jumped to $1.87 a mile. That was followed by the increase in
December. On balance, the 2013 rate story was told in the year's second half, with van rates rising in July, instead of
dropping, and never looking back, Montague said.
Montague chalked up about two-thirds of the year-end increase to broad improvement in the economy and, by extension, freight
demand. The remaining one-third was related to more seasonal factors such as a pickup in construction activity during what is
normally a slow period, a pull-forward in ordering by users of raw materials ahead of expected 2014 commodity price increases,
and bad weather in the Southwest, notably a nasty ice storm in early December in the Dallas/Ft. Worth metropolis that sidelined
capacity in that key market for several days, he said.
Carriers benefited throughout 2013 from strong growth in energy and automotive production, Montague said. They also reaped
the gains from a late-year surge in potato traffic as well as increases in meat production, he added.
The federal government's new regulations governing a driver's hours of operation, which were enforced starting July 1,
affected driver and truck productivity by about 3 percent by, among other things, cutting a driver's available workweek by
15 percent, Montague said. Overall, though, truck capacity was not critically tight throughout the year except in sporadic
cases, he said.
TO BE CONTINUED?
Montague declined to forecast whether the rate momentum would extend into the first quarter or first half of 2014.
He said, however, that the favorable macroeconomic trends that surfaced in the second half of 2013 show no signs of abating.
"The economy is in a good spot," Montague said in a phone interview yesterday.
Spot market rates, if sustained, will often have an impact on the outlook for contract rates. Generally, spot rates lead
the contract rate market by two to three months, Montague said.
Traditionally, the spot market has accounted for 15 to 20 percent of the overall truckload rate universe. However, Montague
said he believes that spot rates actually represent a larger percentage of the total market. DAT has launched an effort to
quantify the relevance of spot rates on the broad truckload rate landscape, he said.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.