Logistics and Transportation Industry News Update: Q4 Recap

As the year comes to an end, so does our Logistics and Transportation Industry News Updates. Don’t despair! It’s being discontinued for a great reason.

Because of the resounding success of The Midnight Freight Broker Podcast, we’ve been able to talk about logistics and transportation news as it happens. Each week we cover the hottest news story and what it means to freight brokers.

Now that you’re receiving weekly news stories from us at LDI, and since we share current articles about news as it happens on our social media channels, this quarterly recap seems redundant.

logistic and transportation news

Instead we’ll be focus our blog on business development content, information about our agent program, and agent success stories.

But since we’re here, let’s complete what we started, shall we?

Broker Benchmark Indicated Healthy Q3

DAT Broker Benchmark Report determined freight brokers stayed profitable at about 16.1% margins “despite tepid revenues.” Load counts were only 1% lower in Q3 than Q2, so not terrible. DAT wasn’t worried about the year over year 7% decrease from 2018, as 2018 Q3 saw record high volumes, in part due to tariff preparations.

Trade Relations

United States – Mexico – Canada Agreement

USMCA has officially been approved in the US House of Representatives! In a 385 to 41 bipartisan victory, the Agreement is now on to the Senate for final approval.

2019 Trade Relations

US China Trade War

Politico reported Trump did not impose the December 15th tariffs previously threatened on about $160 billion of Chinese imports, including smartphones and laptops. The Trump Administration has also promised to lower tariffs imposed on goods back in September.

Xi has promised to purchase more agriculture good from the US, totaling some $40 billion. This will be up from the $24 billion China purchased in 2017, and hopefully the start of a strong recovery from a bad year for US farmers. US Trade Representative Robert Lightizer declined to give numbers to prevent effecting the commodities market.

China also confirmed they have committed to increase their purchases of US goods and services. “We have divided the U.S. exports into four categories: agricultural goods, manufactured goods, energy and services,” Lighthizer said. China also declined to identify any specific targets, but according to Politico, they confirmed “energy and manufactured goods as well as medical and financial services as areas of opportunity.”

Both countries seem optimistic with this new path forward, however, “It is up to the business sector and the market to say whether it is a good agreement or not,” said Liao, the vice minister of finance.

ELD Mandate

ELD Mandate Now in Effect

The December 17th deadline has passed and (with some exception) all trucks were required to migrate to electronic logging devices. Commercial Vehicle Inspectors are not being lenient on non-compliance.

Infrastructure Bill

Despite a lot of vocal support from the transportation and logistics sector, a federal infrastructure bill was put on the backburner. The news of President Trump’s impeachment investigation was announced at a similar time, and discussions between the government branches came to a halt. The bill is currently number 170 on the 116th Congress’ Congressional Calendar’s General Order session.

Transport Topics reported that “In the absence of a strong federal partner, in 2019 states seeking infrastructure funds took financing measures into their own hands.” States and metropolitans are creating a variety of revenue generating initiatives from tolls to fuel tax to congestion pricing to cover much needed repairs of their roads and bridges.

Drug and Alcohol Clearinghouse is Live

While we didn’t talk about this much, as it directly affects carriers more so than shippers or brokers, this is officially live to. The Clearinghouse is a database of drivers who fail or cheat on their drug tests. The database will go live on January 6th.

CDL Drug and Alcohol clearinghouse

AB 5 and S4204

California is being taken to court over their approval of Assembly Bill 5. While good natured in its conception, the bill has thrown many independent contractors livelihood into turmoil, particularly consultants, freelance writers and journalists, and truck owner-operators.

Following California’s lead, New Jersey also plans to tackle the same issue with their S4204, but they’ll have to prepare for a similar fight. Both CA and NJ have some of the most active ports in the country which contract with many independent drivers moving containers and freight out of the terminals. The effects this legislation will inflict on port operations is uncertain, leaving many businesses, associations, and drivers extremely frustrated. We’ll follow the developments as they occur on The Midnight Freight Broker Podcast.

Driver Shortage?

We haven’t touched on this in a while. 2018 was the year of the driver shortage scare, as we had more freight than we knew what do to with. The American Trucking Association claimed our industry was 50,000 drivers short, and that number will grow.

truck driver shortage

2019 corrected the market as tonnage was all over the place. Contract rates remained strong, and the spot market wasn’t as terrible as predicted. By the end of September, 795 trucking companies had shut down or declared bankruptcy. The ATA’s Bob Costello blamed a softening US manufacturing landscape; a result of the trade disputes. Roadmaster Group CEO John Wilbur says the shuttering of carrier companies is a cleansing process.

We’re not saying there’s not a driver shortage. What we are saying is the transportation industry needs to accept new technologies, charge accurate rates, and be serious with their business operations. Use smart tools and systems to better connect freight with trucks for a sustainable rate for all parties. We need qualified truck drivers, and both businesses and government regulations need to support them to the best of our ability.

As our Nate Cross said on TMFB: Carriers need brokers to find freight, brokers need carriers to move freight, and customers need both to ship their freight.

What This Means For 2020

What we know for sure is that 2020 needs to be a year of careful business evaluation and strategic planning. Hope is not a strategy. That’s why you want to partner with a company like LDI who has a finger on the pulse of the industry.

To learn more about opportunities with LDI, contact us today!

logistic and transportation news
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