Welcome to this month’s edition of LGI’s newsletter, where we delve into the dynamic world of freight movement, logistics, and transportation. The Henry Adams Curve illustrates the rapid technological changes and their impact on society. Adams predicted an era in which technology would change at such a rapid pace that predecessors from centuries before wouldn’t be able to comprehend, let alone understand it. Think of handing a caveman a smartphone.
Our industry is at a crossroads, shaped by emerging technologies, regulatory shifts, market trends, and a growing emphasis on sustainability. It’s no easy feat staying on top of all the changes and innovations in our industry. This month, we cover some of the most pressing topics impacting our industry today and shaping it for tomorrow. As we venture into the future of freight, LGI remains committed to leveraging a balance of people, processes, and experience and a robust technology stack to continue driving the industry forward.
The Silent Threat: Navigating Cargo Theft in Modern Logistics
Thieves in the U.S. got away with stealing nearly $130 million in cargo in 2023. Now eclipsing a 10-year high, cargo theft jumped 68% in Q4 of 2023, posing significant challenges for shippers and carriers. Surprisingly, food and beverage topped the list of thieves’ top targets. Scott Cornell of Travelers told FreightWaves that the numbers are trending higher for 2024 and that they are looking to surpass 2023, which surpassed 2022.
It’s indeed a problem for an industry still heavily reliant on paper. But thieves aren’t just preying on shippers and carriers that follow outdated processes. As the industry adopts advanced technologies, criminals are getting more sophisticated and sometimes leveraging technology to steal identities, run brokering scams, or commit fake pickups of full truckloads. We’ve seen firsthand how the integration between Highway and Front can stop a fraud attempt in its tracks. Expect to see more innovation in this space as this problem persists.
Heavy Hauls and Economic Tells: Decoding the Truck Tonnage Index
We’ve been riding this freight recession for a while now, and with each passing month, we get a glimmer of hope or a gut punch. Our glimmer of hope this month is in the shape of an increase in the For-Hire Truck Tonnage Index by the American Trucking Associations (ATA). The 4.3% increase in February marked the highest point in a year, but Bob Costello, ATA’s chief economist, warns, “The index still contracted from a year earlier, suggesting truck freight remains in a recession.”
A Truck Tonnage Index uptick typically signals shifts in the industry and the broader economy. However, we still see too much capacity and need more demand. In an odd turn of events, Ash M. at Trucker Tools reported “a positive net change in carrier authorities” last week, with 137 new carriers entering the market.
When Systems Falter: Lessons from the DAT Outage
DAT Freight & Analytics recently experienced several service disruptions over 10 days that it attributed to “external forces.” In an update to its customers, DAT apologized for the disruption, reiterated its dedication to rectifying the situation, and reported it “successfully safeguarded all customer information.”
According to FreightWaves, earlier this year, DAT added new leadership to bolster its commitment to increasing security and preventing fraud. The recent DAT outage underscores the vulnerability of our digital tools. They do so much to move our industry forward but are susceptible to various disruptions, from equipment failures, hackers, or simple mistakes.
Fueling the Future: Navigating the Diesel Dilemma
Diesel prices are on the rise again and look to continue rising as 10-year low inventory levels put pressure on them. Fuel costs vary depending on many factors but, on average, make up around 28% of the total average marginal cost for carriers, according to the American Transportation Research Institute (ATRI).
Futures are probably the most troubling, with FreightWaves reporting future prices shooting up over $33 per barrel after closing out March at $10 lower. Geopolitical concerns and the transition away from fossil fuels contribute to the uncertainty and volatility in the market and the increase in prices over the past few years. Demand for diesel is expected to increase slightly in 2024, which will continue to drive the price up due to the lower supply.
Locking in Success: Strategic Rate Management in Trucking
Shippers have been reaping the benefits of a down freight market just like carriers did in the previous market. Ronnie Davis, VP of Surface Transportation at C.H. Robinson North America, told Supply Chain Dive what’s different in this market is that we aren’t seeing capacity leave during this downcycle. As the market continues to show glimpses of recovery, is it time for shippers to lock in trucking rates?
It’s a tough call because nobody likes buyer’s remorse. You know when you pay for something and regret it because it either didn’t meet your expectations or because you found something cheaper and possibly cooler somewhere else? At some point, we will see a correction, and if shippers wait too long, they lose leverage at the negotiation table in a market favoring the carrier.
Redefining Work: The Debate Over Independent Contractors
The push to reclassify independent contractors could reshape the trucking landscape. Rep. Kevin Kiley of California is urging suspension of the rule as it jeopardizes “the ability of millions of Americans to work as independent contractors.” In addition to rescinding the 2021 Independent Contractor Rule, the new rule aims to help identify when to classify a worker as an employee or independent contractor. The rule assesses six factors in the employee/employer relationship, called an Economic Reality Test:
- Profit or loss opportunity.
- Investment in the work.
- Depth of work relationship.
- Control of work.
- Essentialness of duties.
- Skills and initiatives.
Champions of the new rule believe it aligns more with the Fair Labor Standards Act (FLSA) by ensuring workers don’t miss out on “minimum wage, overtime, and other protections.” The ATA disagrees, believing the new rule is “un-American” and strips drivers of independence to “run their own business and choose their own hours and routes.”
Solar Solutions: Powering Trucks with Clean Energy
With the freight market down and gas prices up, you’ve got the making of a good country song. Thankfully, the sun is still shining and providing carriers with a way to lower costs. As featured in FreightWaves, Brett Wilkie, VP of maintenance and safety at GP Transco, believes installing solar panels can reduce costs by up to $1,700 annually. As gas prices increase, so do these savings.
Thermo King’s Thermolite solar panels can extend the battery’s life and reduce maintenance costs, waste, and fuel consumption by sending power to the auxiliary power unit (APU). Solar energy can also power refrigeration units for temperature-controlled shipping without harmful emissions. Previously, solar energy was bulky and inefficient and couldn’t deliver a robust ROI. Solar today is flexible, thin, and even peel and stick. If solar energy continues to be more efficient and cost-effective, you could easily see solar energy becoming a staple in the trucking industry. In this video, Henry Albert of Team Run Smart shares how the two aftermarket panels on the hood and the cab of his Freightliner allow him to run his HVAC system “even on the hottest days” without the need to idle.
Navigating the Future of Freight with LGI
From the surge in cargo theft and the tempered good news on the Truck Tonnage Index to the resilience showcased during the DAT outage, we’ve seen the industry’s adaptability. The freight market continues to challenge, surprise, and overcome to deliver and keep our economy humming. In the ever-evolving logistics landscape, LGI remains your steadfast partner, offering unparalleled expertise and innovative solutions across LTL, TL, and specialized trucking services. Our dedication to advancing industry best practices, from enhancing cargo security to optimizing fuel efficiency, underscores our commitment to your success.
Dry Van Services: At LGI, our network of vetted carriers and technology stack provide outstanding dry van service backed by our “no-give-back guarantee.”
Oil and Gas: Our experience in oil and gas dates back several decades. We offer door-to-door custom transport for the unique needs of the oil and gas industry.
Heavy Haul: We take pride in handling the complex challenges of heavy haul. Our carriers are proud of their work, providing you with peace of mind that your shipment will arrive safely and on time.
Discover how LGI can transform your logistics challenges into opportunities. Explore our services and request a quote with us to pave the way for a more efficient, secure, and sustainable future in freight transportation.
