This recap is from Day 3 of FreightWaves’ F3 Virtual Experience.
FREIGHTONOMICS TOPIC: The market view from both Wall Street and the market where the freight gets booked
DETAILS: How long will the current hot freight market go on, and what legacy is it leaving? Zach Strickland and Anthony Smith of FreightWaves’ weekly Freightonomics video chat bring in Amit Mehrotra and Brent Hutto to review that question.
SPEAKERS: Amit Mehrotra, Deutsche Bank; Brent Hutto, Truckstop.com
BIO: Brent Hutto joined Truckstop.com eight years ago and currently serves as chief relationship officer, which includes ensuring the health of all of Truckstop.com’s external relationships with hundreds of transportation technology companies. In his 23 years in the transportation and logistics industry, he has developed experience covering the market including positions of leadership in sales, marketing, media and communications. Hutto has specific experience with carriers, brokers, shippers, industry suppliers, technology leaders, media companies and financial firms.
Amit Mehrotra is a managing director of Deutsche Bank and leads coverage of transportation and shipping markets at Deutsche Bank. His coverage includes trucking, logistics, brokers, airfreight, rails and all maritime shipping verticals. He has consistently been recognized by the world’s largest institutional investors via the Institutional Investor survey, most recently in 2021 being recognized as one of the top two U.S. analysts in shipping and among the top five in airfreight and surface transportation. He was also recognized by Thomson Reuters in 2018 as the No. 1 Stock Picker in the air freight and logistics sector.
KEY QUOTES FROM MEHROTRA:
“The underlying industrial economy is improving. We’ve been consistent about the powerful levers that are fueling freight demand and we don’t see that ending at all.”
“Our best guess is that in the next 12 to 18 months, you would start to see more capacity entering the system, whether that be chassis or containers, and really potentially more drivers entering the market, as we think labor participation rates will increase over the next 12 months. It might be a little easier to get drivers, albeit from a very very low level.”
“The supply chain may get a little bit better in terms of fluidity over the next three, four to five months as you get a seasonal lull in demand. But it will take years for supply chains to truly figure out what to do to not have these pandemic-driven issues again.”
“Eighty percent of the Walmart supply chain is in China. You’re not going to see that in another five years.”
KEY QUOTES FROM HUTTON:
“What has been the most unique is what we see on the shipper end. It used to be they just pushed down hard on their suppliers, whether it be a carrier or a broker. But now they are very, very interested in technology for their company because they want to control their destinations and their outcomes.”
“It’s really driven by the fact that in the last three years alone, we have had capacity crunches. And that is just uncommon. It drives people to think that maybe there’s a new normal.”
“Our advice is, buy the technology that fits you. Do not overbuy. The hardest part is getting it built into your system and then educating your own users on using it.”
“You find they overbuy for what they need and then they can’t implement it fast enough to have an effect on their business.”