Government shutdown looms over supply chains

Welcome to the WHAT THE TRUCK?!? Newsletter presented by Uber for Business. In this issue, government shutdown alert; Flexport shakeups; used truck prices hit new lows; and more.

No ride, no app, no problem. With Uber Central on Uber for Business, you can help your drivers get where they need to go after dropping off the tractor. Schedule rides, control costs and access 24/7 support in an easy-to-use dashboard. Learn more here.

Bottoming out and buying in?

Only one way to go — Are FreightWaves data nerds finally getting bullish? While pricing power remains firmly with the carriers, Michael Rudolph reports, “Any outlook for spot rates should all but guarantee growth in the coming months. Not only is Q4 riddled with holidays and their corresponding capacity crunches, but the price of diesel is threatening to rise exponentially.”

Capacity bleeding out — For rates to go up, capacity has to go down while volume increases. The good news is that carriers are exiting the market at their fastest pace in over five years.

“$144,000 to $67,000. What a mess. If you are looking to purchase, now would be your time. Might have some pain for a while, but if market flips in 2024 you will be sitting pretty.” — FreightPlus analyst Tanner DeHart on X

As you can see in the chart above, if you got in this business with equipment during the pandemic run-up, you’re now deep underwater on your semi loans.

However, if you’re looking to enter the market now or if you need to increase your own capacity, this soft market is creating those buy-in opportunities. Just be mindful that even though spot is bound to go up, the fundamentals around peak season are still very weak.

However, some offices are already seeing a turn around.

Meanwhile, Port of Houston just announced that import volumes are down 20% year over year.

Sponsored Content

Are you a trucking company looking for a way to save time and money on driver transportation? Your search is over. With Uber for Business, you can request rides for your drivers, control transport costs, and streamline operations in one in easy-to-use dashboard. With Uber Central on Uber for Business, you can:

-Coordinate rides for drivers, review trips, and manage costs in one place
-Request rides for drivers in a few clicks. You can even coordinate multiple rides at once, each with their own pick-up and drop-off locations.
-You’ll get visibility into driver location throughout the trip, so you can keep things moving to avoid delays.
-Improve driver retention by providing a comfortable, private ride to and from shifts.

Your drivers get tractors where they need to be. Now you can offer your drivers finishing shifts or picking up a tractor a ride where they need to go. Learn more about how Uber for Business can help you save time, money, and stress at t.uber.com/whatthetruck.”

Government shutdown incoming?

Not this again — For the first time since December 2018, the federal government may be heading toward a shutdown. Reuters reports, “Congress must pass legislation that Democratic President Joe Biden can sign into law by midnight Saturday to avoid furloughs of hundreds of thousands of federal workers and halting a wide range of services, from economic data releases to nutrition benefits, for the fourth time in the last decade.”

“We’re heading into the busiest time of year for the supply chain when you need things to work. Yes, volumes are down, but we’re up against pretty firm deadlines with lots of new product introductions from a variety of companies and lots of shipping going on.” — Neel Jones Shah, executive vice president of air strategy and carrier development at Flexport

Supply chain impacts — Now the airline industry is warning that a government shutdown could snarl air travel and air cargo. More than 17,000 employees will get furloughed this Sunday should negotiations not progress.

While air traffic controllers and customs officials will remain on duty without pay, many others will not. Eric Kulisch reports, “Activities related to airport infrastructure investments, aviation rulemaking, facility security inspections and development of new navigation technologies will cease.”

The National Customs Brokers and Forwarders Association of America is concerned about cross-border shipments getting signed off and has sign a petition urging regulators to remain in contact.

CBP has also established a “war room” to review bottlenecking imports and exports.

It’s bound to be a huge mess and with government workers already being warned of potential furloughs, act as if this is coming. Monday on WHAT THE TRUCK?!?, we’ll break down how this impacts supply chains.

Flexport shake up continues

AI in, CFO out — Flexport’s Ryan Petersen has been rocking the boat ever since returning to his post as CEO replacing the ousted Dave Clark (Dave Clark recently moved his Flexport experience to education on LinkedIn.) On Wednesday, Petersen claimed that the company had been able to reduce operator tasks from 30 minutes all the way down to 20 seconds by using AI-based GPT-4.

There are few details on how exactly they’re achieving this but when asked if those savings would be passed on to shippers, the founder said, “We call this ‘scale economies shared’ — automation is one of many forms of scale we can leverage to provide lower costs to our customers which then drives still more scale economies in a never ending virtuous cycle.”

Getting costs in line has been Petersen’s main goal as he tries to prove the value of this tech-enabled forwarder that was worth billions at the top of the venture capital cycle.

Now they’ll be doing it with a new CFO. CNBC reports, “Flexport informed CFO Kenny Wagers last week that he was being let go, according to people familiar with the situation.” Seven-year Flexport veteran and current head of finance Stuart Leung is expected to assume the role of CFO.

Jennifer Boden, Flexport’s vice president of people tech and employee experience, is also leaving the company just weeks after assuming the role.

Earlier this month, Flexport rescinded 55 offers to potential candidates. Are more cuts on the way or is Petersen just cleaning the house of Dave Clark’s old generals?

FreightTech in, freight brokers out — Flexport, FundersClub, Streamlined Ventures and other undisclosed contributors announced on Wednesday that they’re investing $6.5 million in ZeroBroker, a startup that aims to eliminate brokers from truckload freight.

ZeroBroker founder and CEO Georgy Melkonyan told Grace Sharkey, “Let’s bring an all-in-one solution for shippers to run their entire operation in one place and cut the unnecessary fat and have them directly connect with truckers.”

“We don’t charge a dime on transactions and we share all information on loads between both parties. We are just a software platform that gives logistics managers direct access to truckers.” — ZeroBroker founder Georgy Melkonyan

So, isn’t ZeroBroker just replacing another broker? Not exactly. They make money through a flat monthly subscription fee for both parties instead of via a margin on each transaction.

Sponsored Content

Fuel your company’s success at Tank Truck Week 2023! Discover game-changing strategies, connect with industry leaders, and navigate the future of tank trucking. Help us in “Driving the Tank Truck Industry Forward” by registering today. Don’t miss out on the sector’s largest gathering!

“Tank Truck Week 2023 isn’t just an event; it’s a chance for us to unite, learn, and excel together.” – Herb Evans, Eagle Transport

Learn more & register today at: www.tanktruck.org/tanktruckweek

FedEx gets robots

Dexterity

Digitize the lumpers — On Tuesday at the Unlock the Dock event in San Francisco, robotics firm Dexterity announced that it has partnered with FedEx to have robots load FedEx Ground Trailers. Dexterity says its robots use a “generative wall planning” feature, which takes 500 milliseconds or less to assess billions of wall builds.

It isn’t clear just how many of these units will be deployed and if they’re replacing any actual human workers. Here you can see a video of the platform in action. It does appear to be fairly slow but since they can work nonstop, they may find some efficiency there.

Trucker Gly remains unconvinced though.

80s kids rejoice

Boo buckets are back! — In just a few short weeks, McBoo, McPunk’n, McWitch and McGoblin return to McDonald’s. The buckets, which debuted in 1986, were never really big enough to take along on a successful round of trick-or-treating, but they made excellent storage for your action figures, contraband candy and Warrant cassette tapes.

Get yours starting Oct. 17!

A presidential pallet

WTT Friday

Please Advise Summit II; how to wrap a semi; CSA score audits — On Friday’s episode of WHAT THE TRUCK?!?, I’m hosting Please Advise Summit II with a collection of some of the greatest minds in freight. They’re breaking down the hottest headlines of the week; airships in supply chain; if tracksuits help you book more loads; and more.

Ever see a beautiful semi rolling down the road and wonder how that incredible wrap got on it? We’re going to learn the art of wrapping a semi truck from Total Truck Branding’s Mario Lekovic and Stephanie Burueana.

What’s the methodology behind CSA scores and how do audits work? Fleetworthy Solutions’ Robert Proctor goes beyond compliance as he breaks down everything we need to know about CSA scores.

Plus, news, weirdness and much more.

Catch new shows live at noon ET Mondays, Wednesdays and Fridays on FreightWaves LinkedIn, Facebook or YouTube

Now on demand

Biden hits the picket line, AI in supply chain and Rail Safety Week recap