Loaded and Rolling: Freight media’s evolving landscape on display at F3

Freight execs less optimistic at investor conference; Cass October data highlights muted peak season start

Thomas Wasson

10 months ago

Freight media’s evolving landscape on display at F3

The changing freight media landscape was on full display at the F3: Future of Freight Festival last week in Chattanooga Tennessee, as influencers, salespeople, presenters and executives intermingled during and after the events. One topic discussed is the changing way media is being consumed and how traditional legacy media outlets are responding to tech-savvy upstarts. While at the event, I noted that for drivers who consume media, Facebook groups and YouTube videos remained the mainstay for consuming information but TikTok was gaining ground among the cadre of younger drivers.

The changes in how media is being consumed is evident in the rise of TikTok, a video app by Bytedance, a Chinese technology company. A Pew Research Center survey released Wednesday found that “Among adults, those ages 18 to 29 are most likely to say they regularly get news on TikTok. About a third of Americans in this age group (32%) say they regularly get news there, a higher share than in years before. This compares with 15% of those ages 30 to 49, 7% of those 50 to 64 and just 3% of those 65 and older.” For U.S. adults under 30, TikTok’s rise appears meteoric. In 2020, only 9% of adults under 30 used it for news, according to the data.

Barriers to entry was another topic, with one YouTuber telling me he uses his cellphone to record, edit and distribute his content to his channel, which regularly sees between 30 million and 50 million views a month. These viewing numbers have allowed him to expand his business from being a driver to a full-time content creator who interviews drivers and uploads the edited interviews while selling a line of driver-branded lifestyle apparel.

Freight execs less optimistic at investor conference

Trucking and 3PL executives, once optimistic for green shoots following a brutal ongoing freight recession, are pumping the brakes, according to comments from the Stephens 25th Annual Investment Conference in Nashville, Tennessee, on Tuesday. Freight broker Landstar System noted it doesn’t expect a peak season this year per its fourth-quarter guidance. Jim Gattoni, Landstar president and CEO, said, “There’s no excitement out there — whether it’s the parcel carriers, the shippers — or anybody who thinks this thing is going [to] turn anytime soon.”

Landstar has thousands of smaller fleets as part of its business capacity owner (BCO) program. FreightWaves’ Todd Maiden wrote, “[Gattoni] doesn’t see spot rates stepping materially higher until next year and said that it usually takes better demand versus capacity attrition to move the market. Turnover among Landstar’s business capacity owners, a proxy for truck capacity, is 39% this year, which is in line with the 36% rate recorded during the 2019 downturn.”

Werner Enterprises described a “fairly muted” peak season as improving volumes collided with weaker pricing, causing lower year-over-year (y/y) revenue. Multimodal provider J.B. Hunt was more upbeat due to gains in its intermodal segment, which saw a larger market share, but management hoped for improving margins in the quarters ahead.

Market update: Cass October data highlights muted peak season start

(Source: Cass Information Systems, Inc., ACT Research Co.)

On Tuesday freight audit and payment provider Cass Information Systems released its October Freight Index data, showing the for-hire freight market remaining at the bottom of a cycle that began 22 months ago. The shipments index fell 6.3% from September and was down 9.5% y/y in October, reversing more than two months of gains. The shipments data includes automotive data, and the report suggests that the United Auto Workers strike may have had an impact.

While for-hire volumes remain at cycle lows, the muted start of the 2023 peak season could be impacted by more private fleet insourcing, creating fewer loads available to for-hire carriers. Cass’ expenditures index data saw a similar decline, with total freight spend falling 2.2% month over month and down 23% y/y.

The report is more optimistic for peak season ending better than expected. “We continue to expect modest y/y growth in consumer spending this holiday season, driven by the acceleration in real disposable incomes and the ongoing strong labor market. The recent easing in oil prices improves our confidence that peak season will end on a higher note.”

The growth of private fleets may moderate moving into 2024. The report said for private carriers, “general economic conditions remain better than those in the for-hire freight market. Although private fleet capacity expansion continues to pull freight from the for-hire market, we think equipment purchasing patterns are changing, which should propel the cycle forward in 2024, even if the broad economy slows.”

FreightWaves SONAR spotlight: DOE/EIA price trends downward amid supply and demand battle

Summary: On Monday the Department of Energy/Energy Information Administration released its latest average price of diesel, which declined 7.2 cents in the past week to settle at $4.294 a gallon. This is the lowest price recorded since Aug. 7, which was $4.239 a gallon. Monday’s report has declined in seven of the past eight weeks and is down almost 34 cents a gallon from two months ago. FreightWaves’ John Kingston said an ongoing debate rages between oil investors on whether supply side cuts will matter if demand falls worldwide and how that will play out.

Kingston wrote: “The trend pointing downward on the supply side sees increasing crude flows out of several countries from the OPEC+ group, a rise in barrels that is not supposed to occur given the group’s agreement from April to limit production. It also is based on more oil from several other non-OPEC nations, such as the U.S. — which is up roughly 1 million barrels a day from the end of July — as well as Guyana and Brazil.”

One challenge will be if diesel will see higher prices for the winter due to competition with home heating oils. An EIA forecast released on Oct. 26 is projecting higher heating oil demand, with those locations primarily being in the Northeast. The EIA expects the Northeast will consume 40 more gallons of heating oil per household this winter than last due to lower temperatures. The good news is that only 4% of U.S. households heat primarily with heating oil, but the downside will be those households spending 8% more on average this winter, to $1,851. The interchangeability for household heating means if heating oil stockpiles dip below replacement levels, diesel fuel can step in to fill the gap as a temporary solution.