Interesting trends
/
…. Beginning last year, that need started to recede when consumers’ spending spree started to ebb, and, as a result, several different things have happened in the industry, beginning with too many trucks in comparison to the amount of freight that is available.
That, McQuaide said, hits the truckers and truck companies hard: “The economy is slowing from its frenzy, people aren’t buying anymore, which means there are more trucks on the road than there are loads, and it’s forcing the rates down.”
McQuaide said his company’s rates are about 20% lower than last year.
“In other words, last year, we go from Pittsburgh to Allentown, maybe $1,200. This year, we’re lucky to get $900,” he said, adding, “You have more truckers fighting for the same loads that exist now, and that’s driving the rates down.”
…. McQuaide, who also owns and runs a logistics company that has a series of warehouses holding imports and exports, says the freight recession is real.
“It isn’t just in the trucking world. It is also in air freight and in the rail industries.”
He said he worries not enough people are considering the wider implications of people not spending and truckers not having anything to move.
“This slump is real,” he said flatly.
McQuaide said the trucking industry, or any form of transportation that is moving goods, is the ultimate economic indicator of where the country is heading.
“It provides very valuable insights into the health of where the economy is going and into the mindset of the consumer: Are they spending, or are they feeling uncertain and moving within,” he asked rhetorically.
September data from the government contradicted McQuaide’s concerns, showing a surge in consumer spending — 0.4% to be exact. But economists, like McQuaide, were cautious in reaction.
The Associated Press reported that many households have been spending their money unwisely, tapping into shrinking savings accounts and pulling out the credit cards.
Data also show that when people are spending, they are rethinking forking out money on the big things, such as dishwashers, shiny new stainless stoves and refrigerators, which backs up what McQuaide is seeing on the freight side.
“That is what we are seeing on the freight side, and that is not a good omen for the U.S. economy. That spending had kept us out of a recession,” he said. “Now that consumers are pulling back, we should be paying more attention to what that means.”
FedEx Express is encouraging pilots at its cargo airline to take jobs at a regional passenger carrier because there isn’t enough shipping demand to fill everyone’s flying schedules. It’s the latest step over the past 12 months to align FedEx’s air network with a sharp decline in package volumes and improve efficiency as the parcel sector settles to a lower post-pandemic baseline that could last years.
Maersk to cut 10,000 jobs as cargo boom ends
Shipping and logistics giant A.P. Moller-Maersk said it would cut more than 10,000 jobs, as a pandemic-fueled cargo boom has ended, leaving the industry with a surplus of ships and sharply lower freight rates.
Maersk, a bellwether for global trade, saw its third-quarter profit plummet to $521 million from $8.88 billion last year. Its main Ocean division posted a quarterly loss for the first time in many years.
