Despite some relief from inflationary pressures in recent months, businesses throughout the logistics industry and beyond are being forced to make difficult decisions. As gas prices begin to creep up, shippers are growing anxious about what the coming months will bring. After a week of high-highs and low-lows within the global logistics industry, we've gathered the nine stories you need to know.
FreightWaves, the preeminent logistics industry publication, has announced its annual list of the top 100 tech companies in the logistics industry. According to FreightWaves, the FreightTech 100 2023 is "[...] a selection of the most innovative companies in the freight technology space." For the 5th consecutive year, the panel of industry experts at FreightTech 100 chose to add IntelligentAudit to their list. Intelligent Audit CEO Hannah Testani, in a LinkedIn post congratulating her company on its performance, wrote "I've never been more excited about the potential in our industry to truly empower shippers to ship smarter by leveraging clean, normalized, transformative actionable intelligence."
In an effort to prepare for a busy peak season, UPS is hoping to hire 100k seasonal hires in the coming months. Despite falling short of last year's holiday shipping traffic expectations, CEO Carol Tomé predicts a strong peak season in 2023, saying in a late July Earnings Conference Call, "Inventory levels are good. Retailers are brought in to sell. Where last year, they didn't. So that should help the peak demand." UPS is not alone in announcing lofty peak-season hiring ambitions; according to recent reporting from SupplyChainDive, "the U.S. Postal Service announced its own peak season hiring plans on Monday, with the agency looking for 28,000 seasonal employees."
In a welcome turn-of-events for the U.S. logistics industry, the freight railroads and three of the nation's largest transportation labor unions managed to reach a tentative agreement the the early hours of Thursday, September 15th. With the agreement, the U.S. freight rail industry–as well as the economy as a whole–narrowly avoids a large-scale strike, which some experts estimate could have cost the U.S. Economy $2.2. Billion per day. According to reporting from SupplyChainDive, "The deal includes a 24% wage increase over the five-year period from 2020 through 2024 with a 14.1% raise taking effect immediately [...]" Although a tentative deal has been reached, the agreement now must be ratified through a vote by the approximately 60,000 union members under its purview.
After a difficult first quarter, FedEx is embracing drastic cost-cutting measures. In a September 15th Update, CEO Raj Subramaniam addressed the root causes behind the steep drop in revenue: "Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S." In hopes of streamlining transportation operations, FedEx is "[...] cutting flights, trimming labor hours and canceling network capacity projects to cushion the expected blow of reduced demand for the next several quarters," per reporting from SupplyChainDive. While these cost-cutting measures may help FedEx in the short term, it remains to be seen how a newly minimized logistics process will fare in the upcoming peak season.
More than six months after Russia's invasion of Ukraine initially caused grain prices to skyrocket, another surge in wheat prices is inflating prices of consumer goods like flour and prepared flour mixes. This steep rise in prices isn't limited to flour, but has quickly spread to other consumer must-haves. According to Bloomberg, "Egg prices shot up almost 40% in August from a year ago — the biggest jump since 2007 — while fruits and vegetables increased 9.4%, and dairy and related products saw a 16.2% gain." While inflation and other worrying trends throughout the consumer goods sector have yet to cause major slowdowns in consumer spending, it remains to be seen what the effect of higher prices may mean for holiday shopping trends.
According to a September 7th News Release from Clive Data Services, air cargo volumes saw a slight drop in August, dipping 5% year-over-year. The year-over-year drop in air cargo volumes seen in August follows more precipitous drops of 8% and 9% in June and July. While the more modest YoY dip in August implies a return to normalcy within the air cargo market, Niall Van Wouw, Chief Airfrieght Office at Xeneta, parent company of Clive Data Services, warned shippers that global concerns leave the air cargo market on shaky ground: "[...] Ongoing disruptions due to a lack of people resources, the war in Ukraine, industrial action, natural disasters, reports of record inventory levels in the US, high inflation, and more Covid related lockdowns in cities in China – the ‘ factory of the world' for so many products – promise more air cargo market volatility over the rest of the year [...]"
As steep food prices and product shortages reshape consumer habits, schools are being forced to adapt innovative solutions in order to feed their students. In a recent SupplyChainDive analysis of findings by the School Nutrition Association, reporters found that some districts have begun leasing warehouse space to store bulk items, and recommending that school cafeteria's use recipes that share ingredients in order to save on rising costs. As concerns grow around the food supply chain's effect on children's nutritional health, the Federal Government is taking notice: according to SupplyChainDive, "Those concerns are to be on the table Wednesday as the House Education and Labor Committee marks up a child nutrition reauthorization bill."
In a welcome sign for carriers, a subseasonal trucking market is retaining its dexterity despite industry-wide anxieties around labor and capacity. According to recent reporting from FreightWaves, "The U.S. truckload market is still soft, with accepted contract shipments running approximately 5.5% lower than the year-ago period, and loose, as only 5.5% of contract truckload tenders are being rejected by carriers." However, as shipper's lower contract rates to remain competitive in a subseasonal market, the effects of a persistently soft and loose truckload market on the overland logistics industry as a whole remain to be seen.
Of the many industries affected by global supply chain disruptions, the wire and cable industry–vital to the functioning of a broad range of industries–has been among the most deeply affected. According to a recent report from LAPP Tannehill, a supplier and distributor of wire, cable, and connectors, despite persistent supply chain issue and global conflict, " [...] the wire and cable supply chain situation is somewhat improved, with lower average lead times than even a few months back, the average lead times are still very high versus historical averages, and the standard deviation in lead times is still incredibly high indicating we have a long way to go before even approaching "normalcy" in the market." Like many industries, the wire and cable industry anxiously awaits the news that coming months will bring.
Nobody knows what the future will bring. That's why shippers need an ally they can trust regardless of what the headlines say. For shippers looking for best-in-class freight auditing, anomaly detection, and industry expertise, Intelligent Audit can provide unprecedented certainty in uncertain times. Start a conversation with Intelligent Audit today, and see what supply chain certainty can do for your business.
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The holiday season is just around the corner and, yes, this means higher holiday peak surcharges.