Welcome to the WHAT THE TRUCK?!? Newsletter presented by Dunavant. In this issue, market recovery looks grim; yard dawgs; Flexport’s Shopify buy; and more.
Will freight recover in the second half?
SONAR
Unlikely — Those of you waiting for the ball to bounce back up on the rebound after falling off a cliff may be out of luck. FreightWaves’ Henry Byers reports, “The latest ocean container bookings data from SONAR in the chart above reveals that U.S. containerized import volumes in 2023 (white line) have been trending alongside 2019 levels, which was the last freight recession.”
“Card spending per Household fell sharply by 1.5% month-over-month (m/m) in March on a seasonally-adjusted (SA) basis. We forecast a below-consensus 1.0% m/m decline in the Census Bureau’s retail sales ex autos figure for March.” — Bank of America
At the beginning of the year there was hope that holiday sales would sufficiently burn through shippers’ excess inventory, but the latest Logistics Managers’ Index has shown otherwise. Even worse, the consumer is weak and in debt with savings below pre-pandemic levels. As buy now, pay later options rise to prominence on e-commerce sites, consumers are taking on debt at concerning levels.
Hopium — Vespucci Maritime CEO Lars Jensen is seeing mild increases in trans-Pacific spot rates but cautions that a weak summer peak season could lead to a market floor we haven’t encountered yet.
Inland — How about trucking? Welp, instead of seeing improvement we’re seeing shippers take full advantage of the soft market. Not only are the big dogs like Home Depot fielding RFPs early, but as Tanner DeHart tweeted, “Shippers are getting smart, they’re expanding lead time so they can go ahead and lock in a truck and then continue to bid it out to look for savings.”
The humble yard dawg/yard goat/yard truck/shunt truck/terminal tractor
What’s in name — Little did we know that asking people what they call a terminal tractor would be so divisive. Turns out, what you call a yard dog is just as regional as soda/pop/Coke. In our informal poll, “yard dawg” reigned supreme with over 69% of the votes.
A brief history — According to legend, yard dawgs first started to appear in the 1950s in the post-WWII trade boom. But a decade earlier a company named Ottawa Steel Products formed in Kansas to create small shunt trucks for the construction industry. A fire in 1950 and a devastating flood a year later that destroyed its factory resulted in a massive change in direction for the company.
That’s when a new concept was developed: a tractor that could pull heavy loads. In 1958, the first terminal tractor prototype hit the market. For the record, it was called a “yard hustler.” You can watch a great documentary on it here.
Flexport’s Shopify buy
“I have some big news to share today. Flexport is acquiring the assets of Shopify Logistics, including Deliverr.” — Flexport CEO Dave Clark
Buy it now — With the e-commerce market on track to surpass $8 trillion by 2026, Amazon alum and current Flexport CEO Dave Clark has made a big move aimed at transitioning his digital freight brokerage into a prime-time player in final mile. Flexport has traded 13% equity in the company and a board seat for Shopify’s logistics arm and Deliverr. FreightWaves’ Eric Kulisch reports, “It positions Flexport to compete with Amazon on home delivery with a more holistic port-to-porch logistics system designed for small and medium-size merchants.”
“A key part of the success of Shopify Logistics to-date has been our mission-aligned and deeply knowledgeable partner, Flexport.” — Tobi Lütke, founder and CEO of Shopify.
A horrible deal — Shatranj Capital Partners’ Brittain Ladd sees this move as correcting the sins of Shopify’s past. He says, “The brutal truth is this: Tobias Lütke and Harley Finkelstein made a terrible decision to acquire 6 River Systems and Deliverr in the first place.” According to Ladd, those decisions cost the company nearly $2 billion and are proof Shopify needs new leadership.
“Fed hikes rates 25 bps, Shopify sheds its only asset based business (for the second time), and whacks 20% of workforce all within hours.” — WARP’s Frazer Kinsley
Fallout — Not only did Shopify cut 20% of its workforce but 6 River Systems also got caught up in the dealmaking. The warehouse robotics company was offloaded to Ocado Group for an undisclosed amount. According to sources at The Robot Report, “The whole [6 River Systems] robotics team was axed and sold to Ocado.”
WTT Friday
Scheduling Standards Consortium grows to 10 strong — On Friday’s episode of WHAT THE TRUCK?!?, I’m talking to the triumvirate of Convoy’s Dan Lewis, Uber Freight’s Bill Driegert and J.B. Hunt’s Spencer Frazier about their collaborative mission to develop an open API standard for scheduling. The Scheduling Standards Consortium now consists of 10 major players in FreightTech working together to begin standardizing trade data and synthesizing scheduling technology.
Covenant’s Matt McLelland is back from the ACT Expo and shares the good, the bad and the CARB from the event. We’ll also find what a fleet the size of Covenant’s is looking for in terms of sustainability.
Software provider LogRock on Tuesday launched a recruiting feature as the company continues to grow its carrier compliance offerings. Hunter Yaw spills the tea.
Supply chain veteran Paul MacLellan helps me complain about Boston sports and talks about the importance of experience in managing teams.
Plus, news, weirdness and more.
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Don’t be a stranger,
Dooner
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