White House takes credit for freight recession?

Welcome to the WHAT THE TRUCK?!? Newsletter presented by Trauxit. In this issue, the White House takes credit for the state of supply chains; Operation Santa needs you; and more.

I did that?

Market deflation — President Joe Biden tweeted on Monday that his economic plan has brought shipping rates to a 25-year low. That same day the new White House Council on Supply Chain Resilience met and released this facts sheet.

As many of you readers are aware, we’ve been in an extended freight recession since the spring of ’22. But was it Biden who got us here?

SONAR

If you look at freight as the lifeblood of the economy, a massive drop-off certainly isn’t a great sign. What caused it and what relieved it, though, is not a mystery. During the pandemic, a massive surge of capacity went online to serve the spending spree Americans went on during a stimulus and revenge spending-fueled period of lockdowns.

Now in a period in which inflation is up 17.6% since the Biden admin began, that tidal wave of volume has receded back off the shoreline.

FreightWaves CEO and founder Craig Fuller recently wrote, “The impact has gone beyond U.S. trucking fleets and freight brokerages. The problems are not confined to the United States or just trucking. Ocean carriers, railroads, air cargo carriers and freight forwarders around the world have been impacted as well.”

Out to sea — Biden isn’t wrong, the massive backlog of container ships is a thing of the distant past (unless you’re looking at the Panama Canal) and Biden isn’t wrong that his measures may have helped play into the downturn. Escalating inflation, high interest rates and depressed venture capital markets in this space have all played a factor in the freight recession.

As you can see above, there’s also been a significant reduction in imported consumer goods. We can call the consumer resilient, but something has got to give when buy now, pay later options were up 72% for online purchases during Black Friday.

FreightWaves

Let me play the world’s tiniest violin for the steamship lines. After a couple of years of experiencing a windfall in rates, they’ve lost all of their pricing power — not just from the pandemic era, but also from that start of the quarter.

“If Q4 is not delivering some type of improvement, I think we’re looking at a pretty dire situation in 2024.” — Maersk CEO Vincent Clerc

FreightWaves’ Greg Miller reported, “The global composite of Drewry’s World Container Index (WCI) fell 6% in the week ending Thursday versus the prior week, to $1,384 per forty-foot equivalent unit. The global composite has given back all of its gains since the beginning of Q4 and is now down 1% versus Oct. 1.”

Green shoots? — FreightWaves’ Daniel Pickett tweeted, “We are far from declaring the hard times OVER…. BUT…. the week leading to Turkey Day (and the weekend after) are seeing Y/Y growth in total volumes. Total power units continue to decline.”

While many experts are predicting that 2024 will be another hard year in freight, there is some optimism that declines in capacity and an increase in volume can carry some forward momentum into the new year.

Unfortunately, the reality of this has been some huge bankruptcies in our industry, including the largest carrier failure in history with Yellow and the collapse of Convoy. Here’s a list of many of the fallen.

What do you think? Has the Biden admin helped or hurt the current state of the market? Email me.

Chart of the week

When capacity is this loose, not enough shippers care about being a Shipper of Choice or respecting drivers’ time.

Where do letters to Santa really go?

Justin Martin

Just about 2,900 miles south of the North Pole — How does Santa’s letter supply chain work? Turns out that the U.S. Postal Service has a Dead Letter Office known as Operation Santa to help deal with that. It’s not in the North Pole though, it’s in Utah!

This year, the 111-year-old operation is looking for volunteers. FreightWaves’ Clarissa Hawes reported, “The program allows volunteers to give back by ‘adopting’ deserving children and families in the United States, Puerto Rico and the U.S. Virgin Islands online.”

The deadline for adopting letters is Dec. 18. You can choose which ones you’d like right here.

The ‘Home Alone’ mystery

WTT Wednesday

Did Bidenomics fix supply chains, higher education and slaying your demons — On Wednesday’s episode of WHAT THE TRUCK?!? Dooner is joined by FreightWaves’ Rachel Premack to talk about the role Biden played in the current freight market.

The National Motor Freight Traffic Association has recently appointed Lesley Veldstra Killingsworth as its first-ever female chairwoman of the board of directors. We’ll find out how she achieved the honor and what lessons she has for other female leaders and leaders to be in logistics.

Stride Motivation’s Nick Klingensmith talks about self-sabotage and mental health issues in brokerage sales. He’ll share his stories about his four-time battle with cancer, becoming a bestselling author and advice for reps feeling down during the holidays.

FreightWaves’ Justin Martin divulges the secrets behind Operation Santa and discusses Amazon’s rise to dominance in freight, protecting Christmas trees from cats and more.

Plus, the latest news and trends.

Catch new shows live at noon EST Mondays, Wednesdays and Fridays on FreightWaves LinkedIn, Facebook, X or YouTube or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player.

Now on demand

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