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Electric truck startup Nikola Corp. is doubling the size of its stock-for-credit line with a private lender to $600 million, enough credit to ramp up production through 2022, the company said Monday.

Nikola (NASDAQ: NKLA) will sell up to $300 million shares to Tumim Stone Capital at a 3% discount and make an up front payment of  252,040 shares worth $3,011,878 at Monday’s closing price of $11.95. The 75 basis points up front and the discount are the same as the terms of the first $300 million equity line of credit (ELOC) Nikola and Tumim announced on June 11.

Compared to the cost of a larger follow-on stock offering, Nikola got a good deal – less than 4% compared to 23% –including  3% in broker fees and a 20% share price discount.

“We understand that we’re building our credibility brick by brick and we recognize that is going to take some time. We still have some uncertainty around the SEC and we’re in the process of trying to resolve that.”

Nikola Chief Financial Officer Kim Brady

“If you were to do a follow-on offering right now, the discount is too high and you have to commit to a certain quantum of capital,” Nikola Chief Financial Officer Kim Brady told FreightWaves. “If you think about our ELOC, it gives us flexibility because we get to time when we issue additional shares.”

The other disadvantage to a public offer would be the dilution impacting current investors.

Terms remain the same

Like the first ELOC, of which Nikola has tapped for $47 million through share sales, Tumim agreed it would not short the stock,which means borrowing shares in a bet the shares decline in value. In exchange, Nikola agreed to avoid seeking a line of credit from a financial institution. Nikola did not rule out a follow-on offering if conditions were right.

“We are always looking at what is the best source of capital at any given time,” Brady said.

With the first phase of a greenfield assembly plant nearing completion in Coolidge, Arizona, Nikola is moving forward with pre-production battery-electric Class 8 daycab trucks and early builds of hydrogen fuel cell models. Both are based on the S-Way from its European joint venture partner, which recently completed renovations to a Nikola plant in Ulm, Germany.

“The equity lines with Tumim, together with estimated cash and cash equivalents, will provide Nikola with access to approximately $800 million of liquidity at the end of 2021,” Nikola CEO Mark Russell said in a press release. “We believe this will provide ample liquidity for Nikola to fund our stated operational milestones through the end of 2022.”

Regaining credibility ‘brick by brick’

Brady said Nikola still has a lot to prove following a scandal that started with a short seller’s report that alleged founder and former Executive Chairman Trevor Milton lied about the company’s technological accomplishments to juice the stock price. Milton, who resigned a year ago, faces three federal criminal fraud charges and charges from the Securities and Exchange Commission.

Milton was indicted July 29 and is free on $100 million bond.

“We understand that we’re building our credibility brick by brick and we recognize that is going to take some time,” Brady said. “We still have some uncertainty around the SEC and we’re in the process of trying to resolve that. We suspect that ultimately there will have to be some kind of settlement, which is very difficult.”

Clear of criminal charges

But Brady said Nikola has been told it is unlikely to face any criminal charges from the U.S. District Court for the Southern District of New York, which brought the charges against Milton..

Getting any SEC settlement behind it is important “so there’s not an artificial ceiling on our stock price,” Brady said.

Milton, who has sold millions of shares of Nikola stock since his indictment, remains the company’s largest shareholder with about 15% of outstanding shares. Russell owns about 12% of the company stock.

Tumim is not expected to hold Nikola stock over the long term. “They will not short the stock. It does not mean they won’t sell the stock,” Brady said.

But Tumim Managing Partner Maier Tarlow said Tumim looks forward to continuing to be a long-term partner with Nikola.

Nikola goes private to raise up top $300M in new money

The case against Nikola’s Trevor Milton: ‘Lied about nearly every aspect’

 Nikola moves on from Trevor Milton to tackle supply chain challenges

Click for more FreightWaves articles by Alan Adler

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10 Reasons to Drive with C.A.T. Transport

Wondering why you should drive for C.A.T. Transport? We highlight ten reasons why this carrier should be on your list. C.A.T. Transport offers flexible work options, pet friendly programs, and is one of the Best Managed Carriers in Canada. Learn more at www.cat.ca  or call 1-800-363-5313

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

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An Illinois man was sentenced to 18 months in federal prison for defrauding the family-owned trucking company where he worked of nearly $625,000.

Once released from prison, Timothy P. Mayer, 42, of Waterloo, Illinois, will serve three years of supervised release. He has been ordered to pay nearly $625,000 in restitution to Jung Truck Services. The company is part of The Jung Cos., which provides intermodal, warehousing and logistics services, headquartered in Mascoutah, Illinois.

In May, Mayer pleaded guilty to one count of mail fraud in the U.S. District Court for the Southern District of Illinois.

Federal prosecutors say Mayer, who worked as the manager of Jung Truck Service’s East St. Louis, Illinois, location, charged hundreds of thousands of dollars in expensive truck tires at the company’s local supplier, Pomp’s Tire Services, then sold the tires to an associate and pocketed the cash. 

Pomp’s Tire Services submitted the invoices for the tires, which Jung Truck Service paid.

Court filings state Mayer’s scheme lasted nearly a year — from July 2019 until he was caught in May 2020.

According to the Federal Motor Carrier Safety Administration, Jung has 21 power units and 18 drivers.

Chief U.S. District Court Judge Nancy Rosenstengel stated that Mayer has been instructed to surrender to the U.S. Marshals Service on or after Oct. 11.

Oilfield supervisor admits lining pockets with $400,000 of Petco’s money
Missouri trucking company worker gets 6 years for money laundering, fraud
Ex-trucking employee sentenced in wire fraud case

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Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexico reports 5,000-plus cargo thefts in first half of 2021; automotive supplier relocates to Texas, bringing 315 jobs; Mexico City-based last-mile logistics provider raises $7 million; and international customs broker expands near US-Mexico border. 

Mexico reports 5,000-plus cargo thefts in first half of 2021

Commercial trucks remain at significant risk for robbery or hijacking across Mexico’s highways every month, according to data from Mexico’s Secretariat of Security and Citizen Protection (SSPC).

From January through July, the SSPC recorded more than 5,260 cargo trucks that were robbed nationwide.

Mexico’s top 12 states recording the most cargo thefts through the first seven months of 2021 are:

  • Mexico state 2,024
  • Guanajuato 489
  • Michoacán 454
  • Veracruz  492
  • Puebla 396
  • Jalisco 345
  • Hidalgo 238
  • San Luis Potosí 200
  • Querétaro 198
  • Morelos 189
  • Tlaxcala 142
  • Nuevo León 93

Mexico’s central region had the highest number of cargo theft cases overall at 55%, followed by the western part of Mexico at 29%.

The most often stolen items are food and beverage, clothing and footwear, auto parts, steel, tires, and wine and liquor, according to Mexico’s National Public Security System, an agency that monitors crime.

Security strategies that carriers should think about include satellite tracking devices and highway monitoring devices on roads in high-crime areas, as well as employing convoys to transport goods, according to Verónica Torres, executive director of the Mexican Association of Private Security Companies.

“The technology is available; review your processes so that you have the technology that is generating the security you need,” Torres said during the Ensuring Safe Freight Transportation seminar at the DHL Transportation Forum 2021 on Sept. 11. 

Automotive supplier relocates to Texas, bringing 315 jobs 

Vehicle Accessories Inc. announced it is leasing a 310,000-square-foot facility in Mesquite, Texas.

The automotive products company will move in next year, relocating its 315 manufacturing jobs from New York and Canada to Texas. 

Vehicle Accessories produces vehicle door edge guards, splash guards, moldings, bumper protectors, door sills and floor mats.

The company’s customers include Toyota, Lexus, Ford, Subaru, Nissan, Infiniti, Honda and General Motors.

Mexico City-based last-mile logistics provider raises $7 million

Cargamos, a last-mile logistics platform, announced a $7 million raise in follow-on funding, bringing its total seed round to $11 million. 

The Mexico City-based company said it will use the funds to build a large fulfilment facility in Mexico City, according to TechCrunch.

Cargamos works with several of Mexico’s largest retailers. When the company builds its fulfillment facility in Mexico City, it will be able to expand its service to smaller and medium-size businesses, officials said.

International customs broker expands near US-Mexico border

AMFCO Logistics, an international customs broker, announced it will expand its operations in Brownsville, Texas.

The company said it will construct a 30,000-square-foot warehouse and distribution facility at the North Brownsville Industrial Park. AMFCO could invest about $1 million and employ up to eight people at the facility, according to the Greater Brownsville Incentives Corp. (GBIC).

“[AMFCO] is currently operating at two different locations; their relocation to the North Brownsville Industrial Park will allow the company to gain efficiencies through the consolidation and possible expansion of their operations at this strategic location, located in close proximity to the Port of Brownsville,” Helen Ramirez, CEO and executive director of GBIC, said in a statement.

The Port of Brownsville is a deepwater seaport located along the U.S.-Mexico border and a major trade channel between the two countries.

“We believe this project will be instrumental in our growth as a company,” Luis Rodriguez, owner of MMLC Holdings, said in a statement. MMLC Holdings is the parent company of AMFCO Logistics.

Click for more FreightWaves articles by Noi Mahoney.

More articles by Noi Mahoney

EEOC sues 2 trucking companies, alleging disability discrimination

Worldwide Flight Services acquires Texas-based cargo handler

Feds order border warehouse to pay $235K in back wages

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Professionals of the Highway Tour Stops at Townline Parking and Carrier Windsor

The Professionals of the Highway Tour headed out to the Western side of Ontario stopping at Carrier Truck Centers in Windsor Ontario and Townline Parking. Joel Bezaire of Townline Parking and a salesman with International talk about why he started a parking lot for truckers and the causes they help in the meantime. You can learn more about Townline Parking at www.townlineparking.ca  and Carrier Truck Centers at www.carriercenters.ca

This episode is sponsored by C.A.T. Transport offering flexible work options, pet friendly programs, and is one of the Best Managed Carriers in Canada. Learn more at www.cat.ca  or call 1-800-363-5313

About the Show

LISTEN TO THE PODCAST- The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. www.theleadpedalpodcast.com

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

 

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Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexico reports 5,000-plus cargo thefts in first half of 2021; automotive supplier relocates to Texas, bringing 315 jobs; Mexico City-based last-mile logistics provider raises $7 million; and international customs broker expands near US-Mexico border. 

Mexico reports 5,000-plus cargo thefts in first half of 2021

Commercial trucks remain at significant risk for robbery or hijacking across Mexico’s highways every month, according to data from Mexico’s Secretariat of Security and Citizen Protection (SSPC).

From January through July, the SSPC recorded more than 5,260 cargo trucks that were robbed nationwide.

Mexico’s top 12 states recording the most cargo thefts through the first seven months of 2021 are:

  • Mexico state 2,024
  • Guanajuato 489
  • Michoacán 454
  • Veracruz  492
  • Puebla 396
  • Jalisco 345
  • Hidalgo 238
  • San Luis Potosí 200
  • Querétaro 198
  • Morelos 189
  • Tlaxcala 142
  • Nuevo León 93

Mexico’s central region had the highest number of cargo theft cases overall at 55%, followed by the western part of Mexico at 29%.

The most often stolen items are food and beverage, clothing and footwear, auto parts, steel, tires, and wine and liquor, according to Mexico’s National Public Security System, an agency that monitors crime.

Security strategies that carriers should think about include satellite tracking devices and highway monitoring devices on roads in high-crime areas, as well as employing convoys to transport goods, according to Verónica Torres, executive director of the Mexican Association of Private Security Companies.

“The technology is available; review your processes so that you have the technology that is generating the security you need,” Torres said during the Ensuring Safe Freight Transportation seminar at the DHL Transportation Forum 2021 on Sept. 11. 

Automotive supplier relocates to Texas, bringing 315 jobs 

Vehicle Accessories Inc. announced it is leasing a 310,000-square-foot facility in Mesquite, Texas.

The automotive products company will move in next year, relocating its 315 manufacturing jobs from New York and Canada to Texas. 

Vehicle Accessories produces vehicle door edge guards, splash guards, moldings, bumper protectors, door sills and floor mats.

The company’s customers include Toyota, Lexus, Ford, Subaru, Nissan, Infiniti, Honda and General Motors.

Mexico City-based last-mile logistics provider raises $7 million

Cargamos, a last-mile logistics platform, announced a $7 million raise in follow-on funding, bringing its total seed round to $11 million. 

The Mexico City-based company said it will use the funds to build a large fulfilment facility in Mexico City, according to TechCrunch.

Cargamos works with several of Mexico’s largest retailers. When the company builds its fulfillment facility in Mexico City, it will be able to expand its service to smaller and medium-size businesses, officials said.

International customs broker expands near US-Mexico border

AMFCO Logistics, an international customs broker, announced it will expand its operations in Brownsville, Texas.

The company said it will construct a 30,000-square-foot warehouse and distribution facility at the North Brownsville Industrial Park. AMFCO could invest about $1 million and employ up to eight people at the facility, according to the Greater Brownsville Incentives Corp. (GBIC).

“[AMFCO] is currently operating at two different locations; their relocation to the North Brownsville Industrial Park will allow the company to gain efficiencies through the consolidation and possible expansion of their operations at this strategic location, located in close proximity to the Port of Brownsville,” Helen Ramirez, CEO and executive director of GBIC, said in a statement.

The Port of Brownsville is a deepwater seaport located along the U.S.-Mexico border and a major trade channel between the two countries.

“We believe this project will be instrumental in our growth as a company,” Luis Rodriguez, owner of MMLC Holdings, said in a statement. MMLC Holdings is the parent company of AMFCO Logistics.

Click for more FreightWaves articles by Noi Mahoney.

More articles by Noi Mahoney

EEOC sues 2 trucking companies, alleging disability discrimination

Worldwide Flight Services acquires Texas-based cargo handler

Feds order border warehouse to pay $235K in back wages

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In the Class with Ontario Truck Driving School

Find out what it’s like to be in the class environment as a student with Ontario Truck Driving School. Ontario Truck Driving School has a number of courses to help you be successful when starting a career in transportation from heavy equipment to over the road trucking. You can learn more about starting your career at www.otds.com

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com 

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com   , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com 

 

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This commentary was written by Glenn Koepke, senior vice president of customer success for FourKites. The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

 By Glenn Koepke

The summer of 2021 will be remembered for shattered records. Not to be outdone by pole vaulters in Tokyo or new variants of an unending pandemic, our climate is going above and beyond in asserting its dominance over human life — and the global economy. 

Hurricane Ida’s devastation from New Orleans to New York and the Caldor fire’s carnage in California have made July’s Pacific typhoons and German floods seem like ancient history. All the while, a question nags at us: “What on earth is coming next?”

It’s become increasingly clear these past months that extreme weather is on the rise — and in order to survive, businesses have no choice but to adapt. For the shipping industry, this means accepting extreme weather events as the status quo and integrating them into strategic planning from end to end.

While most companies will develop new strategic plans and review their supplier networks every three to five years, the reality of our current environment means that, regardless of when plans were last made, companies should be having these conversations today — and they should be having them often. 

To ride out all these supply chain disruptions while preserving customers and profits, shippers should consider four major factors: inventory positions, risk tolerance for specific commodities, transit times and associated costs.

Taking stock

In recent years, many companies have edged out the competition by engaging data science and automation to better anticipate customer demand, thereby reducing the amount of inventory sitting idle in a warehouse. This delicate balance of supply and demand depends on precise transit time estimates so customers aren’t left waiting past their expected delivery date.

Unfortunately, a single storm can throw these estimates to the wind. We know that even a minor disruption at one end of the supply chain can result in extreme delays at the other end, in a phenomenon known as the Bullwhip Effect. 

When you tie in the freight capacity market, think of a giant Slinky that is pulled in different ways. As capacity shifts from one area to another, rates, availability and dependability all vary. When you tie in larger events, these are more impactful to the capacity market.

In the wake of Hurricane Ida, the number of loads delivered in Louisiana declined by 28% in the week of Aug. 30. After Typhoon In-Fa thrashed coastal China, the Port of Shanghai’s container intake dropped by 52%, and those containers took twice as long to reach unloading. 

And the last mile is no better off. 

During the Caldor fire in California, officials evacuated cities and shut down 50 miles of highway traffic for a month, resulting in gas and grocery shortages in the Tahoe basin. Note that these statistics were collected during those specific periods of disruption; but given this is an asset-driven capacity model with constrained capacity, it takes time to recover once an event has occurred, and the impacts are felt well beyond the event’s initial geographic scope.

In the face of this new reality, companies must consider the inventory tradeoff, i.e., the value of holding more safety stock in anticipation of weather-related delays. For example, a customer who sees that Company A’s product will arrive too late may choose a similar product from Company B, just for the quicker delivery window – even if Company B’s product is more expensive or lower quality. Next time, Company A might be willing to lose the inventory battle — keeping more items in stock, ready to ship, at a higher cost — in order to win the war for customers.

Considering commodities

While it’s impossible to predict exactly when and where the next Ida will hit, we do know there are seasons for everything. Hurricanes form in the Atlantic between July and November — just as we know that wildfires sweep the West every summer and snowstorms bury the Midwest every winter. We also know that these regions are known for certain products and commodities — oil and gas in the Gulf of Mexico, for example.

Knowing that these events are likely to occur with greater strength and frequency, companies should weigh their sourcing options for the commodities specific to those regions during the above seasons. Companies might be able to source critical products from more stable regions at different points of the year. Some lower-value products might not be worth sourcing at all during some of these extreme events. While complicated and potentially costly, this kind of product-specific evaluation is essential to strategic planning in today’s environment.   

Weighing cost vs. time

We know that extreme weather events can slow down or cut off the supply chain, from production to distribution to the “last mile” of delivery. Hurricane Ida slowed shipments for a thousand miles, with on-time shipments declining 14% in Louisiana and 10% in New Jersey, and dwell time increasing 14% in Delaware. 

With this knowledge, forward-looking companies would be wise to calculate their tolerance for longer transit times if it means getting their products to their final destination safely and predictably.

While longer routes and lead times sometimes equal higher costs, they may be the answer to protecting profits. After all, that same customer who chose faster shipping could very well return to reliable Company A if the shipment from Company B was delayed in transit by an airplane-grounding blizzard, a traffic-stopping wildfire or other factors that could have been avoided by climate-centric planning.

Companies should be reevaluating their networks, as well as their locations of sourcing, manufacturing and shipping, all with climate events in mind. Alternate seaports might be considered for import or export — for example, avoiding Shanghai during typhoon season or favoring Long Beach over Houston when hurricanes are in the forecast. 

Whatever the business decisions, companies should reach them by weighing the cost impacts of shifting sources and routes against the predicted savings realized by customer satisfaction and retention.

Looking forward

As the sun sets on a record-breaking summer, the holiday season looms — accompanied this year by shipping delays, capacity shortages and sky-high freight costs. Throw in a few extreme weather events, and we’re looking at a season for the record books. 

Companies that hope to ride out the storm are already ramping up their holiday production. But companies that want to thrive must go far beyond that, taking a hard look at their inventories, sources and routes not only for this year, but for a predictably unpredictable future. 


About the author

Glenn Koepke has a proven track record of aligning solutions to customer supply chain strategies and objectives for global organizations. Prior to joining FourKites, Koepka served in a variety of roles within the logistics services industry and worked extensively in EMEA and North America. At FourKites, he leads the Network Enablement strategy, which is focused on scaling its industry-leading visibility solution to capture end-to-end supply chain visibility. 

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A photograph of railcars parked in a rail yard.

Rail equipment manufacturers, suppliers and industry observers will talk about the number of railcars in storage being up or down. But why is that figure important?

Knowing how many railcars are in storage is significant because that figure helps observers understand network capacity in relation to the broader economy. Industry participants also look at the number of railcars in storage by railcar type to gauge expectations for where railcar lease rates are heading and the volume of orders that manufacturers will receive for newly built railcars.

A number of organizations, such as the advocacy group Railway Supply Institute and the data firm Commtrex, keep track of how many railcars are in storage, including what type of railcar as different railcars can haul different commodities. The kinds of railcars that may be stored can range from pool fleets and auto racks to coal cars and tank cars. 

One reason why there are so many railcars in storage is that railcars are very specific to the type of freight being moved. There are often shortages of some railcar types and surpluses of other railcar types at the same time.

For instance, if more grain needs to be shipped domestically and for export, then more hopper cars will be needed to move that grain. If there is less grain to be shipped, then railcar owners may store some of those hopper cars temporarily.

Sometimes a commodity will see volumes facing a systemic decline and that will be reflected in the type of railcars in storage. Sand used in the natural gas fracking process was transported in small cube covered hoppers. But when companies began using local sand instead of shipping sand via rail, that lessened the number of small cube covered hoppers on the rail network — and increased the number of those railcars in storage.

Also, when natural gas began to displace coal as the primary feedstock to generate electricity, coal volumes fell, sending coal cars into storage. 

“As demand goes down, some of those cars go into storage and that drives the number of cars in storage,” said Lee Verhey, director of regulatory and industry affairs for the Railway Supply Institute. 

The broader economy can influence how many railcars are in storage. When the COVID-19 pandemic first hit in the spring of 2020, manufacturing rates and in-store consumer activity took a nosedive amid social distancing measures. As a result, U.S. rail volumes sank in April and May 2020. Because there was less rail traffic, more railcars went into storage. 

“The market really drives the availability of cars,” Verhey said. “As demand [to haul certain commodities] goes down, some of those cars go into storage and that drives the number of cars in storage.”

The number of railcars in storage was as high as more than 525,000 cars in July and August 2020, a manager with railcar manufacturer Greenbrier (NYSE: GBX) said recently. That number has been steadily declining over the last 14 months to below 400,000, which is more in line with normal levels. 

“As the economy starts to gain momentum and we start to see manufacturing starting to increase and supply starting to be more available, then you have greater demand for cars,” Verhey said.

A portion of the railcars in storage are older and less efficient than newer railcars because they have lower payload-to-weight ratios. Therefore, some of the railcars in storage may never come back into service. 

Railcar leasing companies own roughly 70% of the U.S. fleet, while freight railroads own about 30%. A customer, such as a chemical company, will need railcars to move product, and that customer will get quotes from the railcar lessors for rates. The leases may be short term or long term.

Meanwhile, the railroads tend to own boxcars or railcars to haul grain or agricultural products. The company TTX is a joint venture owned by the railroads that serves as a railcar pool. But the railroads don’t own tank cars, which have their own special regulations for handling. 

Lastly, a handful of companies will own their railcars, such as Exxon Mobil, Shell and ConocoPhillips. The decision to own railcars depends on the company’s financial strategy, according to Verhey. Some may lease cars because they don’t want to invest in the cars, but some might find it financially advantageous to own their railcars if they serve a niche market.

FreightWaves market expert Mike Baudendistel contributed to this report.

Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.

Click here for more FreightWaves articles by Joanna Marsh.

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For the first time since Todd Amen’s ATBS firm has been tracking fleet and average independent owner operator salaries, pay levels have cracked an annual rate of more than $70,000.

That was the bottom-line number that came out of ATBS’ semi-annual webinar in which Amen reviews data on how drivers are doing. The numbers he draws from are from a huge base of financial information compiled through his company’s activities offering tax and other financial services to owner operators and fleets.

“We’re in the best trucking environment I have ever seen in my history of trucking in 30-plus years,” said Amen, the company’s president and CEO, on a webinar earlier this month.

Amen uses data from truckstop.com to help drive home his points. Prior to the strong freight market of 2018, Amen said data from truckstop.com suggested that there were 12 loads available for every one truck looking for it. “We felt we were at a break-even market,” Amen said.

But after 2018, ATBS re-calculated that number where supply and demand are in balance. He concluded that number is when there are 32 loads for each truck.

In August 2021, that number went up to 142, Amen said. “For the last year or more, it was in the 125 to 140 loads level,” he said. Amen thought in the past that it would be impossible for that ratio to ever get to 150.

Once the market “levels off, which will happen at some point,” a new breakeven level is likely to be somewhere between 50 and 75, Amen said.

Amen’s data, drawn from 135 fleets, confirms the anecdotal reports that drivers are making so much money on a per mile basis that they are willing to drive less, or, as economists would say, exchange wages for leisure. Compared to the first six months of last year, part of which includes the pandemic-burdened months of April and May and one of the worst freight markets ever, ATBS said drivers are running 1.5% fewer miles.

“Every fleet we talk to says, I can’t get the drivers out of the house,” Amen said. “They can make a ton, but they run less.”

For drivers, their increase in revenue per miles is 4.5% overall compared to last year. The overall rate is up 7 cents per mile to $1.55/mile. Within that, reefer is only up 2 cents, to $1.40, while dry van is up 5 cents to $1.45. All independent drivers are up 11 cents, to $1.75 while flatbed drivers rose 15 cents to $1.94.

The increase in net income to more than $70,000 is an average figure across all categories of drivers. Specifically, the average number came in at $70,310, a gain of $6,530 for the 12 months.

Broken down, independent drivers were up $6,035 to $70,294; dry van was up $5,721 to $70,017; reefer drivers climbed $6,483 to $64,013; and flatbed drivers jumped $11,817 to $80,529. 

Amen added that the top 10% of the drivers served by ATBS are making more than $225,000 per year. 

How much better are independent owner operators doing than fleet drivers? One chart by Amen among the several in his presentation showed that the advantage for an owner operator is now beyond $1 per mile. 

Source: ATBS

Partly as a result of this, fleets are having difficulty growing, Amen said. “Everybody we’ve talked to in the last month wants to add capacity but people are having a really hard time,” Amen said. With data showing that anywhere from 50,000 drivers (FTR) to approximately 60,000 drivers (Amen) have been granted new authority so far in 2021, it makes it difficult to grow an existing fleet, Amen said. Out of 200 fleets he has surveyed, Amen said he knows of only two that have managed to grow.

Amen said technology developments have made it easier than ever for a driver to run under their own authority. “Barriers to entry are less than ever with the technology available,” he said. “I can do all my tax reporting, I can factor my bills, I can get my authority online, I can buy my insurance online. It’s easier than it’s ever been.”

But these good times have other consequences that aren’t favorable for independent contractors. Specifically, used truck prices have doubled in the past year, according to Amen. “The average driver today is paying $2,500 per month for a truck and that is not going to change any time soon,” Amen said. 

And a squeeze on mechanics means that the costs of maintenance are soaring too, Amen said, by up to more than 10% in the last year. 

Amen’s recommendation had been that a new truck had maintenance costs of about 3 cents per mile, but that is now up to almost 5 cents, he said. For a truck that is more than 5 years old—and Amen noted that the high cost of a used truck is keeping older trucks on the road longer—the maintenance costs are now about 11.7 cents per mile. 

But the good times don’t last forever. Amen posed the theoretical question: when will the owner operators move back to the fleets?

“When I can make $50,000 more running the spot market, I will do that until it goes away,” he said. The problem is that when the good times end and a driver decides to go back to joining the ranks of fleet drivers, those fleets have run into the same downturn. “That’s when the fleet doesn’t need you,” Amen said. 

With a difference near $1 per mile, “we haven’t seen that turn at all,” Amen said. But there’s hope for fleets, he added. “Our drivers need to understand that to make good money over the long term, maybe the fleet is the place to be,” Amen said. 

More articles by John Kingston

Drilling Deep: the good times roll for independent owner operators

Drilling Deep: What truck drivers are going to report to the IRS this year

Amazon-focused AB 701 in California gets governor’s signature

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Chart of the Week: Outbound Loaded Rail Container Volume Index, Outbound Tender Volume Index – USA  SONAR: ORAILL.USA, OTVI.USA

The National Outbound Tender Volume Index shows a 4% year-over-year growth rate compared to the Outbound Loaded Rail Container Volume Index’s (ORAILL) 12% decline. With demand for surface transportation remaining consistent, this is a not so subtle indication that shippers are choosing trucks over trains when rail container volume is supposed to be on the rise. 

Traditionally speaking, intermodal container shipping on the rail hits its stride late in the third/early fourth quarter, while this year is showing the opposite trend. According to American Association of Railroad data, intermodal container volumes are about 5-10% higher in mid-September than in mid April. This year, volumes are about 8.5% lower. 

Adding to that statistic, container volumes are the lowest they have been since 2017 for the week following the Labor Day holiday period. “Rail volumes have not suffered because of a lack of demand,” Mike Baudendistal, FreightWaves’ rail and intermodal expert said on this week’s Freightonomics episode. Port and intermodal terminal congestion combined with a lack of drayage capacity were some of the main contributors driving service deterioration on the rail lines this past summer. But wait, isn’t truckload capacity also challenged?

The answer to that question is a definitive yes. Spot rates are up approximately 20% year-over-year according to Truckstop.com’s top 100 dry van lanes. National tender rejection rates (the percent of shippers’ load requests rejected by carriers electronically) have been above 20% for over a year. The average rejection rate in 2019, a year when capacity was readily available, was around 6%.

Shippers are having similar difficulties with trucking capacity, but there are far less potential points of failure when booking a load on a truck versus moving it on the rail. Many shippers are already operating from behind and cannot afford to chance additional delays to rebuilding depleted inventories prior to the peak retail season that is just around the corner. 

Shippers have resorted to moving freight in shorter increments, either because capacity is easier to source or because they are trying to make room for all the freight that is coming into the country by moving it into staging facilities close to their ports of entry. Perhaps the best example of this can be observed coming off the West Coast, where the gross majority of imports enter the country. 

The Los Angeles market’s local (<100 miles) and short-haul (101-250 miles) tender volume indices have averaged 39% and 15% higher since the first of August versus last year, while long-haul (>800 miles) tender volumes have averaged 26% lower. This trend started in April, about the same time as loaded container rail volumes began their descent. 

Shippers have to be creative in the climate of extended limited capacity. It is easier to place an order than to move the goods. If they can’t ship them across the country, they at least need to get them out of the way. The path of least resistance has been to move it shorter distances, as is evidenced by the huge discrepancy in local and long-haul tender rejection rates this summer.   

Long-haul rejection rates have been trending slightly lower over the past few months out of Los Angeles. This is potentially a slightly positive sign for shippers as time is running out to get their orders in place for the holiday peak season, which in a way may already have arrived for transportation providers. 

 

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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Chart of the Week: Outbound Loaded Rail Container Volume Index, Outbound Tender Volume Index – USA  SONAR: ORAILL.USA, OTVI.USA

The National Outbound Tender Volume Index shows a 4% year-over-year growth rate compared to the Outbound Loaded Rail Container Volume Index’s (ORAILL) 12% decline. With demand for surface transportation remaining consistent, this is a not so subtle indication that shippers are choosing trucks over trains when rail container volume is supposed to be on the rise. 

Traditionally speaking, intermodal container shipping on the rail hits its stride late in the third/early fourth quarter, while this year is showing the opposite trend. According to American Association of Railroad data, intermodal container volumes are about 5-10% higher in mid-September than in mid April. This year, volumes are about 8.5% lower. 

Adding to that statistic, container volumes are the lowest they have been since 2017 for the week following the Labor Day holiday period. “Rail volumes have not suffered because of a lack of demand,” Mike Baudendistal, FreightWaves’ rail and intermodal expert said on this week’s Freightonomics episode. Port and intermodal terminal congestion combined with a lack of drayage capacity were some of the main contributors driving service deterioration on the rail lines this past summer. But wait, isn’t truckload capacity also challenged?

The answer to that question is a definitive yes. Spot rates are up approximately 20% year-over-year according to Truckstop.com’s top 100 dry van lanes. National tender rejection rates (the percent of shippers’ load requests rejected by carriers electronically) have been above 20% for over a year. The average rejection rate in 2019, a year when capacity was readily available, was around 6%.

Shippers are having similar difficulties with trucking capacity, but there are far less potential points of failure when booking a load on a truck versus moving it on the rail. Many shippers are already operating from behind and cannot afford to chance additional delays to rebuilding depleted inventories prior to the peak retail season that is just around the corner. 

Shippers have resorted to moving freight in shorter increments, either because capacity is easier to source or because they are trying to make room for all the freight that is coming into the country by moving it into staging facilities close to their ports of entry. Perhaps the best example of this can be observed coming off the West Coast, where the gross majority of imports enter the country. 

The Los Angeles market’s local (<100 miles) and short-haul (101-250 miles) tender volume indices have averaged 39% and 15% higher since the first of August versus last year, while long-haul (>800 miles) tender volumes have averaged 26% lower. This trend started in April, about the same time as loaded container rail volumes began their descent. 

Shippers have to be creative in the climate of extended limited capacity. It is easier to place an order than to move the goods. If they can’t ship them across the country, they at least need to get them out of the way. The path of least resistance has been to move it shorter distances, as is evidenced by the huge discrepancy in local and long-haul tender rejection rates this summer.   

Long-haul rejection rates have been trending slightly lower over the past few months out of Los Angeles. This is potentially a slightly positive sign for shippers as time is running out to get their orders in place for the holiday peak season, which in a way may already have arrived for transportation providers. 

 

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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Cognitive Testing with DriverCheck

We talk with Chris Wilkinson of DriverCheck about cognitive testing and how it can help make the workplace safer. Learn why this is a great way to help your employees stay productive longer. DriverCheck is a leader in drug and alcohol, cognitive, and workplace testing helping employers have a safe workplace for their staff. Learn how DriverCheck can help you be safe at www.drivercheck.ca

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com 

 

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Trucking lender and factoring company Instapay, alongside its parent company Flexible Funding, filed for Chapter 11 bankruptcy protection, according to court records filed with the U.S. Bankruptcy Court of North Texas in Fort Worth.

San Francisco-headquartered Flexible provides asset-based lending within the staffing industry, while Instapay focuses on the transportation industry. Flexible’s lending product enables clients to fund and grow their businesses using the accounts receivable that they receive from their customers, Flexible’s attorneys said in a filing last Monday. 

Instapay is a factoring company to help suppliers improve cash flow. It acquires and becomes the owner of the accounts receivable from its clients. Funds from these purchased accounts provide liquidity to Instapay’s clients, which use Instapay to cover operations costs and get trucks back home after deliveries.

According to a February 2020 FreightWaves article, many truckload (TL) carriers depend on factoring to bridge cash flow gaps when working with shippers that have longer payment cycles. Those that lack sufficient working capital and don’t qualify for credit lines turn to factoring as a means of funding their expenses. 

The industry providing this type of service is entering a period of consolidation, according to a June 2021 FreightWaves Small Fleet Summit fireside chat.

Flexible and Instapay have between 600 and 700 clients combined, with approximately 400 as currently active. Their portfolio consists of about $110 million in loans and factored receivables, according to the filing. 

In a joint petition on Monday, Flexible and Instapay asked the courts to authorize them with the ability to use cash collateral to fund borrower accounts, pay present operating expenses, including payroll, and to pay vendors to ensure continued operations. Granting this request will ensure that Flexible and Instapay have the resources to commence Chapter 11 protection. 

“The Debtors request immediate authority to use the Cash Collateral to fund the Debtors’ day-to-day operations. Absent such relief, the Debtors will not be able to continue to operate their businesses. In sum, failure to obtain authorization for the use of the Cash Collateral will be disastrous to the Debtors and their creditors,” attorneys representing Flexible said. 

On Tuesday, Judge Edward L. Morris granted that request, allowing a cash collateral of as much as $15 million. 

“Good cause has been shown for the entry of this Order. The Court finds that the notice of the Motion and the Hearing on the Motion to the U.S. Trustee and Lenders was sufficient under the circumstances. Entry of this Order is justified and appropriate under the circumstances. Entry of this Order is in the best interest of the Debtors’ estates,” said Tuesday’s court order.

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Owner Operator Success with Jaswinder Sandhu of Bison Transport

Jaswinder Sandhu is an award winning owner operator with Bison Transport and we talk about what make him successful on the podcast today. Bison Transport has many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

Rss

Owner Operator Success with Jaswinder Sandhu of Bison Transport

Jaswinder Sandhu is an award winning owner operator with Bison Transport and we talk about what make him successful on the podcast today. Bison Transport has many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

Rss

Owner Operator Success with Jaswinder Sandhu of Bison Transport

Jaswinder Sandhu is an award winning owner operator with Bison Transport and we talk about what make him successful on the podcast today. Bison Transport has many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

Rss

Owner Operator Success with Jaswinder Sandhu of Bison Transport

Jaswinder Sandhu is an award winning owner operator with Bison Transport and we talk about what make him successful on the podcast today. Bison Transport has many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

Reddit

Same gig, new rig

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This week’s DHL Supply Chain Pricing Power Index: 75 (Carriers)

Last week’s DHL Supply Chain Pricing Power Index: 75 (Carriers) 

Three-month DHL Supply Chain Pricing Power Index Outlook: 75 (Carriers)

The DHL Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers. 

The Pricing Power Index is based on the following indicators:

Load volumes maintaining strength against difficult comps

The Outbound Tender Volume Index (OTVI), after setting fresh highs last week, took a breather over the past week. OTVI, a measure of shippers’ requests for capacity, fell by nearly 2% over the past week. After erasing holiday noise last week, volume levels continue to maintain their strength against difficult comps.

Outbound volume levels remain at historically high levels.
SONAR: OTVI.USA: 2021 (blue), 2020 (purple) and 2019 (green)
To learn more about FreightWaves SONAR, click here.

The back half of September is traditionally a stronger period for freight. Volume levels hold strong as shippers have greater need to move freight before the third quarter comes to a close. This year is no different in the fact that volume levels on average were above August levels for much of the month, with the exception of the pullback due to Labor Day. Pulling out the holiday-affected week, on average freight volumes have been over 1% higher than August levels, with no sign of slowing down.

Absolute tender volumes are still running up by nearly 2% year-over-year (y/y) which is remarkable considering that comps have become increasingly difficult during September. As stimulus measures expire, freight demand still seems to be on solid footing thanks to the strength of the consumer. That is going to be beneficial for freight volumes as we enter the traditional peak season, which is forecast to be one of the strongest in recent memory. 

OTVI, which includes both accepted and rejected tenders, hasn’t wavered and with rejection rates pulling back during September, accepted freight volumes continue to outperform. Accepted tender volumes, which account for the rejection rate, are running up 8.5% y/y. Though that has narrowed over the past couple of months, the story is still the same: More freight continues to flow through networks that are already bursting at the seams.

Tender levels are higher in the majority of the country 
SONAR: OTVIW (color) and OTMS (height)
To learn more about FreightWaves SONAR,
click here.

Across the country, 80 of the 135 markets tracked by FreightWaves SONAR were lower over the past week. Most of the markets that experienced an increase in volumes are among the smallest freight markets, with volumes in Rapid City, South Dakota, and Wilmington, North Carolina, increasing by 34.43% and 32.3% week-over-week (w/w), respectively.

The largest six markets in the country, which represent more than 20% of total tender volumes, all had a relatively soft week. Volumes in Atlanta, the second-largest market in the country behind Ontario (home of California’s Inland Empire), had the softest week of the six markets as total tender volumes fell 5.4% w/w.

By mode: Reefer volumes have restarted the upward trend established in August over the past couple of days. Over the past week, reefer volumes have increased by nearly 1%, outpacing the overall volume index. Reefer volumes are underperforming compared to a year ago as economies have reopened and restaurant spending has returned. As the Thanksgiving holiday approaches, the movement of frozen turkeys from large poultry-producing areas, like Arkansas, will see an uptick in reefer requests for capacity. Look for reefer volumes to continue to climb higher in the coming months.

Dry van volume levels have started to improve the past couple of days but are still running down over the past week. VOTVI, the dry van segment of OTVI, is down 1.58% w/w but was down nearly 3% earlier in the week. Dry van volumes in Ontario were really the pulldown in the market this week as reefer volumes exploded, increasing by over 15%.

Long-haul volumes gaining strength compared to other lengths of haul
SONAR: Volumes: long-haul (blue), tweener (green), mid-haul (purple), short-haul (orange) and local (yellow)
To learn more about FreightWaves SONAR,
click here.

Across the mileage band, long-haul (800-plus miles) volumes have had the best month by far, growing by over 7%. The long-haul volume growth comes as intermodal volumes have suffered due to a number of factors, including chassis shortages and container availability. Intermodal and long-haul truckload volumes typically track relatively close to each other due to the value add of intermodal showing up against long-haul trucking. With the congestion on the rails, shippers have been faced with the decision to shift more volume that would have been intermodal shipments in the past to the highway as the value proposition for intermodal has broken down.

Short-haul (100-250 miles) volumes, which were the leader of the pack for much of August, have pulled back over the past month. Short-haul volumes are down over 2% over the past month while capacity has loosened in the shorter lengths of haul.

Tender rejections relatively stable as third quarter comes to a close

The Outbound Tender Reject Index (OTRI), a measure of relative capacity in the market, started to turn back up during the past week, eclipsing 22% once again. OTRI has followed a similar trend to a year ago, albeit at a slightly lower level. Rejection rates have been above the 20% mark for more than a year, which has led to the tightness in the market becoming normal.

Outbound tender rejections are relatively stable, following a similar trend as 2020. 
SONAR: OTRI.USA: 2021 {blue} and 2020 {pink}

To learn more about FreightWaves SONAR, click here.

OTRI has been roughly range-bound between 21% and 25% throughout the entire year. Anytime rejection rates have been trending toward the 20% level, there has been resistance that has sent rejection rates higher. As the third quarter comes to a close, shippers are still burdened with trying to secure capacity for contracted rates (which have increased nearly 25% in the past year).

The increase in contract rates over the past year has helped drive better carrier compliance, however carriers are still maintaining pricing power in the market thanks to the unwavering demand. Rejection rates have been running down on a year-over-year basis since the beginning of August, though the gap has recently widened to the widest point of the year, down nearly 400 basis points y/y. 

Traditionally, the last week of a quarter leads to a period of tightening as volumes ramp up. Over the past week, rejection rates have increased by 23 bps, ahead of the final week of the quarter. Shippers have to be able to secure capacity to move inventory to necessary locations.

What we have yet to see is rejection rates being impacted by carriers heading into the West Coast markets, Ontario and Los Angeles, for higher-paying freight. Typically when the freight market heats up on the West Coast, carriers essentially camp out on the West Coast, starving other markets of truckload capacity. This leads to rejection rates falling in Southern California markets but rising in a vast majority of the country.

Relative capacity tightening in 74 of 135 markets within SONAR
SONAR: OTRIW (color) and OTMS (height)
To learn more about FreightWaves SONAR, click here.

Relative capacity across the country was pretty balanced over the past week in terms of the number of markets that tightened and those that loosened. Seventy-four of the 135 markets in SONAR experienced tightening of relative capacity led by the two tiny North Dakota markets, Bismarck and Fargo, as rejection rates increased by 1,671 bps and 1,589 bps w/w, respectively.

Relative capacity in Dallas loosened more than the other large freight markets over the past week. Rejection rates in Dallas fell by 227 bps w/w to 19.89%. The pullback in rejection rates over the past week has turned them negative compared to the past year, sitting just 71 bps below year-ago levels.

In the other large freight markets, like Ontario, the capacity situation was relatively unchanged over the past week. The rejection rate in the Southern California market has been sub-20% since early July, which is around the same time rejection rates turned negative on a yearly basis. As it stands right now, rejection rates are over 1,000 bps lower than a year ago, but expect some tightening during the last quarter of the year as carriers make final pushes out of the Los Angeles/Ontario area.

SONAR: VOTRI.USA (blue); ROTRI.USA (orange); FOTRI.USA (green)
To learn more about FreightWaves SONAR,click here.

By mode: Reefer rejection rates continue to climb higher as demand for reefer capacity has started to pick up. After spending the early portion of the year with rejection rates around 50%, the recent drawdown in rejections was likely a welcome sight for shippers needing reefer capacity. Even with the drawdown, reefer capacity has been extremely difficult to secure, especially when compared to the other two equipment types within SONAR. Relative reefer capacity is looser than it was a year ago as rejection rates are down over 400 bps y/y, but reefer demand has slipped as well so securing capacity is still extremely difficult in the current market. 

Securing reefer capacity in the Ontario market, which experienced an explosion in demand during the past week, became increasingly difficult as well. Over the past week, reefer rejections in the largest reefer market in the country increased by 572 bps w/w, with the overall rejection rate sitting over 35%.

Dry van rejection rates haven’t moved much the past week, increasing by just 5 bps w/w. Dry van rejection rates — the largest equipment type in the dataset — have erased the entire climb experienced in August, now down 50 bps month-over-month. As demand is expected to stay at the elevated levels, relative capacity is likely to tighten further into the traditional peak season. Any rapid loosening of relative capacity in the coming months is likely driven by the demand side, as opposed to capacity being added fast enough to keep up with demand. 

Flatbed rejections did pull back over the past week like in the dry van market. Flatbed capacity, the smallest of the equipment types in the SONAR platform, is still tighter than the dry van market, though October is typically a softer month for flatbed before it picks up in November and December.

Freight rates: Erase last week’s hiccup; positive momentum for carriers resumes

The spot rate data available in SONAR from Truckstop.com is updated at a 10-day lag. It has rebounded from the slight hiccup in last week’s data.

Truckload rates continue to climb higher both in the contract and spot market
SONAR: TSTOPVRPM.USA (blue, right axis); VCRPM1.USA (purple, left axis)
To learn more about FreightWaves SONAR,click here.

Truckstop.com’s national spot rate, which includes fuel surcharge and other accessorials, climbed by 28 cents per mile to $3.49. The increase erased nearly all of the hiccup in last week’s data when rates fell by 39 cents per mile. The snapback in rates wasn’t a surprise given that the daily volume and rejection rates hadn’t made any significant moves to the downside.

Given the tightness in the market and the strength in freight demand, rates will likely go higher in the coming months. Right now, the Truckstop.com national spot rate is just 11 cents off the all-time high and will likely challenge that level in the coming weeks as carriers become more selective about accepting freight.

The bounce back in spot rates has brought rates back to 18% above year-ago levels, comps with which have been getting increasingly difficult during the back half of 2021. The increase in spot rates this week is thanks to the vast majority of the 102 lanes within SONAR — 87 to be exact — moving higher w/w.

Moving freight out of both Chicago and Elizabeth, New Jersey, became drastically more expensive over the past week. These increases in price are no surprise given that relative capacity in each of the markets last week tightened pretty significantly. Conversely, moving freight out of Atlanta did become cheaper as rejection rates have been below the 20% mark over the past two weeks (the first time since mid-February that rejection rates were under 20%).

Contract rates have continued to climb higher due to the upward trend in spot rates, but also the tightness in the market as well as the freight demand. Contract rates have increased by nearly 25% over the past year and are currently sitting at the highest level in the dataset, which dates back to January 2017.

The rise in contract rates is likely going to weigh on shippers for some time. Those seeking rate relief in 2022 will probably be in for a rough time. In the previous upcycle in 2017-2018, contract rates increased by nearly 20% before plateauing when the market turned during the last couple of months in 2018. In 2019, contract rates were relatively stable even when rejection rates fell to historically low levels. Ultimately, time will tell what happens to contracted rates when market conditions aren’t as fragile, though that is likely a good ways in the future.

For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at khill@freightwaves.com or Andrew Cox at acox@freightwaves.com.

Check out the newest episodes of our podcast, Great Quarter, Guys, here.

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Old blue out working

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U.S. Customs and Border Protection officials said a South Texas port of entry could reopen as soon as Saturday, after being forced to close because of a migrant surge that disrupted operations.

The Port of Del Rio has been closed since Sept. 17 after migrants had converged on the temporary camp site under the Del Río-Ciudad Acuña International Bridge.

CBP has been diverting both commercial and passenger traffic from Del Rio to the Eagle Pass port of entry, about 57 miles east.

“[Homeland Security Secretary Alejandro Mayorkas] just stated that there are no more migrants under the bridge. It basically means good news for us, which is the reality that the Del Rio bridge will be reopening soon,” Armando Taboada, assistant director of field operations at CBP’s Laredo Field Office, said during a Friday meeting with the trade community.

About 2:30 p.m. Friday, Mayorkas announced that all the migrants had been either removed, deported or placed in immigration processing.

“Today, we have no migrants remaining in the camp under the International Bridge,” Mayorkas said. “Migrants continue to be expelled and under the CDC’s Title 42 authority. Title 42 is a public health authority and not an immigration policy, and it is important to note that Title 42 is applicable, and has been applicable, to all irregular migration.”

The migrants — many of them Haitian — were attempting to gain entry into the U.S. by crossing the border under the bridge that connects Del Rio with Ciudad Acuna in Mexico.

The Port of Del Rio is the 97th-ranked port of entry among the nation’s 450 international gateways, according to WorldCity. However, Del Rio is a major export center of small electric home appliances and parts to Mexico.

Paul Del Rincon, the director of the Port of Eagle Pass, said the additional traffic to his port of entry created extra work for everyone involved.

Del Rincon said the Eagle Pass International Bridge No. 2, which processes commercial cargo regularly, sees an average of 700 commercial trucks daily. This week, they saw as many as 200 additional trucks on certain days.

“If in fact we are nearing the end here, it’s nice to know. It’s been one heck of a ride,” Del Rincon said. “Many extra boxes were checked here at the Port of Eagle Pass and as far as these additional volumes that we saw and that we processed, it was very good.”

Click for more FreightWaves articles by Noi Mahoney.

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10 Reasons to Drive with C.A.T. Transport

C.A.T. Transport is an award winning carrier with locations throughout Canada and the United States. It can be hard to choose the right carrier to work for in today’s competitive transportation industry so we highlight the ten reasons you may want to drive with C.A.T. Transport. C.A.T. Transport offering flexible work options, pet friendly programs, and is one of the Best Managed Carriers in Canada. Learn more at www.cat.ca or call 1-800-363-5313

About the Show

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

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The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. The show is available at www.theleadpedalpodcast.com , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

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It's so nice see free parking!

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Vessel omissions and a shortage of shipping containers resulted in a mixed bag of throughput results at the Port of New Orleans (Port NOLA) in August.

Fourteen vessel omissions at the port in August represented a 30% increase in omissions compared to the same month last year.

“A lot of [the omissions are] attributed to how the carriers are dealing with their schedule recovery on the basis of what’s happening in the global supply chain,” Todd Rives, Port NOLA’s vice president and chief commercial officer, said Thursday during the port’s monthly board meeting.

New Orleans handled 42,589 twenty-foot equivalent units in August, a 0.3% increase compared to the same period last year.

Rives said TEU volumes were hampered by a shortage of cargo containers.

“Most of what is driving it is not getting the full import supply of empty equipment to be able to feed the exports,” Rives said.

Rives said breakbulk volume rebounded during the month, boosted by imports of plywood.

Port NOLA handled 159,518 tons of breakbulk cargo for the month, a 178% increase compared to the same period last year, when the port handled 57,200 tons.

The port handled 9,742 Class I railcar switches in August, a 3.6% decrease year-over-year. The port handles switching operations for the six Class I railroads that operate in New Orleans: BNSF Railway, CN, CSX, Kansas City Southern, Norfolk Southern and Union Pacific.

“On the rail side, we actually saw a reduction in total numbers, which is a direct result of Hurricane Ida, where we lost four full days of revenue at the end of August,” Mike Stolzman, general manager of the New Orleans Public Belt Railroad, said during the meeting.

Port NOLA, along with dozens of ports along the U.S. Gulf Coast, closed around Aug. 29 as Ida made landfall as a Category 4 storm southwest of New Orleans. The port reopened on Sept. 3.

“We would have had a very good month in August had we not lost those four days. We saw a significant improvement in our local customer switching, and we were on our way to a very good month on our Class I switching,” Stolzman said.

Total TEU volume is up 8.5% year-to-date at the Port of New Orleans for the fiscal year, which runs from July 1 to June 30. Total breakbulk cargo is up 204% year-to-date.

Click for more FreightWaves articles by Noi Mahoney.

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Featured Truck of the Week Tyler's 2004 Peterbilt

Today’s truck is a cool 2004 Peterbilt from the Big Rigs Truck Show. Each week Bruce picks a cool truck from the many truck shows he attends. Hearing about them is one thing, seeing them is another. Check out this cool ride!

Check out the video on this featured truck by clicking here

This episode is sponsored by Bison Transport with many opportunities for truck drivers in their fleet across Canada. You can learn more about Bison and the opportunities available http://fuelyourjourney.ca/  or call 1-800-527-5781 #fuelyourjourney @BisonTransport

About the Show

LISTEN TO THE PODCAST- The show is available at www.theleadpedalpodcast.com  , ITunes, Stitcher, Spotify, Tunein, iHeartradio, SoundCloud, and other popular podcast platforms. Thanks for listening

JOIN THE LEAD PEDAL PODCAST FAN CLUB www.TheLeadPedalPodcastFanClub.com

LISTEN TO LEAD PEDAL RADIO at www.LeadPedalRadio.com

The Lead Pedal Podcast for Truck Drivers talks all things trucking for people in the transportation industry helping them improve their business and careers. Interviews with industry professionals and truck drivers, trucking information, and other features on the industry are meant to be helpful for truck drivers and those in transportation. The Lead Pedal Podcast for Truck Drivers has main episodes released every Monday, Wednesday, and Friday with bonus material on other days. You can learn more about the host and show on our website and make sure to SUBSCRIBE to the show on your favourite podcast platform. www.theleadpedalpodcast.com

What does The Lead Pedal Podcast mean? The Lead (pronounced - Led) stands for acceleration or fast-track of your career or business. It is a play on words and we certainly are not here promoting speeding in the industry. We are hoping this information will help you become a professional driver faster than if you didn’t know about many of these topics.

Are you enjoying the show? If so we would appreciate you leaving us a rating and review on iTunes or on your favourite podcast platform. www.theleadpedalpodcast.com

Join The Lead Pedal Podcast Fan Club where are loyal fans get first chance at specials, discounts on merchandise and much more.The club is free to join and you can learn more at www.theleadpedalpodcastfanclub.com

 

 

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Cross-border logistics technology platform Forager has begun to seek an exit. 

According to sources with knowledge of the deal, the Chicago-based tech-enabled freight brokerage has engaged an investment banker, seeking a strategic buyer at a $50 million valuation.

While FreightWaves is told the company does have hundreds of millions of dollars of freight in its marketplace, including a carrier network of 3,000 companies with about 110,000 trucks, the company hit a $24 million revenue run rate at a mid-single-digits gross margin, showcasing the difficulties of executing cross-border logistics.

FreightWaves reached out to Forager, which declined to comment.

Since 2019, Forager has raised a total of $14.5 million. It has been 16 months since its last capital infusion, a $10 million Series A round that valued the company at $32.5 million and was led by US Venture Partners.

In past funding announcements, the company has noted goals were to expand its technology platform SCOUT, designed to optimize cross-border supply chain operations throughout the U.S., Mexico and Canada.

Launching its newest release of SCOUT in February, co-founder and CEO Matt Silver explained his hopes for building a platform to enable trucking companies to sell their cross-border capabilities.

“Most trucking companies don’t have salespeople. All they can do is call a few brokers and hope they find decent freight. Seeing how carriers can live or die by a few big customers, it became important to us to give them tools to expand their businesses,” said Silver.

In January, Forager also hired Steve Pho, former senior vice president of corporate and business development at RetailMeNot, to become the cross-border company’s new chief financial officer and president.

In an interview with FreightWaves, Pho explained he would be responsible for allocating capital for building SCOUT into a SaaS product to improve the company’s LTV-to-CAC ratio, the ratio of a customer’s or carrier’s “lifetime value” to the customer acquisition costs, to grow the profitability of its average customer. 

By taking a page from Silicon Valley’s playbook, Forager hoped to create stickier customer and carrier relationships through more value-added services within its SaaS product, driving product loyalty and long-term use.

“Once you get that density or audience, it opens up a lot of opportunities for you to provide services to both parties. That’s what we’re investigating now, and we have a decent idea of how we want to go about it. Right now we’re trying to get share — gotta continue to grow. Series B capital will go toward continuing to scale the business,” Pho said in the interview.

As the Series B raise progressed, the discussion evolved to M&A, the source said, and Forager’s management became convinced that it would take a strategic buyer, another transportation company, to understand the value of the marketplace and the technology that underpins it. 

This is a developing story. FreightWaves will update as the situation develops.

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Ryan Streblow, president and CEO of National Tank Truck Carriers (NTTC)  joins this week’s episode of Taking the Hire Road to discuss the state of the tanker trucking segment with host Jeremy Reymer, founder and CEO of DriverReach.

The NTTC is an advocacy and education group focused on the tanker truck segment, a segment that Streblow said represents 6% of all trucks on the road but hauls 30% of all tonnage.

“There is nothing that we focus on without safety being the priority,” Streblow said. “For the association’s carrier fleet members as well as various suppliers, safety is the forethought every single time.”

Streblow said NTTC has pushed strongly since 2018 to obtain a 10% axle variance in its dry bulk segment. He noted that load shifts affect tanker trucks differently than dry bulk trailers — in the event of a hard brake event, for instance.

“A lot of our sector’s carriers will underload their product just so that if the load shifts they’re not over their axle weight. In doing so, that’s adding more vehicles on the road every year because they’re underloading the product,” Streblow said, adding that increased tanker trailers on the road increase the likelihood for additional incidents.

Railroad crossings is another area of concern for NTTC, specifically at highway rail grade crossings. As hazmat haulers are required to stop at crossings, Streblow and his team are looking at what can be done to reduce rear-end collisions with tanker trucks.

“It takes a really skilled professional to be able to do this job,” Streblow said. “A lot of our carriers, if they’re hauling hazardous material and based on their hiring requirements, will look for a professional driver that has a minimum of two years experience. On top of that, they must get a hazmat endorsement, tank endorsement and any other requirements based on the commodities that they’re hauling. These drivers are some of the best out there.”

The volatility of each load requires that the tanker sector’s drivers perform nothing short of exceptionally, meaning not just anyone can get behind the wheel. But Streblow said this niche sector’s driver pool is reaching crisis levels.

A noted culprit is the pandemic, which spurred many drivers to leave the industry altogether, but another issue, he said, was low attendance at driver schools this past year. If no one is willing to haul, especially in the fuel hauler sector, it has implications for nearly every American.

“We’re talking about the number one commodity in the world — petroleum — so we’re going to feel the pinch at the pump a lot quicker than maybe some of these other commodities,” Streblow said.

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Click for more FreightWaves content by Jack Glenn.

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New locations will train 10,000 workers

Logistics real estate investment trust Prologis Inc. announced Thursday it was expanding its training program aimed at tackling the growing need for logistics workers.

Through its Community Workforce Initiative (CWI), the San Francisco-based industrial warehouse operator is adding six locations to the training program – Dallas, Chicago, Las Vegas, Atlanta, and Tracy and Long Beach, California.

Through a partnership with JFF, a workforce and educational systems nonprofit, the expansion will allow Prologis (NYSE: PLD) to train another 10,000 people for careers in transportation, distribution and logistics over the next two years.

Prologis’ CWI, established in 2018, announced last year a commitment to train 25,000 people for logistics careers by 2025. So far, the program has trained 7,000 individuals.

Prologis plans to add another nine locations in “key logistics markets” by the end of the year.

“Our customers’ needs for skilled and ready labor are greater than ever,” said Hamid Moghadam, Prologis chairman and CEO.

Surging e-commerce demand and the infrastructure buildout required to fulfill it has resulted in an all-time low for property vacancies. While demand for logistics properties is tight, the need for skilled workers is even higher.  

The press release cited data showing employment in the distribution and logistics sectors is expected to grow 29% (from 2019 to 2022) to a total of 1.62 million. Some 735,000 workers are expected to be added in the broader transportation and warehousing category by 2031.

“Helping people acquire in-demand skills that can translate to fulfilling careers in logistics is a benefit to workers, employers and communities,” Moghadam continued. “Beyond creating new career opportunities, the program will strengthen the communities where we operate and contribute to a resilient and healthy logistics industry for years to come.”

The CWI provides workers with training and job placement. The online training platform teaches basic workforce skills as well as best practices used throughout the industry. The initiative also offers a certification program in supply chain warehousing.

“COVID has had a dramatic impact on the labor market, and industry-developed training programs like Prologis CWI offer concrete opportunities to learn skills that are aligned with immediate job openings,” said Nick Schultz, executive director of Pacific Gateway Workforce Innovation Network. “We’ve seen the positive impact the program’s mix of virtual instruction, professional certification and wraparound services can have on people’s lives.”

Prologis Ventures is an investor in FreightWaves.

Click for more FreightWaves articles by Todd Maiden.