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December 10 2018

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6 The Journal of Commerce | December 10 2018 Spotlight The Journal of Commerce Executive Editor, The Journal of Commerce and JOC Events: Chris Brooks 609 649 2181, Executive Editor, The Journal of Commerce and Mark Szakonyi 202 872 1234, Managing Editor: Barbara Wyker 908 507 4802, Senior Editors: William B. Cassidy Trucking and Domestic Transportation 202 872 1228, Bill Mongelluzzo West Coast 562 428 5999, Hugh Morley Northeast, Mexico 646 679 3475, Eric Johnson Technology 213 444 9326, Janet Nodar Breakbulk and Heavy Li 251 473 2742, Greg Knowler Europe +44 7976798770, Turloch Mooney Global Ports +852 9011 9109, Associate Editor: Ari Ashe Southeast Ports, Intermodal Rail 202 548 7895, Web Editor: Joseph Lazzaro 917 309 0148, Data Analyst: Marcin Lejk +44 58 741 62 70, Shipper Engagement Manager: Dustin Braden 646 679 3450, Senior Content Editor: Alessandra Gregory Barrett, 860 248 5238 Senior Designer: Sue Abt, 862 371 3534, Designer: Bryan Boyd, 908 910 7849, Publisher: Tony Stein, 770 295 8809, Sales: Cindy Cronin, Strategic Account Manager Southeast, Gulf, Canada sales, 954 260 6061 Jean Gibbons, Senior Sales Executive West Coast, Midwest sales, 706 469 7160 Ria Van den Bogaert, Sales Representative Europe, Middle East sales, +32 2 569 8905 Alex Remstein, Associate Sales Specialist Reprints/Classifieds/Copyrights, 646 679 3418 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 800 952 3839 Executive Director, Editorial Content, Maritime & Trade, IHS Markit, Peter Tirschwell Executive Director, Media & Events, Maritime & Trade, IHS Markit, Amy Middlebrook Manager, Production, Carmen Verenna Product Manager, JOC, Jesse Case ©2018 The Journal of Commerce — All Rights Reserved For more information, visit our website, cap Truckload pricing power easing? A new survey from Citi Research confirms the sticker shock of US truck rates is over and shippers may have more leverage in 2019 contract negotiations than previously thought. Capacity is balancing out, and it's not nearly as difficult to find a truck as in January or February, according to shippers in the survey. The budget-busting spot markets, which reached unprecedented levels earlier this year, no longer cost a shipper more than a contractual truckload haul. Talk of a 5 percent to 8 percent increase in contract rates in 2019 is now giving way to chatter of 1 percent to 5 percent. It's a remarkable shi in a short period of time. In 2014 — the previous pro-trucker market — spot rates peaked in March, according to DAT Solutions and It took another 12 to 15 months, however, before a recession in rates, and shippers couldn't secure lower contract rates until 2016. This year, the spot market topped out in January-February but is stagnant only eight months later. Freight once placed on the spot market is now being tendered to contract carriers. Freight volume remains strong overall but mostly due to contract business. The American Trucking Associations Tonnage Index grew 9.5 percent in October and the Cass Freight Shipment Index was up 6.1 percent. If volume is a leading indicator on pricing, it would be premature to consider the pro-trucker market over. The Citi Research survey, however, indicates that volume may soon slow and shippers aren't scrambling as much to find capacity. In March, more than 50 percent of shippers anticipated shipping more freight in the next three months. The number is now 31 percent. In March, only 10 percent said they would ship less in the next three months. Today it's 30 percent. While contract volumes are growing, spot market demand is receding. DAT reports the national dry van load-to-truck ratio fell 15 percent in October on a year-over-year basis, a sign that fewer loads are being posted while more trucks are being listed as available. "Overall, we view these results as supportive of our recent move to get more cautious on 2019 freight growth. We believe there is a deceleration of freight growth occurring now and into 2019, due to tariffs and trade concerns, [and] a current soening in demand," said Christian Wetherbee, Citi Research analyst. Panalpina rebuffs takeover talk Panalpina reiterated plans to continue its own aggressive expansion by acquisition strategy to grow the global business in a solid rebuffing of reports that fellow Swiss third-party logistics provider (3PL) Kuehne + Nagel (K+N) was planning to start takeover talks. While Panalpina did not directly comment on the German media reports, a spokesperson told The Journal of Commerce that its board of directors wants to further develop its business independently. "The growth strategy includes M&A [merger and acquisition] activities as the company wants to take an active role in the consolidation of the market. Panalpina is now in a good position to leverage its global platform. There are a number of interesting market opportunities," the spokesperson said. K+N CEO Detlef Trefzger told Bloomberg and Swiss newspaper Finanz und Wirtschaft in late October that the company would consider making a takeover approach to Panalpina. Panalpina has been dealing with disgruntled shareholders and a falling share price, and the company recently announced that chair Peter Ulber will not be seeking re-election at the next annual general meeting in May. In a note to customers, Jefferies said Panalpina has become a likely takeover target with Ulber's decision to stand down following pressure from shareholders to facilitate more active engagement in takeover talks.

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