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August 14 2023

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20 Journal of Commerce | August 14, 2023 Guide to Trucking & Midyear Review Special Report of trade," Jindel told the Journal of Commerce. "LTL carriers that move shipments from 10 or 20 different customers on a truck are playing a bigger role in bringing efficiency to supply chains." Tom Nightingale, CEO of AFS Logistics, said LTL was previously "viewed as something that you'd like to avoid, if possible. It's relatively expensive compared to truckload and relatively slow compared to parcel, but it's never gone away. It continues to fill a needed tweener gap in the market." That "tweener gap" has grown wider as e-commerce has accelerated, even before the COVID-19 pandemic. "LTL used to be an exception," said a retail logistics manager who asked not to be identified. The growth of rapid delivery demand that led to smaller, more frequent shipments has fed LTL expansion in recent years, LTL carrier Roadrunner, said in an interview. "The major LTL carriers have had to learn to be disciplined." That's true for Roadrunner, which underwent a major restructuring of its network and services over the last few years. "Lack of discipline tends to wind up in tears," Jamroz said. Regan said shippers need to match that discipline when it comes to LTL procurement. That means developing a written LTL strategy that encom - passes outbound and inbound trans- portation. "What you don't know about the LTL space today is going to cost you money," he said. Adding supply chain value Disciplined management is only one factor reshaping LTL as the sector enters its second century. It was in the 1920s that trucking companies converted US railroads' less-than- carload business to LTL. A hundred years later, shippers are helping to redefine LTL by demanding more from their carriers, said Satish Jin- del, president of SJ Consulting Group. "There's a greater level of sophis- tication and increased complexity in supply chains due to the globalization Stuck in neutral US truckload carriers driving through lengthy freight market 'bottom' By William B. Cassidy "Lack of discipline tends to wind up in tears." Combined revenue of the Top 40 US and Canadian Truckload Carriers increased 18.7% to $50.9 billion in 2022. to $2.8 billion, according to the com- pany's latest earnings statements, while its truckload dry-van loads dropped 14.2% to 655,036 shipments. Landstar, the third-largest carrier on the Journal of Commerce Top 40 US and Canadian Truckload Carriers, compiled by SJ Consulting Group, relies on owner-operators or "busi- ness capacity owners" and, as such, is more tied to the spot market than some other large carriers. Even among those other large truckload carriers, however, opti- mism remains "cautious" at best. "We are optimistic that the trough of the freight cycle is behind us but are cautious about the rate at which we'll see improvements," Paul Bunn, president and COO of Cove- nant Logistics, said in a July 27 earn- ings call. And as for next year, Bunn said it's "too early to tell." Covenant's total truckload reve- nue decreased 15.2% year over year in the second quarter to $185.3 million. pulling carriers that had primarily focused on industrial verticals deeper into retail supply chains. "Today, we're moving more small shipments, so we need to have that LTL option," the logistics manager said. The option works best in the warehouse or distribution center to fulfillment center middle-mile lane. "We have to evolve with shipper expectations," added Lori Blaney, senior vice president of sales at Road- runner. "Shippers are looking for reli- able carriers that are easy to do business with. They want partners who are really good in the areas where they focus, not people who can do all things." Shippers also have a need for data that only grows more insatiable. "Consumers have evolved, ship- pers have evolved, and LTL has had to evolve along with them," Blaney said. "LTL was never seen as a tech-ori- ented industry, but now we're using AI [artificial intelligence] to perfect our network. It's a completely dif- ferent world than we knew 15 to 20 years ago." JOC email: twitter: @willbcassidy Jim Gattoni, president and CEO of Landstar System, said in a July 27 call with Wall Street analysts. "I would not declare a bottom yet," Gattoni said. "We're still seeing a little more pressure on the con- tract side and the spot prices aren't coming up yet." Landstar's revenue dropped 29% year over year in the second quarter AFTER A YEAR of declining demand and rates, US truckload carriers are looking for a route out of the bottom of their market to higher ground. So far, they're churning up more mud than money. "Our seasonal trends continue to be below normal, which would indi- cate that we're not there yet," mean- ing at the truckload market bottom,

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