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August 14 2023

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22 Journal of Commerce | August 14, 2023 www.joc.com Guide to Trucking & Midyear Review Special Report Serving shippers for over 50 years, Averitt is a leading provider of freight transportation and supply chain solutions with an international reach of over 100 countries. Averitt's LTL, truckload, dedicated, distribution and fulfi llment, and integrated services provide shippers access to a wide array of customized solutions that cover every link in the supply chain. Together, these services and technology offerings provide "The Power of One" to shippers, delivering access to multiple transportation solutions from a single provider. DCLI is the largest provider of container chassis to the US intermodal industry. We own, lease and manage over 151,000 marine chassis and 125,000 domestic chassis. Since our founding more than a decade ago, we have worked to transform the way that chassis work within the intermodal supply chain with a focus on equipment quality, operational effi ciency and delivering a great driver experience. Our ultimate goal is to be the industry's chassis partner of choice. Stubbornly high levels of inven- tory are depressing the outlook. Many trucking executives were more optimistic at the start of 2023, after making gains in 2022. US mer- chant wholesale inventories in May were still 4.1% higher than in May 2022, although they were down 2.6% from their November 2022 peak of $930 million, according to non-sea- sonally adjusted data from the US Census Bureau. Spot rates flattening The 40 largest US and Canadian truckload carriers increased revenue a combined 18.7% to $50.9 billion in 2022, but with rates tumbling in late 2022 and early 2023, they're unlikely to repeat that feat this year. Most of last year's gains came in the fi rst half of the year, when spot rates were starting to slide but contract rates were still elevated. Average selling prices for truck- load services, including base rates and surcharges, were down 27.3% in June from their peak in May 2022, according to the US Bureau of Labor Statistics' Producer Price Index (PPI) for long-distance truckload. The last time the truckload PPI fell that low was February 2021, though it remains 16.6% higher than its most recent low point in May 2020. The national monthly average dry-van per mile spot rate from DAT Freight & Analytics has ranged from $1.61 to $1.65 per mile for the past three months, indicating pricing has reached a bottom. The Journal of Commerce average shipper-paid dry- van spot rate, based on data from Cargo Chief, DAT, Loadsmart and a survey of third-party logistics pro- viders, has hovered between $2.23 and $2.26 per mile since May. "Based on feedback from our customers, we expect volatile freight demand for at least the next quarter of 2023 and look to the holiday season of the fourth quar- ter for potential improvements in the freight demand environment," Michael Gerdin, CEO of truckload carrier Heartland Express, said in a statement July 31. Heartland's second-quarter rev- enue rose 68% year over year, driven primarily by the acquisitions of Smith Transfer and CFI in 2022. Ger- din said Heartland saw freight vol- umes decline in 2022 and then "level out" in the fi rst quarter of 2023, but there was no improvement in the second quarter. The largest US truckload pro- vider, Knight-Swift Transportation Holdings, also is betting on an improved freight market as year-end holidays approach. "After bottoming in the second quarter, spot rates may bounce along the bottom or show modest improve- ment in the third quarter before showing expected modest seasonal uplift in the fourth quarter of this year," Knight-Swift CEO Dave Jackson said during a July 20 earnings call. When demand does pick up, it will likely "sneak up" on everyone, Jackson said, citing sudden upswings in truckload shipments that began in September 2017, following hurri- canes, and June 2020. JOC email: bill.cassidy@spglobal.com twitter: @willbcassidy "Our seasonal trends continue to be below normal ... and the spot prices aren't coming up yet."

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