Here is what to expect in the trucking industry, as we move into the third quarter.
Demand for now, consumers have been resilient and remain focused on services, despite analyst expectations of a slowing economy because of the Federal Reserve’s interest rate hikes.
After riding the COVID-19 lockdown wave spiking logistics rates to the current bottom post pandemic—Q3 brings a muted impact on the “back to school” rush typically seen in August through September.
UPS and the Teamsters are meeting tomorrow to resume negotiations with an August 1 deadline. Right now, it’s business as usual at UPS.
The situation with Yellow has been extremely fluid. As of Friday night July 21, the Teamsters were going to strike effective this morning, July 24. This was highly likely to be the last chapter in the Yellow story, as that would have forced them into chapter seven bankruptcy.
Last night, Sunday, July 23 approximately 6 pm, Central States announced they reached terms with Yellow to grant a 30-day extension on the $50M owed to them for Teamster employee health and pension benefits. As a result, the Teamsters called off the strike for now.
This doesn’t pull Yellow completely out of the woods. They have an extremely heavy debt load, and now need to quickly renegotiate a contract with the Teamsters while trying to keep revenue coming in. This is a delicate situation given all the shippers that pulled their business from them early last week. Currently, we are taking steps to mitigate any possible risk to our clients.
Shippers should consider starting to plan for a rebound in 2024. Line up your favorites now so that when demand/supply restabilizes, no one is caught overpaying for mediocre service. Inventory Management + Budget Forecast + Entire Supply Chain Management (versus singular, reactive moves)—to name a few. We continue to strive to be your go-to resource for the latest market insight. To learn what routing options are best for your shipments, contact us at DomesticSales@mohawkglobal.com
By Katie Kidd, Senior Domestic Account Manager & Wayne Wolfe, Director, Domestic Services