csxns Shadow the Cats owner running in the red all due to fuel costs. Charge more to move the freight.
Shadow the Cats owner running in the red all due to fuel costs.
Charge more to move the freight.
Murphy SidingThey probably have a lot of longterm contracts they have to honor.
Hey Murph! Nows the time to stock up on doors, while container rates are depressed.
Thanks to Chris / CopCarSS for my avatar.
Just think of an alternate reality where the RRs didn't fangirl over EHH and blindly follow the PSR cult and actually had the people and engines to move more freight.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
Shadow the Cats ownerrunning in the red all due to fuel costs.
Russell
Most freight rates are still around 1.50 on a contract basis for long term contracts. Newer contracts are around 2.50 a mile for stuff that was signed in 2021 even at those rates with fuel spiking as fast as it is and remember there are spots where diesel is going for more than 6 a gallon in CA and spots on the East Coast we are seeing well over 6 approaching 7 bucks a gallon for diesel fuel. Companies have to stay ahead of their fuel costs or go bankrupt from just trying to run freight down the road. With the spike in fuel costs in the last 90 days and this has not seen much traction in the MSM but close to 10% of the entire OTR industry has shutdown due to bankruptcy in the carriers. Smaller carriers nationwide are going belly up and no one cares. Right now there are 5 mega carriers right on the edge of being forced by their fuel costs to file Chapter 11. They are Covenant US Express Crete and Schafer and the schocking one for that we have heard is KLLM FFE they are all running in the red all due to fuel costs. Those 5 carriers listed are almost 20% of the mega fleets in terms of size.
For a truck that gets 7 MPG burning fuel that costs 6.50 a gallon it costs .92 cents a mile for that truck to even turn a wheel. That is before Maintance costs insurance driver pay or other fees. BTW DEF which almost all OTR trucks take now except for those trucks that have pre 2012 MY engines in them that is over 8 bucks a gallon to buy when and IF you can find it. DEF is in very short supply nationwide and not being reported upon. That is also figured into the freight rates and surcharges that are paid. Oil for maintance that has jumped over 100% in wholesale cost in the last 6 months for this industry. HD diesel oil is now almost 40 bucks a gallon in BULK for syn. Regular is over 25 a gallon.
Shadow the Cats owner But when fuel to deliver is almost 6 bucks a gallon for diesel fuel with fuel surcharges at over 2 bucks a mile right now on all deliveries.
But when fuel to deliver is almost 6 bucks a gallon for diesel fuel with fuel surcharges at over 2 bucks a mile right now on all deliveries.
I can tell you this much. Around here we are seeing a drop in anything that goes to non food grade spending in our resins. But when fuel to deliver is almost 6 bucks a gallon for diesel fuel with fuel surcharges at over 2 bucks a mile right now on all deliveries. Then throw in gas in my area over 5 a gallon and in Chicago over 6 a gallon. No wonder consumer spending is falling off a cliff. Why it cost so much to fill up the gas tank you have nothing left to spend.
Well, I can't vouch for FreightWaves. I pretty much think our "Knowledge Source", AKA "The Media", is terrible. But, they say this:
BackshopDon't A&F and AEO cater more towards the teenage and twenty-something crowd? They are the ones with the least disposable income.
Canary in the coal mine. Or do think eight percent inflation has no effect on peoples' buying decisions?
It has been widely reported that consumers have changed spending habits from goods (like what comes in on container ships) to more travel, entertainment and other services.
Don't A&F and AEO cater more towards the teenage and twenty-something crowd? They are the ones with the least disposable income.
Not just Target. The slowdown in retail sales andglut of aging inventory is widespread. From CNBC:
"Retailers from Walmart to Gap face a glut of inventory as inflation-pinched shoppers skip over categories that were popular during the first two years of the pandemic. Gap, for instance, said customers want party dresses and office clothes instead of the many fleece hoodies and active clothes the company has. Walmart said some families are making fewer discretionary purchases as the prices of gas and groceries rise. Abercrombie & Fitch and American Eagle Outfitters both reported a steep jump in inventory levels, up 45% and 46%, respectively, from a year ago from a mix of items not selling and supply chain delays easing."
SD60, thanks for your commentary. I have been getting FW popping up on my google page. At first I thought that they were straightforward but some of their recent articles called that into question. Your views on it have made me realize that I shouldn't put too much weight on what they say.
kgbw49If a greater proportion of your take home pay is going for food and fuel, it is a pretty simple equation that there will be less for other "stuff"
I agree, but that's (necessity) usually where change takes root. IMO, there was so much pent up frustration bought about by the quasi-quarantines, that once relaxed....there was an orgy of consumerism.
Being forced to make discomforting choices between either food for the table or a new electric razor, might be just the moderating influence we need?
Convicted One SD60MAC9500 No demand is not dropping off... Freightwaves is putting out another sensationlist piece. Actually, if you run a search for "Target overstocked", you'll find a slew of sources other than Freightwaves running similar stories, many also including other major retailers. And, they are citing decreased demand....thank goodness, at last. The post pandemic splurge appears to be waning.
SD60MAC9500 No demand is not dropping off... Freightwaves is putting out another sensationlist piece.
Actually, if you run a search for "Target overstocked", you'll find a slew of sources other than Freightwaves running similar stories, many also including other major retailers.
And, they are citing decreased demand....thank goodness, at last. The post pandemic splurge appears to be waning.
Yeah... First to fiddle isn't necessarily the best to fiddle either...FW didn't look at long term data showing the opposite of their claim, and other's who ran with the Target story... Target is a small fry in the scope of chain retailers that import goods. Walmart is the one to watch as their import volume is roughly 8% of total US TEU imports per annum.. That's very significant..
On top of all that. Raw material data is one of the key data points pointing at future freight demand.
FW and others are just the little boy that cried wolf..
Yes Balt, Shanghai lockdowns were a reason why freight demand has softened to near Pre-COVID levels. The shutdown killed any manufacturing activity. We are still above 2019..
If a greater proportion of your take home pay is going for food and fuel, it is a pretty simple equation that there will be less for other "stuff".
The core inflation rate that has been over 8% the last several months does not include food and fuel in the calculation.
China being shut down for a month or more wouldn't have anything to do with it.
Never too old to have a happy childhood!
EuclidI don’t think is it too complicated.
Hopefully now all those geniuses hoarding container chassis, will choke on them.
SD60MAC9500No demand is not dropping off... Freightwaves is putting out another sensationlist piece.
No demand is not dropping off... Freightwaves is putting out another sensationlist piece. They've already been criticized by industry veterans for misleading and poor reporting..
FW fails to take into account mean data.. Current freight is well above the average. Asian TEU imports are up 37.5% from 2019..
FW is not accounting for intermodal ramp bottlenecks. Especially Chicago, Memphis, Houston, etc... Also not accounting for invetnory still piled up at the ports. Which as of recently is moving at a somewhat quicker pace..
There are even stories out there about Target having to cut prices to clear out over stocked merchandise, cancelling orders, and reimbursing suppliers for sunk costs incurred due to the cancellations.
My first thought was how this, if widespread, would likely impact logistics companies....however as a consumer I'm delighted to see market forces at long last working in my favor.
edit add: After reading your link I see they mention Target, as well.
greyhounds It might even free up some crews to run locals and such.
It might even free up some crews to run locals and such.
Nah, they'll just get laid off. Way simpler.
Greetings from Alberta
-an Articulate Malcontent
It says so right here:
https://www.freightwaves.com/news/us-import-demand-drops-off-a-cliff?j=155420&sfmc_sub=50660216&l=256_HTML&u=3127081&mid=514011755&jb=30004&utm_source=sfmc&utm_medium=email&utm_campaign=FW_Daily_6_7_22&utm_term=Read+More&utm_id=155420&sfmc_id=50660216
This, if true, will sure change things in the transportation world. It might even free up some crews to run locals and such.
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