“If we can just make it through this next quarter.” I know, that seems to be the mantra of many and a dream of even more. I guess you don’t have to be struggling with low spot rates and higher diesel costs to be battling a dumpster fire these days.
Unfortunately, many of those companies that are trying to make ends meet are actually those that drive the fortunes of the truckload market.
Translation – If they’re hurting then truckers are hurting.
Manufacturers like Monster, as reported in Supplychandive, are struggling on many fronts and making choices that are unpopular but must be made for survival. This does not bode well for the logistics providers. We all know who gets that which rolls downhill.
Huge supply chain costs in the recent past have placed companies in a tough situation. Monster reported paying an additional $66.7 million in freight costs in the second quarter.
Port congestion and manufacturing shutdowns overseas drove up costs and the desire to onshore, near-shore, or just plain old change-shore. I made that last one up; you’re welcome.
All this, the Federal Reserve and the overconfident and wealthy American consumer helped to create inflation. Argue amongst yourselves on the causes or politics therein. I’m just talking consequences.
The choice was to pay more and raise prices in order to get products on shelves. Not so bad, but if you extrapolate that out to the entire economy you have the ingredients for a lengthy freight recession.
Inflation and consumer confidence take time to turn around. Take into consideration the fact that the quarantined and sequestered public never got a chance to get their ya-ya’s out (credit the Stones) before inflation and layoffs kicked them in the ass and you get the full scope of what is happening.
Society is just feeling the ripples of change from the past few years.
At least Gene Seroka (the Executive Director of the Port of Los Angeles) is feeling confident as he implores shippers who are having a hard time with congestion to return to the smoothly running West Coast.
The ships backlogged at the Port of Los Angeles have dropped to only eight. Seroka says the port has maintained its record pace of throughput set in 2021.
Hmmm….You know I like to call bullshit, but if you maintain the same pace of production and backlogs drop 88%, then something has changed in demand.
Peace and love