Business Archives

Electric truck maker Nikola names new CFO

The Trucker News Staff - March 28, 2023

PHOENIX — Electric semi-truck manufacturer Nikola Corporation’s chief financial officer (CFO) Kim J. Brady will retire on April 7. According to a news release, Anastasiya “Stasy” Pasterick, who is currently serving as Nikola’s vice president and corporate controller, will succeed Brady as the company’s new CFO. “It is an honor to have the opportunity to continue shaping Nikola as we remain focused on the execution of our business plan and navigate the next chapter of our journey,” Pasterick said. “I am grateful to Kim for serving as a valued colleague, mentor, and friend since I joined the Nikola team over four years ago.” Brady will remain employed with Nikola through April 28, 2023, as a non-executive officer in an advisory capacity to support the transition. As CFO, Pasterick will be responsible for leading Nikola’s finance and accounting team, including investor relations, strategic finance and treasury, the news release noted. “Stasy’s proven financial acumen and attention to detail are the capabilities the company needs now as we build on the momentum surrounding the unveiling of our new energy brand, HYLA, the commercialization of our Class 8 battery-electric truck, and the pending production of our Class 8 hydrogen fuel cell vehicle,” said Michael Lohscheller, Nikola Corporation president and CEO. “We are grateful to Kim for his leadership and dedication to the company for the past five years. He led the organization’s early rounds of funding and was instrumental in taking the company public and shaping its strategy. We sincerely wish him all the very best as he embarks on a new and exciting chapter in his life.” Looking back on her time at Nikola, Brady said, “It has been a privilege to be part of the great team at Nikola and I am proud of what we have accomplished together, including building a strong foundation for a zero-emissions transportation future and energy transition to hydrogen. I’ll miss the passion, vision, and collaborative spirit throughout the organization and am pleased to see a high-caliber leader like Stasy step in as the next CFO of the company.”

US trailer industry increases build rate in February

The Trucker News Staff - March 28, 2023

COLUMBUS, Ind. — Reflecting a higher build rate, the backlog-to-build ratio contracted to 8.5 months in February, after closing January at 9.9 months. For context, the average since Q3’21 has been in the 8-month neighborhood, according to this month’s issue of ACT Research’s State of the Industry: U.S. Trailers report. “With most categories showing higher build in February, backlogs slid slightly, down 0.5% sequentially (but +23% year-over-year). The dry van backlog was 0.4% lower month-over-month, with reefers down 0.6% and flats nearly 4% lower compared to January,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. “Despite (manufacturers) expanding availability, 2023 is not yet fully open, partially because manufacturers are facing volatile commodity costs, long lead times for some input components and improving but still challenging labor considerations … (and) also because manufacturers are reluctant to overpromise and underdeliver on both price and timing.” While overall demand remains robust, some manufacturers shared this month that conversations of softening are happening. That said, the same manufacturers indicated the talk has not yet turned into slowing orders or cancellations. “Other OEMs told us they are seeing a few actual cancellations, but the cancel data is primarily a reflection of spec changes and plant rewrites,” McNealy concluded. “Some smaller fleets and owner operators have cancelled orders, but large fleets remain eager to fill the void. OEM conversations also continue to suggest supply-chain constraints are likely to remain a limiting factor to production in 2023, with manufacturers mentioning a renewed fluctuation in materials costs, particularly steel, and continuing long lead times of some components.”

For-hire trucking capacity growth seeing sharp slowdown

The Trucker News Staff - March 28, 2023

COLUMBUS, Ind. — Freight volumes and rates declined in February, but the industry is closer to the end than the start of the freight downcycle. According to the latest release of ACT Research’s For-Hire Trucking Index, rate trends should begin to recover as soon as traction on freight volumes is established, and slower capacity growth in March is a hopeful sign that the bottoming process is closer, as fleets begin to respond to softer market conditions. The Trucking Volume Index was in contraction territory for the eighth month of the past 11 in February at 41.3 (seasonally adjusted) from 51.6 in January. Volumes remained soft amidst a market of mixed economic signals. Tim Denoyer, vice president and senior analyst at ACT Research, said, “The soft freight market persists as inflation continues to impact consumers’ purchasing power, and recent bank failures and job cuts make recession more likely.” Pricing Index weakness continues, decreasing 6.3 points, to 39.3 in February (seasonally adjusted) from 45.6 in January. This is only the fourth time in the index’s history that prices have been in the thirties. “The cure for low prices is low prices, and we currently estimate spot rates are 16% below fleet operating costs, which should expedite this bottoming process,” Denoyer said. “Even as freight demand fundamentals will likely remain soft, seasonal increases in TL (truckload) volumes as capacity slows and eventually tightens will build the bottom of the spot rate cycle in the next couple of months.” The Capacity Index declined by 3.7 points month-over-month to 51.0 in February, indicating slower growth. Capacity has improved in terms of both equipment and drivers the past year, with improvements in the supply chain and as drivers have shifted to larger, well-capitalized fleets after the sharp fall in spot rates. After rallying in January, the Supply-Demand Balance reverted looser, falling to 40.1 (seasonally adjusted) in February from 47.0 in January, with the month-over-month declines in both volumes and capacity. “The trucking market has been loose for a full year based on this series,” Denoyer said. “Though the loose environment is expected to persist in the near term, we expect less loosening from here.”

Arpin International Group promotes Matthew Somweber to VP of GSA Services

The Trucker News Staff - March 27, 2023

WEST WARWICK, R.I. — Matthew Somweber has been promoted from director to vice president of Arpin International Group’s GSA Services division. Somweber began his 20-year career in the household goods moving and storage industry when he joined Arpin International Group in 2003 as a relocation coordinator for the GSA international division, according to a news release. “He quickly learned the intricacies of providing international moving and storage services to the federal government and excelled at all the tasks he performed,” the news release noted. “Somweber’s success led him to be promoted to senior GSA coordinator, supervisor and director of operations. He has shown a tremendous work ethic and personal growth in these positions.” Mark Greene, senior vice president GSA Services, said of Somweber: “Matt has been instrumental in the division’s growth and success, including hiring the right people at the right time and empowering their growth. He has a great read on people and has flourished in creating relationships with our vendors domestically and worldwide. Matt’s efforts have helped create a culture of excellence at Arpin. The last few years have been a crucible of sorts, and Matt’s close work with me on many GSA issues has made an impression on me.” Greene also praised Somweber’s leadership as helping to create “a significant increase” in the company’s revenue, culminating in an overall market share of 22% in 2022. “His contributions to the company have been invaluable, and we are confident he will continue to thrive in his new role as vice president,” Greene said. Somweber holds a bachelor’s degree in management and a minor in Finance from Roger Williams University. He resides in Exeter, Rhode Island, with his wife, Jessica, and their two children.

Preparation can make tax time less of a headache for small business owners

Cliff Abbott - March 27, 2023

Spring is a time of spring breezes, blooming flowers … and income taxes. Unfortunately, the tax returns you file this spring are based on last year’s data, so there isn’t much you can do to change the numbers. You can, however, make sure you are claiming every deduction you are entitled to. The best way to do that is often to consult a tax professional. It’s also a good idea to use one that is familiar with your type of business. The bad news is that if you don’t already have a tax professional, it may be hard to find one. It’s a busy time of year for them, and they may not be taking new clients. Be wary of using those chain tax-service locations you see in the local strip mall. The tax preparers who work there are “qualified” with just one to two weeks of training. They often focus on clients who need help with basic income tax filing, often using standard deductions. You’ll want someone with an accounting degree who is knowledgeable about trucking businesses. Many small trucking business owners file as a “sole proprietor.” This option is a kind of hybrid that mingles business and personal expenses and income. It can be the simplest of the choices, but doesn’t provide you with the financial protections of a limited-liability corporation (LLC) or any of the other options. Your tax advisor can help you determine how to register your business to maximize how much of the revenue you keep. If you file as a sole proprietor, keep in mind that you’ll be paying the Self Employment Tax. This tax is comprised of both the employee and employer portions of the Social Security tax (12.4%) and the Medicare tax (2.9%) and adds up to 15.3% of your income — on top of whatever income tax you owe. The amount can be considerable, but it is only paid on profits, not on gross revenue. The more expenses you can deduct, the lower your profit … and the lower your tax. With that in mind, consider your purchases in 2022. Big expenses like truck repairs, tires and fuel are certainly deductible, but other items can also be used as deductions. If you bought a television or a microwave oven to use in the truck while working away from home, you can deduct those as business expenses. Gloves, hard hats and steel-toed shoes (if they are required for the job) are deductible. So are items like air fresheners, flashlights and batteries, cleaning supplies, bed coverings and so on. If it’s used in the truck, it’s probably deductible. One large deduction many drivers overlook is per diem. The IRS allows a deduction of $69 for meals and incidentals each day the driver is away from home. It isn’t necessary to save receipts to claim this deduction; however, the taxpayer should save record-of-duty status (logging) records as proof of travel, just in case of an audit. It may not seem like a lot, but if you’re on the road 250 days (five days a week for 50 weeks) you’ll be looking at $17,250 of non-taxable income. Even if you’re gone for partial days, you may be able to claim a portion of the per diem deduction. Of course, any subscriptions to industry publications or dues you pay to trucking organizations are deductible. If you have expenses for lumpers, chrome polishers or other services, be sure to get a business receipt, or at a minimum, the providers’ driver’s license and Social Security numbers. If you pay any one individual more than $600 in a year, you’ll need to issue them a Form 1099. If you don’t, the IRS could deny your deductions. For this year, income tax must be filed by Tuesday, April 18. Since the 15th falls on a Saturday, the filing date is extended to Monday — which happens to be a holiday in Washington, D.C., pushing the due date to Tuesday. If you don’t file on time, the IRS can assess a fee for late filing and another for late payment of tax owed. Even if you can’t pay the tax on time, you can at least save yourself the late filing fee by getting your return in on time. If you don’t file at all, the IRS could enter a return for you. They are unlikely to find all the deductions and exemptions that your tax preparer will, and you could spend years arguing the final amount owed, racking up fees and interest along the way. Also remember that the income deadline is also the date any quarterly estimated income tax payments are due. There is a penalty for failure to pay estimated taxes on time, so it’s important to get sound advice from your tax professional. If your total tax liability is less than $1,000, the penalty is generally not charged. You don’t have to make estimated payments if you had no tax liability for the previous year, provided you were a U.S. citizen all year and your tax period covered the whole year. Finally, it’s never a bad time to upgrade your paperwork process. Every business should have a journal of some sort for tracking expenses. These can range from an actual ledger book to easy-to-use spreadsheets that can be downloaded for free and even software that does all of the storing and calculating for you. By listing expenses in the correct categories, you’ll make tax time less stressful for both you and your tax preparer. Oh, and remember that the bill from your tax preparer is deductible too.

Mack Trucks names Wayne McDonald regional VP for Canada

The Trucker News Staff - March 24, 2023

GREENSBORO, N.C. — Wayne McDonald has been named the regional vice president for Mack Trucks’ Canadian region, effective April 1. In this role, McDonald will direct the Canadian regional sales team to develop strategies to increase Mack Trucks profitability and market share throughout Canada, according to a news release. “I’m excited to welcome Wayne to our leadership team in Canada,” Jonathan Randall, president of Mack Trucks North America, said. “Wayne is a longtime Mack employee with proven success in meeting our customers’ transportation needs. His extensive industry knowledge of all aspects of the commercial truck business will serve Mack customers and Canadian dealers well.” McDonald has 34 years of experience in the trucking industry and has worked for Mack Trucks in various roles since 2005. McDonald was the director of fleet sales for Canada since April 2021. Prior to that role, McDonald served as a district sales manager for the Canadian Central District from 2013 to 2021. McDonald also has had various positions as a regional parts director, district parts manager and general parts manager. McDonald, who will remain based in Mississauga, Ontario, Canada, is replacing Steve Jugovich, who is retiring March 31.

Ford says EV unit losing billions, should be seen as startup

The Associated Press - March 24, 2023

DETROIT — Ford Motor Co.’s electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology. The figures were released Thursday as Ford rolled out a new way of reporting financial results. The new business structure separates electric vehicles, the profitable internal combustion and commercial vehicle operations into three operating units. Company officials said the electric vehicle unit, called “Ford Model e,” will be profitable before taxes by late 2026 with an 8% pretax profit margin. But they wouldn’t say exactly when it’s expected to start making money. Chief Financial Officer John Lawler said Model e should be viewed as a startup company within Ford. “As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build (sales) volume and gain (market) share,” he said. Model e, he said, is working on second- and even third-generation electric vehicles. It currently offers three EVs for sale in the U.S.: the Mustang Mach E SUV, the F-150 Lightning pickup and an electric Transit commercial van. The new corporate reporting system, Lawler said, is designed to give investors more transparency than the old system of reporting results by geographic regions. The automaker calculated earnings for each of the three units during the past two calendar years. Model e had pretax losses of $900 million in 2021 and $2.1 billion last year, and it is expected to lose $3 billion this year. In the past two years Ford has announced it would build four new battery factories and a new vehicle assembly plant as well as spending heavily to acquire raw materials to build electric vehicles. By the end of this year, the company based in Dearborn, Michigan, expects to be building electric vehicles at a rate of 600,000 per year, reaching a rate of 2 million per year by the end of 2026. Last year, the pretax profit margin for Model e was minus 40%, Lawler said. To get to a positive 8% by the end of 2026, the company expects economies of scale — spreading costs over more vehicles sold— to be worth 20 points of the improvement. Design and engineering improvements will bring 15 points, battery cost reductions 10 points and 3 points will come from other areas including federal tax incentives and raw material price reductions. Wells Fargo analyst Colin Langan calculated that Ford would need $15,000 in cost savings per vehicle to get to an 8% profit margin. He asked what gives Ford confidence it can reach that number. “It just seems like quite a big number,” he said. Lawler replied that Ford is looking at a whole new way of designing vehicles, focusing on energy efficiency, including aerodynamics. “Every decision is about optimizing energy efficiency so that we can get the smallest battery possible to hit the range target that we have for that vehicle,” he said. Ford also will simplify its manufacturing process, maximizing common parts in next generation of EVs, saving over the current generation of repurposed internal combustion vehicle underpinnings. “There is a significant amount of opportunity in there to identify efficiencies and drive those home,” he said. Ford’s disclosure of the losses shows “ugly industry truths” that only Tesla is making a profit on electric vehicles, CFRA analyst Garrett Nelson wrote in an investor note. “EVs are likely to be a material drag on near- and intermediate-term earnings,” he wrote. He maintained a “buy” opinion on Ford shares but cut his one-year share price target by $1 to $16. Ford Blue, the unit that sells internal combustion and gas-electric hybrid vehicles, made just over $10 billion before taxes during the last two years. Ford Pro, the commercial vehicle unit, made $5.9 billion during those years, the company said. For this year, Ford expects Ford Blue to post a $7 billion pretax profit, modestly better than last year. Ford Pro is expected to earn $6 billion before taxes, nearly double its earnings last year, Lawler said. Ford was to present the new structure, announced last March, to analysts and investors on Thursday. Other business units include corporate, Ford Credit and Ford Next, a new business incubator. Shares of Ford slipped 1.2% in trading late Thursday. Lawler said the company is changing the way it does business, not just doing an accounting exercise. “After 120 years, we’ve essentially re-founded Ford,” he said. “We’re embracing technology and competitive disruption in our industry, fundamentally changing how we’re thinking, how we’re making decisions, and how we’re running the company.”

Motive adds 2 to executive team

The Trucker News Staff - March 23, 2023

SAN FRANCISCO — Motive, an automated operations platform in the trucking industry, has announced an expansion of its executive team. Carolyn Patterson has been named the company’s chief human resource officer, and Robson Grieve has been hired as the company’s first chief marketing officer. “The roles come as Motive accelerates its next phase of growth to improve the safety, productivity and profitability of businesses that power the physical economy,” a news release noted. Patterson comes to Motive from SeatGeek, where she was the chief people officer. According to the news release, she “built and scaled the HR team in preparation for its public offering.” Previously, she spent nine years at Yelp in a series of operational roles, including revenue operations, before being appointed chief people officer. Earlier in her career, Patterson held leadership roles at Yahoo, eBay and Facebook, among other technology companies. “Motive has created incredible value for its customers, but what really sets the company apart is its people,” Patterson said. “My mission at Motive is to enable every team member to achieve excellence in their work and their career by delivering trusted guidance, data-driven programming and equitable experiences that attract, retain and motivate top talent to do their best work as we capture the incredible market opportunity ahead of us.” The news release notes that Grieve “brings a proven track record of building and scaling marketing programs at high growth enterprise software companies.” Prior to Motive, Grieve was chief marketing officer at OutSystems and New Relic. Before that, he was EVP of marketing and customer experience at Concur, where he built a category-leading brand that resulted in the company’s acquisition by the multinational software company SAP. “The team that started Motive and that is building the company today has an authentic customer orientation,” Grieve said. “We have a strong team and marketing engine in place to further accelerate the progress we’ve made expanding into the enterprise, entering new industries and bringing new and innovative solutions to market that solve the problems that matter most to the businesses and people who are moving the economy.” Shoaib Makani, co-founder and CEO of Motive, praised the new additions to the Motive team. “Carolyn and Robson have joined Motive at a pivotal time for the company,” Makani said. “The addition of these two new leaders will help accelerate Motive to its next phase of growth as we scale our team and technology. I am excited to work with Carolyn and Robson to further our mission to unlock the potential of the physical economy.“

Vehicle service professionals sought for ATMC survey

The Trucker News Staff - March 22, 2023

LEESBURG, Va. — The ASE Training Managers Council (ATMC) is inviting all auto and truck (heavy trucks duty included) service professionals to participate in its annual training benchmarks survey. Those who complete the entire survey will be entered for a chance to win a $250 Snap-on Tools certificate or one of several Cabela’s gift cards, according to a news release. “ATMC conducts the annual survey to establish training benchmarks within the vehicle service and repair industry,” the news release stated. “The survey is designed to establish a series of metrics that help the industry recognize trends, provide a comparison standard and align the offerings of training providers with the needs of training consumers.” Survey results will be compiled and presented at the ATMC Conference in Grapevine, Texas, on April 18-20, then posted on the ATMC website. Click here to take the survey.

RoadEx to donate matching gift to Truckers Final Mile

The Trucker News Staff - March 22, 2023

LIVONIA, Mich. — Transportation service provider RoadEx plans to donate their largest match gift to date of $5,000 to Truckers Final Mile, a charity created to reunite truckers and their families due to unforeseen circumstances they experience in the line of duty. The matching gift campaign will take place at the Mid-America Trucking Show, March 30 through April 1. RoadEx CEO Paul Adams made the announcement. “Over the past 2 years, we have been committed to supporting Truckers Final Mile and their mission to help truckers and their families during difficult times,” RoadEx CEO Paul Adams said. “We hope our contribution will encourage others to support this important cause and continue to support the truckers and their families that are at the heart of our industry.” Truckers Final Mile was founded in 2014 by founder Robert Palm, inspired by more than 40 years in the industry and several life-changing events from his time on the road. Palm saw a recurring need for truckers and families who were faced with financial hardships due to the loss of life, injury, serious illness or crisis. The demand for services has increased in the past three years because of rising fuel costs, insurance, cost of equipment, health and stress-related conditions as well as increasingly dangerous driving conditions. “To date, Truckers Final Mile has reunited more than 500 truckers with their families following a tragic accident by covering costs from funeral home services and more,” Palm said. “Thanks to RoadEx and their generous partnership, we’re one step closer to reaching our goal to eliminate financial burdens for drivers.” Donations can be made through PayPal and will benefit the organization’s program to provide home improvement support to truckers due to injury and disabilities. For more information about truckersfinalmile and to donate, click here.

ACT Research: Preliminary net trailer orders indicate strong demand

The Trucker News Staff - March 22, 2023

COLUMBUS, Ind. — February’s preliminary net trailer orders increased sequentially but were lower against longer-term comparisons, with 25,800 units (25,600 seasonally adjusted) projected to have been booked during the month. Final February results will be available later this month. This preliminary market estimate should be within +/-5% of the final order tally. “Preliminary net orders were more than 6% higher compared to January’s intake, but about 5% lower against the same month last year,” Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. “The decline versus last year can largely be chalked up to backlog length. Trailer backlogs at the start of 2023 are 50,000 units above year-ago levels. February’s preliminary data show orders for dry vans and platform trailers driving the sequential uptick.” McNealy added that while demand remains strong, “we’re also seeing improved, albeit still challenged, build data. While we are still waiting for February data, January’s backlog-to-build ratio, a proxy for industry demand strength was nearly 10 months, roughly double the historical average. That means fleets needing trailers will need to maintain their patience.” When asked about build and backlog, she commented, “Using preliminary February orders and the corresponding OEM build plans from the February State of the Industry: U.S. Trailers report (January data) for guidance, the trailer backlog should decrease by around 1,100 units when complete February data are released. That said, with orders being preliminary and the build number a projection, there will be some variability in reported backlogs when final data are collected.”

ATA’s Truck Tonnage Index increased 1.2% in February

The Trucker News Staff - March 22, 2023

WASHINGTON — American Trucking Associations’ (ATA) advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 1.2% in February after increasing 0.6% in January. In February, the index equaled 118.4 (2015=100) compared with 117 in January. “Tonnage has increased sequentially for the last three months totaling 2.9 percent,” ATA Chief Economist Bob Costello said. “As a result, the index is just 0.3 percent below the recent high in September. The fact that our index is growing sequentially and on a year-over-year basis demonstrates that contract freight continues to hold up at high levels. Compared with February 2022, the SA index increased 2.3%, which was the eighteenth straight year-over-year gain, but the largest since October. In January, the index was up 1.4% from a year earlier. In 2022, compared with the average in 2021, tonnage was up 3.5%. “Looking ahead, we continue to see evidence the inventory cycle is improving, which means bloated stocks will stop being a headwind and eventually help truck freight volumes,” Costello said. “Increased infrastructure spending will also boost volumes heading into the summer months. However, we expect to see continued freight softness related to lower home construction and slowing factory output.” The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 107.6 in February, 4.5% below the January level (112.6). In calculating the index, 100 represents 2015. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight. Trucking serves as a barometer of the U.S. economy, representing 72.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.93 billion tons of freight in 2021. Motor carriers collected $875.5 billion, or 80.8% of total revenue earned by all transport modes. ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 5th day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons and key financial indicators.

Fleet Advantage honored by Monitor for 3rd consecutive year

The Trucker News Staff - March 21, 2023

FORT LAUDERDALE, Fla. — Fleet Advantage, a Class-8 tractor fleet data analytics firm, has been named one of Monitor’s 2023 Most Innovative Companies in Equipment Finance for the third consecutive year. According to a news release, Monitor’s 2023 Most Innovative Companies in Equipment Finance award recognizes the most innovative companies in the equipment finance ecosystem within various industries, including transportation and logistics. “We are thrilled to be recognized again by Monitor as one of the most innovative companies in the equipment finance industry,” Matt de Aguiar, chief operating officer for Fleet Advantage, said. “Fleet Advantage’s leadership and entire workforce population believes that innovation, when leveraged effectively, can create a culture where breakthrough ideas are generated continuously.” According to Monitor, “Fleet Advantage has a deep legacy of developing advanced solutions to benefit its clients and the equipment finance industry, and its innovatory focus was most recently on display when the company announced it placed orders for 200 Class 8 electric vehicle (EV) tractors. Over the last year, Fleet Advantage’s business prowess, leadership and focus on environmental preservation has benefitted many organizations, as the company has made significant innovations in many areas pertinent to transportation and equipment finance for corporate transportation fleets.”

Industry vets launch ‘Freight Think’ to help drive profitability in supply chain businesses

The Trucker News Staff - March 21, 2023

FRISCO, Texas — Supply chain veterans Reid Klosowsky and Bill Maroney, in partnership with NT Logistics Inc., have co-founded and launched a new advisory group dubbed Freight Think. According to a news release, the group is “dedicated to helping business leaders drive profitability by optimizing transportation strategy to increase efficiency and reduce costs.” “I’m excited to partner with Reid and Bill as we launch this venture,” Lynn Gravley, president and CEO of NT Logistics, said. “With a combined 40-plus year history of supply chain leadership, they have managed billions of dollars in annual spend, optimizing both performance and cost by bridging the gaps that all too often exist between the ‘product’ people and the ‘logistics’ people. Plus, they are keenly aware of just how time-strapped teams are today, so they’ve built services to quickly get in and get out, so shippers can act fast.” Klosowsky and Maroney use a four-part advisory approach to negotiate, validate, analyze and optimize freight expenditures, the news release noted. Freight Think offers a variety of services and solutions, including: Carrier contract review and analysis. Freight bill auditing. Packaging and network design. Routing compliance and optimization. Carbon reduction guidance. Performance measurement. End-to-end visibility. Speed and service strategies. “Shippers today understand that it’s time to take a more surgical approach to improve profitability,” Klosowsky said. “We’ve got to look at profitability at the product versus the company or department level. By understanding how product and freight work together, companies can be smarter and gain efficiency. All too often we find simple solutions that drive significant value.” Freight Think works with shippers throughout the U.S. to answer pressing questions facing their supply chain teams, such as: Are current shipping rates and discounts as favorable as they could be? Are freight invoices 100% accurate? Are freight dollars being spent efficiently? Is the impact of freight expense on profitability fully understood at both macro- and micro-levels? Are corporate environmental strategies effective and on target? “With NT Logistics’ Business Intelligence platform, we’re able to accurately advise on data-driven improvement options. The ability to marry our experience as shippers with NT’s analytics provides a unique perspective and a simple, powerful report,” Klosowsky noted. “We look forward to helping shippers identify and implement strategies and behaviors to improve supply chain performance.” Maroney said that being more efficient, whether that means minimizing redundant moves, shortening length of haul or removing empty space from cartons, containers or trailer “is not just ‘the right thing to do, it’s good business.”

Knight-Swift Transportation to purchase U.S. Xpress Enterprises for $808M

The Trucker News Staff - March 21, 2023

PHOENIX and CHATTANOOGA, Tenn. — Knight-Swift Transportation Holdings Inc. plans to purchase U.S. Xpress Enterprises Inc for approximately $808 million, excluding transaction costs. According to a news release, the transaction has been unanimously approved by the Knight-Swift board of directors and a special committee of the independent directors of the U.S. Xpress board of directors. The deal is expected to close late in the second quarter or early third quarter of 2023, subject to customary closing conditions. U.S. Xpress stockholders are set to receive 310% premium over U.S. Xpress’ closing stock price on March 20, 2023. The U.S. Xpress brand and separate operations will continue, according to the news release. “The opportunity to add one of the largest and most well-known brands in our industry, with significant opportunity to improve earnings, gain customers and reach more professional drivers, was very compelling to us,” Knight-Swift CEO Dave Jackson said. “We expect to apply the same playbook that proved successful in the Knight-Swift merger as we share best practices, improve operations and work together to help U.S. Xpress become the best that it can be.” Jackson noted that although it will take time, particularly given the current freight environment, “we would not have pursued the transaction unless we were confident in achieving our return thresholds within a few years. Beyond that, we will continue to work with the U.S Xpress team in pursuit of the performance levels of our other truckload businesses over the next several years, so the opportunity for our stockholders is substantial. Moreover, this transaction will not slow down the geographic expansion of our LTL network or our other growth initiatives, as our financial and other resources remain significant.” John Rickel, Lead Independent Director and Chair of the U.S. Xpress Special Committee, said that the Special Committee evaluated the transaction against the company’s standalone prospects and current macroeconomic environment and unanimously determined that the compelling and certain cash consideration is in the best interest of all U.S. Xpress stakeholders and maximizes value for its stockholders. “Knight-Swift is a proven operator with a strong track record in the industry, and we are confident this transaction is the best path forward for U.S. Xpress,” he added. Based on 2022 results, U.S. Xpress is expected to add approximately $2.2 billion in total operating revenue (including $1.8 billion in truckload revenue), 7,200 tractors and 14,400 trailers to Knight-Swift’s consolidated enterprise. After the transaction, Knight-Swift’s consolidated revenue run-rate is expected to approach $10 billion, while the truckload fleet will have approximately 25,000 tractors and 93,000 trailers. For 2022, U.S. Xpress total revenue comprised approximately 36% dedicated truckload, 34% U.S. Xpress Inc. irregular route truckload, 14% Total Transportation of Mississippi irregular route truckload, and 16% brokerage. Portions of the U.S. Xpress business are performing reasonably well, such as the Total Transportation subsidiary, while the most underperforming irregular route business unit matches up well with Knight-Swift’s strengths. “We are very pleased to deliver to our stockholders the opportunity for near-term liquidity at a significant premium,” U.S. Xpress CEO Eric Fuller said. “Additionally, joining the Knight-Swift team is an exciting opportunity for our people, our customers, and the Chattanooga and other communities we call home. The increased scale, operating expertise and resources of the combined entity will allow U.S. Xpress to pursue new levels of service and efficiency. We’re delighted that U.S. Xpress will continue to operate as an independent brand and will do so with the support and partnership of one of North America’s strongest transportation companies.” Knight-Swift operates one of the largest asset-based truckload fleets in North America while delivering leading profitability. The truckload business generates most of the capital Knight-Swift deploys for growth, diversification and returning capital to shareholders, such as the $1.5 billion invested in acquisitions in the less-than-truckload sector and $733 million spent on share buybacks and dividends over the past three years. For perspective, in 2013, the year before the acquisition of Barr-Nunn, Knight Transportation’s truckload segment generated $822 million in revenue and $106 million in GAAP operating income (12.9% operating margin). By 2022, through internal growth and several acquisitions, Knight-Swift’s consolidated truckload segment generated $4.5 billion in revenue and $747 million in GAAP operating income (16.5% operating margin).

CarriersEdge adds Netradyne’s AI-powered fleet safety solutions to dashcam integration system

The Trucker News Staff - March 21, 2023

NEWMARKET, Ontario, Canada — Online truck driver training company CarriersEdge has announced a collaboration with Netradyne, an artificial intelligence provider focused on driver and fleet safety. According to a news release, Netradyne’s Driver•i® is now integrated with the CarriersEdge online training automation system, which allows Netradyne customers to automatically assign and track required CarriersEdge safety and compliance training courses based on events and behaviors captured by the Driver•i device. “Netradyne’s Driver•i is an innovative vision-based fleet safety camera platform built to reinforce good driving behavior,” the news release stated. “CarriersEdge offers access to nearly 200 interactive online driver training modules through its monthly subscription package and provides innovative management and reporting functions through its platform. Training courses are offered as full-length orientation, shorter refresher, and remedial titles, and as standalone knowledge tests.” Adam Kahn, chief business development officer at Netradyne said his company is “thrilled to combine our industry-leading AI powered safety technology with CarriersEdge’s latest online driver training features. This integration is a next-level solution for fleets that take safety seriously. By automatically assigning custom-tailored driver training programs it simplifies the driver coaching process and ensures drivers are getting feedback reflective of their behavior, ultimately making our roadways safer.” The two companies tout that the integration “will allow fleets to better simplify training practices and improve driving behavior. Using a simple drop-down menu, administrators can create as many rules as needed, specify the type of driving behavior and set trigger thresholds and periods. The integrated solution allows for cascading levels of training intervention based on the number and frequency of driver events. Rules are fleet configurable and can be changed at any time. In addition, the CarriersEdge platform documents training and coaching, which reflects the carrier’s efforts and dedication to consistently improving safety, providing proof in the case of litigation.” According to Jane Jazrawy, CEO of CarriersEdge, assignments can be a combination of content, including classroom, online courses, surveys — or even policy documents — “allowing for flexible learning and progressive interventions that match behavior severity and frequency.” Once drivers complete the assignments, details are mailed directly to administrators and managers, providing updates on training scores and completion status. “Dashcam technology is rapidly evolving thanks to advancements in machine learning, edge computing, and AI. As a result, fleets have more information available at their fingertips to evaluate driving behavior in real-time,” Jazrawy said. “Correcting unsafe driving practices is a multi-step process that starts with identifying problems drivers are having and implementing solutions to help prevent the issues from reoccurring. This integration is a feature carriers can use to better streamline their remedial training practices and improve driving behavior. In addition, having solid evidence of driver training is increasingly more important in today’s highly litigious environment.” Ryan Johnson, director of safety at Halvor Lines, said he expects the integration to be a useful new feature for the company. “At Halvor Lines, protecting our drivers is paramount,” Johnson said. “By combining Netradyne’s Driver•i data and CarriersEdge library of safety and compliance courses, this integration will streamline safety coaching by automating training assignments based on the driver’s dash camera events. It will also document these training efforts showing we’re doing what we can to improve driving behaviors and reinforce safe driving practices.”

Netradyne partners with Cover Whale to provide high-tech dash cams for policyholders

The Trucker News Staff - March 21, 2023

SAN DIEGO, Calif .– Software services and artificial intelligence (AI) company Netradyne has announced a partnership with commercial trucking insurance provider Cover Whale Insurance Solutions Inc. to use AI technology for truck driver behavior studies. According to a news release, the idea is to “gain insights (and) identify critical incidents on the road, delivering real-time alerts.” “With intuitive driver alerts and high-performance processing, the latest Driver•i® dual-facing dash cameras enable fleet management to promote safer driving, flag aggressive behavior, coach and communicate with drivers and exonerate them should accidents happen,” the news release noted. The Netradyne platform also allows Cover Whale to coach drivers in cases of unsafe trends such as excessive speed, hard-braking and hard-turning. Drivers that follow the Driver Safety Program’s guidance can save money on premiums, as well as other perks, according to the news release. “We are thrilled to partner with a provider who puts fleet safety at the forefront of its business,” Adam Kahn, chief business development officer at Netradyne, said. “Advanced AI dash cams are no longer an industry ‘nice to have’’ but have become a necessity for companies who recognize that safety coaching is the best form of insurance. Traditional Accident Event Recorders look back at harsh events, missing risky behavioral trends. The Driver•i devices being deployed with Cover Whale use AI and edge computing to capture and analyze every second of drive time, which will help policyholders quickly identify where to focus coaching to reduce risk and lower insurance costs.” Dan Abrahamsen, CEO of Cover Whale, called cameras “an indispensable part of our Driver Safety Program that not only help us improve safety measures and save drivers money, but also empower our policyholders to make safe driving a core part of their day-to-day. Partnering with Netradyne to use their advanced cameras, including the Driver•i D-210 and D-215 dash cameras fall directly in line with our mission of using tech to preempt and prevent future loss. We continue to focus on ways to streamline and improve the claims process, maintain low loss ratios and prioritize the safety of our policyholders.”

Despite potential recession, truck sales and orders remain high

Cliff Abbott - March 21, 2023

U.S. sales of new Class 8 trucks continued their strong pace in February as OEMs reported sales of 20,136 trucks. This total is second only to the year 2006 for the best February ever, according to data received from Wards Intelligence. The February total was just 234 trucks higher than January’s 19,902 for an increase of 1.2%. When compared with February 2022, however, the increase was more than a third higher at 35%. Last February, 14,916 trucks were sold. North American orders for new Class 8 equipment continued to pour in during February, supporting assumptions that freight will hold steady despite rumblings of a coming recession. According to ACT Research, preliminary net orders were 23,600 — up 27% from January and up 13% from February 2022 orders. Final numbers weren’t in as of press time but are expected to be close to the preliminary report. ACT had been expecting orders in the 15,000-20,000 range. “Thus, February’s SA (seasonally adjusted) 22,400 represents a modest upside to our expectation,” said Eric Crawford, vice president and senior analyst at ACT. “Combined with January, SA orders have averaged 19,700 units year to date.” ACT also reported robust orders for new trailers, with 24,300 reported for January. A Feb. 20 release titled “U.S. Trailer Industry Already Committed Through Most of 2023” indicated that, if orders were to stop today, it would take the industry until nearly year-end to build the trailers already on order. Some of those orders could be to replenish dealer stocks, which have been low for a year or more now. The latest purchasing and ordering activity creates some confusion in the “Truckload Capacity/Rate Cycle” shown in the diagram here. Bottoming spot freight rates, falling contract rates and a decline in new carrier registrations indicate the truckload industry should be contracting as shown in Quadrant 4 of the diagram. The market correction usually would be to order fewer trucks. However, the trucking industry is still buying trucks at a high rate — and ordering more, as if correcting for the condition shown in Quadrant 1. Despite worsening conditions, large carriers are still making money, and are anticipating they will continue to do so for the near future. Smaller carriers — many of them single-truck operations that depend heavily on spot rates — are finding it more difficult to operate. A recession, if one occurs at all, would likely curtail truck buying and push the industry into Quadrant 4, contraction. Inflation, however, may have a large impact. Inflation occurs as the economy grows, so higher inflation indicates a fast-growing economy — and a growing economy produces more freight. If the economy continues to expand, the condition of too many trucks for the available freight could solve itself, a factor carriers are considering as they place orders for more equipment. In new U.S. truck sales, International claimed the largest year-over-year increase by percentage, reporting February sales of 2,828 new trucks compared to 1,514 in February 2022 for an increase of 86.8%. Compared to January 2023, International’s February sales were up 15%. For the year to date, International sales have been good for 13.2% of the new Class 8 market, up a little from the 12.5% market share for the full year of 2022. As recently as 2009 the company had bested Freightliner as the top seller, bringing in 28% of the U.S. market compared to Freightliner’s 27.3%. With emissions issues behind them and now under the ownership of the Traton Group, who also owns MAN, Scania and RIO brands, more trucks on the highway might be wearing International nameplates in the future. For now, Freightliner still reigns as the Class 8 leader. The company reported sales of 7,368 in February, down 21.7% from January sales of 9,404 but a 25.1% increase over February 2022 sales of 5,891 trucks. Freightliner accounted for 37.9% of the Class 8 trucks sold on the U.S. market in 2022, within a point of where the manufacturer has been for the past decade. Volvo rode the good times for truck sales with a report of 2,366 new Class 8 trucks sold in February — a whopping 68.4% higher than January’s 1,405 sold. Compared with February 2022, sales grew by 45.6%. Volvo-owned Mack also saw a good month, reporting sales of 1,344 new Class 8 trucks compared to 989 in January for an increase of 35.9%. Compared with February 2022, sales were up by 36.7%. Mack’s share of the U.S. Class 8 market so far this year is 5.8%, while Volvo’s is 9.4%. Kenworth reported sales of 2,843 in February, 8.8% better than January’s 2,614. Compared with February 2022, sales increased 34.2% from 2,118 a year ago. Interestingly, Peterbilt reported exactly the same sales number for February with 2,843 sold, a 15.6% increase over January and a 22.2% increase over February 2022 sales of 2,327. Kenworth holds 13.6% of new Class 8 truck sales so far in 2023 while Peterbilt claims 13.2% Western Star is the smallest of the road truck manufacturers, reporting 534 sold in February. That’s down 5.8% from January’s 567 but 16.6% higher than February 2022, when 458 trucks were sold. So far company has 2.7% of the new Class 8 truck sales in 2023, equal to its market share for the whole of 2022. An interesting note in the February report is that Tesla reported sales of 10 of its battery-electric trucks during the month, after registering on the Wards report for the first time in January with sales of 30 units. The 40 trucks sold year to date represent just under a tenth of one percent of the Class 8 trucks sold on the U.S. market so far in 2023, a number that will undoubtedly grow in the future. Other manufacturers of battery and/or fuel cell electric trucks will eventually be counted in the totals. If the predicted recession is mild, the trucking industry could see a quick return to favorable conditions and more expansion, with even higher sales of new trucks and other equipment.

Mixed signals: Rates continue downward trend as freight volumes decline

Cliff Abbott - March 21, 2023

The state of the trucking freight market remains murky, as recent reports send mixed messages. During February, the overall outlook spot rates remained suppressed, while contract rates continued a downward trend. Spot rates are notoriously more volatile than contract rates — to the detriment of the smaller carriers who depend on agent freight. The Cass Freight Index for Shipments, compiled using data from Cass Information Systems, declined by 0.3% in February compared to February 2022. The index increased by 3.8% from January, but when seasonally adjusted it declined by the same 0.3%. If that seems confusing, consider that typical February rates are 4.1% higher than January, so the 3.8% gain fell short of expectations. The Cass Freight Index for Expenditures is the larger indicator for February. Cass customers typically spend 1.9% less on shipping in February than in January, a number that grows to 3.9% when seasonally adjusted. Comparing current numbers to February 2022 and February 2021, however, provides a better picture of the market. Shipping expenditures this year were 28.4% higher than in February two years ago, but 9.7% lower than February one year ago. That’s an indication that the market, which showed strong growth coming out of the pandemic, has reversed course. The report, written by Tim Denoyer, vice president and senior analyst for ACT Research, states, “Soft real retail sales trends and ongoing destocking remain the primary headwinds to freight volumes, and sharp import declines suggest this type of environment will persist for several more months.” The Cass reports reflect primarily trucking data but also include other modes of shipping such as rail, pipeline, ship and air. Specific to trucking, however, is the Cass Truckload Linehaul Index, which fell 0.4% in February after a 0.9% drop in January. Compared to 2022, the January index fell 5.6% from January 2022 and the February index fell 5.6%. The index has fallen in each month since May 2022 as spot rates fell, followed by contract rates. “At the risk of stating the obvious, the fundamental reason truckload spot rates are still falling is there are too many drivers chasing too little freight,” Denoyer said. “But the freight market is constantly dynamic, and we expect current loose conditions to first rebalance and then tighten over the course of the next year or so.” A statistic that could help spur spot rates into a climb is a sad one for small carriers. The U.S. Department of Transportation reported nearly 2,000 carrier closings per day during the last quarter of 2022. Many of those were single-truck operations, begun by drivers who purchased trucks to take advantage of record-high spot freight rates, that failed when rates came down. As those trucks are removed from competition for broker freight, capacity tightens. The “rebalance” suggested by Denoyer indicates that when the number of trucks and loads is in balance, rates should rise again. We’re not there yet. A March 13 release from DAT Freight and Analytics reported load-to-truck ratios hitting their lowest point since May 2020 (in the thick of the COVID-19 shutdowns). Simply put, when there are fewer available loads and more trucks competing for them, rates decline. Spot rates for van and refrigerated freight hit two-and-a-half-year lows, according to the report. The average van spot rate on the DAT load board dropped to $2.24 in February, down 85 cents from February 2022 average rates. Refrigerated rates fared worse at $2.59 per mile, down 95 cents from February a year ago. Flatbed rates fell to $2.70 per mile, 51 cents below the average rate in February 2022. The DAT release also noted considerable differences between contract and spot rates. Average van contract rates, for example, were 63 cents per mile higher than average spot rates. Refrigerated contract rates were 57 cents higher, and the difference was 73 cents for flatbed rates. Obviously, truckers stand to increase their revenues if they can secure some rates by dealing directly with shippers. A March 13 Weekly Transportation Update from FTR noted that trucking experienced a sharp decline in employment in February, while the overall economy added 311,000 jobs. Fewer drivers means fewer trucks to haul freight — a factor that could help reverse declining rates. At the same time, the unemployment rate rose to 3.6% in February from a 50-year low of 3.4% in January. The Motive (formerly Keep Truckin) Monthly Economic Report claimed the trucking industry is rebounding, offering as evidence an increase of 10% in miles traveled compared to February of 2022. The report noted, however, that miles are still 15% lower than 2021 figures. The culprit is the Consumer Price Index (CPI) issued by the Bureau of Labor Statistics (BLS). According to the BLS, the CPI rose 0.4% in February after climbing 0.5% in January. That doesn’t seem like much but calculated on an annualized basis it’s well above the Federal Reserve’s target of 2% growth for the year. That could trigger another interest rate hike from the Fed. If there is good news, it’s in the number of new carrier registrations, which rose in February after months of decline. The Motive report states, “The trucking industry has borne the brunt of changing economic tides in 2022, getting punished with high diesel prices, rapidly decreasing volumes, and drastic declines in operating margins. We ended Q4 2022 with historically high out of business rates exceeding what was seen during the 2008-2009 financial crisis and a net contraction in the number of freight companies.” Adding more trucking companies into the mix, however, is only a good thing if there is freight to haul. The Motive report indicates softness in consumer demand: “Retailers aren’t investing in inventory due to softness in consumer demand, and they’re offering steep discounts to unload existing stock.” There is a ton of available information, but determining what it all means can be confusing. The peak profit time has ended but there is still money to be made. It’ll take judicious management, including some belt-tightening, for smaller carriers and owner-operators to be successful.

Major US railroad merger to shift thousands of truckloads to rail, feds say

The Associated Press - March 20, 2023

KANSAS CITY, Mo. — The first major railroad merger in more than two decades, one that would link the United States, Canada and Mexico, has been approved by federal regulators. Canadian Pacific’s $31 billion acquisition of Kansas City Southern will combine the two smallest of the nations seven major railroads after an arduous two-year review from the U.S. Surface Transportation Board. The new single-line service is expected to “foster the growth of rail traffic, shifting approximately 64,000 truckloads annually from North America’s roads to rail, and will support investment in infrastructure, service quality, and safety,” the board said. The bar for railroad mergers in the U.S. was raised substantially at the start of the century after a disastrous combination of Union Pacific and Southern Pacific in 1996 that snarled rail traffic for an extended period, followed by the 1999 split of Conrail between Norfolk Southern and CSX, which created backups in the East. Railroads and safety have become a national political fight this year following a fiery derailment that forced evacuations in Ohio last month, and the safety track record of both Canadian Pacific and Kansas City Southern were poured over throughout the extended review process. The Transportation Board said that the new railroad “will facilitate the flow of grain from the Midwest to the Gulf Coast and Mexico, the movement of intermodal goods between Dallas and Chicago and the trade in automotive parts, finished vehicles, and other containerized mixed goods between the United States and Mexico.” The combined company will have little to no track redundancies or overlapping routes, and is also expected to add more than 800 new union jobs in the U.S., according to the board. “The Board is well cognizant of the recent elevated level of public concern stemming from the derailment in East Palestine, Ohio, and as always, the Board has carefully analyzed the proposed merger from a safety perspective.” It said that Canada Pacific has the best safety record of any Class I railroad over the past 15 years and that the combined record for both railroads of preventing hazardous material releases on average exceeds any record affiliated with using trucks or any other railroad. “Any rail traffic diverted to (Canadian Pacific-Kansas City Southern) from other railroads will mean traffic likely moving to a railroad with a better safety record,” the board said. Canadian Pacific outmaneuvered Canadian National railroad in 2021 to complete the deal even though Canadian National offered $33.6 billion for Kansas City Southern. Canadian National lost out in the bidding war because the Surface Transportation Board rejected part of its plan to acquire Kansas City Southern. Regulators said in a report earlier this year that the only major impact of the deal would be an increase in noise in places where train traffic is expected to increase significantly. The Surface Transportation Board essentially rejected concerns that the deal would create problems in towns along the tracks by blocking crossings for extended periods of time or clog the already busy rail network around Chicago and create problems for commuter trains. A coalition of several suburban Chicago cities opposed the merger, fearing that blocked crossings would lead more commuters to drive, rather than using the area’s Metra rail network. The biggest traffic increases are expected between Chicago and Laredo, Texas, with some of the rail lines across Iowa predicted to see more than 14 additional trains a day and the tracks between Kansas City, Missouri, and Beaumont, Texas, likely to see about 12 more trains a day. But the Surface Transportation Board determined that the expected increase in train traffic across the new railroad’s network will only add seconds to the average delay when the time a crossing is blocked is averaged out over all the vehicles that pass through a crossing every day, including all the ones that are never stopped. The railroad industry is under pressure to improve safety in the wake of last month’s Norfolk Southern potentially dangerous derailment in Ohio that prompted evacuations and created lingering health concerns. The major freight railroads have announced several steps they plan to take, but that may not be enough to satisfy regulators and members of Congress who are pushing for broad reforms. Even after this merger, the new Canadian Pacific Kansas City railroad will be the smallest of the major freight railroads with about 20,000 miles of track. The rest of the industry is expected to remain stable with two major railroads in the Western United States — Union Pacific and BNSF — two in the Eastern United States — CSX and Norfolk Southern — and Canadian National running trains across Canada and parts of the United States. The only recent deal involving one of the major railroads is the 2010 purchase by Warren Buffett’s Berkshire Hathaway of BNSF, but that deal faced less scrutiny because it wasn’t a merger of two rivals. A couple years before the Kansas City Southern deal, Canadian Pacific had attempted unsuccessfully to buy both Norfolk Southern and CSX.