[PDF] Download Market Update - Transplace PDF Market-Update_Q42019.1.22.2020

1 avr 2020 · further exacerbated by rapidly declining spot rates and significant discounts Source data and charts: FTR Trucking Update - December 2019

12 nov 2019 · With continued demand for freight, contract prices should maintain stability in 2019; however, spot market prices will remain volatile External

Short-Term Truckload Spot Rates’ Prediction - IEEE Xplore

14 mai 2020 · Further research could focus on rates' standardization, to define a practical freight index for the trucking industry Although our results are specific

[PDF] Q3-Carrier-Rate-Report-1pdf - FreightWaves

The trucking market today is as healthy as it has been since 2017– early rejections of above 20 ), Truckstop com national spot rates are currently running 25 + above 2019 levels, with rising rates on almost all major lanes and rising spot

[PDF] US Intermodal Savings Index - JOCcom

3 fév 2020 · Spot intermodal rates sequentially fell four- tenths of a cent to $1 55 per mile for the final three months of 2019 Spot truckload rates rose 5 cents to $1 75 on a rolling three-month average Contract intermodal rates rose 2 cents to $1 46 per mile and truckload contracts declined a penny to $1 81

[PDF] Download Market Update - Transplace

1 avr 2020 · further exacerbated by rapidly declining spot rates and significant discounts Source data and charts: FTR Trucking Update - December 2019

[PDF] Download Transplace Market Update Q2 2020

Spot rates have dropped sharply for the last couple of weeks at $1 71 All segments now forecast for negative comparisons with 2019 except refrigerated ▫ Dry van loadings The Trucking Conditions Index is set to turn sharply negative

[PDF] TRUCKING & LOGISTICS REPORT - Bridgepoint Investment Banking

Q3 2019 BRIDGEPOINT INSIGHTS Trucking company median EBITDA Van and Reefer Spot Rates Begin to Improve as Holiday Freight Starts to Move $1 81

[PDF] European Road Freight Rate Development Benchmark - HubSpot

The Ti Upply European Road Freight Benchmark for Q3 2019 was flat, with average freight rates in the region unchanged from the previous quarter at € 1,180

2 0 1 9 Q 4 M A R K E T U P D A T E A N D O U T L O O K

MARKET UPDATE & OUTLOOK

Executive Summary 2019 Q4

US Full Truckload

YoY volumes relatively flat

YoY contract rates holding in both Dry/Temp

Significant >10% spot discounts begin to exit the market Short Term Outlook: Flat contract rates into 2020 H1

US Less than Truckload

YoY volumes declining, increase of smaller shipments

Yields and OR flat or slight increase

YoY rates up 2.5 to 6%

Short Term Outlook: 2.5 to 5% increase on contract rate levels into H12020

US Intermodal

YoY Volumes down -3%

Import shift to east coast impacting west coast port volumes

Plentiful Dray capacity continues

Forecasted 2020 rates -5 to 0%

US Bulk

YoY Rates flat or declining in all markets

Declining spot volumes

2020 Outlook: Stable capacity Flat rates

Mexico Truckload

Bankruptcies impacting capacity availability pressuring contract rates Current security situation and administrative policy creating significant uncertainty with over the road modes Increasing interest in multi-year rate commitments

Canada Truckload / LTL

Capacity surplus exists due to record 2018

Only consistent rate increases appearing in metro area short haul Fuel prices increasing more rapidly than US, future carbon tax to add +8 cts/liter 4/1/2020

US Flatbed

Average Spot Discounts continue extreme spread in Jan at ~15% Expectations of Flat to moderate increases across 2020. Bureau of Labor Statistics Non-Adjusted Housing starts indicate unexpected YoY spike for Dec 2019

International Ocean

CN to USWC Spot Rates showing -20% YoY

CN to NEUR Spot Rates +10% YoY

Several ocean carriers launching online quote tools California Trucking Association wins injunction of AB5 legislation exempting California trucking industry FULL

TRUCKLOAD

M A R K E T U P D A T E A N D O U T L O O K

KEY FACTORS IMPACTING SUPPLY

F U L L T R U C K L O A D

Class 8 Orders which indicate a forward expectation of capacity needs are significantly down trending throughout

2019 creating a pessimistic outlook. Market conditions are

further exacerbated by rapidly declining spot rates and significant discounts compared to contract rates. Trucking employment continues to decline from its all-time high in June driving additional supply out of the network. Supply is still in the early stages of shrinking and will continue to do so throughout 2020. Carriers are facing strong headwinds in pricing, labor costs and increased potential for lost drivers due to pending federal drug testing regulations. Strong balance sheets developed in 2018 have likely delayed the impact of these headwinds as many carriers were flushed with cash. All signs point to loadings increasing while overall driver supply decreases. Expectations are for continued contraction in supply of capacity to meet the slight increase in demand.

KEY FACTORS IMPACTING DEMAND

PMI and ISM

inventories both point to slowing demand.

F U L L T R U C K L O A D

Source: https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?SSO=1

Shippers across

the Transplace network are continuing to experience significantly better route guide compliance across all

Truckload

modes.

MARKET UPDATE AND OUTLOOK

Spot rate discounts drive contract rates down (slowly), while spot premiums have the opposite effect.

Contract rates for dry van trending at $2.08 while spot rates are increasing due to holiday season, $1.97 still

below contract rates.

Contract rates expected to continue to trend downwards to following the spot market. Spot showing seasonal

uptick as well.

F U L L T R U C K L O A D

T R A N S P L A C E S P O T & C O N T R A C T MA R K E T T R E N D S

MARKET UPDATE AND OUTLOOK

Van Conditions will remain soft as we head further into 2020. Weekly Spot Market Report continues to show weaker conditions, but spot has increased at a fast rate likely due to seasonal uptick. The current expectation is that the truckload market will offer flat to moderate increases (2 to 3%)in the back half of 2020 as pricing is expected to regain normal inflationary levels. Transplace is actively monitoring the turn at the bottom of the current cycle as it will be instrumental for shippers. Tightening conditions will likely require changes in procurement and execution strategies as conditions change.

Temp Control

Refrigerated loadings are projected to grow 2.9% in 2020. Refrigerated loading growth % outpaced dry van in 2019 and is projected to do the same in 2020. Rates will likely start to show a moderate increase the 2nd half of 2020 with an accelerated increase heading into 2021 following the expected increase in refrigerated loadings.

F U L L T R U C K L O A D

Source data and charts: FTR Trucking Update -December 2019

LESS-THAN-

TRUCKLOAD

M A R K E T U P D A T E A N D O U T L O O K

KEY FACTORS IMPACTING DEMAND

S L O W I N G T O N N A G E L E A D I N G T O S O F T E R Y O Y C O N D I T I O N S Institute for Supply Chain Management (ISM) and Purchasing volumes as industry has significant exposure to the manufacturing economy. A reading above 50 indicates manufacturing economy is expanding.

4 consecutive quarters of YoY declining LTL tonnage.

Average weight per shipment is declining; primarily due to less TL spillover due to the softening of the TL market and general economic conditions and less product being ordered at a time. Tonnage, shipment count, and average weight all declined in

2H2019.

Tonnage is down 4.5% in 3Q19 compared to 3Q18.

Shipment count is down 2.3% in 3Q19 compared to 3Q18. Average weight is down 1.8% in 3Q19 compared to 3Q18.

Source: Stephens, Stifel and ISM

L E S S-T H A N-T R U C K L O A D

KEY FACTORS IMPACTING SUPPLY

Capacity Conditions:

The decrease in terminals was due to better utilization of the service centers in addition to upgraded, larger service centers. in order to more efficiently deliver the increasing increases capacity. Due to declining tonnage, most carriers have excess capacity to fill within their networks. XPO is investing significant capital in technology to improve operational utilization.

Source: Stifel

I N C R E A S I N G A U T O M AT I O N & R E D U C I N G I N T E R N A L C O S T T O O F F-S E T W E A K E RD E M A N D

Automation:

Continued focus from carriers to better utilize

technology to more efficiently operate terminal operations and automate with customers to reduce errors and labor expenditures. As part of FedEx 2020 Program, FedEx Freight plans dimensioners efficiently manage their terminals.

L E S S-T H A N-T R U C K L O A D

CURRENT PRICING IMPACT

L AT T E N I N G

Operating Ratios (OR):

increasing by .7 points. Primary reason is due to overall decline in tonnage followed by a decrease in average weight per shipment which historically have lower profitability. Yields are trending positive due to a reduction of average weight since it is a calculation of revenue per hundredweight. Pricing discipline, improved technology (dimensioners& data), and ability to more efficiently charge accessorials are primary factors driving OR improvement, over recent years, in addition to expanding additional value-add offerings that come at higher margins. (guaranteed service, MABD services, custom solution services, AK/HI/PR services, etc.)Source: Stephens

L E S S-T H A N-T R U C K L O A D

2020 RATE OUTLOOK

Contractual Renewals:

Expect 2020 contractual renewals to be in the 2.5% to 5.5% range.

Expect lower increases in 1H2020

Expect higher end of the range in 2H2020

2019 contractual renewals were in the 2.5% to 6% range despite

slowing tonnage. Experienced lower increases in 2H2019 vs.

1H2019.

2018: 4% to 8% range

2017: ~5%

2016: ~4%

Driving Factors:

Focus on retaining current business levels while maximizing annual increase renewal. Focus on increasing market share on new business to off-set declining tonnage levels. significant fixed cost when compared to TL counterparts. Carriers are focused on reducing their internal cost when integrating with shippers/3PLs in order to reduce the impact of increases.

Source: FTR & Stifel

L E S S-T H A N-T R U C K L O A D

INDUSTRY OBSERVATIONS

2019 YTD RFP contractual renewals average 2.5% increase.

2019 YTD RFP results average 5.1%+ savings.

$50M LTL shipper focuses on automation with core LTL carriers to achieve rate reductions.

2018 was year of yield & OR improvements.

2019 was the year of retaining current business levels without negatively impacting OR and aggressively targeting

new business for growth. Expect 2020 behavior to be similar to 2019 (especially for the first half of the year). Numerous carriers state they have 10% -15%+ additional capacity within network.

YRCW Network Consolidations:

YRCW proposal dated 10/1/2019 calls for YRC Freight locations in Alpena and Cadillac Michigan to be merged

into a Holland facility in Gaylord, MI, according to a "Change of Operations" document obtained from labor

sources. This is now an option due to recent union labor agreements, and is pending union approval. New Penn closed Lebanon, PA corporate headquarters in September 2019 and consolidated operations at Mountain Valley Express and Midwest Motor Express were both sold to Private Equities in Q4 2019. W H AT W E A R E O B S E R V I N G F R O M T H E M A R K E T

L E S S-T H A N-T R U C K L O A D

INTERMODAL

M A R K E T U P D A T E A N D O U T L O O K

KEY FACTORS IMPACTING SUPPLY

I N T E R M O D A L

Dray Capacity:

Dray capacity continues to be plentiful across the intermodal network. California Trucking Association wins injunction of AB5 legislation exempting California tucking industry

Equipment:

Intermodal equipment continues to be plentiful across the intermodal network. The railroads are continuing to invest in their equipment and facilities in 2020.

Rail Service:

Rail service continues to improve. One of the service measurements is the average intermodal train speeds. The results in the fourth quarter continued to exceed the five year average.

KEY FACTORS IMPACTING DEMAND

I N T E R M O D A L

Domestic intermodal year to date volume was down 6.2% year over year through November. There continues to be a shift on imports from the West Coast to the Southeast and Gulf Coast. This has negatively impacted volume off the West Coast. Fall Peak: There was an uptick in volume on the west coast, especially in early December due to parcel volume, but overall it was pretty much a non-event. Intermodal volume is expected to rise again as over the road capacity tightens.

Factors include:

The long-term shortage of drivers.

Bankruptcies due to low spot/contract rates and rising costs. There were over 800 companies that shut their doors in 2019, more than double the number from 2018. An increase in the percentage of drivers required to be drug tested, a federal mandate on hair follicle testing, and the launching of the National

Drug and Alcohol Database.

The next steps with AOBRD which was implemented in December.

IMO 2020 and the impact on fuel prices.

impact intermodal volume. Domestic intermodal volume did increase in the fourth quarter relative to other points of 2019, but it is expected to drop off again in the first quarter of 2020. Volume will likely start to shift back to Intermodal starting in Q2 2020.

CURRENT PRICING IMPACT, OUTLOOK AND

RECOMMENDATION

Railroads:Rates continue to hold

and in some lanes rail providers have been willing to reduce rates in order to retain and grow the business.

Dray Carriers:The response

varies by market and by provider, but generally speaking they are still willing to reduce rates.

Recommendation:This is a great

time to secure long-term intermodal rates, before capacity gets consumed when the market turns.

I N T E R M O D A L

Source data and charts: FTR Intermodal Update -December 2019

MARKET UPDATE AND OUTLOOK ANECDOTES

Morgan Stanley Surveys

1/2/20:

capacity needed to absorb the shocks of insurance premium increases, and other regulatory changes, was removed via attrition. We now believe we can throw our "stability" forecasts out the window and

12/18/19:

a rapidly tightening Q2. There are more dominoes to fall in terms of bankruptcies prior to any real

12/4/19:

2020 bids. However, based on the large number of bankruptcies and the latest e-log mandate, we feel

the market will turn toward the carriers favor again in early to mid 2020 and we hope to see a "spot market" again during quarters 2-

12/4/19:

transportation budgets. Some are hedging against overspend should the cycle start heading towards

imbalance in favor of carriers, while many others are still aiming to squeeze as much current spend out

I N T E R M O D A L

INTERNATIONAL

M A R K E T U P D A T E A N D O U T L O O K

IMO 2020 CURRENT MARKET

CONDITIONS

I N T E R N A T I O N A L

and no data back up to calculate very low Sulphur fuel surcharges (VLSFO). Are carriers using the opportunity to recover from low freight rates in 2019? Carriers in the same alliance on the same trade lanes are providing varying VLSFO surcharges.

Along with a lack of how the surcharges are being calculated, analysts are finding no correlation between the relative efficiency of the

various carriers based on average size of vessels deployed and the applicable surcharge.

Several ocean carriers sent notices to the trade advising additional interim surcharges effective December 1 for spot rate market. Two

carriers noted lane specific dollar amounts, and CMA-CGM has created a low sulfur tariff calculator.**

Ocean carriers who opted to implement scrubbers are currently able to benefit from large spread between high sulfur fuel currently trading at

$337 per ton and low sulfur at $500 per ton.* rrent price

So will be curious to see how that plays out between those carriers that installed scrubbers and those

It costs around $4-10MM to install scrubbers in a vessel and it will take a couple of years before carriers see ROI.Scrubbers come with

their own set of issues and costs.Some jurisdictions may not allow for open loop scrubbers (this is what many carriers installed instead of

closed loop) to discharge the waste water in their territory and those carriers using scrubbers will have to use the VLSFO (VeryLow Sulfur

Fuel Oil) as they get closer to coastal areas.

Those carriers who have opted for LNG also come with challenges of availability and ease of refueling LNG and vessel construction costs.

U.S. CHINA TARIFF UPDATE

U.S and China have reached a first stage trade deal, which was signed January 15.

This first stage deal includes the following:

Cancels the 15% tariffs that were to be levied

December 15 on $160 billion in Chinese goods.

Further reduces tariffs at 15% on 120 billion in

goods to 7.5%

Those products currently at 25% will remain in

effect.

In return, China agrees to purchase $50 billion

of agricultural goods and increase protections on intellectual property. It remains to be seen if this first stage will lead to an overall decrease in trade tensions and further reduction in tariff rates as ongoing negotiations continue.

I N T E R N A T I O N A L

OTHER NEWS OF INTEREST

CONTAINER SHIP BIOFUEL: Maersk & WalleniusWilhelmsen will test the commercial and environmental viability

of a new biofuel: LEO, a blend of lignin and ethanol. Lignin is a structural bio-polymer. It has the potential for more

scalability than cooking oil fuel that Maersk piloted between Shanghai and Rotterdam from March through June in

2019.

RATE API: CargoSphere, a freight rate management software company, is releasing a rate application programming

interface (API) usable by all container lines. The rate API, along with an accompanying universal rate structure,

enables container lines to transfer confidential customer contracts, amendments and surcharge tariffs to

neutral rate network. ALAMEDA CORRIDOR FINANCIAL CONCERN: The Alameda Corridor which opened in 2002 is a 20 mile freight

rail expressway that shuttles ocean containers from the ports of Los Angeles and Long Beach to the national rail

system. The operating Alameda Corridor Transportation Authority (ACTA) is facing a severe financial risk due to long

term shifts in cargo volumes away from the LALB ports as well as local drayage and trans-loading of discharging

containers. Container volumes have been steadily shifting to US east coast ports.quotesdbs_dbs20.pdfusesText_26

[PDF] [PDF] Download Market Update - Transplace

2 0 1 9 Q 4 M A R K E T U P D A T E A N D O U T L O O K

MARKET UPDATE & OUTLOOK

Executive Summary 2019 Q4

US Full Truckload

YoY volumes relatively flat

YoY contract rates holding in both Dry/Temp

US Less than Truckload

Yields and OR flat or slight increase

YoY rates up 2.5 to 6%

US Intermodal

YoY Volumes down -3%

Plentiful Dray capacity continues

Forecasted 2020 rates -5 to 0%

US Bulk

YoY Rates flat or declining in all markets

Declining spot volumes

2020 Outlook: Stable capacity Flat rates

Mexico Truckload

Canada Truckload / LTL

Capacity surplus exists due to record 2018

US Flatbed

International Ocean

CN to USWC Spot Rates showing -20% YoY

CN to NEUR Spot Rates +10% YoY

TRUCKLOAD

M A R K E T U P D A T E A N D O U T L O O K

KEY FACTORS IMPACTING SUPPLY

F U L L T R U C K L O A D

2019 creating a pessimistic outlook. Market conditions are

KEY FACTORS IMPACTING DEMAND

PMI and ISM

F U L L T R U C K L O A D

Shippers across

Truckload

MARKET UPDATE AND OUTLOOK

F U L L T R U C K L O A D

MARKET UPDATE AND OUTLOOK

Temp Control

F U L L T R U C K L O A D

LESS-THAN-

TRUCKLOAD

M A R K E T U P D A T E A N D O U T L O O K

KEY FACTORS IMPACTING DEMAND

4 consecutive quarters of YoY declining LTL tonnage.

2H2019.

Tonnage is down 4.5% in 3Q19 compared to 3Q18.

Source: Stephens, Stifel and ISM

L E S S-T H A N-T R U C K L O A D

KEY FACTORS IMPACTING SUPPLY

Capacity Conditions:

Source: Stifel

Automation:

Continued focus from carriers to better utilize

L E S S-T H A N-T R U C K L O A D

CURRENT PRICING IMPACT

L AT T E N I N G

Operating Ratios (OR):

L E S S-T H A N-T R U C K L O A D

2020 RATE OUTLOOK

Contractual Renewals:

Expect lower increases in 1H2020

Expect higher end of the range in 2H2020

2019 contractual renewals were in the 2.5% to 6% range despite

1H2019.

2018: 4% to 8% range

2017: ~5%

2016: ~4%

Driving Factors:

Source: FTR & Stifel

L E S S-T H A N-T R U C K L O A D

INDUSTRY OBSERVATIONS

2019 YTD RFP contractual renewals average 2.5% increase.

2019 YTD RFP results average 5.1%+ savings.

2018 was year of yield & OR improvements.

2019 was the year of retaining current business levels without negatively impacting OR and aggressively targeting

YRCW Network Consolidations:

L E S S-T H A N-T R U C K L O A D

INTERMODAL

M A R K E T U P D A T E A N D O U T L O O K