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August 31, 2022

“Get the Hell Back to Work, Hank!”

Hank Newman, CEO/Founder

Hank Newman, CEO/Founder

At Reconex, we have a great weekly company meeting every Thursday morning that concludes with me telling everyone to get the hell back to work. Of course, it’s meant to be humorous.

Or is it?

Well, it’s time for me to get back on track after a summer filled with all kinds of distractions! 

After such an absence, I’ve been stuck trying to think of a really good post that sounds super smart and insightful. So to get unstuck, I decided we just needed to get going.

Where is the market headed regarding capacity, pricing, service, technology, etc.? If we look at the last two years of craziness, I believe any predictions will be wrong. But, as my dad often has said, our “expert” pundits are “often wrong, and never in doubt.” Well, I have a lot of doubt, so I’ll give you my best guess with a healthy dose of I’m not really sure. I mean – how do you predict what happens next after a pattern like this?

Everyone is saying we won’t see a return to normalcy for some time — if ever. So I’m saying we are returning to normalcy. LTL year-over-year pricing historically runs at 3.9%. Currently, we are running at 21.1%. All the “Pros” say it’s different this time, and the fundamentals are there for sustained higher LTL pricing for quite a while. Maybe, but I’m going to defer to very long-term charts and trends, and that tells me we are returning to normalcy. Take a look at the following chart showing YOY LTL pricing since 2005:

We aren’t going back to actual prices of the past — we never do — but the rate of change will return to normal, and that will mean opportunities in improving LTL pricing are close at hand — ESPECIALLY FOR THOSE EMBRACING TECHNOLOGY, PERFECT BOLs, and EXECUTING FROM THE TOP, NOT THE BOTTOM!  

So when I say it will be a return to normalcy, it comes with one HUGE caveat – those who operate in the past will NOT return to normalcy.  

That’s all I have for now — let’s start slowly as we get back into the flow! For your pleasure, I’ve updated several key charts below, including LTL carrier performance, TL carrier capacity, TL rates, etc.

Enjoy – 

LTL carrier performance appears to be inching its way back. But 1 out of every 5 shipments still has a failure!

Capacity is looser, but when compared to the past, it’s still tight.

TL Rates have dropped sharply, but elevated diesel keeps the total rate up.

The Cass Shipment Index may be signaling a return to “normal.”

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