| | Transportation Update: Slight Upward Growth | | After several consecutive dismal periods, there is some positive news this quarter that points to a healthier and more competitive transportation segment going forward. Thre is anecdotal evidence of increased shipment count. Many leading providers posted modest profits or stayed out of the red, some for the first time in several quarters. While those of us paying freight bills have enjoyed some benefit from heavy pricing pressure, it is certainly clear that recent market conditions are not sustainable. A balanced and healthy market allows the type of variety and excellence of service that is a necessary and integral part of our supply chains.
Over-capacity still exists in both the less-than-truckload (LTL) and truckload (TL) markets, though TL capacity seems to be drying up rapidly as the 4th quarter draws to a close. LTL is still heavily affected by the continued presence of Yellow/Roadway Corp (YRC). YRC is in the progress of completing a debt-for-equity swap in an effort to eliminate $500,000,000 from their books. This deal is in progress and must complete after 20 trading days. If the measure proves unsuccessful, YRC's Tim Wicks has stated that the next step will be a Chapter 11 filing to restructure. YRC's corporate leadership stresses that it intends to continue to operate during these steps. Many leading analysts feel that if YRC successfully navigates the equity swap, LTL pricing will remain depressed for the foreseeable future.
We at M33 have been very proactive in the last several months, engaging our carrier base to assure a positive relationship on behalf of our client partners as the pendulum begins to inevitably shift back to the carrier side. As always, we will seek to keep you informed and well-positioned to receive the best value in the market. Please contact your M33 Account Manager or Business Development Manager if you wish to discuss the strategic direction of your supply chain. *** Jeff Thomas is the Director of Carrier Pricing and Implementation Services for M33 Integrated Solutions, a global logistics solutions provider. Jeff is responsible for the successful integration of new customers into the M33 Client Network, overseeing data analysis, procurement of carrier resources through the RFQ process, and carrier contract management. He can be contacted at (877) 369-0343.
The commentary above is based solely on the professional opinion of M33 representatives, and is meant to provide M33 clients with the knowledge they need to make more educated decisions. |
| Note to Readers | | Help us enhance your transportation network If you think one or more of your vendors or customers have room to improve their transportation operations, please forward us their contact information. |
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