State of the Industry Report January 2023
Industry Insight from RXO Experts
Industry Insight from RXO Experts
Over the past three years, the automobile industry has experienced significant headwinds related to the China Covid-19 shutdown, micro-chip shortage and various employee and parts shortages at the supplier level, all of which impacted production. In the years prior to Covid-19, light vehicle sales in the United States averaged just over 17M units (2015-2019). Vehicle sales in 2020-2021 averaged 14.7M units and dropped to 13.5M units in 2022. The overall drop in new car sales was due to a rising increase in rates, inflation concerns and the threat of a recession. With these economic headwinds, consumers are holding on to vehicles longer or scouring the used car market as an alternative to buying new ones.
For 2023, new vehicle sales are projected to be in the range of 14.1M-15M but there are still ongoing concerns over the threat of a potential economic downturn. Again, people are delaying buying or they are considering a used car even as job growth remains healthy and consumer confidence rebounds.
As the microchip shortage improves and supplier constraints begin to normalize new vehicle inventory will continue to improve. This may boost incentives to drive sales and minimize the markups that are currently being added to the MRSP.
It’s more important than ever for companies to have a strong Expedite partner.
Brian Dean
Vice President,
Managed Transportation,
Southfield, MI
RXO Wins Dow Above and Beyond Award
Dow’s Above and Beyond Award recognizes the stellar work of RXO’s Managed Transportation team in 2022.
Drew Wilkerson, chief executive officer at RXO, said, “We’re thrilled to be recognized by such a distinguished customer for going above and beyond to provide mission-critical support under a tight timeframe. We pride ourselves on acting as an extension of our customers and solving complex supply chain issues under any condition.”
RXO In The News
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RXO Wins Dow Above and Beyond Award
Dow’s Above and Beyond Award recognizes the stellar work of RXO’s Managed Transportation team in 2022.
Drew Wilkerson, chief executive officer at RXO, said, “We’re thrilled to be recognized by such a distinguished customer for going above and beyond to provide mission-critical support under a tight timeframe. We pride ourselves on acting as an extension of our customers and solving complex supply chain issues under any condition.”
Top Industry News
2023 Rate Outlook: Will Shippers Catch a Break?
An annual gathering of freight transportation industry analysts reveals some common themes, largely around the notion that rates are not likely to increase much—if at all—in some modes and will continue declining in others. Does this mean things are stabilizing?
Inflation, Consumer Spending Cool in December
The Federal Reserve’s preferred inflation gauge eased further in December, and consumer spending fell — the latest evidence that the Fed’s series of interest rate hikes are slowing the economy.
The Jan. 27 report from the Commerce Department showed that prices rose 5% last month from a year earlier, down from a 5.5% year-over-year increase in November. It was the third straight drop.
US and Global Macroeconomics
IMF Chief Says Global Economic Outlook ‘Less Bad’ Than Feared
SupplyChainBrain: Deal flow in the transportation and logistics space slowed notably in 2022 as the economy cooled. Investors have become more risk averse, minimizing exposure to companies with less-proven track records, as interest rates have soared and credit markets have tightened
U.S. Aviation System Meltdown Tied to Corrupted Digital File
SupplyChainBrain: A corrupted computer file led to the breakdown of an air-safety system that prompted flights to be grounded across the U.S., according to people familiar with the preliminary findings.
California’s Loss is Texas’ Gain
FreightWaves: Nation’s 2 largest states for freight are moving in opposite directions.
Sanctions Effect Begins: Crude Tankers Forced onto Longer Voyages
FreightWaves: Russian crude exports switch from European Union to buyers in India.
Trucking M&A Expert Doesn’t Expect Slowdown
Transport Topics: The market for mergers and acquisitions in trucking is poised to stay robust, but could undergo some changes, an expert said during a recent industry event.
Truckload and LTL
Relationship Between Imports and Trucking is Dynamic but Telling
From January 2019 through the first two weeks of January 2023 companies have booked container imports nearly in sync with asking for domestic truckload capacity over the past four years. As inventories correct, that is changing. But their direction remains similar entering ’23.
Trucking Demand Falls Faster than Inventories in December
The Logistics Managers’ Index (LMI) inventory level component increased from 55 to 57 from November to December, indicating inventory growth accelerated for the first time since the summer. Meanwhile, trucking demand as measured by the Outbound Tender Volume Index fell. We’re seeing an early sign that demand for goods is eroding faster than companies were expecting.
Smart Solutions
Modes Overview
- Parcel Carriers made Good on Peak Delivery Commitments, ShipMatrix says. More from FreightWaves.
- Last-mile Delivery of Big Items a Fertile Field for 3PLs, report says. More from FreightWaves.
- Rough Start to 2023 for Dry Bulk, Tanker, Gas, Container Shipping. More from FreightWaves.
- Air Cargo: Volatility Lingers. More from Logistics Management.
- Collaboration must be Key for Railroads to Thrive, experts say. More from FreightWaves.
- RXO Makes Dedicated Freight Accessible, Desirable for Shippers and Carriers. More from FreightWaves.
- Running on Ice: Cold Chain Demands Grow Stronger. More from FreightWaves.
Infrastructure and Regulation
Driver Tax Credits, Truck Parking Capacity Part of New Bipartisan Bill
- Legislation promises ‘sweeping overhaul’ of interstate trucking.
- Truck drivers would be eligible for up to $10,000 in tax credits, along with training incentives, as part of new bipartisan legislation aimed at retaining and recruiting drivers.
- Also incorporates truck parking funding and an hours-of-service exemption for livestock haulers — long-sought measures by drivers and carriers.
Biden Climate Blueprint Promotes Modal Shift Away from Trucks
Maritime and rail offer ‘cleanest options’ for achieving net-zero GHG, administration asserts
Cross-border: Mexico, Canada and International
Canada Still Top US Trading Partner Ahead of Mexico
Canada ranked as the United States’ top trading partner for the second consecutive month in November and stands No. 1 overall year to date, according to the most recent data from the U.S. Census Bureau.
Mexico ranked No. 2, as its total trade with the U.S. increased 6% year over year (y/y) to $62.4 billion in November, compared to the same period in 2022. China rated third with $52.5 billion.
As the nearshoring trend continues, companies must start building relationships with transportation providers that have strong cross-border operations.
GM to Expand EV Production in Mexico, Creating 4,500 Jobs
General Motors is reportedly considering expanding electric vehicle production to its existing plant in the northern Mexico city of Ramos Arizpe.
Port Laredo No. 2 Gateway for International Trade in November
It was among the nation’s 450 international gateways, behind Chicago O’Hare Interational Airport. As the nearshoring trend continues, companies must start building relationships with transportation providers that have strong cross-border operations.
Technology
Three Procurement Technology Evolutions for 2023
As we usher in 2023, the procurement and supply chain operating model will continue to evolve. Despite sustained uncertainty in the business landscape, consumers still need goods and services. And manufacturers still need to meet demand.
Technicians Gear Up for Truck Technology Changes
As truck technologies and emissions systems continue to evolve and electric-powered trucks begin to hit the market, the knowledge and expertise required to service and maintain these vehicles is also shifting.
Initiatives – Safety
DOT Unveils Strategic Safety Plan
Evaluating existing technologies and supporting emerging technologies will facilitate the adoption of safety programs for the country’s mobility corridors, a new strategic plan from the Department of Transportation determined.
Head of Transportation Safety Board Shares Concern Over Heavy EV Safety Risks
The extra weight that EVs typically carry stems from the outsize mass of their batteries. To achieve 300 or more miles (480 or more kilometers) of range per charge from an EV, batteries have to weigh thousands of pounds.