First-Quarter Trucking Outlook
Special Report
The US manufacturing sector contracted further in December , with the S & P Global US manufacturing purchasing managers index ( PMI ) falling to 47.9 from 49.4 in November . The overall picture is one of supply exceeding demand for goods , S & P Global , the parent company of the Journal of Commerce , said in the December PMI report .
Waiting for an inflection
LTL carriers and shippers are waiting for a catalyst that would increase demand and push US manufacturing back toward expansion . The likeliest candidate on the horizon may be US interest rate cuts , but such cuts may still be months away and are likely to be modest .
“ People were expecting things to tighten up when Yellow went out , and they did , but not to the degree some people hoped .”
Vise said he expects an “ inflection ” — i . e ., an increase in demand and pricing — in 2024 , “ but not really much of one . By the time we get to the end of the year , we ’ ll be in a fairly normal environment , just not one to get too excited about .”
“ The failure of Yellow was obviously a short-term boost to the industry ,” he added . “ But LTL demand drivers are still quite weak , and we don ’ t see a lot of prospects for that changing .”
Done deal
Forward Air , Omni Logistics seal long-awaited merger
By William B . Cassidy
Forward Air on Jan . 26 completed its acquisition of Omni Logistics after the expedited surface transportation provider and global freight forwarder reached an amended merger agreement . Plans for the merger were initially announced last August , but the deal was delayed by a series of battles between activist investors , shareholders and the companies themselves .
The completion of the deal will allow the two companies to integrate their international and North American operations , sending more high-value freight into Forward ’ s less-than-truckload ( LTL ) network , according to Forward Chairman and CEO Tom Schmitt .
The combined company will have approximately $ 3.5 billion in annual revenue .
“ We are now uniquely positioned to be the premier provider of choice in high-quality freight transportation to a larger customer base with an expanded domestic footprint ,” Schmitt said in a statement . Although the deal brings expanded international services to
Forward , it ’ s the ability to bring more freight into its LTL network that drew the ground-air trucking firm to Omni .
The amended agreement , announced at the end of January , reduces the amount of cash Omni shareholders will receive from $ 150 million to $ 20 million . Omni shareholders will also receive slightly less Forward stock than the original agreement would have provided .
When it was announced in August , the proposed merger quickly ran into objections from activist investors . Investment analysts raised concerns about integration of disparate services , and shareholders protested terms of the deal that bypassed shareholder approval .
Forward ’ s stock traded at $ 104.02 per share when the merger was announced
Andriy Blokhin / Shutterstock . com
Aug . 10 ; it was trading at $ 46.67 per share on Jan . 26 .
Schmitt has insisted that LTL remains “ the main show ” for Forward , and that Omni would increase volumes in its expedited LTL network . The merger brings Forward into direct contact with Omni shippers , but also raises the specter of competition with other forwarder customers , a risk Schmitt has said the company is addressing .
Forward said it would release more information on integration plans , future management and board structure when it publishes its fourth-quarter earnings report in February .
email : bill . cassidy @ spglobal . com
30 Journal of Commerce | February 12 , 2024 www . joc . com