February 12, 2024 | Page 6

LTL carriers look to ports to boost business
Less-than-truckload ( LTL ) carrier Averitt says business at US ports is “ exploding ” as shippers pursue transloading options at new locations . “ We ’ ve done over 40,000 drays and 35,000 transloads ” in the past year , said Kent Williams , executive vice president of sales and marketing for Averitt , which provides LTL , truckload and warehousing services from the Southeast to Texas . Speaking at the SMC3 JumpStart 2024 conference in Atlanta in late January , Williams said Averitt ’ s Distribution & Fulfillment division has grown rapidly , aided by the shift of freight from West Coast ports to East and Gulf coast ports during the pandemic and West Coast longshore labor negotiations last year . Still , Averitt is “ a little concerned right now ” about the potential for some freight to return to the US West Coast due to Panama Canal drought restrictions and diversions away from the Suez Canal due to ongoing attacks on commercial shipping in the Red Sea . The East Coast ’ s share of imports from Asia , at 33 % at the start of the COVID-19 pandemic , rose as high as 39.3 % by December 2021 , according to PIERS , a sister company of the Journal of Commerce within S & P Global . The share has bounced up and down over the past two years and was just under 36 % in December . Other LTL carriers are joining Averitt by building terminals closer to the water . A . Duie Pyle , a Philadelphia-based Northeast and mid-Atlantic regional carrier , told the Journal of Commerce it is planning a 200,000-square-foot terminal in Norfolk with 40 to 60 doors . Estes opened a larger terminal near the port of Savannah in 2022 . For Averitt , the distribution and fulfillment business is one of several industry verticals that complement its LTL core , including truckload , final-mile and dedicated trucking . “ Instead of expanding our geographic footprint , our strategy is to offer customers more services . It ’ s a one-stop-shop approach ,” Williams said , adding the port , LTL and other services are highly integrated . “ If we ’ ve got to pull 110 containers from the port , we can shift LTL drivers over to help with that .”
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Asia – Europe air rates , demand get big boost
Air cargo rates and demand from Asia to Europe rose sharply during the last week of January in what analysts believe is a seasonal export push ahead of the Lunar New Year combined with a Red Sea-driven shift in mode away from ocean . The Baltic Air Index ( BAI ) covering outbound routes from Shanghai was up 8.8 % compared to mid-January , led by an increase in European demand , according to the latest air freight update by TAC , which provides pricing data to the BAI . “ The increase is in line with expectations that rates may spike following disruption to ocean shipping in the Red Sea , though sources also point out that rates often rise in the runup to Chinese New Year ,” the TAC said in its update . The Lunar New Year in Asia began on Feb . 10 . China – North Europe air freight rates rose to $ 4.02 per kilogram in late January , up 13.5 % from the week before and 20 % from the first week of January , according to the BAI . Netherlands-based air cargo analyst WorldACD reported strong demand on the Asia – North Europe corridor . It also said overall global demand in the last two weeks of January was up 6 % year over year despite the 2023 period benefiting from an earlier Lunar New Year and the accompanying annual surge in air cargo traffic ahead of the holidayrelated factory closures in China . But the analyst pointed to an unanticipated 21 % increase in air freight tonnage out of the Middle East and a 12 % gain in South Asia volume , which suggested the conversion of some ocean freight into air cargo and sea-air cargo because of the Red Sea security situation .
UPS announces layoffs , eyes ‘ alternatives ’ for Coyote Logistics
UPS on Jan . 30 said it is exploring “ strategic alternatives ” for its Coyote Logistics subsidiary , one of the top truckload and domestic intermodal brokers in the US . UPS , which currently employs 495,000 people , also said it will lay off 12,000 workers this year , mostly management and contractors , although the company did not break down what percentage will come from Coyote versus other divisions . UPS Coyote , a non-asset brokerage , saw its revenue decline sharply as the truckload market slumped in 2022 and 2023 , UPS said . The company did not break out Coyote ’ s revenue and operating income from the results of its Supply Chain Solutions division , of which Coyote is part . “ When we acquired Coyote in 2015 , the revenue in the previous year for Coyote was $ 2.1 billion ,” UPS CEO Carol Tomé said during an earnings call Jan . 30 . The brokerage ’ s revenue peaked at more than $ 4 billion , but “ it ’ s gone way down since then ,” Tomé said . Revenue at UPS ’ s Supply
6 Journal of Commerce | February 12 , 2024 www . joc . com