A 2019 Logistics Overview and A Look Ahead to 2020

2019 has caused a thinning out of some of the transportation companies and caused the remaining firms to continue to evolve, grow, and adjust to the changing climate. An article from Transport Topics stated that “More trucking firms have shut down during the first six months of 2019 than in all of 2018.” Many companies couldn’t stay in business due in part to tariffs, regulations, and increasing costs.

We summarized some of the headlining industry changes in 2019 and what lies ahead for 2020…

 c

REGULATORY CHANGES:

Transportation companies continue to face increasing regulations.

  • The FMCSA released the proposal to make changes to its hours-of-service rules in August. The HOS rules were intended to allow for more flexibility for the driver without increasing the maximum time a driver is allowed to spend driving.
  • The electronic logging device (ELD) rule took effect two years ago but December of 2019 was the final date for 100% compliance. They recently published a press release reminding carriers of the deadline and that there “will be no soft enforcement grace period.”

c

ECONOMIC RISKS:

  • The main risks for transportation companies are the same ones that could derail overall economic growth–global trade wars and higher interest rates. A further escalation of the U.S.-China dispute would slow economic growth and hurt certain transportation sectors more directly (shipping is the most exposed).
  • The other key risk to transportation companies, higher interest rates, affect economic growth, the capital markets, and–more directly–companies’ interest expense. Transportation companies use large amounts of debt and they are probably ready to handle rising rates as long as they don’t increase too sharply.

 c

DRIVERS:

Looking at the trucking side of the logistics industry, there has been a major stalling point for the last two years: Too much freight and not enough drivers, which is both good and bad for the industry as a whole. This is good in the sense that the U.S. economy is still robust. The bad news is that carriers have been struggling to recruit and retain quality. Unfortunately, as 2019 comes to an end, more of the same can be expected for the remainder of the year.

The Morgan Stanley Truckload Freight Index (TLFI) said, “we expect TL companies to focus on potential market tightening in 2020 this earnings season given supply side rationalization catalysts on the horizon, including the Drug and Alcohol Clearinghouse and insurance rate spikes, as they continue to grapple with a currently tough operating environment.” Their sentiment survey showed an overall negative outlook regarding rates and supply.

c

Looking Forward into 2020

c

DRIVER SHORTAGE:

The truck driver shortage has been a serious issue through 2019 and is expected to continue causing issues well into 2020. One reason it has been so difficult to recruit and retain quality drivers is the demand for salary increases. Good drivers expect to see salary increases of as much as 20% to 50% over what they were paid just a few years ago. You can expect to see a major jump in driver recruiting efforts, going so far as the government lobbying to lower the commercial driving age to 18. Fleet carriers will put pressure on insurance companies to take a risk on these non-traditional, younger recruits in order to relieve the pressure. The FMCSA’s Entry-Level Driver Training (ELDT) regulations go into effect in February of 2020. Their intent is to raise the professional standards for new drivers with new training requirements. This training requires aspiring drivers to complete a curriculum of basic working knowledge and behind-the-wheel (BTW) instruction with one of the FMCSA’s registered training providers. This could result in more fully-trained drivers and help combat the shortage.

c

CLAIMS:

The good news is that fatalities due to crashes have decreased in the last decade, however, there have been more crashes resulting in severe bodily injury. While this data may seem conflicting, the reason is because of increased speed limits and the increasing use of safety equipment in vehicles. The high dollar amounts for these severe crash claims have taken the insurance industry somewhat by surprise and these increased costs will undoubtedly be passed onto the carriers in the form of higher premiums and deductibles in 2019 and 2020.

The growing cost of insurance and claims litigation will only increase the pressure felt by carriers to reduce the crash frequency, avoid litigation and improve DOT compliance. ISS scores, drivers, maintenance and ELD equipment will be a major focus for insurance carriers in 2019 and 2020. “Best-in-class” carriers that are DOT compliance will likely try alternatives like member-owned insurance captives and risk retention groups, which can help ease premium and deductible costs.

c

REGULATIONS:

Legislation changes could increase trucking costs. Though more and more carriers are independent truck drivers, it is facing more and more public scrutiny and legal issues. The California State Supreme Court ruled that any independent contractor must be able to pass an “ABC Test,” with what many consider an unreasonably high standard in an effort to discourage using these independent drivers. New Jersey is also scheduled to review a similar bill. These state legislations could start happening in more states and cause problems for owner-operators and potentially increase trucking costs in the affected states.

c

CAPACITY:

Inevitably, the freight capacity overloads the transportation industry has been stuck in the past few years will find a balance before too long. You can expect that when supply and demand do eventually balance out, the trucking industry profitability will slow down considerably and there will be a difficult struggle between insurance underwriting and the ability of fleet operators to pay increased premiums and deductibles. Until then, the major players in the transportation logistics industry will continue to grow and turn a nice profit in the meantime.

c

c

About Us

Westgate has 36 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Westgate’s commitment to growth and providing exceptional solutions for our customers’ transportation needs are what will carry us into many more years of service.

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

Sources:

https://www.cvsa.org/news-entry/dec-17-2019-eld-compliance-deadline/

https://www.ttnews.com/articles/2019-trucking-company-closures-so-far-have-doubled-all-2018

Mid-Year Logistics Insights Webinar Recap

We’re happy to be able to offer you the opportunity to re-watch this incredible webinar featuring industry expert, Noël Perry. Watch and learn about some key trends impacting 2019  & 2020.

 

Webinar Highlights:

  • How do truckloads follow the stock market trends?
  • GDP Growth Outlook for 2019 based on trends
  • Is there really a driver shortage or an inability for the industry to rapidly adapt to new changes?
  • What is happening with spot prices? Contract prices? Which is recovering better and which is past their peak?
  • 2020 Vision: How many more years do we have left in this recovery? Why does the data make Noël nervous?
  • Disruptions you may see over the next 10 years:
    • The future of delivery times
    • Automated trucks and warehouses
    • Digital tools and controls

 

We’d like to thank all of the attendees for participating in this webinar, as well as Noël Perry for his incredibly informative presentation. Noël’s research and extensive knowledge on the freight industry have allowed us to gain much insight from the information he has presented.

Through Westgate’s long time involvement with and support of the Transportation Intermediaries Association, we have had the pleasure of becoming familiar with Noël and his predictions.  Every April, we attend the annual TIA conference and in my opinion, Noël’s Economic Outlook presentation is the highlight of the educational sessions. He has unique presentation skills and a passion for the industry that grabs the attention of the audience and keeps them on the edge of their seat.

Recently, we have been fortunate to get even more exposure to Noël and his crystal ball…not only as Chief Economist for the TIA, but through his partnerships with Truckstop.com and his Transport Futures newsletter which we read religiously every week.  Noël’s insights and predictions have been extremely beneficial to Westgate with regard to giving us a pulse on the future of the freight world, technology tools to consider and what to prepare for in coming years.

These are the reasons that Westgate wanted to offer this beneficial webinar to our list of contacts. Immediately following the webinar, we have received so many emails , calls, and comments telling us just how much the attendees enjoyed and appreciated the opportunity to participate in this webinar and be privy the information Noël shared. The information, data, and statistics Noël covered is truly invaluable both to us and all of the people who attended this webinar.

Mid-Year Logistics Insights Webinar with Industry Expert Noël Perry

Learn about key trends impacting 2019 and 2020

Register for Westgate’s June 4th webinar

 

Don’t miss this unique opportunity to hear from the Chief Economist for Truckstop.com and Principal of Transport Futures on the state of logistics. This will be a powerful webinar for you to quickly get up to speed on trends affecting freight and logistics and gain insight on how the rest of 2019 and 2020 will shape up. Westgate Global Logistics is hosting this webinar at no cost to help participants get the critical industry data, insights, and outlook they need.

Noël Perry, has been provoking the transportation market for more than forty years. He is one of the most insightful and knowledgeable leaders regarding freight and the broader economy. As a respected analyst and futurist, Noël is known for questioning, researching, and always providing statistics and analysis to back up his findings.

 

Please join us on June 4th, 11am ET for a LIVE Webinar hosted by Westgate.

>> REGISTER to save your spot

 

About Westgate: Westgate has 35 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Reach out to us and allow one of our Certified Transportation Brokers to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

Questions for Noel?

Submit your questions to Westgate and we will pass them on to Noel to address during the session.

Lehigh Valley Business names Forty Under 40 honorees for 2019

Today, 40 young professionals from the Greater Lehigh Valley were named as Lehigh Valley Business Forty Under 40 honorees for 2019.

2019’s honorees were selected based on their contributions to their companies, industries, and communities. These individuals will be recognized at the seventh annual Forty Under 40 awards reception and ceremony in April.

We’re elated that our own president, Mark Fiorini has been chosen to receive this award. Like each of the honorees, Mark was selected for his commitment to business growth, professional excellence and the community.

Congratulations Mark!

And thank you for all that you do for this company and the industry at large!

 

For more information and to obtain tickets for the event, click here.

To see the full list of 2019 Forty Under 40 honorees, click here.

How’s It Hauling In 2019?

Capacity, economic growth, and what the experts say…

2018’s strong growth in the beginning of the year trailed off a bit as the year went on. The fourth quarter experienced a bit more of a boost than the normal holiday demand due to concerns of the upcoming tariffs and shippers trying to get ahead of this additional expense. The Chinese tariff was supposed to go into effect January 1, 2019 but has been delayed for 90 days to allow for more negotiations. Even with this end of the year slight surge, 2018’s freight demand ended lower than at the beginning of the year.

As Noël Perry, principle of Transport Futures and chief economist for Truckstop.com, said in his Transport Navigator analysis, “2018 started at a VERY high level but gradually and steadily declined as the year matured. Declined may be too strong a word because the market is still relatively tight.”

For carriers, 2019 may seem slower when comparing it to the frenzy we experienced in the beginning of 2018. For shippers, they can look for potential easing capacity issues, but there are still more loads than trucks in most lanes according to DAT. We are not out of the capacity woods yet.

American Trucking Associations’ Chief Economist Bob Costello also expects continued, but slower, growth in demand for freight hauling in 2018. He said, “We have hit the peak in the current freight cycle,” Costello said.

“The economy is still growing, just not as fast as it has been in 2018.”

 

Positive Indicators to Watch:

• Unemployment levels remain low and personal income is rising which could lead to increased spending.
• There is wide support for FMCSA’s proposed Hours of Service (HOS) changes which could alleviate some of the drive shortage by attracting more drivers to our industry.

 

Negative Indicators to Watch:

• Many economists warn of continued market and economic volatility in the first half of 2019. This can cause a depressed freight demand.
• Even though we listed the HOS changes as a positive, we expect a continued driver shortage while we wait for improved regulations to reinvigorate the appeal of the profession.

 

Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

GET A QUOTE

 

Noël Perry, has been provoking the transportation market for more than forty years. You can subscribe to the Transport Navigator at www.transportfutures.net

 

 

SOURCES

https://transportfutures.net

https://www.dat.com/blog/post/rates-rise-but-gains-may-be-temporary

https://www.ttnews.com/articles/infrastructure-trade-loom-large-trucking-new-year

Logistics Industry 2018 Recap and 2019 Forecast

See statistics on the state of transportation and what to prepare for in 2019.

We took a look at the highlights of 2018 that we think impacted the logistics industry. Reviewing the hot topics in our industry can help us all be better prepared for what is to come in 2019 and get ahead of freight trends.

CAPACITY AND DRIVER SHORTAGE

2018 Recap: The economic growth in 2018 has added to the capacity issues our industry is already facing. Coupled with the driver shortage, capacity issues are on everyone’s mind. However, innovative brokers who have experience are able to navigate this landscape and deliver. According to the Bureau of Economic Analysis, the gross domestic product rate increased at an annual rate of 4.2% in the second quarter of 2018, and at a rate of 2.2% in the first quarter.[1]The driver shortage has caused driver pay and packages to increase in response to the demand. According to the American Trucking Associations’ (ATA) latest Driver Compensation study, the median salary for a truckload driver working a national, irregular route was more than $53,000—a $7,000 increase (15 percent) from ATA’s last survey in 2013. Private fleet drivers saw an 18% pay rise to more than $86,000 from $73,000. [2]
2019 Forecast: The 2019 forecast is for us to see slower growth. According to the nonpartisan Congressional Budget Office (CBO), the 2019 pace of GDP growth will slow to 2.4 percent in as growth in business investment and government purchases slows. The CBO also warns that trade tensions could make a bigger dent on GDP growth than anticipated.[3] For 2019 and beyond, the driver shortage will continue to increase (especially considering that the unemployment rate is at a 49-year low of 3.7%.)

THE ELD COMPLIANCE AND HEADACHES

2018 Recap: The ELD deadline caused some carriers to scramble while others were well prepared. At the end of the day, the improved technology can give us all better visibility and data. However, a survey by Cortex revealed 33% of respondents indicated it is more difficult to retain drivers because of the strict Hours of Service compliance. With the American Trucking Association stating there are 50,000 fewer drivers than available jobs, the ELD ‘solution’ could be fueling the flames of the driver shortage.[4]
2019 Forecast: The next step will be how can we turn this data into business efficiencies. In particular, efficiency on the shippers’ part will be key to allowing drivers to use the majority of their allotted time on the road with the wheels turning.  The more time spent driving will allow more loads to be completed on time and allow carriers to better plan their schedules (leading to less cancellations, delays and headaches for shippers.)  Continuing to increase driver pay will be integral to attracting younger folks to the profession.  While an increased driver pay may lead to a short-term increase in trucking rates, it will combat the extreme pricing fluctuations and uncertainty we are experiencing with the exponential growth of the driver shortage. Much of 2018 was spent dealing with supply and demand issues and could continue to get worse. Westgate will continue to monitor this as well as the hours of service issue in Congress.

TECHNOLOGY TAKES FLIGHT

2018 Recap: Logistics companies are now expected to utilize the latest technology in order to keep customers informed on their load status. While many companies tout that they offer the latest technology, not all of them have the attentive team to monitor the data and get the full use out of it. See our article on The Major Roadblock to Technology.
2019 Forecast: Offering technology will not be a distinguishing factor among brokers. How that technology is utilized and access to a support team will be what separates companies. Aggregating data and translating it into business efficiencies will be the next step. While technology continues to take over a large part of our every day lives, communication continues to be as important as it ever was in the freight industry. There are too many variables beyond anyone’s control (Traffic, weather, mechanical issues, etc) to allow technology to replace the service provider entirely.  Where technology benefits us is by providing additional means to source trucks, communicate with carriers and track shipments to be ahead of issues. In addition, it offers efficiencies in back office procedures that allow customer service folks to concentrate solely on servicing clients to the fullest.
At Westgate, we provide monthly ‘On-Time’ reports to several of our customers to highlight our performance levels.  We also are very flexible and have developed custom reports to meet the particular needs of clients in providing them data that is valuable to them.

Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

GET A QUOTE

 

[1] https://www.bea.gov/news/2018/gross-domestic-product-2nd-quarter-2018-third-estimate-corporate-profits-2nd-quarter-2018
[2] http://www.inboundlogistics.com/cms/article/driver-pay-and-benefits-rise/
[3] https://www.reuters.com/article/us-usa-economy-growth/u-s-economy-seen-strong-in-2018-to-slow-in-2019-cbo-idUSKBN1KY23R
[4] http://www.inboundlogistics.com/cms/article/fleet-operators-get-no-eld-satisfaction/

2018 Driver Appreciation Week

Let’s Shower Our Truck Drivers With Appreciation

Did you know that there are over 3.5 million professional truck drivers in the United States? These highly skilled truck drivers:

  • Deliver 10 billion tons of freight each year

  • Deliver to the 80% of our nation’s small cities, towns and villages

  • Have a crash rate that is 29% lower than the average driver

Don’t worry, you can show your gratitude to professional truck drivers during National Truck Driver Appreciation Week. This is the perfect time of year to pay tribute to these hard working truck drivers for the important work they do to make our lives more comfortable and more convenient. Here are a few simple ways to thank our valued road warriors:

    • Prize Giveaways
    • Free Lunch
    • Thank You Card
    • Drivers Night Out
    • Give A Radio Shout Out
  • Post On Social Media
  • Give A Gift

Giving a gift your drivers will actually use allows you to show your appreciation while adding a personal touch. Here are some great gift ideas:

  • Electric Blanket
  • Wireless Bluetooth Headset
  • Pressure Relieving Cushion
  • Audio Books
  • XM Satellite Radio

Truck drivers work hard and commit their lives to one of the toughest jobs in America. So, this National Truck Driver Appreciation Week, be sure to thank him or her for the remarkable work they do, every day.

 


 

Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

>REQUEST A QUOTE<

Westgate High Cost of Poor Service

The High Cost of Poor Service

Do you know if your logistics partner is costing you money? 

Recent statistics indicate that poor service could not only tarnish your company’s reputation, it could potentially cost you future customers as well. New Voice Media recently researched the cost of poor service and found that it costs U.S. businesses a whopping $41 billion annually in lost revenue. Not only will poor service cost you the current customer, research shows that most dissatisfied customers will share their bad experience and many will post a negative review online. Companies need to show consistent, efficient, and friendly service to retain and grow their business. An unreliable logistics provider could damage your reputation and cost you more in the long run by having to fix their mistakes. We outline how to avoid these mistakes and improve your shipping processes.  

Our Guide Includes:

  • Criteria your logistics provider should meet

  • Insight into key areas impacting shipping inefficiencies

  • Best practices for shipping and receiving

 

GET YOUR COPY!

DOWNLOAD THE HIGH COST OF POOR SERVICE TODAY and learn how to stop profits from slipping out the door!

DOWNLOAD NOW

 

Email us with your thoughts!

Westgate Looks to the Future as it Celebrates its 35th Year!

Our passion for delivering exceptional logistics services continues to be at our core and is why we have thrived in this constantly-changing industry.

 

Since Westgate was launched in 1983, the company has grown in size and variety of services. Today, Westgate offers a full range of logistics services including truckload, LTL, specialized services, and more. Founder Tom Fiorini’s son, Mark Fiorini, has since taken over the leadership roll as president of the company and continues the company’s legacy as a premier transportation partner.

 

“Being a family-owned business since 1983 has allowed our customers to develop personal connections with our team. The durability of our company and team assures our customers of the high level of expertise they will receive when they partner with Westgate to handle their transportation needs,” said Tom Fiorini, Chairman of Westgate Global Logistics. Our core values – honesty, integrity and trust – have allowed us to develop close relationships not just with our customers, but with a strong network of carriers as well, who we can depend on to meet our customers’ expectations for service.”

 

Though the company has grown in size throughout the years, we still remain smaller than most of our competitors. However, we don’t view this as a disadvantage. Westgate’s small, intimate structure helps us remain flexible. Because of our close-knit group of eight employees, the typical layers of management between the customer and the team are eliminated. We are available directly to provide personalized solutions to our clients’ issues. We treat our customers like family, resulting in close relationships that last for years and years.

 

“Celebrating 35 years of business in a constantly changing industry is an exciting achievement for us,” said Mark Fiorini, President of Westgate Global Logistics. “As we move into the future, my goal is to continue to offer our customers the latest technology, tools and resources while preserving Tom’s legacy of honesty, integrity and trust he built into the foundation of our business.”

 

Westgate’s commitment to growth and providing exceptional solutions for our customers’ transportation needs are what will carry us into many more years of service.

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

>REQUEST A QUOTE<

 

Take a look at our featured article on page 15 of the Lehigh Valley Business publication.

http://www.lvb.com/article/20180226/SUPPLEMENT/180209878/milestones-2018

 

 

About Us

Westgate has 35 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Reach out to us and allow one of our Certified Transportation Brokers to provide you with a quote.

Improving Shipping Efficiencies

Nowadays being an efficient shipper has received a ton of buzz, simply because of how much of a difference it can make in the costs of running a business.

But did you know, even with all the new mandates, price compression, and industry changes, you could still help manage your shipping expenses by paying attention to overlooked ways to improving shipping efficiencies? Some freight budgets are being revised around the New Year, because it turns out many businesses are seeing losses of 8-10% due to inefficient shipping practices.

Three of the major areas impacting shipping inefficiencies are:

  • ELD Enforcement
    Understanding the ELD implementation can be critical to improving efficiencies in your business. We know that as we move past the April 1st deadline for ELD implementation, the already tight capacity landscape will be affected even more as some carriers will drop out of service. Being proactive with our network of carriers by confirming available hours of service and ELD compliance helps us to be prepared in meeting our customer’s desired timelines and in making sure all parties involved are on the same page.
  • Small Changes
    Benefiting from small changes such as proper packaging and maximizing the pallet placement in trucks can have a positive effect on your freight savings and can also limit damage claims. Using standard size pallets (when the product allows) that are in sound condition and properly securing the items to the skid can minimize the number or trucks, and avoid potential damage and/or mishandling. Both the pallet preparation phase and the truck loading phase, can present cost-saving opportunities.
  • Inefficient Processes
    Direct impacts from inefficiencies in your processes are going to be felt with higher rate increases in 2018. For example, labor intensive requests on the pickup or delivery end are going to result in even higher rates as these additional services are going to be factored into the quotes. Also, with the additional hours of service constraints resulting from the ELD mandate, prompt loading and unloading procedures will be as important as ever in limiting freight costs and securing capacity.

 

Don’t get left behind in 2018. Get control of your shipping costs now, and inform yourself on how to take the most advantage to help yourself and your business. Have a happy and healthy New Year!

You can also check out our article on Best Practices for Shipping and Receiving

 

About Us

Westgate has 35 years of consistently delivering expertise in handling specialty loads, maintaining a large network of resources, and exceptional personal service. Reach out to us and allow one of our Certified Transportation Brokers to provide you with a quote.