Stalled negotiations by the ILA and the USMX have stakeholders on edge because of the looming strike threatening to derail and disrupt shipping operations in the last quarter of the year. It's not all bad news across the freight industry, though. The trucking industry breathes a sigh of relief as businesses leaving the market slow down in the second quarter of 2024. However, experts are still not expecting a complete rebound before 2025, even as the Biden administration is legally tangled in the new independent contractor (IC) rule.
Join us as we explore the latest news and trends surrounding the logistics and supply chain industry and the people within.
The International Longshoremen's Association (ILA) contract negotiations with the United States Maritime Alliance (USMX) have stalled, and the former is threatening a strike.
In a recent statement, the former said it is still far from reaching an agreement with maritime employers along the East and Gulf coasts over a new master contract, citing ongoing complaints against Maersk's terminal arm and its use of automation projects at the Port of Mobile. The union believes that the move violates the current contract.
To ensure there are no expectations of continuing work past the current contract's extension, ILA President Harold Daggett has issued a statement saying that the union's 45,000 members will not work past the contract's expiration on September 30. He also rejected any calls for federal intervention in the negotiations in the statement.
Despite all these, the USMX remains optimistic that a new contract with ILA will be reached by October 1. However, the current tide and pace of negotiations beg to differ. All signs point to a strike being increasingly likely. We will have to wait and see.
Trucking businesses leaving the market slowed down in the second quarter of 2024. However, despite the reduced rate of exit, the numbers show that it is still significant compared to historical trends. The net change in active trucking businesses remains negative, indicating that more companies are leaving the industry than entering.
The industry can breathe a sigh of relief comparing the number to the last few years. New entrances have increased slightly, while exits have slowed down. With factors such as tractor prices and market stability influencing carriers' decisions, the net change in active trucking businesses remains negative, indicating that more companies are leaving the industry than entering.
Experts do not expect a full rebound in the market until 2025 at the earliest. And analysts increasingly have reservations about relying solely on FMCSA operating authority data, as it doesn't fully capture the size of each business. Other data sources indicate a decrease in the average number of employees per establishment, even as the number of trucking business locations increased during the pandemic. However, this trend is reversing, with the total number of establishments slowing down significantly in recent quarters.
Louisiana trucking companies and the state's primary trucking association are challenging the Biden administration's new independent contractor (IC) rule in court. The case is now before the U.S. Court of Appeals for the 5th Circuit.
The plaintiffs, led by family-owned Frisard's Transportation and joined by other freight carriers, including A&B Group, Triple G Express, and the Louisiana Motor Transport Association, initially sought to block the rule with a preliminary injunction in the U.S. District Court for the Eastern District of Louisiana, but this was denied. They have since appealed for an injunction from the 5th Circuit, which will stay district court proceedings until the appeals court rules.
The defendants in this case are the U.S. Department of Labor (DOL) and several named individuals, including Acting Secretary of Labor Julie Su, also known as public enemy No. 1 by those pushing back against the state. Due to the magnitude of this case and its major impact, it has garnered significant attention, with support from major organizations like the American Trucking Associations and the U.S. Chamber of Commerce.
The plaintiffs argue that the Biden rule's "economic realities" test, which includes six tenets, is overly complex compared to the more straightforward five-factor test of the previous Trump administration rule. They claim the new rule disrupts established judicial precedent and complicates worker and business operations. The 5th Circuit's decision on the injunction will determine the next steps in this legal battle.
U.S. Class 8 retail sales have declined for the 11th consecutive month, dropping 24.7% in June to 18,134 units compared to 24,085 in June 2023. Year-to-date sales are down 16.4% to 113,529 units, with five of the seven major brands experiencing lower sales.
Freightliner, a Daimler Truck North America brand, held the largest market share at 33.5%, with 6,074 trucks sold, even though this was a 32.4% decline from 8,991 the previous year. Western Star, also a DTNA brand, saw a 13.2% increase in sales to 831 units from 734 the year prior. Mack Trucks and Volvo Trucks North America saw sales drop by 21.9% to 1,362 and 17.1% to 1,991 units respectively. Mack and VTNA are Volvo Group brands.
Navistar's International brand experienced a 49.6% decrease in sales. Peterbilt Motors Co. slightly increased sales by 1.6%, while Kenworth Truck Co. saw a 19.4% decline to 2,830 from 3,512. Peterbilt and Kenworth are Paccar Inc. brands.
The freight market will never stop seeing volatility and disruptions to operations. However, that should not make navigating the market complicated. With the right platform, you can make it a breeze. As a shipper or an operator, you will need a secure platform that is not susceptible to attacks and can help you stay compliant in the face of ever-changing policies.
At EKA Solutions, we leverage experts and a robust platform to ensure you have zero friction at every step of the workflow. Our innovative, cost-effective, user-friendly ecosystem for carriers, brokers, and shippers prioritizes transparency, efficiency, and robust capabilities. Connect with us today to experience the difference.
Related Content
.jpg)
