Global Truck Solutions Inc.

Transformative Investment in Automotive Technology! Great news for the automotive and sustainability sectors! Honda has announced a transformative plan to build Canada's first comprehensive electric vehicle supply chain, marked by a staggering $15 billion investment. This monumental initiative is set to revolutionize the production of electric vehicles and strengthen Ontario’s job market significantly. Driving Sustainability Forward With this investment, Honda will retool its Alliston Plant in Ontario, transitioning to produce fully battery-electric vehicles. This move is supported by substantial contributions from both federal and provincial governments, underscoring a significant shift towards more sustainable automotive manufacturing. Boosting Employment and Economic Impact This ambitious project will generate thousands of new jobs, offering a variety of roles across the supply chain and manufacturing sectors. It's a game-changer for Ontario, solidifying its position as a North American leader in the electric vehicle industry. Collaborative Efforts for a Greener Tomorrow This initiative is a prime example of how collaboration between governments and industry leaders can foster technological innovation and meet environmental goals. It represents a major stride towards reducing carbon footprints and promoting eco-friendly transportation solutions. Let's discuss the impact of this significant investment on industry standards and our global environmental efforts. What are your thoughts? #ElectricVehicles #Honda #Sustainability #AutomotiveIndustry #SupplyChain #Logistics #Transportation #AIinSupplyChain #FutureofMobility #ElectricVehicles #SustainableTransport #Innovation #JobCreation #Ontario

I’ve received many questions regarding which shipper industries are most exposed to a Canadian rail strike (which would affect CN and CPK). There are two different ways to answer this question. One is to focus on the commodities these railroads haul. The second is to normalize the volume of hauled commodities by the total commodity movements of that type across all Class 1 railroads. Below I’ve done the latter, as this helps understand where CN and CPK have a disproportionate impact on Class 1 railroad traffic by commodity. Data cover all of 2023. Thoughts: •Metallic ores jump out as a disproportionately impacted commodity, with CN and CPK accounting for 74% of movements in 2023. This also shows up when looking at raw carload movements; metallic ores was the largest carload category for CN and CPK in 2023, with 578 thousand carloads hauled. •Coke used for blast furnace steel production is up next, though coke carloads totaled just 89 thousand in 2023. •Next up are pulp, paper, & allied products (147 thousand carloads); petroleum products (248 thousand carloads); lumber & wood products (85 thousand carloads); fertilizer (90 thousand carloads); and grain (280 thousand carloads). •While CN and CPK moved 1.24 million intermodal containers in 2023, this represented just 8% of the Class 1 railroad total. Implication: shippers need to have contingency plans (to the extent possible) in place for CN and CPK going on strike next week. For anyone interested in understanding the types of commodities affected, these data can be obtained from https://lnkd.in/gfM4niKH. #supplychain #supplychainmanagement #markets #shipsandshipping #freight #logistics 

Werner Enterprises CEO Derek Leather several times used the term “inflection point” to describe the current freight market on Tuesday’s conference call with analysts after the company reported another in a long series of weak truckload company earnings. https://lnkd.in/ebwQYbAg

Given the excitement about the IPO of Lineage (e.g., https://lnkd.in/gcmAUZn4), I wanted to offer a few thoughts based on available government data. Lineage’s operations fall under NAICS 49312 – Refrigerated Warehousing & Storage. Two charts below. Thoughts: •Top chart shows the number of establishments classified as refrigerated warehouses in the US, from the Quarterly Census of Employment and Wages. Over the past 5 years, that number has ballooned from ~1300 to nearly 1800 by Q4 2023 (most recent data). •Bottom chart shows the producer price index for this sector, which shows the price refrigerated warehouses receive for their services has risen ~30% since before the eve of COVID-19. Data from https://lnkd.in/g6D9qa_Y •One thing to keep in mind; there are thousands more refrigerated storage locations in the USA, but these are categorized in various sectors of wholesale trade. For example, there are over 2,000 establishments categorized as wholesale locations for meat and meat products, and nearly another 2,000 for fish alone (https://lnkd.in/gHYwSxxW).   •In terms of industry concentration, the most recent Economic Census data from 2017 places the four largest players having 42.3% market share (https://lnkd.in/g6t4XhQR). My guess is this number will have dramatically increased when the 2022 Economic Census data are released next year. Implication: very strong growth in number of locations, coupled with strong increases in prices, paint a solid demand picture for refrigerated warehousing in the USA. These data help explain why Lineage’s IPO was the largest so far in 2024. #markets #supplychain #supplychainmanagement #freight #trucking

Interesting! https://lnkd.in/gzPc75wk

While most of the content I share concerns economic data, motor carrier safety (especially understanding dynamics of carrier-level safety) is my primary area of academic research. As such, I wanted to provide some thoughts based on this decade of research to FreightWaves news article about the Chapter 7 bankruptcy filing of Blue Thunder Trucking (DOT#: 320435). https://lnkd.in/gprt6vFp •What caught my eye that the statement, "Blue Thunder’s insurance was canceled July 1." That suggests safety issues. Sure enough, this carrier's CSA page is the epitome of an unsafe carrier (https://lnkd.in/gNyCVzZt) •The first metric I look at is Hours-of-Service (HOS) Compliance, not so much because HOS violations cause crashes, but because poor HOS performance suggests a lack of management controls. In an ELD era, a HOS BASIC score above 0.5 is bad, 0.7 is really bad, and 1.0 is terrible (especially for this size of carrier). Blue Thunder was consistently above 1.0, with June 2024 at 1.65. That is inexcusably poor performance. •The second metric I check is Unsafe Driving, as this is strongly linked to crash rates. My rules of thumb are > 2.5 is really bad, and > 3.0 is terrible. Blue Thunder has consistently been in the really bad to terrible range. •Those cutoffs are informed by this peer reviewed article: https://lnkd.in/gBRvUmav Implication: while I feel for all the workers at this carrier who were doing their jobs and operating safely, the harsh reality is that carrier management clearly didn't prioritize safety, and at minimum a subset of drivers was operating in a very unsafe manner for an extended time. This carrier closing will likely make the roads safer. #supplychain #supplychainmanagement #freight #trucking #logistics

Perhaps the greatest surprise I saw from May’s wholesale trade data was the dynamics observed in household appliances & electrical & electronic goods wholesaling (NAICS 4236). This sector is very large, with merchant wholesalers that aren’t manufacturers’ branches selling over $65 billion in goods each month (https://lnkd.in/gnuuPHnt). For comparison, all general merchandise stores sell ~$75 billion each month (https://lnkd.in/gCU327Kk). Two charts below. Thoughts:  •Top chart shows seasonally, and inflation adjusted sales in this sector. We saw a 4% increase in sales in May from April, which is one of the steeper jumps observed in the data. •It appears unlikely that this is pure noise, as the inventories to sales ratio (bottom chart) fell 5 basis points in May from April. This suggests demand was substantially stronger than these wholesalers expected. •But what could have caused this strong demand? Here is my guess: wholesalers of solar cells are part of this sector, and we just saw the Biden Administration increase tariffs of solar cells (https://lnkd.in/g2Cwv-jy). This announcement likely spurred a pull forward of demand. •Strong demand for solar cells maps to what we are observing in import data as well. Implication: it appears the tariff announcements on solar cells have pulled forward demand for such devices. If we start to see a decline for solar cells with new tariffs in place, this will be a headwind on container shipping volume. #supplychain #supplychainmanagement #shipsandshipping #freight #trucking   

I wanted to share an update for the types of goods for which we have seen the greatest increase in containerized imports in January – May 2024 from Asia relative to those same months in 2018, 2022, and 2023. Data are from the Census Bureau measuring metric tons of containerized waterborne imports, with HS codes mapped to NAICS codes for easier interpretability. I’ve highlighted codes for which 2024’s imports outpaced all three comparison years. Thoughts: •The first highlighted record concerns plastics products. Diving deeper, the majority of the increase stems from imports from China (China accounts for 67% of the gain in 2024 relative to 2023). This aligns with reporting from Bloomberg about a capacity glut in Chinese plastics product manufacturers causing them to turn aggressively to exports. https://lnkd.in/gbm3pzRs •Basic chemical increases likely stem from continued elevated U.S. prices, which have risen ~29% since the pandemic (https://lnkd.in/gweCqPgd). •Semiconductors & other electronic components are heavily capturing solar cell imports. •Other general purpose machinery maps to very strong price increases that have yet to abate (up 33% from COVID and still trending up https://lnkd.in/gF3Xu5Nr), coupled with persistently high capacity utilization in this sector likely causing buyers to turn to overseas suppliers. •Electrical equipment and components is capturing EV batteries. Implication: while total containerized imports receive lots of media attention, more detailed breakdowns like these help us better understand the underlying dynamics and enable better predictions about future states. This is the type of content I’ll be covering in my supply chain analytics course in our new graduate certificate (https://lnkd.in/gg5-4jUU) #supplychain #supplychainmanagement #shipsandshipping #economics #freight #trucking   

FreightWaves has advanced a new theory as to why trucking capacity hasn't exited as quicky as most expected, which is that the COVID-19 Economic Injury Disaster Loan (EIDL) program, "offered long-dated business loans at very low interest rates. Beginning in March 2020, small businesses could get loans of up to $500,000 on 30-year terms at a fixed interest rate of 3.75%. Given that the current yield on 20-year Treasury bonds is 4.57%, these loans were effectively free money, at least in the short term." The SBA reported to FW's that $37 billion was given out to firms in transportation and warehousing (NAICS 48-49) across 419,500 loans (https://lnkd.in/gBQ_wRY5). While there may be a nugget of truth in this argument, the article has key factual weaknesses. •The article states, "In sector 48-49, there are 723,573 total businesses employing a total of 726,238 people. Of those people working in the sector, 539,702 work at firms with only 1-4 employees. In other words, the majority of the sector is composed of small businesses, and 58% of them received COVID EIDL loans.". This is categorically incorrect. The 2017 Economic Census https://lnkd.in/gGCihwKs has there being 184,735 firms across transportation & warehousing (NAICS 48-49) that operated 237,095 distinct establishments that employed 4,954,931 people. As shown in the top plot, the majority of employment in NAICS 48-49 rests with firms with 250+ employees, with firms having 1-4 employees being just 3.1% of employment. While we don’t yet have the 2022 Economic Census detailed data that will likely show an increase in small firms’ share of payrolls, the underlying reality hasn’t shifted that much. •A more compelling narrative is that abnormal profits in trucking in 2021 and 2022 (which can be seen in the second plot) gave carriers financial resources to stay around longer in a down market. These data come from the 2022 Service Annual Survey. Implication: getting facts right matters immensely. If only FreightWaves would have reached out to someone like me who knows government data who could have pointed them towards the correct figures. #supplychain #supplychainmanagement #freight #trucking #logistics #transportation

I'm happy to share that Michigan State's Top-Ranked Department of Supply Chain Management is introducing a new online graduate certificate this fall called Elements of Global Supply Chain Management. This program is a 9-month, 11 credit hour dive into the basics of SCM. •For those interested, I'm teaching the Supply Chain Analytics course, which will provide an overview of many of the data sources we have come to rely on (producer price indexes, industrial production & capacity utilization, retail trade sales, import/export data); basics of time series forecasting (e.g., seasonal and trended exponential smoothing, using Excel to optimize forecasting parameters); multiple linear regression (e.g., how to build models to seasonally adjusted quarterly financial data from public companies); and inventory management (e.g., how to build a simulation of demand during lead time to set safety stock levels based on historical demand and lead time data, understanding assumptions that go into automated safety inventory calculations). •Full disclosure, if you are a SC manager with years of experience, this ISN'T the program for you (our MS in Supply Chain Management is a much better fit). •This certificate is ideal for individuals who don't have undergraduate exposure to SCM topics. For those of you managing many new hires out of undergrad who don't have exposure to SCM, this program would be a phenomenal investment in employee training. The fully online, asynchronous nature provides great flexibility. Implication: The main page to this program can be found at https://lnkd.in/gg5-4jUU. If you have questions, please DM me, and I'll do my best to respond in the next few days (traveling back home today from a family vacation). #supplychain #supplychainmanagement #shipsandshipping #manufacturing #freight #trucking