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Yahoo
3 days ago
- Business
- Yahoo
Universal Logistics bets on specialized freight in soft market
This story was originally published on Trucking Dive. To receive daily news and insights, subscribe to our free daily Trucking Dive newsletter. Universal Logistics is betting big on specialized freight, as hauling components for the wind business in the energy sector shows promise in an otherwise soft freight market, several executives said in a recent Q2 earnings call. 'Our focus on specialized freight, including our wind energy business, continues to support more resilient margins even in a depressed market,' CEO Tim Phillips said. 'In the current freight environment, Universal Logistics' revenue decreased by 14.8% year over year to $393.8 million as trucking volumes sank 22.6% during the quarter, according to its earnings report released July 24. The company has been investing in its wind franchise where it hauls blades, towers and components, CFO Jude Marcus Beres said in the call. The strong demand in wind is a continued trend the company highlighted back in Q1, with the CEO saying its heavy haul wind operations were a strategic differentiator for its trucking segment. Universal Logistics' revenue per load, excluding fuel surcharges, increased by more than 24% YOY in Q1, Phillips said, labeling it a sign that the company's strategy of emphasizing specialized high-yield freight is gaining traction. Growth in demand for wind energy-related transport hauls seems to be a growing trend among other companies, with Landstar System also reporting its heavy haul service being positive for the company. Landstar's CEO said the demand for infrastructure related to AI, such as data centers, along with wind energy, are contributing to the need for flatbed and bulk trucking services. Even with strong demand, Universal Logistics' wind franchise was negatively impacted in the first half of the year due to tariffs. 'A lot of those components are imported but I think the cadence that we're seeing in the back half of the year should make up for the shortfall in that business that we experienced in the first half,' Beres said. Most of the headwinds in the wind business will be manageable and start to improve in the coming quarters, Beres said, due in part to clarity the company gained with the passing of the 'One Big Beautiful Bill.' The tax package from Congress enhances multiple areas for trucking businesses and tax-reduction benefits, according to some trucking groups. Looking ahead, Universal Logistics plans to expand into other heavy haul opportunities to support various industries, Phillips said. 'We're pretty bullish on the specialized and we'll continue to focus on building that product out,' he said. Recommended Reading Universal Logistics revenues fall amid 31% drop in trucking volumes
Yahoo
6 days ago
- Business
- Yahoo
TFI projects $75M savings from new US tax law
This story was originally published on Trucking Dive. To receive daily news and insights, subscribe to our free daily Trucking Dive newsletter. TFI International projects it will achieve $75 million in savings due to the U.S.' One Big Beautiful Bill Act tax package, the company said on a July 28 earnings call. The money would not be gained without the recent tax law, CFO David Saperstein told analysts. The projection is based on a cash tax benefit involving capital expenditures over a five-year period, with $40 million realized in the first two years. Additionally, company executives told investors they were optimistic the tax plan and administration's budget would help the trucking industry finally emerge from an approximately three-year freight recession. Saperstein said he expects the cash tax savings will spread throughout the economy to companies doing capital expenditures, and those companies represent TFI's customers. CEO Alain Bédard further called out investments in industrial sectors, housing and schools as potential drivers for the economy. 'We feel way better that we're finally going to get out of this freight recession,' Bédard said, while cautioning that market demand has continued to lag. Truck orders have been choppy in recent months, with some carriers lowering forecasts, such as Knight-Swift Transportation Holdings and Werner Enterprises. Schneider National, which reported its earnings later than those carriers, reported July 31 that its capital expenditure plan would remain the same. At the same time, tariff-related uncertainty continues to weigh on industrial end market demand, Bédard said. 'A lot of our customers are just waiting on the sideline' for clarity on the direction of the economy and when the uncertainty would end, he said. Meanwhile, TFI's profitable U.S.-Canada LTL traffic was down, the company reported on the call. For the segment as a whole, its operating income was $73.6 million for Q2, a 33% decrease from a year ago. Even though industrial sentiment has lagged in recent years, TFI purchased Daseke over a year ago, in part, because the company anticipated a turnaround in that sector, according to the company. 'We were maybe one year too early,' Bédard said. The company is working to integrate Daseke's operations and reduce its truckload operating ratio, and that turnaround could make significant gains in early 2026, according to Bédard. If the market helps, that could happen more quickly, he said. 'We're still doing really well, but we're down, right?' Bédard said, adding that once U.S. tariff issues involving Canada and Mexico are resolved, freight should return. Recommended Reading US imposes 35% tariff on Canada imports 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
07-08-2025
- Business
- Yahoo
XPO saves on outsourcing costs, prepares for market upside
This story was originally published on Trucking Dive. To receive daily news and insights, subscribe to our free daily Trucking Dive newsletter. Dive Brief: XPO reduced its purchased transportation costs for its North American less-than-truckload segment in Q2 to $32 million, down about 53% compared to a year ago, per an earnings release. Investments in rolling stock in recent years have allowed XPO to cut outsourcing costs in the short term and position the carrier for success once the market improves, Chief Strategy Officer Ali Faghri told Trucking Dive. 'When demand recovers in the LTL industry, you're going to see truckload rates go up significantly, 20-, 30-, 40-percent,' he said. 'And that's really where we're going to see a bigger benefit, because we've essentially insulated our cost structure from this cost category.' Dive Insight: XPO can operate linehaul miles more efficiently than third-party contractors, the company notes, and so it's finding wins among a market slowdown. Outsourced linehaul miles were 6.8% of total miles in Q2 for the carrier, a significant shift from a rate of 15.9% a year ago, per company earnings reports. 'That's more than 900 basis points lower than last year and the best level in our history, with more opportunity ahead,' CEO Mario Harik said on a July 31 earnings call. New AI-powered linehaul models are 'driving additional savings, reducing normalized linehaul miles by 3%, empty miles by over 10% and freight diversions by more than 80%,' he added. The company aims to hire a director of AI, and Harik said the company plans to launch more AI integrations this year. XPO is also currently piloting how AI can improve pickup and delivery operations that lower costs, the CEO said. AI initiatives with other transportation players have led to efficiencies, such as ArcBest optimizing city routes to reduce miles and fuel costs and C.H. Robinson Worldwide offering price quotes, eliminating significant manual processing and speeding up output for customers. Recommended Reading XPO leans on AI to minimize miles, handling for LTL freight
Yahoo
26-07-2025
- Business
- Yahoo
Tariffs, economic uncertainties keep freight markets flat, analysts say
This story was originally published on Trucking Dive. To receive daily news and insights, subscribe to our free daily Trucking Dive newsletter. The Trump administration's ongoing tariff actions, combined with current economic conditions, continue to cloud freight rates in the trucking industry. Truckload freight rates remained under pressure from excess capacity in the market, while less-than-truckload is seeing a year-over-year positive change as carriers manage profitability, according to the TD Cowen/AFS Freight Index released July 15. "Despite plenty of international travel by world leaders, trade policy remains an unsettled picture and businesses are opting for a wait-and-see approach and delaying spending decisions,' Andy Dyer, CEO of AFS, said in a press release. "With no catalyst to ignite demand, some carriers are buckling under the pressure of unrelenting low volumes while others are deploying all available mechanisms to capture revenue." Excess capacity in the truckload market The index projects a tenth straight quarter with truckload rates at or near the bottom. Q3 rates are expected to be at 5.6% above the 2018 baseline, reflecting a 0.4% quarter-over-quarter decline. Taking a closer look, the truckload market is stuck in a rut, again, and excess capacity is a key driver. Excess capacity can be traced back to the COVID-19 pandemic, when a number of carriers entered the market due to increased demand, Aaron LaGanke, VP of freight services at AFS, told Trucking Dive in an email. As time passed, inflation skyrocketed, economic uncertainty grew and demand increased, leading to too many carriers to meet soft demand, LaGanke said. 'And while a number of carriers have left the marketplace, these have mostly been very small carriers that haven't cut too deeply into the excess capacity,' he added. Excess capacity and low rates will continue unless there is a larger industry contraction or a growth in demand, LaGanke said. One way the truckload market could experience some ease is through the regulatory guidance for stricter labor and language standards for truck drivers. The policy from the Trump administration 'could constrict the supply of truck drivers, which could in turn limit truckload capacity and influence supply and demand pricing dynamics in the market,' he said. LTL carriers focus on profitability strategies While the LTL market is also being impacted by the same global trade and economic conditions, carriers are holding firm on pricing, in turn creating only slight declines in costs per shipment. Weight per shipment declined 5.1% YoY, but cost per shipment fell by 2.9%, per the release. In a low-demand environment, LTL carriers are focusing on profitable lanes, contractual relationships and reliable freight, rather than chasing volume with discounted pricing, LaGanke said. These strategies are showing positive results as the TD Cowen/AFS LTL Freight Index report is expected to reach 65.9% from its 2018 baseline, marking a 1% year-over-year increase. The increase will also mark the seventh consecutive quarter with positive YoY changes, per the report. "The continued resilience of the rate per pound index shows the effect of carrier pricing discipline, and the upcoming NMFC transition to a density framework should equip carriers with another method to tightly manage freight classification and pricing,' LaGanke said in the release. The National Motor Freight Traffic Association classification overhaul kicked off on July 19, and while it adds more pricing discipline and transparency, it's still too early to see the actual impact on the LTL market, Mich Fabriga, VP of LTL Pricing at AFS, said in an email. Recommended Reading Tariff concerns weigh on freight recovery: report
Yahoo
26-07-2025
- Business
- Yahoo
What plastic, paper and metal commodity experts are watching with tariffs
This story was originally published on Waste Dive. To receive daily news and insights, subscribe to our free daily Waste Dive newsletter. Editor's note: This story is part of a series highlighting takeaways from a July 23 virtual event hosted by Packaging Dive, Supply Chain Dive, Manufacturing Dive and Trucking Dive. Register here to watch the replay on demand. It's normal for commodity markets to ebb and flow due to a variety of domestic and global factors, but recent tariff impacts and changes in the U.S. economy in 2025 have thrown a new wrench in markets for virgin and recycled aluminum, plastic and fiber commodities. Experts in plastics, paper and metals offered an overview of these factors during the 'Supply Chain Outlook: Trends and Risks to Watch in 2025' event on Wednesday. The Trump administration's tariffs have resulted in market uncertainty, and that's playing out in different ways depending on the commodity, speakers said. These were some key takeaways from the event: Varied trade exposure, but also opportunities for US plastic manufacturing In the plastics industry, tariff exposure varies by sector. For example, plastic resins face less uncertainty compared with the machinery and molds sectors, said Perc Pineda, chief economist at the Plastics Industry Association. 'By and large, the plastics industry's exposure to trade is only about 20%,' he said, noting that there's currently 'a lot' of U.S. plastics production capacity and low utilization. 'If there is a need for import substitution because tariff rates are so high it's cost prohibitive, I am confident that domestic manufacturing could actually step in,' he said. The United States is a net importer of recycled plastics materials, he said. At the same time, domestic virgin resin production has increased by 5% year over year, which he sees as a sign that such production could help backfill demand if recycled commodities become harder to source due to tariffs. In June, virgin resin prices rose by 0.3%, which he sees as a sign that higher tariffs haven't automatically translated to higher inflation. However, the U.S. imports about 70% of the machinery it needs for plastic production, plus around half of needed molds, leading the industry to call for certain tariff exemptions in these sectors, he said. The industry is monitoring the situation, but likely won't see the true effects of such tariffs for several months. 'I know things are evolving, but I am hopeful, because I don't think the economy can continue with a scenario like this, when there's so much uncertainty. It has long-term effects, and the knock-on effects on the economy are going to be broad and wide.' Section 232 tariffs continue to impact steel and aluminum can manufacturing Section 232 aluminum and steel tariffs, which have been in place since 2018, went from 25% to 50% earlier this year. That has increased costs for aluminum and steel cans used for food, beverages and other items. The Can Manufacturers Institute and other groups are calling for specific tariff exemptions on aluminum imported from Canada, as well as on tin plate typically used to make steel cans, said CMI President Scott Breen. The industry prides itself on its recycled content use, Breen said. The average aluminum beverage can is made of about 71% recycled content, 'but that does mean that 29% is virgin or new aluminum, and most of that virgin aluminum is imported,' mainly from Canada, he said. For steel cans, nearly 80% of tin plate is imported, and 'we would love to purchase more domestic tin plate, but it's just not produced at the levels we need,' he said. Since 2018, nine of the 12 tin plate lines available in the U.S. have shut down, he said. Breen said continued tariffs will likely lead to increased food prices, citing a study from the Consumer Brands Association estimating a 9% to to 15% increase in the cost of canned goods. Broader economic trends, not tariffs, driving US fiber trade for now Meanwhile, broader changes in the global economy are making more of an impact on the fiber industry than tariffs specifically are, said Terry Webber, vice president of industry affairs for the American Forest & Paper Association. Paper is 'a commodity that tracks pretty closely to general economic performances. There's more economic activity, there's more paper and paper-based packaging consumed,' he said. The U.S. exports about 6 million tons of packaging papers globally. However, about 70% of the nation's external fiber trade is with Canada and Mexico, 'so as long as that trading relationship continues, that's going to cover the lion's share of the business we do,' he said. U.S. exports of recovered fiber to global markets have been declining in recent years, and the U.S. has focused on domestic investments meant to expand manufacturing that uses recycled fiber, namely OCC and mixed paper, he said. He estimated that AF&PA companies have announced about $7 billion in recent investments, 'so we're seeing a long-term positive trend in U.S. mill consumption that's helping to offset some of those changes that we're seeing in global trade flows.' At the same time, the U.S. has seen multiple notable mill closures in the first half of 2025. Webber attributed that activity to the industry adjusting its output to market demands. 'As capacity is coming offline, we're making investments in new capacity' while making the overall supply chains more efficient, he said. Webber noted AF&PA is tracking possible tariff impacts on equipment, which is typically imported from regions like Europe. 'It would be unfortunate if the spending and investment that our companies are conducting becomes subject to tariffs," he said. Recommended Reading ISRI says its rebrand to ReMA reflects the recycling industry's modern values Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
