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It’s been an exciting, albeit challenging, six months in the world of freight, setting the stage for a dynamic second half of 2024. This month’s newsletter takes a look at port activity, the impacts of diesel prices on the trucking industry, building resilience within your supply chain, and what it takes to be a leader in the industry. 

Man vs. Machine Causing Labor Standoff at U.S. Ports

With all the talk of AI, machine learning, and other automated technology, there’s an underlying anxiety that technology is out to take our jobs. The man vs. machine debate is on full display at many of our ports as labor unions and port operators continue to negotiate the balance of automation and human labor. As reported by Supply Chain Dive, the International Longshoremen’s Association (ILA) canceled a meeting with the United States Maritime Alliance (USMX) due to the use of automated truck gates. The ILA believes this violates the current agreement and sees no point in negotiating when companies like the USMX seek to eliminate jobs. 

The threat of a possible strike at the East Coast and Gulf Coast ports, according to the American Journal of Transportation (AJOT), has led many shippers to frontload in efforts to mitigate the risk of disruption. We will be keeping a close eye on this one as the current contract expires at the end of September, and if a strike happens, it will significantly impact other port activity

Port of Baltimore Fully Reopens

In an impressive display of collaborative teamwork and servant leadership, it took less than three months to fully reopen the Port of Baltimore after the devastating collapse of the Francis Scott Key Bridge. Alongside several leaders, U.S. Transportation Secretary Pete Buttigieg delivered a press conference from the port on June 12 to announce the reopening, where he thanked “The interagency partners, including the Unified Command, the Coast Guard, the Army Corps, the first responders, and the extraordinary workers of the Port of Baltimore.” He went on to say, “Our Department of Transportation was proud, to play our role in that teamwork. From the coordination and convening of key players to mitigate the impact of the shock to our national supply chains.”

Do Gas Prices Really Matter? 

Interestingly, despite the extreme fluctuations in diesel prices over the past five years, the trucking industry shows an inelastic demand for fuel. In layman’s terms, fuel consumption does not decrease significantly even when prices go up. While the price of gas may not impact demand, ask any shipper or carrier, and they will tell you that fuel spending management 100% matters. Shippers and carriers must forecast and look for ways to reduce these costs as the industry slowly shifts away from fossil fuels. 

Fuel may seem like a necessary evil in transportation. However, there are opportunities to reduce your fuel cost per mile to enhance competitiveness. Whether through fuel card discount programs or leveraging technology to increase MPG, the trucking industry continues to adapt and evolve in its efforts to manage fuel costs. 

DHL Identifies Diversification to “Bolster Supply Chain Resilience” 

DHL recently released a report highlighting four ways companies are fortifying their supply chains. The four ways include taking a multi-shoring approach, expanding supplier and manufacturing networks, leveraging multiple modes of transportation, and expanding logistics infrastructure. The report identifies diversification as an enabler for supply chains “giving companies the tools and options, they need to respond to external shocks, changing customer needs and market developments.” Diversification isn’t a new approach, but it’s definitely grown some legs in light of recent disruptions. Industry experts predict it will take excess capacity leaving the trucking market or interest rates to drop for the freight market to bounce out of the recession. Shippers in particular are negotiating away from single-source suppliers in light of geopolitical concerns and expanding their carrier network to avoid disruptions. 

A Big Year for The Ports of Los Angeles and Long Beach

Volume at the ports of LA and Long Beach is up nearly 20% compared to 2023. Port of Los Angeles Executive Director Gene Seroka adds, “We continue our trend of strong, consistent volume that started at the beginning of the year…our forecast indicates more robust activity on our docks throughout the summer.” The ports are also set to receive $112 million in funding from the U.S. Corps of Engineers for various maintenance and repair projects. As the largest container port complex in the nation, both ports play a critical role in our economy. The ports employ over a quarter of a million people and indirectly support millions more. 

The Role of a Leader

Any good leader understands employee challenges and works to create an environment where employees can do their best work. Our new CEO John Rivers is making that happen for Logistics Group International (LGI). John believes, “Agents can choose to broker freight anywhere, but they choose LGI because of the exceptional support and compensation they receive. Our technology and operational support are second to none,” Rivers added. “At LGI, we recognize the hard work of our sales team and strive to create an environment where they feel valued and empowered.” Check out John’s welcome video here and see firsthand his approach servant leadership approach and growth mindset that positions LGI for continued growth and success.  

The Best Place for Freight is LGI

Since the pandemic, there has been a greater understanding and emphasis on freight management. It’s not just moving items from A to B but how well you navigate disruptions while eliminating fraud, elevating efficiency, and innovating for continuous improvement. At LGI, we are poised to lead the charge in the freight industry by integrating technology, servant leadership, and industry expertise. 

  • Dry Van Services: Our experienced team is ready to handle all of your LTL and FTL dry van needs from door-to-door delivery to cross-border logistics. 
  • Oil and Gas Transportation: LGI’s foundation was built with oilfield trucking. We specialize in transporting oilfield equipment and heavy machinery for the oil and gas industry
  • Heavy Haul: We enjoy taking on big freight challenges. For oversized loads, we develop a comprehensive plan to ensure safe and efficient transport. 

We are excited to be leading the charge in the future of freight. If you’re looking for a collaborative, innovative, and knowledgeable shipping partner, we invite you to request a quote and see why LGI is the best place to move freight.