b'6American Journal ofTransportation ajot.com(SHIFTScontinued fromstill proceeding apace, Siplonmentskyrocketed,anda(RESTRUCTURINGcon- air, or rail services. In the case page 4) doesnt see a recession, or asevere recession ensued.tinued on page 4) ofbothrailandocean,the which spot rates become lessfreightrecession,looming.Though our current situ- aregionalintermodalcarrierprice of entry to these closely of a factor when consideringWhywouldthetruckingation is similar to the 1980soperating in the Southwest, aheld markets is very high and the trucking industrys health. industrybespendingmoneyinmanyways,thereportregion in which the Randolph,returns relatively low. The industry is shiftingon trucks if they think that aadded,employmentlevelsMassachusetts-based carrier isIts not surprising to read towards dedicated capacity tofreight recession is coming?remain far stronger today. expanding. Ridgemont Equity Partners, a removevariabilityandsea- hesaid.SpendingmoreAstheRoadOnemoveprivateequityfirm,recently sonality,saidPageSiplon,money on trucks before goingillustrates,acquisitionshaveannouncedtherecapitaliza-CEO of TeamOne Logistics,intoafreightrecessionjustlong been a way to increasetionofRoadOne,alongside atransportationandlogis- doesnt add up. geographiccoverageandRoadOnesco-foundersand ticsworkforceexpert.ThatTo Siplons point, the questfacilities, to add wheels andNonantumCapitalPartners. means shippers are lockingformorebalanceandstabil- drivers and some cases spe- Its an influx of capital to help in contract rates to have moreitymeansthatshippersarecialized services like temper- further the carriers growth.stability.Shiftingvolumeprioritizing the in-full part ofature-controlledtransportorThere is also a fair amount fromthespotmarketwillthe on time-in full equation,even drayage.of shuffling of the deck. For lower spot rates because lesssaid Claude Pumilia, CEO ofHowever,morerecentlyexample,Montreal-basedTFI freightisbeingmadeavail- DATFreight&Analytics,athereasonbehindtheM&AInternational(10)soldtheir able to that market. truckload freight marketplace.fueledconsolidationinthesubsidiaryCFIsTruckload, Fewer truckloads are neededtrucking industry could be theTemperature-Control and Mex-to move the same amount ofinterest from institutional inves- ican non-asset based logistics consumer spending as duringtors. Equity capital was takingbusiness to Heartland Express theheightofthepandemic.a strong interest in the supply(37)for$525million.The Maximizing utilization allowsClaude Pumilia, CEO of DAT Freightchain companies, even beforelogicofthetransactionwas carrierstomaintainalevel& Analytics COVID.ThepandemicandTFI wanted to concentrate on ofprofitabilitybyreduc- With consumers still spend- other disruptions to the supplytheirU.S.operations,espe-ing empty miles, emphasizinging and the employment marketchain pointed out just how criti- cially on higher return LTL. fuel economy, and coordinat- roaring,theU.S.economyiscal supply chain providers areHeartland, on the other hand, ing with shippers and brokersnotinarecessionnorisittotheeconomyandpoten- will add assets and build its toreducedwelltimes,saidfacing one, unless the Federaltially how profitable the supplytruckload business. Page Siplon, CEOPumilla. Reserve puts it there by over- chain can be as an investment.There have been quite a of TeamOne Logistics Theothersideofthisaggressivelyhikinginter- Anditcanbearguedtruck- few strategic moves made in Convoy also reported thatargumentisthatthecurrentest rates. You have to hopeing touches more parts of thethelastyear.Forexample, assetcarriersnowemploysituation resembles the earlytheyrenotcrazyenoughsupplychainthananyotherbackinFebruaryof2022, arecordnumberofdrivers1980s,thelasttimeinter- todothat,saidSiplon.Iserviceprovider.Also,truck- HirschbachMotorLine(78) whileowner-operatorsareest rates and inflation were atbelieve theyll manage inter- ing is one of the least consoli- bought John Christner build-down 25% from the summersimilar levels, according to aestratesonlytothepointdated segments of the supplyingareeferconglomerate peak.Siplonmaintainsthatreport from Anderson Truck- (SHIFTScontinued onchain when compared to other(RESTRUCTURINGcon-bolstershisviewofamoveing Service, and unemploy- page 7) servicesegmentslikeocean,tinued on page 14)awayfromthespotmarket. Asshippersshiftmore volumetowardcontracts, he said, trucking companies need more employee drivers. t ruCking in aB alanCeDM arketp laCeThe trend toward contract carriage and the move to hire more drivers are being driven bythedemandsofshippers, accordingtoSiplon.Ship-pers are willing to entertain a contract, but they require their loads to be picked up on time, every time and the same time every week, he said. Ship-persareincreasinglyasking carriers in their RFPs whether they own their own assets and employtheirowndrivers. At the same time, opportuni-tiesinthetruckingemploy-mentmarket,intheformof higher wages and more attrac-tive benefits, provide owner-operators with the incentive to seek employment rather than going it alone.With consumer spending'