25 January - 31 January
Manifest Weekly: January 25-31, 2023
What we’re covering:
Jobless claim declines pointing to a still-tight labor market across the US
This week’s featured news stories, including online freight booking platform Freightos going public
Why shippers will add more FedEx and UPS competitors to their last-mile delivery mix in 2023
Logixboard’s recent white paper & featured content
IN THE NEWS
Jobless Claims Decline Despite Layoffs, Pointing To Still Tight Labor Markets
Throughout 2020-21, supply chains worldwide had to deal with multiple disruptions thanks to COVID-19. Thanks to lockdowns and the fear of the deadly virus, e-commerce grew exponentially, pushing logistics and supply chain companies to hire more people to fill crucial roles. But as demand dropped in the last quarter of 2022, thanks to inflationary pressures, various companies are laying off people. In January 2023, while big players made lay-off announcements, jobless claims reported by the Labor Department actually declined to pre-pandemic levels, indicating a still-tight labor market.
Initial jobless claims, a proxy for layoffs, fell by 6,000 to a seasonally adjusted 186,000 last week, according to the Labor Department. The 4-week moving average of weekly claims, which smooths out volatility, was 197,500. Claims are up from lows reached early in 2022 but have remained near pre-pandemic levels. In 2019, claims averaged about 220,000 a week. The historically low level of jobless claims stands in contrast to some large companies making layoff announcements.
TOP HITS THIS WEEK
From The Manifest
How Much Time Is Your Operations Team Losing on Manual Tasks?
The freight forwarding industry has a long way to go when it comes to optimization. From decentralized communication strategies to cumbersome booking processes, and everything
Adopting Sustainable Practices as a Freight Forwarder
Over the past few years, sustainability has gained relevance in the logistics industry. From major policy initiatives to consumer-driven movements, companies are facing pressure from
Are you using automation in your logistics operation? If not, it’s time to start 🤖
Check out our latest white paper How Automation Levels the Field Against Digital Forwarders to learn how to implement the right technology to help you get ahead 📑
WHAT’S HAPPENING AROUND THE WORLD
Featured News Stories
Israel-based online freight booking platform Freightos Ltd. started trading shares publicly through a merger with a special-purpose acquisition company, just as the booming shipping demand that helped fuel the digital startup’s growth shows signs of weakening.
Orders for manufactured durable goods in the US jumped 5.6% in December because of a flush of new contracts for Boeing passenger planes, but business investment was weak again in another sign of a corroding U.S. economy.
The latest data from the Drug and Alcohol Clearinghouse reveals that drug use among commercial drivers may be at its highest level since the federal repository was set up in 2019, with truckers’ positive drug tests up 18% in 2022.
Container freight rates from Asia are expected to come under renewed pressure in the period following the Chinese New Year. However, spot rates on the transpacific and Asia-North Europe trade lanes have already plummeted below break-even levels.
ON OUR RADAR
FedEx and UPS To Face Stiff Competition As Shippers Diversify Their Parcel Carrier Mix
One of the biggest reasons for Amazon’s massive success is its last-mile delivery prowess. Orders reach the end customer within 24 hours, with same-day deliveries now turning into a reality. If other retailers and manufacturers, as well as industry leaders, want to maintain their status quo, last-mile delivery expertise will be a major differentiator. As a result, interest in last-mile delivery players is increasing, with the chances that FedEx and UPS may face stiff competition from this segment.
Even as space frees up within FedEx and UPS’ networks, shippers are poised to continue diversifying their parcel carrier mix in 2023, industry experts say. Adding new last-mile carriers emerged as a popular strategy during the pandemic after volume surges limited capacity at the two delivery giants. In recent months, FedEx and UPS have seen service levels rebound and demand normalize, but many shippers continue to keep other delivery options on tap.
If anything, shippers are adding alternative carriers at an even faster rate. The average number of last-mile carriers per company account in December was 5.73, up from 4.86 the year before, according to project44 data. A mix of factors is buoying this ongoing trend, including higher rates and concerns over UPS and the Teamsters’ contract negotiations — their current agreement expires on July 31.
Increased capacity and more robust services from smaller competitors are also driving interest in alternatives. The result is that last-mile carrier mixes are starting to look more like shippers’ varied LTL portfolios.
Experts say another company could soon enter the parcel carrier fray, placing increased pressure on FedEx and UPS: Amazon. Amazon now plans to expand its “Buy with Prime” service to all US merchants, connecting their outside websites to Amazon’s fulfillment network and delivery capabilities. Essentially, looking forward, diversification isn’t expected to slow down, leaving some industry experts wondering if Amazon will capitalize by launching a competing service.