Narrator [00:00:04]:

Welcome to Supply Chain Now, the voice of global supply chain. Supply Chain Now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today's critical issues, the challenges, and opportunities. Stay tuned to hear from those making global business happen right here on Supply Chain Now.

Scott W. Luton [00:00:32]:

Hey, good morning, good afternoon, good evening wherever you may be. Scott Luton and the one and only Tandreia Bellamy here with you on Supply Chain Now. Welcome to today's livestream. Hey Tandreia, how you doing today?

Tandreia Bellamy [00:00:43]:

I'm great. You know, I'm always great anytime I get to spend time with you, Scott.

Scott W. Luton [00:00:48]:

Well, it's just you and me today, right? Of course not. Of course not. Not only do we have Tandreia's expertise, we're going to be sharing with all of y'all, but we've got an outstanding panel as we're going to be sharing key insights from one of the leading transportation industry resources, the U.S. Bank Freight Payment Index for Q3 2024. We're going to be gaining, you all know how this goes. We've been doing it for quite some time. We're going to be gaining key takeaways from the index and from the domestic freight market from two business leaders. One perspective focused heavily on what the data is showing and one perspective focused heavily on expertise in terms of what's really going on out in the market.

Scott W. Luton [00:01:26]:

So Tandreau, before we introduce our guests, as I mentioned, we've been collaborating with the U.S. Bank team for quite some time. The U.S. Bank freight payment Index focus released every quarter and it's free. How about that? It offers intriguing insights and it's based on massive amounts of data processed through U.S. Bank. In fact, did you know U.S. Bank processed $42 billion worth of transactions in 2023 alone? Imagine the truckload, the container, loads of insights from all of that data. And all of that is one of the biggest reasons why U.S. Bank is such a great resource for not only disinformation but these, these types of conversations.

Scott W. Luton [00:02:05]:

And hopefully you'll take this information and all the analysis and go have conversations with your team, your suppliers or a whole ecosystem. So Tandreia, your thoughts here? You've been with us for two or three of these types of conversations here. Your thoughts.

Tandreia Bellamy [00:02:19]:

You know, Scott, it really brings to light how interconnected not only we are domestically but globally. And there is so much information that you need these types of very fact based insights to help with decision making. So we've got, like you said, U.S. Bank is giving us based on data and then we have other insights just looking at market trends and what's happening globally. And again, insights that fact based foundation for future decision making. It's just extremely important.

Scott W. Luton [00:03:00]:

That's right. And my, my favorite parts about this conversation is, well, we got all the data but we got expertise from this panel. Not, not just the two folks we're about to introduce, but Tandreia, now you know we don't break the 20 year rule. You've been doing big things in supply chain and transportation and engineering of innovative solutions for quite some time. So I'm looking forward to your perspective throughout. Okay, Tandreia, it is time to get to work. I'm going to welcome in our two esteemed guests that round out the panel here today. And that is Bobby Holland.

Scott W. Luton [00:03:33]:

Back by popular demand, Director of Freight Business Analytics at U.S. Bank. And our longtime friend, also certainly back by popular demand, Cathy Morrow Roberson, Founder & President with Logistics Trends and Insights. Hey. Hey, Bobby, how you doing?

Cathy Roberson [00:03:49]:

Doing well. How are you all?

Scott W. Luton [00:03:51]:

Wonderful, wonderful. And guess who's back, back again is Cathy Morrow Roberson. Cathy, how you doing?

Cathy Roberson [00:03:58]:

Hey, how are you?

Scott W. Luton [00:04:00]:

Wonderful, wonderful, wonderful. All right, so me and Tandreia, if y'all can't tell, we are excited for today's conversation. But folks, we're going to start. We've got a trio of big time travel buffs between Tandreia, Cathy and Bobby. So let's start with a fun warm up question, right? And I want to ask each of y'all about some recent travel that y'all have made. And Cathy, I'm starting with you. Bat Cave, North Carolina, that may not be on some folks radar. Tell us about your visit to or visits maybe to Bat Cave.

Cathy Roberson [00:04:29]:

Well, I haven't had a recent visit to Bat Cave for obvious reasons. Bat Cave, North Carolina is in the western part of the state that was hit really hard during Hurricane Helene. In fact, the roads into Bat Cave were completely washed out. So I'm wearing my t-shirt today to kind of raise awareness. Don't forget the folks from western North Carolina, you know, in regards to donations and such. It's beautiful, beautiful area.

Scott W. Luton [00:05:00]:

Yeah, Cathy, appreciate you putting that on our radar. You know, the news cycles move so fast. There's so many people still recovering. Folks, if you want to help out one of our favorite nonprofits, the American logistics aid network, allenaid.org and maybe Amanda or Joshua can drop that there. But Cathy, I appreciate that and we look forward to going back and visiting these beautiful places soon. Okay, Bobby, I'm gonna go to you next. Bobby, you're Telling us you're still plotting your next anniversary trip, but you're telling us about one of your past ones to beautiful Sicily, Italy. Now, there's probably 18 pages of highlights from a trip to Sicily, but what's one of your favorite aspects of your travel?

Bobby Holland [00:05:41]:

Driving across the island. Actually, you know, getting to the island was pretty excellent, too, because took a train from central Italy, and I was trying to figure out how we're gonna get from the train over to the island, and evidently, the train drives right up into the ferry, and then the ferry goes across the channel, and then the train leaves the ferry and continues on. So I thought that was very cool. I've never been on a train inside of a boat before.

Scott W. Luton [00:06:07]:

Yeah, I'm talking about logistics and engineering feats. Goodness gracious. I love that, Bobby. You know, supply chains everywhere when you go look. And it's kind of like that Tootsie Roll commercial back in the day. But, Bob, be looking forward to hearing the highlights of your next trip. And that brings us to Tandreia. Now, Tandreia, you're a big sports buff like I am, and you're particularly football, and you kind of.

Scott W. Luton [00:06:29]:

You got torn allegiances. You've got UCF, University of Central Florida, and you got Stanford, both where you matriculated through, and you took some recent football trips.

Tandreia Bellamy [00:06:38]:

I'm a bad luck charm for both. I say both lost. I was in Orlando for the UCF versus Colorado game, and that didn't go well. And then I was in North. In Raleigh, in North Carolina for the Stanford, NC State game. And that was horrible. To be honest. I was so bad.

Tandreia Bellamy [00:07:02]:

Me and my freshman roommate, we left at halftime. Oh, losing 59 to 28. It was horrible.

Scott W. Luton [00:07:12]:

Well, let's look at the highlights, though. The food and the fellowship. Even if your team loses, which. Which tailgate from North Carolina to Florida, which had the better tailgate?

Tandreia Bellamy [00:07:21]:

Ucf. And that may be because I'm more involved with UCF. As you know, I'm on the foundation board, so I heard a lot more places that I could stop and engage and eat because it was a home game for them.

Scott W. Luton [00:07:39]:

I bet you're like the mayor walking through there. And one thing, you know, Tandreia's pretty humble, but I think you're on a hall of fame engineering hall of fame down at UCF, Right?

Tandreia Bellamy [00:07:47]:

I was very honored to be just to be a distinguished alumnus for computer science and engineering. But if we're going to speak about recognition, congratulations for being one of the top voices from Thinkers360. Great job.

Scott W. Luton [00:08:05]:

Scott, thank you for the surprising me. Well, I appreciate that. And it takes a team and you know, I think all four of us here together love to amplify good news, data driven insights and of course, everything that's going on across this wonderful industry that is global supply chain. So I appreciate that though. Tandreia. So Bobby, let's switch over to the task at hand here today. Of course we value your quarterly insights and perspective. We've been doing this quite some time since we were about 15 years old by my count.

Scott W. Luton [00:08:34]:

And of course we get a lot of feedback from our global audience about these quarterly conversations. So if you would give us a sneak peek of some of the takeaways from the Q3 2024 Freight Payment Index that we're going to be diving into here today. What are some of those things?

Bobby Holland [00:08:51]:

Okay, so we'll be looking at a few emerging bright spots in the truck freight transportation market and also the headwinds that remain. And we'll also be looking at the data for insights that will help us better understand what's going on with domestic truck freight.

Scott W. Luton [00:09:05]:

So that's right. Hey, we gotta be able to know what's going on and understand it so we can make better decisions and take actions and navigate the path forward. We can learn a lot from the past. So Bobby, I appreciate that. So let's do this. We're gonna get to those key takeaways in a minute. We've got several national level takeaways and then we're going region by region. Right.

Scott W. Luton [00:09:27]:

But Cathy, I lost count of how often. Both actually. You and Tandreia both. And of course Bobby's on that probably that top 10 list too. We've enjoyed lots of previous appearances, but for our new audience members, you know, that maybe aren't as familiar with your great work out in the market such as this. And this is just one of many the Freight Forward weekly newsletter which folks, if it's not on your radar, you got to jump and get it with the cool kids club because it is logistics nourishment every week. But Cathy, tell us about yourself.

Cathy Roberson [00:10:01]:

Well, okay, so I've been in the logistics space for well over 20 years. I do have a small market research firm, Logistics Trends and Insights. But I also work with various folks organizations such as the Journal of Commerce. Hence that's the Freight Forward shares a lot of the great stories coming out from the Journal of Commerce. I also write a weekly column for Cargo Facts which focuses on air freight, Air cargo and Express. And I also work with the Reverse Logistics association as a research manager. So in between all of that I have my own specific clients doing research and writing and such as that.

Scott W. Luton [00:10:51]:

Love it. And you got to have a couple of clones because you stay extremely busy. And she didn't mention this folks, but I love how Cathy would digest earnings calls and share some of those nuggets that you got to know across social media. So make sure you connect and follow Cathy. So Cathy, great. Okay, so Bobby, back to the U.S. Bank freight payment Index for some of our new audience members. Right.

Scott W. Luton [00:11:17]:

Maybe hitting seeing this conversation for the first time. Tell us briefly about what the U.S. Bank Freight Payment Index is, what it analyzes and just kind of how it works. Okay.

Bobby Holland [00:11:28]:

Well the Freight payment index is U.S. Bank's perspective on the truck freight marketplace. We arrive at this data, we analyze data from our transaction processing of more than $43 billion in annually in payments and then we presented in our index as a national index as well as a regional breakdown. And the regional breakdown is important. It's our unique perspective because it helps to show how the national freight drivers can impact areas differently in the US It's a chain based index, quarterly chain based index using a same store sales type methodology to compare quarterly deltas and velocity as well as year over year analysis.

Scott W. Luton [00:12:09]:

And folks, you know this is a quarterly report as I think Bobby mentioned and we have a quarterly analysis and discussion each quarter here. One of my favorite things to do question for you Cathy and Tandreia and Cathy at you first. You know you absorb tons of data and perspective from across the market. You know, when it comes to the U.S. Bank Freight Payment Index, how do you and other industry leaders utilize resources like this?

Cathy Roberson [00:12:37]:

The primary way that I tend to use U.S. Banks research is for a market overview to get an understanding of what's going on regionally. Which is really interesting because there's not a whole lot of reports out there that will split it up by region such as U.S. Banks. And also it's a nice gut check against other resources from an overall perspective.

Scott W. Luton [00:13:05]:

Yeah, well said. And you know the regions I love going region by region kind of to your point. And it all rolls up when you, you combine it with other data and resources and points of view, man, you can get really arrive at a sense of what's really going on out in the marketplace so we can inform others or make decisions for organizations and more. So Tandreia, again really enjoyed you being a part of these discussions. Going back a few quarters if I'm not mistaken. How do you use resources like this?

Tandreia Bellamy [00:13:34]:

Yeah, much like Cathy, Being able to see how the different areas of the country are being impacted because there's a huge correlation with what's happening on one side of the country that impacts another. You know, just recently, when we were hot and heavy talking about the longshoreman strike on the east coast, understanding the impact that that was going to have on trucking in other areas. So sometimes fluctuations are not simply based on growth or the economy. It's based on other things that's happening in the country. And being able to decipher that is hugely important in decision making.

Scott W. Luton [00:14:16]:

Yeah, excellent point, deciphering. Gosh, I wish I had invested more of my deciphering skills back college. Baby, I missed that class. But, you know, I think the other element here, you know, of course, just like supply chain, the freight market is indeed global. It takes a global village. And I like how we can really focus in and break it down a bit just looking at the domestic freight market because there's so much there. Right.

Scott W. Luton [00:14:43]:

And I think that's where this really comes in and delivers lots of value, no pun intended. Today we've got seven key takeaways from the Q3 2024 Freight Payment Index. And where we want to start, Bobby, is two national observations. So, Bobby, tell us more.

Bobby Holland [00:15:02]:

Okay. Well, nationally we saw that declines in Q3 overall were the smallest in the last six quarters. And what this perhaps suggests is positive signs for the truck freight market. One of the things that people have been looking for is when is the bottom in sight so that the recovery, however long it may be, can start. And so these are positive signs in that regard. And the other national one is that even though there are bright spots in retail sales and declining or low diesel prices, there are still headwinds in place for the marketplace due to softer manufacturing activity overall. And then fewer housing starts overall, we'll see that there's some spots where housing starts are up, but overall housing starts across the nation are down. And both of these are heavy contributors to freight. So they're things that we keep our eye on.

Scott W. Luton [00:15:51]:

That's right. Excellent starting point, Bobby. You know, housing starts, manufacturing, consumer spending, several of the key cogs in our economy and certainly key impact factors on the freight market. And, Cathy, I want to circle back to you. So we're starting nationally as some key takeaways. When you kind of survey the Freight Payment index, what are some key takeaways nationally that you see?

Cathy Roberson [00:16:15]:

I agree with Bobby. You know, after reading various earnings transcripts from trucking firms, most of them have noted recently that it looks like we have reached a bottom in regards to spending as well as in volumes. So hopefully as we go forward, we'll start seeing, you know, a little bit of growth and such. So fingers crossed on that. But yeah, and the spending, consumer spending, housing starts. I think that's been a lot of wait and see, you know, particularly with the buildup going towards the elections, strikes and so on.

Scott W. Luton [00:17:01]:

Yep, excellent point. I think there's a whole bunch of hurry up, wait and see in there. So, Tandreia, Bobby and Cathy shared a few national observations from freight and economic and otherwise. What thoughts come to your mind?

Tandreia Bellamy [00:17:16]:

You know, I think just locally I have seen the explosive growth that we had in housing starts and you're starting to see the market really slow down. I mean, you're starting to see that real estate in general is the time on market for existing homes is slowing down, which doesn't bode well for all of the new construction that's in place. So you really can see that houses starts slowing down being a key indicator that could continue for some time.

Scott W. Luton [00:17:52]:

Yep, excellent points there, Tandreia. The housing market is so many layers to that onion. To peel things back to truly get a sense of what's going on. You got housing starts, which is kind of the current snapshot. You got permits, which is kind of a longer term snapshot. And then of course, you're talking about sales and time on market and all that stuff. This is why we need as much data as we can get our hands on, especially because these factors impact the domestic and global supply chains for sure. So, Bobby, we're going to go region by region and we're going to start with the west, which was a bit of a unique region in Q3, is that right?

Bobby Holland [00:18:30]:

Yes. The west saw strong import volumes at the coastal seaports and land ports of entry. And this led to the west being the only one of the five regions to post gains in Q3 shipments and spend.

Scott W. Luton [00:18:43]:

Yep. So, Cathy, with what's going on out West. Right. For Q3, whether it's in the report, in the data, or putting your finger on the pulse of what's going on out in the marketplace, which may look the same or be different, what do you see going on out West?

Cathy Roberson [00:19:00]:

I think what we saw for The west in Q3 is some of that pulling forward of freight, the shift from east coast to west coast perhaps, as well as what's going on in Canada. And it caused a lot of imports coming into La Long beach and some of the other west coast ports. As a result, we had our friends from you know, trucking and rail, picking that up and moving it to either local warehousing, you know, to, to stage at a later date, or moving it up further inland.

Scott W. Luton [00:19:40]:

Yeah, for a shift over to Tandreia. Talking about those imports that Cathy mentioned. You know, west coast ports benefited from a number of different things. That inventory replenishment that was going on, shippers hedging their bets, that labor dispute that they kind of kicked the can on. We'll see kind of how that, how we circle back to that come the first of the year. And a lot of folks were saying, okay, we're going to get out ahead of this and move some of our traffic to the West Coast. We get this. According to the Pacific Merchant Shipping association, pmsa, we love our acronyms.

Scott W. Luton [00:20:13]:

Their most recent data shows that as of August 2024, the U.S. west coast ports have increased their market share of all US import activity to 43.4%, which is up, to give you a frame of reference, up from 40.4% in 2019. Now that kind of goes back and forth, as all y'all know. But just a interesting data point there, Tandreia. When you think of the Western region, what's going on out there? Your thoughts?

Tandreia Bellamy [00:20:38]:

And I think that's why sources like this with U.S. Bank and also with freight forward and some of the research and information that Cathy and her team produces, it makes you pause as you're looking at these because when you see increases, it doesn't have to be just organic growth. And if it's not organic growth, you have to be careful how you forecast moving forward. In this case, we're saying there's other things that are spurring what's happening on the west coast that is not organic growth.

Scott W. Luton [00:21:17]:

Yep, good point, Tandreia. Left shift over. Let's see, we're going from the west to the Southwest. So Bobby, we saw some big declines, I think over in the Southwest, is that right?

Bobby Holland [00:21:31]:

Yes, we did. Flatness in cross border trade with Mexico as well as continued soft manufacturing in the region. It led the Southwest region to post the largest quarterly and year over year declines in shipments in Q3, 2024. So Southwest is still struggling.

Scott W. Luton [00:21:49]:

All right, so with that in mind, Cathy, and you think of what goes on in the Southwest, whether you're seeing the data or out in the market. Your thoughts?

Cathy Roberson [00:21:57]:

Well, it's certainly interesting for sure. And yeah, I can't help but think is this seasonal and again, hesitation of manufacturing being low and such as that? It's a difficult one, that's for sure.

Scott W. Luton [00:22:15]:

That's right. Tandreia.. Let me go to you first. Your thoughts of what we saw in the Southwest.

Tandreia Bellamy [00:22:19]:

Again, I think it's really critical that we look at the connectivity between the different things we just talked about housing starts and how that impacts freight. Well, there's a lot of manufacturing that's involved with housing starts. So you end up having a double edged sward when you don't have the housing starts. There's no need to manufacture a lot of the things that's needed in construction. The list goes on and on and on. As far as that's concerned.

Scott W. Luton [00:22:51]:

It does on and on and on. One quick point, Cathy, and maybe Bobby both, maybe all three of you all mentioned manufacturing. So when you look at, when you think of factory production, which again is a big cog, not just in the freight market but our economy, what goes on in global supply chain, domestic supply chain, you name it. Some data suggest that the US Manufacturing activity contracted for the seventh straight month in October. In fact, according to the Institute for Supply Management's manufacturing PMI, it pointed to October 2024, that month's factory production just last month to be at a 15 month low. Now I think I want to go back to the point that a couple of us have made. You can't look at one data set, right as the, you know, single source of truth. However, there are multiple sets of data that does point to a just a continued bit of malaise in the manufacturing industry here in the States.

Scott W. Luton [00:23:49]:

So hopefully better things lie ahead. Cathy, you're nodding your head. Anything you want to add related to the manufacturing activity, anything you've seen with specific manufacturers or any of those calls? Any comment there?

Cathy Roberson [00:24:04]:

I think, you know, post Covid, you know, right as Covid was easing and all of a sudden we saw a jump in manufacturing declines. Then the issue with too much inventory and that's when we started seeing the drop in manufacturing. Hasn't really picked up since and it won't pick up until demand starts picking back up again.

Scott W. Luton [00:24:27]:

Yep.

Bobby Holland [00:24:28]:

And you mentioned before about let's wait and see, a lot of people are waiting to see whether it's moving on housing or any other large purchases that are affected by interest rates.

Scott W. Luton [00:24:37]:

Yep. More on interest rates in just a second. I do want to offer a little bit of good news though. Well, one of the data sets I read about the manufacturing industry domestically, you know, we've seen a lot of layoffs unfortunately across the manufacturing industry, but we have seen in third quarter, at least according to one data set, actually an increase in hiring and hopefully that is a harbinger of good things to come. We'll see. All right, so now we want to shift over. Bobby, let's talk about the Midwest. Right.

Scott W. Luton [00:25:05]:

Where housing starts. Activity actually was a big tailwind. Tell us more.

Bobby Holland [00:25:10]:

So on the Midwest, the Midwest had five straight quarters of shipment volume declines, but it had robust housing start activity, and that helped the region to see its first quarterly gain of 0.3% in shipments since Q1 of 2023. So, again, it just kind of shows how, you know, nationally they're down, but each region has its own impacts from these national impacts. So it's just an interesting way that that works.

Scott W. Luton [00:25:39]:

Yeah, you're right, Bobby. And it shows also why we've got to get down below the national numbers and look at it region by region, because there's always some commonalities as you go from state to state or region to region, but there's also some big, stark differences that are important to call out. So I appreciate that, Bobby. Cathy, when it comes to the Midwest, your thoughts there?

Cathy Roberson [00:26:01]:

No, I totally agree with both of y'all. And again, this shows the beauty of being able to look at the data from a regional perspect.

Scott W. Luton [00:26:09]:

Yep, that's right. Tandreia, your thoughts when it comes to the Midwest, the mighty Midwest, your thoughts?

Tandreia Bellamy [00:26:18]:

I really don't have anything to add to what both Bobby and Cathy. Cathy said.

Scott W. Luton [00:26:24]:

Yep, housing starts for a second. We've already established how critical they are. Right. In the economy and freight activity. The freight market, whole nine yards. Some may be surprised. Bobby, you mentioned interest rate. Right.

Scott W. Luton [00:26:37]:

In your response a second ago. Well, despite the Fed rate cut in October, we've actually seen mortgage rates and construction loan costs go up. Right. Which is really strange. I'm not accused of being an economist or even a macroeconomist, so you'll have to go to the experts to find out why. But I've also heard many financial gurus say one cut does not make for a robust market. So after the half point cut in September 2024, which we all welcome, we were all waiting. I mean, gosh, that was like pent up demand for that rate cut for a long time.

Scott W. Luton [00:27:12]:

Well, the next Fed rate cut may come today, as many economists are projecting a quarter point cut. So we shall see. I think I saw one of the latest federal inflation figures come in at 2.1%, which is just a smidge over their target. So hopefully we get some good news there.

Bobby Holland [00:27:31]:

Just information that I've come across empirically. A lot of people might be looking at lower housing costs in the Midwest or lower, lower cost of acquisition, if you will. It's easier to get into an affordable housing with the high interest rates in the Midwest right now. So that might be one of the reasons why it's kind of right now.

Scott W. Luton [00:27:51]:

That's right. That is right. And you know, I was hoping to have some late breaking news, Bobby, about this interest rate cut right as we were going on, but it hasn't happened. I don't think just yet. Maybe this afternoon will be brighter. All right, so let's talk about the Northeast, folks. Northeast. I was about to make up a new region.

Scott W. Luton [00:28:10]:

I think the Northeast kind of that offered a mixed bag of sorts. Bobby, tell us more.

Bobby Holland [00:28:16]:

Yeah, the Northeast has usually been affected by retail. It's a very dense region. And so, you know, swings in retail sales show up big here. And so the Northeast was affected by soft retail sales as well as flat factory production. And those two outweighed the strong housing starts in the Northeast. And that led to the largest year over year decline in spend of the five regions.

Scott W. Luton [00:28:43]:

Cathy, I'd love to get your thoughts on the Northeast, but if I'm not mistaken, the manufacturing market, which we've already talked about and established, kind of what we've seen there for months and months and months, they're major contributors to the less than truckload overall activity. Right. And so hopefully, as we see when we finally break through this manufacturing malaise, we'll probably see that factor right into the many aspects of the freight market. But especially ltl your thoughts on that or what we saw in Northeast.

Cathy Roberson [00:29:15]:

Now really, if we could just break through the malaise just like you said, that'll be great. And hopefully, and we have heard little rumbles that it will start getting better, but slowly, it'd be a gradual improvement through next year. So fingers crossed on that. But as far as the Northeast goes, I agree with Bobby. This is a huge area for retail spend in particular and those retail warehousing facilities as well. It's been down.

Scott W. Luton [00:29:48]:

Practical optimism is one of the things I'm hearing here. And I think we all share in that. And you know, with interest rates with I can't make it plural just yet, but odds are that we're going to see that today. But as we garner some more of these interest rate cuts, of course manufacturing leaders and other business leaders will feel a lot better with that certainty to invest in the business and expansion plans, new products and new market entries, maybe some hiring right. Investing in their supplier ecosystem and more. So we will see what's ahead. I wish my crystal ball worked better than it did Tandreia. The Northeast or if you want to talk about practical optimism, I'll take either.

Scott W. Luton [00:30:27]:

Either one, my friend.

Tandreia Bellamy [00:30:28]:

Well, I think, you know what Bobby mentioned, there were several different data points that he discussed. So you cannot just look at one thing and try and base decisions on it. In this case, we have housing starts that are up, but we still saw freight declines because so many other things were down. So having great data sources like these, having great analysis like what Cathy and her team provide, the more data points you can get, the better foundation you have for making decisions, move them forward.

Scott W. Luton [00:31:06]:

That's right. Excellent point, Tandreia. And you know, one more thing about the region, Bobby, Cathy and Tandreia. You know, Cathy, when, when folks are trying to figure out their regional play, whether it's their demand planning. Right. Based on where, where certain customers are or their logistics or transportation plan, that's where. Having more slightly more granular data and insights and know how and market knowledge, that's critically important. Would you, would you agree with me?

Cathy Roberson [00:31:35]:

Totally. Yeah. And particularly in the Northeast, you know, a lot of these retailers, last mile delivery providers and such, it's all about building that density.

Scott W. Luton [00:31:47]:

All right, I want to circle back to the Southeast, right. Me and Cathy and Tandreia call the Southeast home. Bobby, you're up in Northeast. So we just left your neighborhood and coming back down down the Atlantic coastline. What did you see in the Southeast? It seems like we experienced a variety of challenges and certainly headwinds, huh?

Bobby Holland [00:32:08]:

Yeah, this will definitely be a region to watch going forward. But currently we saw sharp drops in housing start activity, manufacturing output and consumer spending which led to a 3% decline in the Southeast region. 3% decline in Q3 after 1.8% increase in second quarter. So again, it'll be interesting to watch because obviously, you know, we've seen the things that have hit the Southeast and there's always a rebuild and that's going to, you know, it's kind of morbid, but it's going to drive truck freight into the area as they dig out and rebuild and put it all back together. So yep, you see how it shows up.

Scott W. Luton [00:32:47]:

It's a good point, Bobby. And I don't think it's morbid at all. I think, I think all four of us, we talked about this in the pre show. So many folks are still trying to recover. I mean the news cycle has certainly left long since then and folks are still folks and families and businesses are still trying to rebuild. Hurricanes Helene and Milton. What Bobby's talking about didn't hit until late September and early October. So we will certainly see the impact of that in the next freight payment index.

Scott W. Luton [00:33:13]:

And we've got as business leaders, we've got to take that into account. But on a human level, as we all agree, you know, thoughts and prayers, best wishes and our help certainly to all of our neighbors in here in the Southeast still recovering, even if you don't see it on the headlines. Back to the Southeast from a business perspective. Cathy, your thoughts here in our home, neck of the woods?

Cathy Roberson [00:33:36]:

Well, okay, so the housing starts. I think the interest rates are still high and I think the more they come down, the more people will be willing to purchase new houses and such. I think, you know, the Southeast has been a huge area for housing starts for a number of years and that stop, I think has led to the higher interest rates but also higher priced housing as well. I know Bobby mentioned the more affordable housing in the Midwest. I think it's been the opposite here in the Southeast. And then the manufacturing output, this area is hot for automotive, automobile manufacturing and demand has kind of sloughed off for buying new cars and such.

Scott W. Luton [00:34:26]:

You know, speaking of automotive, I think we've mentioned in some previous shows, I'm still tracking the Rivian, the big mega site that's been put on pause. That will be really interesting to see when, if and when that comes back online. Goodness gracious, that whole industry is interesting. We need a whole series of shows on what's going on EV for sure. All right, Tandreia, the Southeast, you know, you, you put on your logistician hat the other day driving from Florida to North Carolina pass by, no shortage of truckers and sites and warehouses and plants. What do you see here in the Southeast?

Tandreia Bellamy [00:35:06]:

There is a lot of construction that's going on and that will continue some of it. Again, it's not going to be organic growth. It's just going to be necessary to rebuild so much of what was destroyed with the hurricanes and how that comes back, it's going to be really interesting. Interesting to watch especially you know, I'm a native Floridian. How are they going to rebuild along the coast? What are going to be some of the inputs that go into that? How is what's happening with the insurance industry going to impact how quickly things are rebuilt? Because I believe the number was 0.9% of the people in Boone County, North Carolina had flood insurance. So how does that rebuild happen if those houses that were destroyed aren't covered by insurance? So we're going to have a very long case study to see exactly how these areas are rebuilt and how that impacts a lot of things, how that impacts unemployment, how it impacts the manufacturing in the area, how it impacts tourism in the area because so many things were lost with these storms.

Scott W. Luton [00:36:26]:

Yeah, excellent point, Tandreia. Speaking of climate, Starbucks made some some headlines this past week as they're investing in a more climate resistant supply chain, purchasing some farms I think down in Central America, if I'm not mistaken, could be South America, but where they're going to be experimenting with all sorts of coffee bean plants that are more resistant and how they can also use that and many other initiatives to be better prepared as we navigate through all sorts of climate related challenges and impacts on our global supply chains. So Bobby, Cathy and Tandreia, in just a second I'm going to get Tandreia and Cathy's bold, fearless predictions of where the freight market is going given everything we kind of walk through. Right. But I want to go back for a second to go back. You know, I love factoids. Cathy and Tandreia and Bobby and I didn't get to mention this when we were talking about the south, the Southwest. These are the five regions that we walked through and these are the five regions international observations that the U.S. Bank Freight Payment Index hits.

Scott W. Luton [00:37:33]:

But did you know back in the Southwest, back in South Texas, data shows that truck freight imports from Mexico through the Laredo Texas port of entry were flat in Q3, which also contributed to the Southwest activity. Now, some folks, even though we've got smartest audience in all the land, some folks may not know that a Port of Laredo down in South Texas is at the center of U.S. trade with Mexico. And get this, as of 2023, it was the top international trade port in the U.S. it topped 300 billion in trade for the first time ever. So I guess indeed everything must be bigger in Texas, or so the rumor goes. All right, Bobby, Cathy and Tandreia, a lot of good stuff here. I want to get to our crystal ball moment.

Scott W. Luton [00:38:24]:

And Cathy, I want to start with you and what's our refrain we're saying a couple times already kind of wait and see. I think everybody's kind of waiting and see. Some of us are holding our breath and waiting and see. Right. But with more information, with more data, with more perspective, we can better navigate the uncertainty that just goes with the territory of managing freight and certainly managing supply chain. So Cathy, what do you think we're going to see in the freight market in the months ahead?

Cathy Roberson [00:38:53]:

Currently, we're in fourth quarter. So fourth quarter brings holiday time, holiday spending. So you will see a rise in consumer spending, but I expect it will be more on very careful spending, more promotion, sales spending and such. Next thing up would be hitting January. So I think from what I understand January 1st we're going to have some more tariffs hitting. I think next year is going to be like the year of tariffs. Potentially we'll see. But we also have January 15th.

Cathy Roberson [00:39:30]:

Don't forget that that's the date that the port workers contract extension ends. So fingers crossed we'll have a contract by then. If it doesn't happen, we're going to see more freight going shifting over to the West Coast. We probably will see a rise in air freight demand as well.

Scott W. Luton [00:39:55]:

Lots of things to come, Cathy, and so much more to talk about, which is one of the fascinating aspects of being in global supply chain in this era that we're in. Be it the challenging days or the incredible innovative days, it really is an exciting industry to be in. Tandreia, Cathy shared a snapshot of what's to come. What about your thoughts? What are we going to see in the freight market in months?

Tandreia Bellamy [00:40:18]:

That very much along the same lines. I think fourth quarter is going to be up, but I think some of that is going to be artificial growth because of the fear of the longshoremen strike here in the US but also don't know what's happening with the longshoremen strike in Canada. Again, uncertainty with tariffs. I think there's going to be artificial buildup of inventory just to try and get ahead of those things. So I think there's going to be a little bit of a artificial bump and then followed off by a decline because you're going to have those inventories that are in place.

Scott W. Luton [00:41:00]:

Excellent point. Lots and lots of stuff to not only continue to track and monitor, but lots of factors old and new that will roll up into the decisions that and the preparations that business leaders and supply chain leaders have to make. Both of y'all touched on hopefully the upcoming resolution of the East Coast and Gulf Coast ports labor contract negotiation. Earlier this week I recorded a podcast and we were talking about interesting new AI use cases. Real, you know, not future stuff, not kind of sorta. And this business leader was involved in an AI application in a labor dispute that helped that use AI to help negotiate it and resolve it. And actually the use of technology and of course both parties engaging management and the workforce led to less grievances and less fees for both sides. So how is that? And so my comment to our guest was gosh, if we could take a and help not just supply chain parties, but the rest of the world and humanity find more common ground.

Scott W. Luton [00:42:12]:

Sign me up. Sign me up. There are so many different opportunities for maybe technology to be leveraged in that regard. We'll see. We're going to keep our finger on the pulse there. All right. So Bobby, circling back to you, we've had a wide ranging conversation here today. As as always, Bobby, we appreciate your quarterly appearances to help us decipher because I've established my poor deciphering skills help us decipher what this tidal wave of data means and the important signals because everything's not relevant.

Scott W. Luton [00:42:45]:

The important signals that supply chain leaders need to know, especially those that move freight. So how can folks connect with you and how can they certainly find their Freight Payment Index and of course subscribe to it?

Bobby Holland [00:42:58]:

Yeah, it's easy to subscribe to. You just go to freight.usbank.com and fill in the information and there's no cost, no charge and then it's delivered to.

Scott W. Luton [00:43:07]:

Your email box quarterly. That's right. It's just that easy, folks. It's just that easy. Cathy, how can our audience I've got a few hunches. You and your army of clones. How can our audience connect with you and some of the great work that you're leading?

Cathy Roberson [00:43:23]:

Probably the best way is through LinkedIn. You can hit my company LinkedIn page, Logistics Trends and Insights. Or you can just hit me up and you'll find a link for Freight Forward Newsletter which goes out every Monday morning, usually by 6 AM. Also I'm on Twitter. I feel like I'm part of a dwindling crowd on Twitter, but I'm still there at @cmroberson06 or you can always just email me.

Scott W. Luton [00:43:54]:

That is outstanding. And folks, again this is one of my favorite. Oh, the Freight Payment Index. Right. And then Freight Forward, two of my favorite resources that I download. I'm changing my behaviors, I promise. But I'm still a bit of a of a hard copy person. Y'all might can relate.

Scott W. Luton [00:44:12]:

So spilling coffee, dog ear and red ink, you know to call out certain highlights. But this is great stuff. Check out Freight Forward. That hits every Monday, right Cathy? Every Monday, correct. Okay, Tandreia, we've covered well coast to coast, right. Lots of some of the most critical takeaways from the Freight Payment Index. That was for Q3, 2024. What's one of your key takeaways from this discussion we had here today?

Tandreia Bellamy [00:44:40]:

That collaborative communication is extremely important. There is so much information, so many different data points and you need to make sure that you're aware of various information. Again, like I said, there are outside external forces that are putting pressures on and causing different inflection points. So being able to talk to different people who have different levels of expertise, different areas of expertise so that you can make good decisions is extremely important because our world has changed quite a bit.

Scott W. Luton [00:45:17]:

Yeah, you're right. And to build on one of the things you shared there, the pressure, right? We all need to be pressure busters because if you're leading a supply chain out there or an organization or you name it and you feel the pressure, that's one thing. But imagine all the folks that work for you that make up your team, imagine the pressure they feel, right? So however you can bridge the gap, be that pressure buster, right? Find that path forward, communicate and collaborate like Tandreia shared. And all of that is powered at least more effectively with I think, a willingness to go explore what's in your blind spot and address your. Every human has the awareness gaps, but also seek out good data driven perspective. Right. It's rooted in fact and that is always welcome in any conversation. Okay, big thanks to Bobby Holland, as always, Director of Freight Business Analytics at U.S. Bank. Bobby, thank you so much.

Bobby Holland [00:46:15]:

Thank you.

Scott W. Luton [00:46:16]:

Cathy Morrow Roberson, Founder & President, Logistics Trends and Insights. Always a pleasure, Cathy, thanks so much for being here, my friend.

Cathy Roberson [00:46:23]:

Thank you.

Scott W. Luton [00:46:24]:

And Tandreia Bellamy continuing to rocket up the appearance list here at Supply Chain Now. Always a pleasure to have you here and help you decipher these conversations we have each and every time. Thanks for being here, Tandreia.

Tandreia Bellamy [00:46:38]:

Thank you, Scott, for having me.

Scott W. Luton [00:46:40]:

You bet. Okay, folks, you heard it here from an outstanding panel of experts from a variety of different perspectives. There's no shortage of things to track and make sure it's on your radar as we all together navigate what's ahead by looking back and trying to understand better of what we've just been through. So. But whatever you do, you have simple homework here today. Take one thing that Bobby or Cathy or Tandreia shared here today, share it with your team, put it into practice. Let's change how business is done for the better. And with all that said, on behalf of the Supply Chain Now team, Scott Luton challenges you. Do good, get forward, be the change that's needed. And we'll see you next time. Right back here at Supply Chain Now. Thanks. Goodbye.

Bobby Holland [00:47:25]:

Thanks for being a part of our Supply Chain Now community. Check out all of our programming at supplychainnow.com and make sure you subscribe to Supply Chain Now anywhere you listen to podcasts and Follow us on Facebook, LinkedIn, Twitter and Instagram. See you next time on Supply Chain Now.