Category Archives: Transportation

Logistics Sector Gains Back Some Ground As China Recovers

The coronavirus outbreak has hit the global economy pretty hard, though the logistics industry, thanks to its necessity, has been hit less compared to most, to the benefit of Titan Transline and other providers. Meanwhile, China’s logistics sector has managed to gain back some ground in March, as operations are starting to go back to normal as the country recovers from the coronavirus outbreak, with orders for companies coming out again.

According to data from the China Federation of Logistics & Purchasing, the country’s express delivery index, which is a measure of the door-to-door activities in the country’s service and manufacturing industries, managed to hit 103.7% in March, an increase of 12.5% from February.

The federation, however, did note that February’s index was quite low, sitting at 91.2%. Logistics remained in demand during the worst of the coronavirus outbreak, as evidenced by companies like Titan Transline, and with China, a major logistics demographic, recovering, the increased demand resulted in a return for the logistics sector.

The latest number in the index, which doesn’t keep track of traditional logistics services like trucking, is the highest for 2020, as demand went up in the economy, which got hit quite hard by the coronavirus pandemic, according to the Federation. The country’s express logistics index in December 2019 sat at 105.7%.

Changes in the express logistics index in the past three months of 2020 match up with the changes in the Logistics Performance Index (LPI), which keeps tracks of all activity in the logistics sector, including express and heavyweight shipping. According to the Federation’s data, China’s LPI hit 51.5% in March 2020, which is a whopping 25.3% increase from February’s.

If the LPI sits below 50%, it signifies contraction in the industry, while a rating above 50% shows that the industry is growing.

Logistics companies in the country have already announced their plans for recovery, like JD Logistics, arm of JD.com, which announced late in March that they’re hiring at least 20,000 warehouse and delivery workers in order to meet the increase in online demand, as China slowly gets back to normal following the peak of the coronavirus outbreak.

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The Future Of Shipping In LTL

The past few years, the shipping industry has witnessed the bloom of the FTL dedicated truckload freight but a new player is going to disrupt the market in the form of LTL. Experts believe that it is already on the edge of undergoing an expansion. There are many factors that will ultimately contribute to the success of the LTL market such as fears brought about by trade wars, shortage of truck drivers, e-commerce and costs of fuel, capacity crunch and increases in the general rate among many others. While these factors will drive LTL to victory, these will also cause chaos in the years to come.

According to reports, the costs of the inbound LTL freight are already increasing even before the peak season for shipping has started. This prompted the overall market of the LTL to raise their rates in the following year. In line with this, shippers should be aware so they can budget properly and to get the most of the shipping costs they are allocating.

One of the main problems, if the outlook rate of the LTL freight is to increase, boils down to the foundation of business which is competition. In comparison to FT trucking, the market of the less than truckload is not in proportion. Twenty-five of the leading LTL providers are also managing around 90 percent of the total LTL freight. The rest which is only 10 per cent is already divided to smaller carriers in the regional and local market.

At the end of the day, acquiring a better deal is not as obvious compared to choosing a carrier under FT. An estimated 11.2 per cent has changed with the FT rates. On the other hand, a 7.5 per cent growth with regards to the LTL rates has been recorded.

While there are still many providers of FTL dedicated truckload freight, LTL will start to make its way into the spotlight because of its extra capacity to handle which the former cannot do so. The main advantage with LTL is that the system is able to hire drivers in the younger age range compared to FTL.

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