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In this edition: breaking down the 2023 FIFA Women’s World Cup, the unforeseen side effect of rising demand in Mexico, and Yellow officially declares Chapter 11 bankruptcy.
(Image: know your meme)
Over the weekend the upset of all upsets happened in the FIFA Women’s World Cup. The two-time reigning champions, USA, lost to Sweden in penalty kicks. Now it might seem weird as to what an international soccer tournament has to do with logistics, but everything is logistics. This year, for the first time, the tournament is jointly hosted by two countries, Australia and New Zealand.
Equipment, stadiums, housing and, most importantly, the soccer balls have to get to the respective stadiums somehow. This year that is thanks to Team Global Express, Australia’s leading multimodal logistics provider. Team Global Express operates across rail, sea, air and road, according to its news release. Team Global Express’ approach to sustainability and diversity is reportedly what cinched it for FIFA to designate it as the official logistics partner for the tournament.
One of the unique things that had to be set up for the tournament this year was housing. It was a little more than just a hotel room. At the last World Cup in France, there were some issues with traveling across the country in between games, so FIFA established base camps for each of the 32 teams, including a unique training facility and hotel for each squad. The U.S. Soccer Federation overhauled its Bay City Park base to make it feel more like home. This included renovations on a locker room, high-performance gym and space for media and medical personnel — all made possible through Team Global Express.
Plans for the next World Cup have already started with bids from South Africa, Brazil and a stab at co-hosting the tournaments in separate bids from the U.S. and Mexico as well as Belgium, Germany and the Netherlands. The decision on the 2027 World Cup is expected to be made May 17, 2024.
Reshoring has brought a boom to Mexico’s trucking market and along with it a stronger peso, which we love, except for some of the challenges that come along with it. Because so many companies are looking to set up shop and expand operations in Mexico, there is a bit of a capacity crunch happening to trucking capacity there. Mexican carriers naturally pay their expenses in pesos, but with the rise of cross-border shipments they’re getting paid in U.S. dollars, which means the carrier loses profits on the exchange rate when the peso is strong.
Matt Silver, vice president of cross-border solutions at Arrive Logistics, laid out the problem quite nicely when he told FreightWaves’ Noi Mahoney, “If a Mexican carrier is getting paid 1,000 U.S. dollars a year ago for a shipment, that might have been worth 20,000 pesos to them. Today, that shipment might only be worth 17,000 pesos. So they’re getting shorted, about 3,000 pesos, roughly.”
Market Check. The Outbound Tender Market Share Index shows what markets have the most impact on truck volumes. A larger market share means the market demands more trucks and has a larger impact on freight market capacity. When market share levels change, network imbalances can show up, creating potential spot market activity. Detroit has seen double-digit growth of 10.6% week over week, which signals some tightened capacity and elevated spot rates. While some of the largest markets have seen drops in market share, there are some surprising markets such as Joliet, Illinois, and Indianapolis that are seeing some substantial capacity changes.
Who’s with Whom? It’s official: Yellow has filed Chapter 11 bankruptcy. The company had 30,000 employees and 22,000 Teamsters. This is the largest filing in U.S. trucking history. The last major LTL closure was Consolidated Freightways in 2002. After 99 years in business and the unnatural ability to never be out no matter how many times it got knocked down, Yellow has run its course.
According to FreightWaves’ Todd Maiden’s article, “The company estimated assets of $2.15 billion and liabilities of $2.59 billion. It expects to enter a debtor-in-possession (DIP) financing agreement to provide liquidity to sell its assets and to pay wages and vendors. Yellow listed $39 million in cash in the filing but said the company has lined up $142.5 million in DIP financing. Further, it said a recent appraisal of assets showed a value exceeding the amounts of the secured debt and the DIP facility.”
(Image: Reddit r/FreightBrokers)
Thoughts on this situation? Let me know. I’d love to share them with everyone.
The more you know
Sorting out Yellow’s secured debt: Ratings agency doesn’t declare default yet
Watchdog: FMCSA’s oversight of Mexican carriers needs work
Contract rate decline takes pause despite significant spot market discount
Daimler Truck CFO Jochen Goetz dead at 52
TFI acquires truck transport provider JHT
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