"Money is like gasoline. It gets you where you want to go, but it's not the destination."
5 min read · October 2023
October PMI came in at 49.1 — a slight improvement from September's 48.9, but still in contraction. Manufacturing isn't out of the woods yet. Meanwhile, crude oil hit $92.22/barrel, up from $84.72 the prior month. Higher energy costs flow directly into freight costs, and freight costs flow into everything you buy.
From inside the brokerage world, October presented its usual complexity. Dry van spot rates moved flat month-over-month. DAT contract rates held at $2.05/mile (+1¢ m/m, -16% y/y). Reefer rates dipped to $2.39/mile. The brutal year-over-year comparisons reflect how far we've fallen from the 2021-2022 peak.
Holiday retail sales are projected to grow only 2-3% this year — well below the historical average. Compare that to 2020 (+8.3%) and 2021 (+14.1%). Softer demand means softer freight, and carriers will continue fighting for every load.
Two geopolitical crises dominated October. The war in Ukraine continues to strain energy markets and supply chains. The outbreak of conflict between Israel and Palestine added another layer of uncertainty. The U.S. government requested $61.4 billion in aid for Ukraine and $14.3 billion for Israel — significant fiscal commitments that contribute to government spending and debt dynamics.
The Nasdaq Composite fell into correction territory — down more than 10% from its July highs. Commercial real estate continues to struggle as remote work empties offices. The Fed's aggressive rate hiking campaign is doing its job, but the economy is beginning to feel the pain.
"Currently, I have positioned myself in a state of liquidity, patiently awaiting a shift toward a more bullish sentiment."
Google Cloud and Flexport partnered to launch Flexport Ocean+, using AI and machine learning to provide real-time freight visibility, optimize routing/scheduling, and offer predictive analytics for disruptions.
Walmart launched drone delivery in Arkansas, partnering with DroneUp. Initial rollout covers two towns, with national expansion planned. The last-mile delivery race is heating up fast.
Amazon launched the Robotics Accelerator program — grants and support for startups building warehouse robotics. The goal: identify and deploy next-generation automation at scale.
Paperless shipping is gaining real traction. USPS's new Label Broker feature lets customers email a QR code to any USPS location — no printer required. Small innovation, massive convenience improvement for millions of shippers.
"Currently, I have positioned myself in a state of liquidity, patiently awaiting a shift toward a more bullish sentiment."
— Daivik Suresh, October 2023-DAIVIK SURESH-
Supply Chain + Business Analytics Enthusiast · October 2023