News / With US freight market still in the doldrums, brokers continue to cut staff

Photo: © Andrii Yalanskyi | Dreamstime.com

For freight brokerages, 2024 is continuing the negative vein of the past year, with at least two major players trimming their workforce due to diminished business.

Coyote Logistics, a subsidiary of UPS, has cut an undisclosed number of positions, but did not give any details, merely stating it was “aligning its sales and operations structures with the needs of our business”.

A few days earlier, Uber Freight terminated the employment of some staff, again without revealing how many, but some sources have talked of 40-50 people.

Uber said the move would “optimise the team to enhance operational efficiency and long-term success”.

For both companies the lay-offs bring a sense of déjà vu. In December, Coyote offered voluntary separation agreements to a number of senior managers and directors – the fourth round of lay-offs last year. Uber Freight also went through multiple rounds of job cuts in 2023: after the elimination of 150 positions – 6.8% of its staff – last January, it parted ways with another 50 employees in July.

Another major players, Convoy, dropped out of the market altogether in October, blaming the “massive freight recession”, as well as a contraction in capital market that thwarted management’s efforts to attract fresh funding. The company ceased operations after lay-offs and a futile search for a buyer.

Notwithstanding month-on-month improvement, the freight market was still deep in the doldrums in December, according to the Cass Freight Index, which showed a 7.2% drop in volumes from a year earlier and shipments at their lowest level since July 2020. Freight spend was 23.7% lower year on year, marking the seventh straight month of decline north of 20%.

Observers have commented that the volume decline had slowed in recent months, and rates are expected to stabilise in the coming months, as more capacity exits the market. The number of carriers dropping out of the market continued to climb last month, while new registrations declined further.

Improving demand accompanied by capacity production should help brokers to some extent, commented Satish Jindel, president of SJ Consulting.

“Capacity will match rising demand eventually, but there is a time lag when a broker has better visibility,” he said. but, in the long term, this won’t alleviate the pressure on brokers, he warned.

“Brokers need to do some serious soul searching on what value they can create for carriers and shippers. Otherwise, the need for them will decline,” he said, noting that technology had enabled shippers to deal directly with carriers, which rendered brokers increasingly redundant, unless they can offer solutions which trucker and shipper between them cannot achieve.

“The future of the industry will depend on having the best, the most sophisticated and the most transparent technology to match shippers and carriers efficiently,” he added.