Trucking news and briefs for Wednesday, July 14, 2021:
XPO board approves logistics division spin-off
The board of directors for XPO Logistics (CCJ Top 250, No. 6) has approved the previously announced separation of its global logistics segment, GXO Logistics, through the distribution of all the outstanding shares of common stock to holders of XPO common stock.
Following the separation, GXO and XPO will be independent public companies with distinct investment identities and service offerings in vast addressable markets. GXO will be the largest pure-play contract logistics provider in the world, and XPO will be a leading provider of transportation services, primarily less-than-truckload transportation and truck brokerage services.
If the distribution is completed, each XPO stockholder will receive one share of GXO common stock for every one share of XPO common stock held on the record date of July 23.
GXO will officially go public on the New York Stock Exchange on Aug. 2.
Spot volume, rates fall during July 4th holiday week
Data from Truckstop.com and FTR Transportation Intelligence for the week ending July 9 mostly reflect the fact that the week included the observed Independence Day holiday on July 5.
A 16.5% decline in spot volume was almost exactly the scope of the decline seen during the week that included Memorial Day. Volume was down sharply in all segments, the firms report, but flatbed also had seen a sharp decline during the prior week while dry van and refrigerated had posted small gains.
Declines in both weeks could imply more than just holiday weakness for flatbed, the firms note, as it has been falling steadily since its mid-May record level. Flatbed volume is down 49% from that peak but is on par with volume seen prior to the surge that began earlier in the year. At least some rebound coming off the holiday week could be expected.
Aside from the expected weakness during the holiday week, the firms said dry van and refrigerated volumes are still holding strong at levels close to record if you exclude the distortions due to February's extreme weather and May's International Roadcheck event. With the holiday distortions, it might take a few weeks to understand whether the second half of 2021 will display seasonal weakness as June traditionally has been the peak of volume for the year.
Total spot rates were down about 8 cents, which is the largest drop since the first week of the year. The decline in truck postings lagged the drop in volume, and the Market Demand Index declined to 158.7.