DHL Supply Chain and US Xpress suffer layoffs as freight demand falls – Sourcing Journal

redundancies keeps rocking logistics amidst the “Freight Recession” characterized by weak demand, spending cuts, etc Truck transport Overcapacity.

The contract logistics division of DHL plans to lay off 152 workers at three Texas facilities, according to two alerts (Worker Adjustment and Retraining Notification) sent May 3 to the Texas Workforce Commission.

DHL supply chain will lay off 123 employees in Missouri City, Texas, and 29 employees at two locations in Sugar Land, Texas, effective June 30. According to the announcement, the employees are not represented by a union.

DHL 80 of the planned job cuts are due to the fact that an unnamed customer has terminated his service contract. Depending on the outcome of the ongoing customer negotiations, further employees could be laid off.

“Since this WARN, we have been in an active dialogue with our customer that may impact the outcome of our business,” a DHL Supply Chain spokesman told Sourcing Journal. “We will work to support affected employees to explore opportunities with the new provider or within DHL Supply Chain’s operational footprint.”

News of the layoffs comes four months after DHL Supply Chain laid off 394 employees at two San Francisco Bay Area facilities. At the time, the company said the decision was in response to a “planned strategic change in one of our client’s businesses.” In March, DHL eCommerce, DHL’s package delivery company, announced that it would be closing a facility in the St. Louis metropolitan area on June 3. In the process, 75 employees would be laid off, but would be given the opportunity to transfer to a warehouse in Kansas City, Missouri.

The job cuts at DHL Supply Chain come as the segment invests in warehouse automation. The company is expanding its Partnership with Locus Robotics plans to deploy 5,000 of its autonomous mobile robots (AMRs) across its global warehousing and distribution network of 1,400 locations.

Layoffs at US Xpress

With net losses hitting nearly $44 million last year and a looming takeover by trucking company Knight-Swift Transportation, USXpress The company has cut staff for the third time since it began cutting jobs last year.

While the Chattanooga, Tenn.-based trucking company cut about 140 jobs — or nearly 10 percent of its then 1,400 company employees — in two layoffs last year, US Xpress has laid off 150 more, according to FreightWaves.

Over the past week, posts from several LinkedIn users have indicated that employees at the company are being laid off. Her responsibilities include engineering, human resources and administrative roles, but US Xpress has not confirmed where positions will be cut.

Another Chattanooga-based company, freight Freight forwarder Lipsey Logistics also laid off employees. FreightWaves reported that the company cut 20 jobs, but Lipsey has not confirmed the total number.

US Xpress and Lipsey Logistics did not immediately respond to requests for comment.

There were layoffs logistics side The supply chain has grown significantly over the past year as FedEx and Amazon shed jobs, along with other freight carriers like CH Robinson, XPO Logistics and Old Dominion.

Digital Freight Platform convoy completed its third round of layoffs in a year and also closed its Atlanta office as part of a major reorganization. And Shopify has abandoned its logistics ambitions altogether, sale of the business to the digital freight forwarding company Flexport. Both parties dismissed 20 percent by their respective employees, with Flexport laying off employees in January and Shopify announcing layoffs of those employees this month.

The layoffs come with poor freight demand, causing US Xpress to report a net loss of $27.1 million in its most recent quarter. In February, the haulage company said it expects the difficult freight market to persist for at least the first half of the year as shippers clear increased inventories.

fourth quarter freight shipments fell to its lowest level since the first quarter of 2014 as consumer spending continued to shift from goods to services for the first quarter of 2023, according to the US Bank Freight Payment Index. Truck freight shipments fell 7.1 percent year over year in the fourth quarter — the sharpest decline since the third quarter of 2020 — and 4.6 percent compared to the third quarter of 2022. The slowdown was offset by a significant decline in the western U.S caused where the volumes occurred decreased by 8.9 percent year-on-year and by 10.6 percent compared to the third quarter.

Despite the decline in shipments, spending by companies that ship goods didn’t fall significantly in the fourth quarter. Spending fell just 0.2 percent compared to the third quarter and increased 1.8 percent compared to the fourth quarter of 2021.

“With shipments falling significantly and diesel fuel prices falling, we would have expected a sharper drop in spending this quarter,” Bobby Holland, director of freight data solutions at US Bank, said in a statement. “This suggests that capacity is becoming tighter, possibly as smaller airlines exit the market, as cost pressures remain high, particularly coupled with lower spot market volumes and rates.”

Should consumer demand improve, US expects

A possible sign that this recovery may be happening is that container import volumes to the US rose in April from March for the first time since 2020 amid the Covid-19 outbreak, according to data from Descartes Datamyne. In both 2021 and 2022, container imports fell in April after a strong March, before escalating again in May.

April 2023 US container import volumes increased by 9 percent from March 2023 to 2.02 million TEU. Adding year-on-year changes, TEU volume decreased by 17.8 percent from April 2022 but increased by 5.3 percent from pre-pandemic levels in April 2019.