Inside the mystery box
Like a box of chocolates, you never know what you’re gonna get when you buy a shipping containers nobody wants.
The International Federation of Freight Forwarders Associations (FIATA) defines abandoned goods as those “the consignee [importer] has manifested no intention to take delivery of after a reasonable period.”
With millions of containers in circulation, hundreds of thousands are bound to go unclaimed by importers. Abandoned goods can be scrapped, destroyed, re-routed to alternative buyers or confiscated and sold to salvage buyers like Jake Slinn.
Slinn tells Bloomberg that his office is full of items that he hopes to sell, including boxes of aluminum take-out pans, bagged and labeled rice, even faulty electric scooters. “If it’s food waste, we can get rid of it. If it’s clothing for resale, we can buy it. And that’s what our customers want—someone to come in and take the problem off their hands, so they haven’t got to deal with it,” Slinn said.
FIATA publishes best practices for when the importer can’t be reached or the owner is unable or can’t afford the fees to retrieve the contents.
“Containers are backed up,” said Ben Reynolds, the director of transportation abandonment at Salvex in Houston. “You’re going to start having people not paying for them.”
The shipping company’s top priority is putting an empty container back into service. Salvex is happy to oblige: the company has an online marketplace with $5.2 billion of goods, much of it abandoned freight.
Pros and cons of power-only loads
In an ideal world, power-only loads let the carrier hook up a tractor to a shipper’s preloaded trailer and hit the road fast. Load boards, digital brokers, carriers and others all offer truckers some form of power-only freight.
When the system works, it’s brilliant. But a new survey from Overdrive details some of the limitations that owner-operators feel about power-only loads.
For instance, 43% of respondents said their lack of input into trailer maintenance increases their exposure to violations and safety problems.
Another concern: 34% said the lack of rate negotiation limits their earning opportunity. Many successful power-only carriers end up looking a lot like leased carriers, operating within a single brokerage’s system with their carrying capacity dedicated to that broker or one of its customers.
“Booking a load can be like trying to hit the buzzer on Family Feud,” owner-operator Kenyette Godhigh-Bell, who uses Amazon Relay, said. It’s difficult to make cost/revenue calculations in just a few seconds.
So what do truckers love about power-only loads? Overdrive details those survey results in a separate story. It’s good insight for brokers and shippers who want to build their power-only operations.
Lots of profit, not used trucks
In the context of the lowest level of inventory the industry has probably ever seen, truck dealers have pulled out all the stops to satisfy buyers. “Given the dynamics of underlying fundamentals, namely freight and freight-hauling capacity,” said Steve Tam, vice president at ACT Research, “used truck prices are likely to continue climbing higher in the near term.
Case in point: last week Ritchie Bros. attracted more than 12,400 bidders to a used equipment and truck auction in Fort Worth, Texas, that produced a gross transaction value of more than $58 million.
A 2019 Peterbilt 389 day-cab heavy-haul truck sold for $262,500, while a 2013 Kenworth T800W day-cab heavy-haul truck went for $105,000.
December tends to be a busy month for truck auctions. Sellers want to offload excess inventory that could be taxed starting Jan. 1. Buyers are often businesses that made money and want to buy equipment to help offset taxes.
Thomas Blackmon of Blackmon Auctions in Little Rock, Ark., said his family-owned equipment auction house is enjoying a banner year: “It’s probably the best we’ve had in 20 years.”