MegaCorp Logistics Named to 2018 NC Mid-Market Fast 40 List

MegaCorp Logistics has been named to Business North Carolina magazine’s 2018 N.C. Mid-Market Fast 40 List, which ranks mid-size companies based on revenue and employment growth. We were ranked 3rd, and the complete list will be released in a supplement to the November issue of Business North Carolina.

“We are thrilled to be named to Business North Carolina magazine’s 2018 NC Mid-Market Fast 40 List and recognized as a top-performing private company in our state,” said Ryan Legg, CEO. “This lists reaffirms our commitment to North Carolina and our community. We continue to have record-breaking weeks this year thanks to the dedication and superior service of our employees.”

The complete 2018 list can be viewed here.

About Grant Thornton North Carolina 100®
Business North Carolina magazine has explored what’s happening in one very special place – North Carolina – for more than 37 years, producing quality, in-depth journalism that digs into the stories behind the news. In addition to the monthly magazine, BNC publishes its annual North Carolina Economic Development Guide and partners on projects with various statewide organizations. For more information, visit BusinessNC.com.

 

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MegaCorp Logistics Named to 2018 Grant Thornton North Carolina 100®

MegaCorp Logistics has been named to the 2018 Grant Thornton North Carolina 100® (NC100), which ranks the state’s largest private companies by revenue.

“We are thrilled to be named to the 2018 Grant Thornton North Carolina 100® list and recognized as a top-performing private company in our state,” said Ryan Legg, CEO. “This lists reaffirms our commitment to North Carolina and our community. We continue to have record breaking weeks this year thanks to the dedication and superior service of our employees, so this award goes to the amazing staff here at MegaCorp Logistics.”

Since 1984, the NC100 has ranked the state’s largest private companies by revenue in the most recent fiscal year, based on data provided by the participants. MegaCorp was ranked 49th this year, and the complete 2018 list can be viewed here.

About Grant Thornton North Carolina 100®

Since 1984, the Grant Thornton North Carolina 100® has ranked the state’s largest private companies by revenue in the most recent fiscal year, based on data provided by the participants. The NC100 is a voluntary list restricted to companies based in North Carolina that do not have publicly traded stock. Companies owned by private equity are permitted. Nonprofits, financial-services companies, health care providers such as hospitals and subsidiaries of corporations are excluded.

 

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MegaCorp Logistics Named to Food Logistics’ 2018 Top 3PL & Cold Storage Providers List

Food Logistics, the only publication exclusively dedicated to covering the movement of product through the global food supply chain, has named MegaCorp Logistics to its 2018 Top 3PL & Cold Storage Providers list.

The Top 3PL & Cold Storage Providers list serves as a resource guide of third-party logistics and cold storage providers whose products and services are critical for companies in the global food and beverage supply chain.

“Leading 3PLs and cold storage providers that support the global food supply chain are increasingly tasked with providing more value for their customers while simultaneously controlling costs,” notes Lara L. Sowinski, editorial director, Food Logistics and Supply & Demand Chain Executive. “Companies that earned a place on Food Logistics’ 2018 Top 3PL & Cold Storage Providers list demonstrate their ability to meet the current marketplace demands with the latest innovations and technology combined with customer care and collaboration.”

Truck on highway

MegaCorp Logistics, founded by Ryan and Denise Legg in 2009, specializes in full truckload shipments and less-than-truckload shipments throughout the US, Canada and Mexico. MegaCorp is committed to creating long-term, strategic partnerships with our clients who range from Fortune 100 companies to smaller, regional manufactures and distributors. We specialize in food logistics and serve all sectors the food industry including but not limited to, fresh and frozen foods, poultry/meat/seafood, dairy, produce, retail/grocery, restaurants, wholesale, distributors, manufacturers and cold storages/warehouses.   We strive to offer the best to our clients, transportation partners and employees– It’s The Mega Way!

 

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MegaCorp Named to Inc. Magazine’s Annual List of America’s Fastest-Growing Private Companies

For the 3rd Time, MegaCorp Logistics Appears on the 37th Annual Inc. 5000 List of America’s Fastest-Growing Private Companies

Inc. magazine revealed that MegaCorp Logistics has again made its 37th annual Inc. 5000, the most prestigious ranking of the nation’s fastest-growing private companies. The list represents a unique look at the most successful companies within the American economy’s most dynamic segment—its independent small businesses. Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, Yelp, Zillow, and many other well-known names gained their first national exposure as honorees on the Inc. 5000.

Ryan Legg, Founder and CEO of MegaCorp Logistics said, “We are honored to be named as one of Inc. Magazine’s Top 5000 Fastest Growing Companies for the third time. Here at MegaCorp we pride ourselves on providing only the very best for our employees, and our rapid growth is a direct reflection of their hard work and dedication.”

Not only have the companies on the 2018 Inc. 5000 (which are listed online here) been very competitive within their markets, but the list as a whole shows staggering growth compared with prior lists. The 2018 Inc. 5000 achieved an astounding three-year average growth of 538.2 percent, and a median rate of 171.8 percent. The Inc. 5000’s aggregate revenue was $206.1 billion in 2017, accounting for 664,095 jobs over the past three years.

“If your company is on the Inc. 5000, it’s unparalleled recognition of your years of hard work and sacrifice,” says Inc. editor in chief James Ledbetter. “The lines of business may come and go, or come and stay. What doesn’t change is the way entrepreneurs create and accelerate the forces that shape our lives.”

MegaCorp Logistics, founded by Denise and Ryan Legg in 2009, specializes in full truckload shipments (dry van, refrigerated, flat bed, intermodal, etc.) and less-than-truckload shipments throughout the US, Canada and Mexico. MegaCorp is committed to creating long-term, strategic partnerships with our customers who range from Fortune 100 companies to smaller, regional manufactures and distributors. We serve all business sectors of the US economy including (but not limited to) food, retail, government, textiles and metals/building materials. We strive to offer the best to our clients, transportation partners and employees– It’s the Mega Way!

 

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Truck Market Analysis: Q2 2018

The main factors affecting the truck market in the second quarter are the Road Check, ELD Mandate, produce season and driver shortages. Additionally, rising fuel prices and the increasing load-to-truck ratio will have a heavy impact on the market in the summer months of 2018.

Nationwide Road Check June 5th-7th

The Commercial Vehicle Safety Alliance’s (CVSA) International Roadcheck is June 5-7, 2018. Over that 72-hour period, commercial motor vehicle inspectors throughout North America conduct inspections of commercial motor vehicles and drivers. During Roadcheck 2017, more than 14 trucks or buses were inspected, on average, during every minute of the 72-hour event. That’s over 840 inspections per hour.

“The top reason drivers were placed out of service during 2017 International Roadcheck was for hours-of-service violations,” said CVSA President Capt. Christopher Turner of the Kansas Highway Patrol. “Thirty-two percent of drivers who were placed out of service during last year’s three-day International Roadcheck were removed from our roadways due to violations related to hours-of-service regulations. It’s definitely an area we need to call attention to this year”(Source: J. J. Keller & Associates, Inc).

“Although the Electronic Logging Device (ELD) rule that went into effect on Dec. 18, 2017, does not change any of the underlying hours-of-service rules or exceptions, the ELD mandate placed a spotlight on hours-of-service compliance,” said Capt. Turner. “We thought this year would be a perfect opportunity to focus on the importance of the hours-of-service regulations. This is why the emphasis area at this year’s Roadcheck is hours of service. Officers will be downloading drivers’ electronic logs, when possible, and checking for compliance.

If a minor violation is discovered, the carrier is given 15 days to complete the repairs and to sign and return the report. If the driver’s violation is serious enough, they can immediately be placed out of service for up to 10 hours. If the vehicle is placed out of service (instead of or in addition to the driver), the vehicle must either be repaired where it is or towed directly to a repair facility before being able to move.

Trucks will be tight and expensive the week of the roadcheck, as some carriers decide to pull their trucks off the road to avoid inspection. This puts a larger strain on the market, contributing to inflated rates due to supply-in-demand.

Market Trends

Despite the tame monthly results in March, trucking inflation remains elevated. Year-over-year growth in long distance truckload prices pushed to a fresh six-year high of 6.8% in March. Yearly inflation in the LTL space also climbed during the month, remaining near 8% in March (Source: Freightwaves.com).

Details from the Producer Price Index (PPI) report from the Census Bureau suggest that other modes of transportation are seeing rising rates. Intermodal rail freight rates have climbed rapidly. PPI data for intermodal rail has surged over the past couple of months and climbed a whopping 4.5% in March from February’s levels. Intermodal prices are now over 13% higher than at this point last year, a sign that some of the pricing pressure from the trucking industry might be spilling out into other modes of transportation (Source: Freightwaves.com).

Fuel prices continue to rise and there is no telling when they will stop. At this time, prices are 22% higher than they were last year; an increase of $.70 over last year. Prices are expected to climb until they hit $3.50 by the end of the year (Truckstop.com).

There are about 6.6 loads for every available truck trailer, according to DAT Solutions, which tracks freight and rates. According to Trucks.com, a year ago there were 3.5 loads per every van. The larger imbalance this year gives truckers and motor carriers the ability to negotiate higher fuel surcharges and rates to cover rising expenses. Motor carriers charged customers a fuel surcharge of $0.31 per mile last month, up from $0.24 a year earlier. Meanwhile, according to DAT, the spot trucking rates for a standard trailer have risen 29% to $1.85 per mile from a year ago.

National Flatbed Demand & Capacity

ELD Mandate

The ELD mandate was expected to reduce driver productivity anywhere from 3-10% (source: FSA) because drivers need to stay within the hours-of-service (HOS) limits. A run that previously could have been squeezed into one day now may take two days, which will translate into additional costs and delays for shippers.

DAT Solutions recently conducted a survey, and of the carriers currently running ELDs, more than 70% reported that they are earning less money now than they were prior to implementation. Correspondingly, 87% of respondents indicated that the ELD mandate changed the way they choose loads. This is because they are restricted to driving fewer miles since installing ELDs.

On a positive note, according to FreightWaves.com, “Implementation of ELDs are expected to save 26 lives, prevent 562 injuries and deliver more than $1B in savings each year through reduction of crash related costs, driver’s safety, efficiency and paperwork.”

How Can Shippers/Receivers Help?

  • If possible, have a space reserved for trucks to park when they run out of hours. Truck parking has already become an issue and will only continue to get worse.
  • Know the closest safe place for trucks to park (Wal-mart, Sam’s Club, rest area, etc).
  • Expand shipping and receiving times.
  • Load and unload as efficiently as possible.
  • Review and update your detention and/or layover policies.

Produce Season

The produce season started off strong in the Southeast fruit markets due to the warm, dry conditions, but that changed quickly with the unseasonably early tropical depression. The heavy rains in the Southeast have delayed harvesting. Capacity will be extremely tight in Georgia, the Florida Panhandle, Alabama, Mississippi, South Carolina and Eastern North Carolina as soon as they are allowed to harvest after the area dries out.

Due to the amount of produce coming out of Texas, in addition to the year-round freight out of that area, Texas is experiencing high truck rates and tight capacity.

Cotton out of Arkansas will be ready for harvest in late June adding strain to that area.

Arizona truck rates have been expensive due to tight carrier capacity throughout produce season this spring. With Arizona currently winding down, we should see a full transition to the California produce season after July 4th.

Similar to Arizona, California is experiencing a strong growing season state-wide and the outbound trucks outnumber the inbound trucks creating a spike in shipping costs. Adding more strain to the market, apples and cherries will be ready to harvest soon out of Northern California, Oregon and Washington because the temperatures have been above normal, speeding up their harvesting season. Therefore, the Pacific Northwest will see an influx of trucks and an increase in pricing.

How can shippers help? Give as much notice as possible to your logistics provider about upcoming shipments. This will allow your provider to secure truck capacity and should lower freight charges.

Driver Shortage

According to the Food Shippers of America (FSA), the labor Market added more than 313,000 jobs in February 2018 which is the strongest gain since July 2016. While that’s good news for job seekers, it’s not good for the trucking industry because drivers are leaving the road for better-paying opportunities and more desirable hours.

Some of the factors that are contributing to the truck driver shortage include: “Competition within the industry and from other industries; driver qualifications and requirements; workforce demographics; regulations that tighten capacity; and difficulty attracting young people to the industry since one cannot acquire a commercial driver’s license (CDL) until age 21” (DC Velocity). Currently the driver shortage is estimated at around 50,000 drivers, and could skyrocket to 898,000 drivers in the next decade if consumer confidence and economy continue to grow at their current pace (Source: ATA).

 

MegaCorp’s Observations

We have seen carrier pricing stabilize in March and April. However, due to the upcoming summer months/produce season, we are already experiencing a tighter truck market. We expect the market to continue to tighten through the summer months.

MegaCorp’s focus this summer is to continue building strong carrier relationships by reloading our primary carrier base. This will enable us to keep our customers’ freight rates below the national average. By reloading our primary carriers, not only will we provide exceptional service, but we will be able to offer our clients truck capacity in tight regions throughout North America.

 

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Truck Market Analysis: Q1 2018

There are a multitude of factors contributing to the tight truck market that we will cover in this article: ELD Mandate, Consumer Confidence/Spot Market, Driver Shortage, Visa Enforcement and Weather.

Electronic Logging Devices (ELDs)

The Federal Motor Carrier Safety Administration (FMCSA), a branch of the US Department of Transportation (DOT), has mandated the installation of ELDs (Electronic Logging Devices) for drivers that are currently required to prepare Hours of Service (HOS) records. An ELD is a technology device that automatically records a driver’s driving time, facilitates the accurate recording of the driver’s HOS, and that has been approved by the FMCSA. The effective date was December 18, 2017.

According to the Journal of Commerce, the mandate means, “Tighter delivery schedules for shippers and less inherent flexibility in supply chains.” A survey of over 2,000 owner-operators by Overdrive.com revealed that 14% of respondents reported having shut down in protest or left the trucking business as a result of the mandate. This equates to 98,000 trucks off the road. Fewer trucks on the road means that trucks are in high demand which contributes to inflated prices.

Many traditional, next-day delivery lanes will be impacted due to less operating hours available for drivers to squeeze out extra miles. Drivers may not be able to make next day delivery commitments, which pulls capacity from the market. Team drivers will become more in demand which will cost the customer more money in order to pay for two drivers.

Truck parking becomes scarce as hours are depleted and drivers have to use their “on-duty” hours to find parking. Delays on the dock causes detention which jeopardizes the carrier’s next appointment. This costs the carrier even more when driver’s hours cannot be extended. The motor carriers will not be able to make up their time, due to parking issues, detention and hours of service. If a truck cannot get loaded in time, they may run out of hours and have to wait 10 hours for a fresh drive clock before they can move again causing service interruption and increased costs.

Increased Tonnage and Volume due to Consumer Confidence

Trucking demand rose 5.5% in the fourth quarter of 2017 according to a Truckstop.com survey. Import growth was the strongest it has been since 2010, with a 6% increase in 2017, according to KeyBanc Capital Markets.

US Consumer Confidence Index

 

 

 

 

 

 

 

The Consumer Confidence Index rose to 129.5 in November 2017, the highest mark since the index hit 132.6 in November 2000. The index takes into account Americans’ views of current economic conditions and their expectations for the next six months. Economists pay close attention to the numbers because consumer spending accounts for about 70 percent of U.S.
economic activity.

KeyBanc Capital Markets also states that, “Our dry van spot rate, excluding fuel index, increased 19% in 4Q17 and 12% in 2017. Refrigerated rates were up 20% in 4Q17 and 12% for the full-year 2017. Flatbed rates have increased 23% in 4Q17 and 14% in 2017. All amounts exclude the impact of fuel on rates and are based on information from Internet Truckstop. Our forecast of spot rates based on normal seasonal patterns implies high teen to low 20% year over year increases in spot rates in the first half of 2018, before any additional impact from enforcement of electronic logs expected in early 2Q18.”

Driver Shortage

The average age of today’s trucker is 55, which means more and more drivers are retiring from the industry. According to the American Truckers Association, there are currently 50,000 unfilled truck driving positions. The Journal of Commerce states that the nationwide low unemployment rate and better wages among other industries are drawing people away from the trucking industry.

driver shortage

Visa Enforcement

As a generation of truck drivers “ages out” from the industry, immigrants have been filling a lot of the open positions. With the, “Buy America, Hire American” executive order, which the President signed last April, a lot of the current drivers will be in jeopardy of being deported or forced out of their job. This executive order includes a thorough review of employment based visa programs and Green Cards.

Natural Disasters/Weather

When FEMA is activated due to a major event, it consumes 7%-10% of the available truck capacity. Two major hurricanes recently hit the US within two weeks of each other, one in Texas and one in Florida. This created an artificial bubble in the capacity from which the market has not yet recovered. With these trucks out of the market, it placed increased pressure on the already strained trucking and logistics industry. The capacity for FEMA is pulled from all areas of the country – Washington, New York, Florida, California, etc. to help in the time of need. As expected and understood, FEMA has the ability to offer high paying rates to get many trucks to the affected areas ASAP which immediately affects the market. In addition to these natural disasters, the recent holidays and large winter storms such as Grayson have hindered the market from recovering.

MegaCorp’s Observations

MegaCorp conducted a survey to their primary carrier data base and found that 94% of carriers are operating at 100% capacity. This indicates that their trucks are constantly on the road and they do not have extra trucks in need of loads.

The survey also revealed that 98% carriers are selective in the loads they accept and are taking into account shipper and receiver loading and unloading times. MegaCorp has noticed a large increase in the carrier demand for accessorial charges, which are up 35% over last year.

 

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