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Everchem Updates

VOLUME XXI

September 14, 2023

Everchem’s Closers Only Club

Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: read more

May 13, 2022

Evonik Divestitures

Evonik to Divest Performance Materials Business; Aims to Invest in Sustainable Growth

Published on 2022-05-12. Edited By : SpecialChem

TAGS:  Sustainability / Natural Coatings    

Evonik-sustainable-target

Evonik is aligning its portfolio completely to its three growth divisions: Specialty Additives, Nutrition & Care, and Smart Materials. Preparations are already under way for the exit of all three businesses of Performance Materials – Superabsorbents, Functional Solutions and Performance Intermediates. Evonik aims to find new owners or partners for each of these three businesses in the course of 2023.

EUR 3 Bn Investment in Next Generation Solutions

The proceeds from the divestment of the Performance Materials businesses and the operating cash flow in the coming years will be channeled to the green transformation. By 2030, Evonik aims to invest more than €3 billion in Next Generation Solutions – products with superior sustainability benefits.

That is around 80 percent of annual growth investments. In the same period, a further €700 million will be invested in Next Generation Technologies, i.e., the optimization of production processes and infrastructure to avoid CO2 emissions.

We are greatly increasing our handprint and reducing our footprint at the same time,” said Thomas Wessel, the executive board member responsible for sustainability.

Translated into KPIs: We will substantially increase the sales share of our Next Generation Solutions from 37 percent at present to over 50 percent by 2030.

“That includes, for example, drug delivery technologies for controlled release of pharmaceutical active ingredients, gas separation membranes for biogas and hydrogen, as well as natural-based active ingredients for cosmetics. “Our innovations help our customers make their products more sustainable and improve their climate performance,” said Wessel. The dynamic rise in demand for Next Generation Solutions is evidence of their importance and offers Evonik above-average growth potential.

Aim to Reduce CO2 Footprint

Evonik aims to reduce its footprint by significantly cutting both direct and indirect greenhouse gas emissions from production and processing. With the support of Next Generation Technologies, Evonik will reduce its scope 1 and 2 emissions by 25 percent, from 6.5 million metric tons at present to 4.9 million metric tons by 2030.

This goal is fully consistent with the requirements of the Science Based Targets (SBTi) initiative, which Evonik is committed to. At the same time, the investments in sustainability are profitable: By investing €700 million in Next Generation Technologies, Evonik will cut its operating costs by more than €100 million a year up to 2030.

The repositioned Research, Development & Innovation unit is also fully integrating sustainability into the management of Evonik’s innovation activities. “Our RD&I targets are right on track to generate additional sales of more than €1 billion with our innovation growth fields by 2030,” said Harald Schwager, the executive board member responsible for innovation. “Our innovative capability is a key factor in leveraging green and profitable growth.”

Evonik’s aspirations are supported by its venture capital activities. A new Sustainability Tech Fund with a total investment volume of €150 million will strengthen the sustainability targets by investing into innovative technologies and business models. The focus is on new technologies that will reduce emissions as well as on innovations that have a high technological fit with the Next Generation Solutions.

As part of its strategic transformation, Evonik has also reviewed its mid-term financial targets. “Despite the current challenging environment, we are confirming our core targets: an adjusted EBITDA margin of between 18 and 20 percent, a cash conversion rate of over 40 percent, and ROCE of around 11 percent,” said Evonik’s chief financial officer, Ute Wolf.

In line with the full alignment to high-growth, less cyclical specialty chemicals, Evonik now aims to achieve an organic sales CAGR of over 4 percent. Up to now, the target was volume growth of over 3 percent. The annual capex budget increases successively from the current level of around €900 million to a level between €900 million and €1 billion over the next years – as a result of investments in Next Generation Technologies to save CO2 emissions.

In addition to these ambitious financial targets, the updated sustainability targets for Evonik’s handprint and footprint will be integrated into the executive board’s long-term compensation scheme from next year.

Source: Evonik

https://coatings.specialchem.com/news/industry-news/evonik-exit-performance-materials-sustainable-growth-000227652?li=200215882&lr=ipc22051762&_hsmi=212912364&_hsenc=p2ANqtz–CAW5-TuK6Jv5GyubUyz0STM0cQwjQxMvGBisgdBMj0c5JpWyHhAlPr772ubCbkQOF_lI7W6yv_kq9Dg33SxN5KlXRPw

May 13, 2022

Evonik Divestitures

Evonik to Divest Performance Materials Business; Aims to Invest in Sustainable Growth

Published on 2022-05-12. Edited By : SpecialChem

TAGS:  Sustainability / Natural Coatings    

Evonik-sustainable-target

Evonik is aligning its portfolio completely to its three growth divisions: Specialty Additives, Nutrition & Care, and Smart Materials. Preparations are already under way for the exit of all three businesses of Performance Materials – Superabsorbents, Functional Solutions and Performance Intermediates. Evonik aims to find new owners or partners for each of these three businesses in the course of 2023.

EUR 3 Bn Investment in Next Generation Solutions

The proceeds from the divestment of the Performance Materials businesses and the operating cash flow in the coming years will be channeled to the green transformation. By 2030, Evonik aims to invest more than €3 billion in Next Generation Solutions – products with superior sustainability benefits.

That is around 80 percent of annual growth investments. In the same period, a further €700 million will be invested in Next Generation Technologies, i.e., the optimization of production processes and infrastructure to avoid CO2 emissions.

We are greatly increasing our handprint and reducing our footprint at the same time,” said Thomas Wessel, the executive board member responsible for sustainability.

Translated into KPIs: We will substantially increase the sales share of our Next Generation Solutions from 37 percent at present to over 50 percent by 2030.

“That includes, for example, drug delivery technologies for controlled release of pharmaceutical active ingredients, gas separation membranes for biogas and hydrogen, as well as natural-based active ingredients for cosmetics. “Our innovations help our customers make their products more sustainable and improve their climate performance,” said Wessel. The dynamic rise in demand for Next Generation Solutions is evidence of their importance and offers Evonik above-average growth potential.

Aim to Reduce CO2 Footprint

Evonik aims to reduce its footprint by significantly cutting both direct and indirect greenhouse gas emissions from production and processing. With the support of Next Generation Technologies, Evonik will reduce its scope 1 and 2 emissions by 25 percent, from 6.5 million metric tons at present to 4.9 million metric tons by 2030.

This goal is fully consistent with the requirements of the Science Based Targets (SBTi) initiative, which Evonik is committed to. At the same time, the investments in sustainability are profitable: By investing €700 million in Next Generation Technologies, Evonik will cut its operating costs by more than €100 million a year up to 2030.

The repositioned Research, Development & Innovation unit is also fully integrating sustainability into the management of Evonik’s innovation activities. “Our RD&I targets are right on track to generate additional sales of more than €1 billion with our innovation growth fields by 2030,” said Harald Schwager, the executive board member responsible for innovation. “Our innovative capability is a key factor in leveraging green and profitable growth.”

Evonik’s aspirations are supported by its venture capital activities. A new Sustainability Tech Fund with a total investment volume of €150 million will strengthen the sustainability targets by investing into innovative technologies and business models. The focus is on new technologies that will reduce emissions as well as on innovations that have a high technological fit with the Next Generation Solutions.

As part of its strategic transformation, Evonik has also reviewed its mid-term financial targets. “Despite the current challenging environment, we are confirming our core targets: an adjusted EBITDA margin of between 18 and 20 percent, a cash conversion rate of over 40 percent, and ROCE of around 11 percent,” said Evonik’s chief financial officer, Ute Wolf.

In line with the full alignment to high-growth, less cyclical specialty chemicals, Evonik now aims to achieve an organic sales CAGR of over 4 percent. Up to now, the target was volume growth of over 3 percent. The annual capex budget increases successively from the current level of around €900 million to a level between €900 million and €1 billion over the next years – as a result of investments in Next Generation Technologies to save CO2 emissions.

In addition to these ambitious financial targets, the updated sustainability targets for Evonik’s handprint and footprint will be integrated into the executive board’s long-term compensation scheme from next year.

Source: Evonik

https://coatings.specialchem.com/news/industry-news/evonik-exit-performance-materials-sustainable-growth-000227652?li=200215882&lr=ipc22051762&_hsmi=212912364&_hsenc=p2ANqtz–CAW5-TuK6Jv5GyubUyz0STM0cQwjQxMvGBisgdBMj0c5JpWyHhAlPr772ubCbkQOF_lI7W6yv_kq9Dg33SxN5KlXRPw

Large truckload carriers say recent downturn not hurting them

‘In the next 4 weeks we will know which theory is correct’

Todd MaidenThursday, May 5, 2022 7 minutes read

A tractor-trailer with the logo of Knight Transportation drives on a road with storm clouds and a rainbow behind it, illustrating a downturn in the trucking industry.
Large trucking companies like Knight-Swift will weather the freight market downturn better than their smaller peers. (Photo: Jim Allen/FreightWaves)

Listen to this article 0:00 / 10:49 BeyondWords

While a host of unfavorable freight data points appeared by the end of the first quarter, with trend lines declining further to start the second quarter, many executives at the nation’s largest trucking companies are presenting a much rosier outlook than the data suggests. During the first-quarter earnings season, management teams from publicly traded carriers acknowledged softness in the spot truckload market but said the loosening in capacity won’t likely hurt them.

The growing consensus in the industry is that the little guy is likely in store for pain if spot TL fundamentals have reset lower for the near term. On the other side, well-capitalized, large operators with the majority of their business tied to annual contracts will see a much more manageable environment if the market moderates further.

Just delayed seasonality?

Some industry participants have subscribed to the theory that the recent downturn is just “delayed seasonality” following a prolonged stretch of outperformance, and freight will flow heavily again once China’s lockdowns are lifted.

The new year picked up where 2021 left off with capacity remaining tight and rates continuing to soar. The trend bucked normal seasonality, wherein January and February traditionally see a slowdown in freight demand following the holidays.

March is normally when shipments step materially higher sequentially as consumers exit hibernation, spring merchandise begins to fly off the shelves and produce season nears. March too, didn’t follow normal seasonal trends this year, as demand cooled with each passing day. As industry data points turned sharply lower, investors became spooked and trucking stocks were down by as much as 20% to 40% year-to-date by mid-April.

A graph showing showing the Outbound Tender Reject Index, a measure of truckload freight demand, over the past year.
Chart: (SONAR: OTRI.USA). Loads tendered under contract are being rejected by carriers only 9% of the time currently. That compares to a rejection rate of nearly 25% a year ago. To learn more about FreightWaves SONAR, click here.

“I think what is undeniable is that the data is pretty weak and continues to weaken,” Morgan Stanley (NYSE: MS) analyst Ravi Shanker told FreightWaves. He said that it isn’t just trucking data that is soft, some of the firm’s other equity research teams are seeing signs of a downturn as well.

“We know that demand has driven the bulk of the downturn so far and it feels like that is going to get tougher.”

In December, Shanker downgraded his outlook for the freight transportation industry to “cautious” from “in line,” citing the stocks were trading on inflated earnings estimates and valuation multiples after a pronounced bull run. He also flagged a potential “over-inventory” situation as demand was cooling and shippers had ordered merchandise at record levels throughout 2021. His call at the time was that the current trucking cycle would likely end in mid-2022.

While Shanker sees three plausible theories in play now — delayed seasonality, an “air pocket” caused by China lockdowns and the Russian invasion, or the cycle just tapped out one quarter ahead of schedule — it is clear that the industry has hit an inflection point.

“We are still fairly confident that there is going to be a downcycle in the back half of the year. I don’t think it is going to be a massive downcycle,” Shanker said. He expects rates to trough above where they peaked in the last cycle with spot rates seeing the bulk of the reset, not contract rates. Also, the firm’s proprietary TL freight index, which prompted his December downgrade earlier than similar actions from other analysts, has already started to level. Early indications are that the next reading from the dataset is likely to be up slightly.

“In the next four weeks we will know which theory is correct,” Shanker said.

A graph showing the 7-day van trucking rate per mile  over the past year
Chart: (SONAR: TSTOPVRPM.USA). The 7-day per-mile average rate for dry van spot loads including fuel. The recent decline in spot rates is more pronounced when stripping out fuel, which is up more than 50% since the beginning of the year.

Management commentary positive in Q1, guidance steps higher for some

Commentary from trucking heads thus far in earnings season suggests business as usual at least in the near term. The bifurcation between what’s happening in the spot market versus comments from large carriers about the contract market give the appearance the two aren’t even engaged in the same business.

What has not been surprising is the number of record quarterly performances reported by carriers in the first quarter. The public TLs saw robust freight demand and rates from 2021 spill over into the first three months of the year. For some, revenue and earnings per share were not just first-quarter records but all-time records, a big deal for what is traditionally the seasonally weakest quarter of the year.

Contract rates were well into the double digits last year and early in the 2022 bid season, there has been no letup.

A graph showing the contract trucking rate per mile
Chart: (SONAR: VCRPM1.USA). Contract rates still logging year-over-year gains.

Knight-Swift Transportation’s (NYSE: KNX) formal 2022 guidance calls for TL contract rates to increase by double digits with spot rates continuing to moderate. The company raised full-year EPS guidance to reflect its outperformance in the first quarter. The financial implication is that the outlook for the remainder of the year was unchanged from the initial guide in January.

“As we sit here today, demand for our services, and in particular the asset side of our business, is the strongest I’ve seen in my 27-year career at the company,” J.B. Hunt (NASDAQ: JBHT) Chief Commercial Officer Shelley Simpson stated on a conference call with analysts. The company is hallway through bid season, which Simpson referred to as “the best bid season that I have seen.”

Schneider (NYSE: SNDR) too raised guidance, by 7% at the midpoint of the range, pointing to strength in the contractual market. The company worked through nearly 40% of 2022’s contract renewals in the first quarter and the outcomes were good.

“We are seeing share gain and very healthy improvement in price with recognition towards the inflationary cost around the driver [and] around equipment,” Mark Rourke, CEO and president, stated on a call. “We think the market is still very responsive to that.”

However, to balance the argument, some of the language from management teams has to be taken with the understanding that many companies still have to reprice 60% to 75% of their contractual revenue books and don’t want to show any weakness heading into negotiations. 

“Most companies still think that they’re going to have a decent back half,” Shanker said. “I think that’s because they have to.”

The step lower in spot market fundamentals has resulted in many analysts reeling in estimates.

Earnings floor has been raised, higher rates part of the reason

“We do think that the [earnings] floor has been raised,” Shanker said. “I think that’s largely because the cycle floor has been raised.” His assessment comes from the expectation that inflationary pressures will keep spot rates from falling below prior cycle peaks.

It simply costs much more to run a truck now than it did in prior cycles. Lower utilization due to the ELD mandate, along with a notable step up in cost inflation on every expense line, has structurally altered the cost profile. It was the hardening of insurance markets that pushed fleets to fail during the last downturn. Since then, the industry has seen additional capacity move to the sidelines as Drug and Alcohol Clearinghouse compliance has increased.

“All of these supply constraints they’re structural, they’re never going away,” Shanker said. “In fact, Clearinghouse and insurance repeat and reset on Jan. 1 of every year. They’re going to end up taking capacity out of the industry every single year in perpetuity.”

While inflationary headwinds are expected to prop up rates, small carriers will still have a tough time adjusting to their higher cost structures, which include elevated expenses like labor, fuel, insurance, parts, equipment, etc. Also, many of the recently minted entrepreneurs obtained their authority at the peak of the market and also bought their trucks at the peak of the market. The reality of a downturn will be tough to overcome for a group that may have modeled its new venture off of all-time high spot rates.

More diversity in the model but the cycle is largely the same

Some carriers have diversified their offering, branching out into intermodal, brokerage and other asset-light offerings. The changes have smoothed out some of the booms and busts historically seen in asset-based TL. These efforts accelerated further during the pandemic as record free cash flow generation allowed for a bigger push in M&A and other organic initiatives.

Spreading out the business has some management teams suggesting their models are now better built to weather a downturn, meaning earnings are unlikely to revert back to prior trough levels.

“I think the diversification helps reduce the cyclicality of earnings,” Shanker said. “[TL earnings] have a lot more upside in the upcycle and more downside in the downcycle. That range of cyclicality kind of narrows with every level removed you are from TL.

“At the end of the day, if you’re in this industry and you have a TL, LTL, intermodal, logistics business, it’s all the same cycle. It might be one is early cycle, one is mid cycle, one is late cycle, and the difference is a matter of quarters, not years.”

No material relief for shippers in 2022

Shanker noted in a report last week that lower rates in the spot market wouldn’t provide any material rate relief to retail shippers this year as the bulk of their freight is tied to contracts. Contractual rates lag changes in spot rates by several months in most cycles, meaning it’s likely 2023 before most shippers see relief.

However, shippers could see some relief on all-in freight costs. Freight costs surged in the second half of 2021 as record consumer demand had many supply chain managers scrambling to pace inventories with sales. That pushed shippers to use more expensive airfreight options versus ocean. Once the merchandise landed in the U.S., they were forced to use a higher-cost spot market for capacity more than they would have liked.

The thought is total freight costs could net out lower as shippers move away from the premium options used last year. Also, any pick up in supply chain fluidity would likely lower costs as well. However, the report said if shippers were to see material cost relief in 2022, it’s likely due to consumer demand rolling over or it turns out they over ordered merchandise trying to navigate supply chain bottlenecks.

https://www.freightwaves.com/news/large-truckload-carriers-say-recent-downturn-not-hurting-them?sfmc_id=63552105

Large truckload carriers say recent downturn not hurting them

‘In the next 4 weeks we will know which theory is correct’

Todd MaidenThursday, May 5, 2022 7 minutes read

A tractor-trailer with the logo of Knight Transportation drives on a road with storm clouds and a rainbow behind it, illustrating a downturn in the trucking industry.
Large trucking companies like Knight-Swift will weather the freight market downturn better than their smaller peers. (Photo: Jim Allen/FreightWaves)

Listen to this article 0:00 / 10:49 BeyondWords

While a host of unfavorable freight data points appeared by the end of the first quarter, with trend lines declining further to start the second quarter, many executives at the nation’s largest trucking companies are presenting a much rosier outlook than the data suggests. During the first-quarter earnings season, management teams from publicly traded carriers acknowledged softness in the spot truckload market but said the loosening in capacity won’t likely hurt them.

The growing consensus in the industry is that the little guy is likely in store for pain if spot TL fundamentals have reset lower for the near term. On the other side, well-capitalized, large operators with the majority of their business tied to annual contracts will see a much more manageable environment if the market moderates further.

Just delayed seasonality?

Some industry participants have subscribed to the theory that the recent downturn is just “delayed seasonality” following a prolonged stretch of outperformance, and freight will flow heavily again once China’s lockdowns are lifted.

The new year picked up where 2021 left off with capacity remaining tight and rates continuing to soar. The trend bucked normal seasonality, wherein January and February traditionally see a slowdown in freight demand following the holidays.

March is normally when shipments step materially higher sequentially as consumers exit hibernation, spring merchandise begins to fly off the shelves and produce season nears. March too, didn’t follow normal seasonal trends this year, as demand cooled with each passing day. As industry data points turned sharply lower, investors became spooked and trucking stocks were down by as much as 20% to 40% year-to-date by mid-April.

A graph showing showing the Outbound Tender Reject Index, a measure of truckload freight demand, over the past year.
Chart: (SONAR: OTRI.USA). Loads tendered under contract are being rejected by carriers only 9% of the time currently. That compares to a rejection rate of nearly 25% a year ago. To learn more about FreightWaves SONAR, click here.

“I think what is undeniable is that the data is pretty weak and continues to weaken,” Morgan Stanley (NYSE: MS) analyst Ravi Shanker told FreightWaves. He said that it isn’t just trucking data that is soft, some of the firm’s other equity research teams are seeing signs of a downturn as well.

“We know that demand has driven the bulk of the downturn so far and it feels like that is going to get tougher.”

In December, Shanker downgraded his outlook for the freight transportation industry to “cautious” from “in line,” citing the stocks were trading on inflated earnings estimates and valuation multiples after a pronounced bull run. He also flagged a potential “over-inventory” situation as demand was cooling and shippers had ordered merchandise at record levels throughout 2021. His call at the time was that the current trucking cycle would likely end in mid-2022.

While Shanker sees three plausible theories in play now — delayed seasonality, an “air pocket” caused by China lockdowns and the Russian invasion, or the cycle just tapped out one quarter ahead of schedule — it is clear that the industry has hit an inflection point.

“We are still fairly confident that there is going to be a downcycle in the back half of the year. I don’t think it is going to be a massive downcycle,” Shanker said. He expects rates to trough above where they peaked in the last cycle with spot rates seeing the bulk of the reset, not contract rates. Also, the firm’s proprietary TL freight index, which prompted his December downgrade earlier than similar actions from other analysts, has already started to level. Early indications are that the next reading from the dataset is likely to be up slightly.

“In the next four weeks we will know which theory is correct,” Shanker said.

A graph showing the 7-day van trucking rate per mile  over the past year
Chart: (SONAR: TSTOPVRPM.USA). The 7-day per-mile average rate for dry van spot loads including fuel. The recent decline in spot rates is more pronounced when stripping out fuel, which is up more than 50% since the beginning of the year.

Management commentary positive in Q1, guidance steps higher for some

Commentary from trucking heads thus far in earnings season suggests business as usual at least in the near term. The bifurcation between what’s happening in the spot market versus comments from large carriers about the contract market give the appearance the two aren’t even engaged in the same business.

What has not been surprising is the number of record quarterly performances reported by carriers in the first quarter. The public TLs saw robust freight demand and rates from 2021 spill over into the first three months of the year. For some, revenue and earnings per share were not just first-quarter records but all-time records, a big deal for what is traditionally the seasonally weakest quarter of the year.

Contract rates were well into the double digits last year and early in the 2022 bid season, there has been no letup.

A graph showing the contract trucking rate per mile
Chart: (SONAR: VCRPM1.USA). Contract rates still logging year-over-year gains.

Knight-Swift Transportation’s (NYSE: KNX) formal 2022 guidance calls for TL contract rates to increase by double digits with spot rates continuing to moderate. The company raised full-year EPS guidance to reflect its outperformance in the first quarter. The financial implication is that the outlook for the remainder of the year was unchanged from the initial guide in January.

“As we sit here today, demand for our services, and in particular the asset side of our business, is the strongest I’ve seen in my 27-year career at the company,” J.B. Hunt (NASDAQ: JBHT) Chief Commercial Officer Shelley Simpson stated on a conference call with analysts. The company is hallway through bid season, which Simpson referred to as “the best bid season that I have seen.”

Schneider (NYSE: SNDR) too raised guidance, by 7% at the midpoint of the range, pointing to strength in the contractual market. The company worked through nearly 40% of 2022’s contract renewals in the first quarter and the outcomes were good.

“We are seeing share gain and very healthy improvement in price with recognition towards the inflationary cost around the driver [and] around equipment,” Mark Rourke, CEO and president, stated on a call. “We think the market is still very responsive to that.”

However, to balance the argument, some of the language from management teams has to be taken with the understanding that many companies still have to reprice 60% to 75% of their contractual revenue books and don’t want to show any weakness heading into negotiations. 

“Most companies still think that they’re going to have a decent back half,” Shanker said. “I think that’s because they have to.”

The step lower in spot market fundamentals has resulted in many analysts reeling in estimates.

Earnings floor has been raised, higher rates part of the reason

“We do think that the [earnings] floor has been raised,” Shanker said. “I think that’s largely because the cycle floor has been raised.” His assessment comes from the expectation that inflationary pressures will keep spot rates from falling below prior cycle peaks.

It simply costs much more to run a truck now than it did in prior cycles. Lower utilization due to the ELD mandate, along with a notable step up in cost inflation on every expense line, has structurally altered the cost profile. It was the hardening of insurance markets that pushed fleets to fail during the last downturn. Since then, the industry has seen additional capacity move to the sidelines as Drug and Alcohol Clearinghouse compliance has increased.

“All of these supply constraints they’re structural, they’re never going away,” Shanker said. “In fact, Clearinghouse and insurance repeat and reset on Jan. 1 of every year. They’re going to end up taking capacity out of the industry every single year in perpetuity.”

While inflationary headwinds are expected to prop up rates, small carriers will still have a tough time adjusting to their higher cost structures, which include elevated expenses like labor, fuel, insurance, parts, equipment, etc. Also, many of the recently minted entrepreneurs obtained their authority at the peak of the market and also bought their trucks at the peak of the market. The reality of a downturn will be tough to overcome for a group that may have modeled its new venture off of all-time high spot rates.

More diversity in the model but the cycle is largely the same

Some carriers have diversified their offering, branching out into intermodal, brokerage and other asset-light offerings. The changes have smoothed out some of the booms and busts historically seen in asset-based TL. These efforts accelerated further during the pandemic as record free cash flow generation allowed for a bigger push in M&A and other organic initiatives.

Spreading out the business has some management teams suggesting their models are now better built to weather a downturn, meaning earnings are unlikely to revert back to prior trough levels.

“I think the diversification helps reduce the cyclicality of earnings,” Shanker said. “[TL earnings] have a lot more upside in the upcycle and more downside in the downcycle. That range of cyclicality kind of narrows with every level removed you are from TL.

“At the end of the day, if you’re in this industry and you have a TL, LTL, intermodal, logistics business, it’s all the same cycle. It might be one is early cycle, one is mid cycle, one is late cycle, and the difference is a matter of quarters, not years.”

No material relief for shippers in 2022

Shanker noted in a report last week that lower rates in the spot market wouldn’t provide any material rate relief to retail shippers this year as the bulk of their freight is tied to contracts. Contractual rates lag changes in spot rates by several months in most cycles, meaning it’s likely 2023 before most shippers see relief.

However, shippers could see some relief on all-in freight costs. Freight costs surged in the second half of 2021 as record consumer demand had many supply chain managers scrambling to pace inventories with sales. That pushed shippers to use more expensive airfreight options versus ocean. Once the merchandise landed in the U.S., they were forced to use a higher-cost spot market for capacity more than they would have liked.

The thought is total freight costs could net out lower as shippers move away from the premium options used last year. Also, any pick up in supply chain fluidity would likely lower costs as well. However, the report said if shippers were to see material cost relief in 2022, it’s likely due to consumer demand rolling over or it turns out they over ordered merchandise trying to navigate supply chain bottlenecks.

https://www.freightwaves.com/news/large-truckload-carriers-say-recent-downturn-not-hurting-them?sfmc_id=63552105

Nicolas Kaufmann is appointed Americas President for IMCD

Rotterdam, The Netherlands(5 May 2022) –IMCD Group, a leading distributor of speciality chemicals and ingredients, today announces the appointment of Nicolas Kaufmann as Americas President for IMCD effective 1 July 2022.

“I am confident that in his new role as Americas President, Nicolas will continue to bring his passion and enthusiasm that empowers employees to thrive with an entrepreneurial spirit that not only embodies IMCD Values but opens a world of opportunity for our supplier partners, customers and the communities in which we serve,” said Marcus Jordan, Chief Operating Officer (COO) and current Americas President at IMCD.

This announcement follows the approval of Marcus’ newly appointed role as COO and member of IMCD’s Management Board.

With nearly 20 years of international business and management experience in the business-to-business world, Nicolas’ multicultural career includes the development of new markets in the Americas, successful mergers and acquisitions, business optimization and a vast network of global business partners through his work experiences in Germany, Mexico and Brazil. He joined IMCD Brasil as Managing Director in 2019. As president of IMCD’s Americas region, Nicolas is responsible for all operating companies within the Americas, with afocus on stimulating growth through the development of supplier partnerships, market expansion (organic and acquisition), optimizing operational excellence and driving forward the region’sdigitization and sustainability goals.

“I am honored for the opportunity to lead the next chapter of IMCD’s growth story in the Americas region as president,” said Nicolas Kaufmann. “A sincere thanks goes to Marcus for building the foundation in the Americas, which propelled our rapid growth as a speciality distributor and anindustry leader. Our team is highlymotivated to continue our growth trajectory and I am looking forward to facilitating the materialization of the potential we have in developing all of our core markets throughout the region.”

A native of Argentina, Nicolas will be based in the Miami metropolitan area of the U.S. upon transitioning into his new role. IMCD operates in nearly 30 countries throughout the Americas region and has offices in Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Mexico, Peru, Puerto Rico and United States.

About IMCD Group

The IMCD Group, based in Rotterdam, the Netherlands, is a global market leader in the marketing, sales, and distribution of speciality chemicals and ingredients. Its result-driven professionals provide market-focused solutions to suppliers and customers across EMEA, Americas and Asia-Pacific, offering comprehensive product portfolios ranging from home, industrial and institutional care, beauty and personal care, food and nutrition and pharmaceuticals to lubricants and energy, coatings and construction, advanced materials, and synthesis.

The IMCD Group realised revenues of EUR 3,435 million in 2021 with more than 3,700 employees in over 50 countries. IMCD’s dedicated team of technical and commercial experts work in close partnership to tailor best-in-class solutions and provide value through expertise for around 56,000 customers and a diverse range of world class suppliers.  IMCD shares are traded at Euronext, Amsterdam (IMCD).

For further information, please visit www.imcdgroup.com.