IOS Market News 3-2-1 - Dec 18, 2024

THIS WEEK’S TOP 3
Things to Know

1) Estes and a R+L Carriers Affiliate Buy 12 More Ex-Yellow Terminals for a combined $192.5 Million

• Estes Acquisitions: Estes will pay $142.5 million for seven owned properties and four leased properties. The seven owned properties are:

  • A 167-door terminal on 52.7 acres in Tracy, CA

  • A 75-door terminal on 13.5 acres in Fort Wayne, IN

  • An 80-door terminal on 21.9 acres in Jeffersonville, IN

  • A 136-door terminal on 39.2 acres in Hagerstown, MD

  • A 67-door terminal on 8.6 acres in Omaha, NE

  • A 216-door terminal on 42.9 acres in Cincinnati, OH

  • A 198-door terminal on 95 acres in Ringgold, GA

  • The four leased properties are in: Norway, MI; Dunmore, PA; Miami, FL; and Orange, CA.

• Ramar Land Corp (R+L Carries Affiliate) Acquisitions: Ramar Land Corp. will pay $50 million for one owned terminal.

  • A 304-door terminal on 51.2 acres in Maybrook, NY — this facility was the second-largest owned property available in the third auction of Yellow’s real estate

• Yellow’s Remaining Real Estate: Two previous rounds of auctions resulted in $1.8 Billion and $82.8 Million for the sale of 128 and 23 of Yellow’s owned and leased terminals, respectively. A binding bid deadline for the remaining facilities is Jan 6, which will be followed by an auction of the remaining properties held Jan 13-15.

2) U.S. Manufacturers Rush to Stockpile Imports as Tariff Uncertainty Looms

• Manufacturers Stockpile Ahead of Tariff Hikes: US manufacturers are accelerating purchases of key imports, such as raw materials and components, to avoid potential cost increases tied to President-elect Trump’s proposed tariffs, which could reach up to 60% on Chinese goods.

• Businesses Adjust Supply Chains to Stay Competitive: Companies are prioritizing critical manufacturing components and using supply chain planning tools to assess short- and long-term strategies, in fear of losing customers to competitors who act faster.

• Industrial Real Estate Poised to Benefit: Similar to what was seen during and post-COVID, companies are looking to keep more goods and supplies stored so they are readily available. This means that existing warehouses and outside storage yards will likely fill up fast, causing some manufacturing groups to look for additional industrial and industrial outside storage space to lease or purchase.

  

3) How Proposed Tariffs Might Impact the Trucking Industry’s Future

• Tariffs Could Disrupt Freight Flows: President-elect Trump’s proposed tariffs—25% across North America and up to 60% on Chinese imports—pose a direct challenge to the trucking industry. The potential tariffs could reshape freight patterns of products coming from Mexico and Canada and reduce the volume of goods transported domestically.

• Economic Slowdowns Might Hit Trucking Demand: Tariffs act as a tax on consumers and are likely to slow economic activity, reducing the overall movement of goods. Trucking demand could take a hit as fewer imports mean less freight to haul, potentially offsetting the industry’s recent recovery from challenges.

• Uncertainty Impacts the Industry’s Outlook: While trucking experts foresee modest improvements in 2025, the timeline for tariff implementation and the possibility of port strikes add significant uncertainty. Reduced freight volumes and disrupted supply chains remain pressing concerns for the industry as Trump’s administration doubles down on trade barriers.

2 NOTABLE QUOTES
They said…

“What [contractors] don’t want is to quote a fixed price on a project and then watch their materials or equipment costs skyrocket,” 
- Anirban Basu, Associated Builders and Contractors Chief Economist

1 THING TO THINK ABOUT
Something to discuss…

What role might IOS play in helping businesses manage disruptions caused by changing freight flows and trade patterns across North America? And how do you think this change in IOS demand impacts current and future owners and tenants?

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