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Monday, January 25, 2021
Logistics Intelligence Brief
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Trucking

Shippers Expecting More Volume in 2021

Truckinginfo.com January 22, 2021

“This year’s results revealed the largest jump in shipper confidence since we began the survey six years ago,” says the report. “Of those surveyed, 73.44% expect to ship more in 2021 – a 7.21 percentage point increase from the year before.” It also noted, however, that the previous year’s survey results marked the lowest confidence level recorded in the survey’s six-year history. Other conclusions included: Nearly 25% of respondents struggled with capacity challenges in 2020, compared to a little more than 12% that reported issues in 2019. About 29% viewed trade tariffs as having a negative impact on their business in 2020 (a significant decrease of 14.5 percentage points from the previous year) in comparison to 8.4 % that reported positive effects (an increase of 3.2 percentage points from the previous year). 63.2% felt unsure (an increase of 12 percentage points from the previous year).

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Most recent FedEx pricing surcharges feel permanent

Freight Waves Andrew Cox January 22, 2021

FedEx announced Friday it will implement a new peak surcharge on Express and domestic residential Ground shipments, as it continues to deal with “elevated volume” due to the pandemic. The surcharge will impact shippers that had a weekly average volume of more than 30,000 packages between Jan. 4 and Jan. 31. The fee will take effect Feb. 15 and apply until further notice, the carrier said. Shippers who fall into this category will be charged an additional 30 cents per Express and Ground residential package. SmartPost and One Rate packages in the Ground network are excluded from the new fee, according to a rate update. FedEx announced indefinite SmartPost peak surcharges of 75 cents per package beginning Jan. 18 in December.

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Shippers/3PLs

Manufacturing Rebound Has Suppliers Struggling to Keep Up

The Wall Street Journal Bob Tita January 24, 2021

A quicker-than-expected recovery in U.S. manufacturing is resulting in supply disruptions and higher costs for materials used in everything from kitchen cabinets to washing machines to automobiles. Consumers unable to spend on vacations, dining out and concerts instead have opened their wallets for appliances and other improvements to their current or new homes. Car sales also rebounded faster than expected in the second half of 2020. As a result, prices for some industrial commodities used in those products, such as steel and copper, have climbed to their highest levels in years. The increased demand for these materials is showing up in manufacturers’ supply chains, which are clogged with orders, causing some producers to add weekend hours and overtime for employees. Orders that took a week or two to fill during the summer now require six to eight weeks, according to manufacturers coping with extended wait times for essential supplies. “The lack of availability is what kills you,” said Mark Verhein, president of Church Metal Spinning Co., a Milwaukee-based manufacturer of steel parts for large industrial engines. “If you can’t get the material, that’s vexing.”

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E-Commerce Shaped by COVID-19 May Become New Normal, Experts Say

Transport Topics Eleanor Lamb January 22, 2021

The online shopping trend hastened by the COVID-19 pandemic may signal a new normal for purchasing habits and shipping services, according to Adam Colon, director of operations at J.B. Hunt Transport Services Inc. Colon described how consumer practices have changed during the pandemic in a session at the Transportation Research Board’s annual meeting Jan. 22. The event, which usually brings experts from around the world to Washington, was held virtually. Colon said COVID-19 has encouraged online shopping, causing a high demand for shipping services. He indicated a premium has been placed on convenience, as consumers will search for products that will be delivered to their homes quickly. “The new normal has definitely accelerated the convenience model,” Colon said. “Consumers want their product as soon as possible. I think we were already headed this way. I think this could be the new norm of shop.”

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Hand Sanitizer Sales Jumped 600% in 2020. Purell Maker Bets Against a Post-Pandemic Collapse

The Wall Street Journal Sharon Terlep January 22, 2021

The company behind Purell hand sanitizer is making a big bet that America’s fixation on clean hands will outlast the global Covid-19 health crisis. Gojo Industries Inc. added both a factory and a warehouse—the family-owned company had just one of each before the pandemic—and restructured its supply chain, all with the expectation that demand for hand sanitizer will remain exponentially higher than before the pandemic. The Akron, Ohio, company’s investment is an unusual move in the consumer-products world, where the majority of players deluged by Covid-fueled demand have stopped short of building new factories or making other major long-term investments that could backfire after the health crisis eases. Behind Gojo’s confidence that demand for sanitizer will stick: the dearth of flu cases this season amid Covid-19 precautions.

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Industry

‘Insatiable demand’ drives Southern California warehouse boom

Freight Waves Linda Baker January 24, 2021

The Inland Empire, a metropolitan area centered around the Southern California cities of Riverside and San Bernardino, continued a record streak of warehouse development in 2020, even as questions surface about how long the e-commerce-fueled boom will last. Last year the Inland Empire completed 52 million square feet of transactions, the most ever recorded, according to the real estate services firm CBRE. Vacancy rates during the fourth quarter of 2020 fell to 1.9%, the lowest in four years. Pricing has been “off the charts,” increasing by 10% last year for quality Class A product, Kurt Strasmann, executive managing director of CBRE’s Orange County and Inland Empire Operations, told FreightWaves.

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U.S. rail carload and intermodal volumes are mixed for the week ending January 16, reports AAR

Logistics Management January 22, 2021

Intermodal container and trailers—at 295,997—rose 12.8% annually, topping the weeks ending January 9 and January 2, at 289,849 and 219,713, respectively.

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Technology/Innovation

U.S. Xpress makes “significant investment” in self-driving tech vendor

DC Velocity January 22, 2021

Self-driving technology vendor TuSimple has added another truck fleet to its list of financial backers, announcing Thursday that truckload carrier U.S. Xpress Enterprises Inc. had made a “significant investment” in the company. The new funding comes just days after the San Diego-based tech startup announced a similar deal with transportation and logistics provider Werner Enterprises Inc., and will help it bring to market its “autonomous solution for long-haul freight transportation,” TuSimple said. Terms of the deal were not disclosed, but U.S. Xpress President and CEO Eric Fuller has joined TuSimple’s executive advisory board and says his company is now “actively testing” the technology on select shipping lanes for some of its major customers.

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Government/Safety

Plaintiff Attorneys Often Use ‘Reptile Theory’ to Win Nuclear Trucking Jury Verdicts, Experts Say

Transport Topics Eric Miller January 19, 2021

“The reptile theory is a tactic developed by plaintiffs to take the focus away from the accident itself — and the actual damages that were incurred by plaintiffs and what they suffered — and then turn it around to increase the jury award,” said Douglas Marcello, a trucking defense attorney at the law firm of Marcello and Kivisto, based in Carlisle, Pa. “How do they do that? By presenting the jury with the notion that the jurors are the defenders and protectors of the community, and the only way they can do that is by large verdicts.” In trucking accident lawsuits, plaintiff attorneys use the tactic to turn attention away from the incident, and focus instead on a carrier’s safety practices and policies — even when the carrier is in compliance with federal regulations. That tactic, attorneys and litigation experts said, can often result in a much larger jury verdict. In fact, it has already created what Triple G Express President Randy Guillot described as a “growing highway litigation crisis for the trucking industry.”

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Biden to Sign Buy American Order for Government Procurement

The Wall Street Journal Yuka Hayashi January 25, 2021

President Biden will sign an executive order Monday imposing tougher rules on government procurement practices to increase purchases of products made in the U.S., a step toward fulfilling his Buy American campaign pledge to strengthen domestic manufacturing. The new policies will include tightening the government procurement rules to make it harder for federal agencies to purchase imported products, revising the definition of American-made products and raising local-content requirements. The executive order also ensures that small and midsize businesses will have better access to information needed to bid for government contracts.

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Workforce

COVID-19 surge hurting productivity, but won’t close LA-LB ports: employers

The Journal of Commerce Bill Mongelluzzo January 22, 2021

Southern California waterfront employers say rising dockworker infection rates have contributed to a reduction in terminal productivity at the ports of Los Angeles and Long Beach, but stressed that cargo-handling activity will not be interrupted. Employers and the International Longshore and Warehouse Union (ILWU) leadership praised labor for working amid the COVID-19 pandemic as the top US import gateway experiences an unprecedented surge of imports from Asia that began building in the summer. The ILWU on Jan. 15 called on local, state, and federal elected officials to give immediate priority to longshoremen, as front-line essential workers, in receiving vaccines for the coronavirus disease 2019 (COVID-19). The ILWU and the Pacific Maritime Association said there have been more than 600 known cases of the coronavirus at the ports of Los Angeles and Long Beach, and 12 deaths, since Dec. 1. “Longshore workers have been working every day through the pandemic to keep cargo moving despite the exposure to a life-threatening virus they face every day,” Frank Ponce De Leon, ILWU coast committeeman, told JOC.com.

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