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Tuesday, September 22, 2020
Logistics Intelligence Brief
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Trucking

Intense peak season on tap, three top transportation executives say

Freight Waves Mark Solomon September 21, 2020

Three top transportation executives said Monday that they expect a high-intensity peak shipping season marked by the ongoing shortage of qualified commercial truck drivers and a pandemic that won’t disappear any time soon. The peak will be “bigger, faster, will come quicker and stay longer,” said Greg Ritter, chief customer officer of transport and logistics giant XPO Logistics Inc. Derek Leathers, vice chairman, president and CEO of Omaha, Nebraska-based truckload and logistics company Werner Enterprises Inc., said that peak capacity will be tight this year. Another issue, Leathers said, is that some of Werner’s customers are having a tougher time than usual securing products because the pandemic has disrupted many of their traditional channels of supply. The pandemic has accelerated the long-running problem of driver availability, said Eric Fuller, president and CEO of truckload carrier U.S. Xpress Enterprises Inc. Fuller warned that supply tightness will extend well beyond peak season. “The driver situation is getting worse,” he said. “It will be a lot more difficult and it won’t get much better” for the foreseeable future.

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Cass Freight Index Report shows encouraging shipment and expenditure signs, for August

Logistics Management September 21, 2020

“Further recovery in the freight market was shown by the Cass Freight Index in August,” wrote David Ross, the report’s author and transportation analyst at Stifel. “This supports what we have heard from public carriers across all modes, and we believe the trend of ‘better’ has continued here in September.

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Further recovery in the freight economy was shown by the Cass Freight Index in August.

Cass Freight Index September 21, 2020

This supports what we have heard from public carriers across all modes, and we believe the trend of “better” has continued here in September. Expect the Cass Index to move back closer to year-ago levels in the coming months, although we think it will stay in negative territory until 2021. Rail traffic has been growing faster than the Cass Freight Index, but rail is only a small part of this index and a small part of overall freight spend in the U.S. Still, all signs point to an improving economy, and goods movement is getting better every month.

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Spot market imbalance sets another record following holiday lull

FTR Transportation Intelligence September 18, 2020

Dry van loads rose more than 22% from the prior week, but volume fell about 2% short of the weekly record set during week 35. Loads in week 37 were nearly 93% higher than the same 2019 week and more than 98% above the five-year average. Truck postings were up nearly 12% – the strongest increase in eight weeks – but the stronger load growth resulted in the sixth record dry van MDI in seven weeks.

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Shippers/3PLs

RBC: Amazon Logistics’ planned 2020 growth exceeds previous 3 years combined

Supply Chain Dive Matt Leonard September 21, 2020

Amazon's delivery stations, the facilities closest to the consumer, are growing the most as the e-tailer expands its logistics footprint, according to a research note published last week from RBC Capital Markets based on data from the supply chain consultancy MWPVL and Amazon's financials. Amazon delivery stations are growing in number and getting larger, the researchers noted, pointing out this helps Amazon get inventory "dramatically closer to the consumer."

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Amazon to raise holiday rates to offset USPS surcharges

Freight Waves Mark Solomon September 21, 2020

In a brief, undated communique to the millions of sellers that use Amazon to sell, fulfill and deliver products, Amazon said that the “USPS rates” available to Amazon’s shipping customers will increase to “coincide” with the surcharges, which take effect Oct. 18 and run until Dec. 27. USPS announced last month that it will levy its first-ever holiday surcharge, with the hit to be felt by commercial shippers tendering very large volumes. The surcharge will apply only to domestic traffic. Retail customers and international shipments will not be impacted. The Postal Regulatory Commission, a separate federal agency which approves all USPS pricing actions, signed off on the proposal earlier this month.

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The standard holiday season is ‘meaningless’ this year, AlixPartners says

Retail Dive Ben Unglesbee September 21, 2020

"The traditional November-December holiday-season definition is meaningless this year — and, I would argue, for the future as well," Joel Bines, who co-heads AlixPartner's retail practice, said in the release. "For years now, holiday sales have been pulled forward earlier and earlier, thanks mostly to the explosion in online shopping. This, in turn, has led to such things as the diminishment of Black Friday, of door-buster sales and of many other traditions." In terms of online spending, AlixPartners found that 45% of surveyed consumers plan for shop online, up 15% from their survey last year. Other observers have issued similarly high expectations for online shopping during the season. Deloitte last week said it expects e-commerce sales to grow 25% to 30% year over year, and survey data from analytics firm Glassbox found that 70% of respondents planned to do the majority of their holiday shopping online, via the web or mobile.

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Industry

IANA data points to August intermodal volumes seeing slight decline, amid signs of improvement

Logistics Management Jeff Berman September 21, 2020

On a year-to-date basis through August, IANA reported the following:

  • domestic containers fell 0.1% to 4,993,588;
  • trailers were down 12.7% to 733,736;
  • all domestic equipment was off 1.7% to 5,727,324;
  • ISO containers declined 12.7% to 5,569,982; and
  • total units were down 7.5%, to 11,297,306
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Government/Safety

Federal Drug Official Defends Proposed Guidelines for Hair Testing

Transport Topics Eric Miller September 21, 2020

“Contrary to the views of some stakeholders, the feature of authorizing another specimen to be collected does not diminish the value of hair testing,” Flegel wrote. “Roughly 90% of all hair tests return negative results, which means federal agencies and federally regulated entities will have the flexibility to eliminate urine or oral fluid testing in approximately 90% of cases where a donor provides a hair specimen for testing.” The letter also said, “This would leave the benefits of hair testing intact for approximately 90% of hair tests. It should also be noted that if the donor provides a legitimate medical explanation for the positive hair test result, the medical review officer reports the test as negative to the employer. If the donor admits illicit drug use, the MRO reports the test as positive to the employer. In these cases, the proposal does not require that an alternative specimen be tested.”

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HOS changes are coming. How are fleets training drivers to comply?

Transport Dive Amanda Loudin September 21, 2020

Train, rinse, repeat HOS violations are among the most common reasons inspectors put drivers out of service. That's why it's beneficial for fleets to conduct refresher trainings, said Broomfield. "Information is knowledge and power for the drivers." Hildebrant agreed. "We have a single terminal and drivers throughout 48 states," he said. "We rely heavily on technology and training to remain compliant."

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Workforce

Schneider shifts to some off-site orientation for its new drivers

Freight Waves John Kingston September 21, 2020

Schneider National is moving toward more remote orientation for newly hired drivers and independent owner-operators. In a recent announcement, Schneider said it would take several steps at eight sites where it now performs orientation training: Phoenix; Indianapolis and Gary, Indiana; Atlanta; Dallas; Carlisle, Pennsylvania; West Memphis, Tennessee; and Charlotte, North Carolina, which is dedicated solely to owner-operators who have leased with the truckload carrier. There are several aspects to the new training regime, Schneider said. Drivers who are going through orientation will now do it from a large conference room at a hotel near the training facility rather than at the training center itself — but only if the space at the training center becomes too full for proper social distancing, the company said. And lodging is being cut down to single occupancy in a room. It had been two trainees sharing a room.

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