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Tuesday, July 14, 2020
Logistics Intelligence Brief
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Trucking

Trucking secures as much as $12 billion in government-backed PPP loans

CCJ Jason Cannon and James Jaillet July 13, 2020

According to data compiled by CCJ from SBA listings, upwards of 100,000 trucking companies received funds ranging from loans of less than $10 (yes, ten dollars) to some in excess of $5 million. Local and long-haul trucking companies snagged as much as $12 billion, more than 2% of all the PPP cash handed out by banks across the United States. Those listings exclude household goods movers. Among the companies receiving $150,000 or more, general freight companies collectively snagged between $3.1 billion and $7.4 billion. Long-haul truckload carriers received between $1.3 billion and $3 billion, leaving between $176.7 million and $411.9 million for less-than-truckload (LTL) carriers and between $1.68 billion and $4 billion for local carriers.

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Spot volume rebounds in week 27 after holiday lull

FTR Transportation Intelligence July 13, 2020

Total spot load postings in the Truckstop.com system rose more than 17% during the week ended July 10 (week 27), but volume did not quite rebound to week 25 levels. Weak loads on the Monday following the weekend Independence Day holiday muted week 27 gains. Loads in all key segments – dry van, flatbed, and refrigerated – were higher than in week 26, but rates excluding fuel surcharges were lower in all segments for the first week-over-week decline in total rates since the bottom in week 16. Load postings in week 27 were dramatically higher in all segments than in 2019 or the five-year average, but comparisons are distorted by the July 4th holiday, which fell squarely in week 27 in recent years but only barely affected week 27 this year. Total load availability was almost 76% higher than the same 2019 week and more than 169% higher than the five-year average. Holiday-related distortions in prior-year comparisons are gone until September, so it will be easier to understand how strong the market is as the economy continues to recover from the economic contraction caused by the coronavirus (COVID-19) pandemic.

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Truck movement declines across US after July 4th, businesses close again

Transport Dive Shefali Kapadia July 13, 2020

Truck movement is down in nearly all 50 states over a two-week moving average, according to data from FourKites. "We are seeing the residual effect of coming off a quarter end and the July 4th holiday," Glenn Koepke, VP of network enablement at FourKites, told Transport Dive. Inbound movement was particularly lower in several of the Great Lakes states. Movement in Michigan was down nearly 30% compared to its two-week moving average. The downturn coincides with states closing businesses again after a resurgence in COVID-19 cases. States witnessing a spike in positive cases, such as Arizona, Florida, Georgia and Texas, faced decreases in truck movement ranging from 10% to 12%.

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Shippers/3PLs

From Flour to Canned Soup, Coronavirus Surge Pressures Food Supplies

The Wall Street Journal Annie Gasparro and Jaewon Kang July 12, 2020

“We are running flat out,” said Conagra’s Chief Executive Sean Connolly. He said Conagra won’t be able to build up inventory of certain brands, such as Chef Boyardee and Healthy Choice, unless demand slows or it further increases manufacturing capacity. Food makers and grocers expect prolonged shelter-in-place orders and restrictions on restaurants, as well as the battered economy, to result in a longer stretch of eating at home. Added safety measures at plants are slowing operations, too. There is enough food in the U.S. to keep people fed, executives say, but every product might not be available everywhere while inventories are strained. Mark Griffin, president of Nebraska-based B&R Stores Inc., said the chain would be in worse shape if cases rise again in the Midwest because it lacks the inventory it had in March.

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Survey: Covid-19 won’t curtail holiday shopping spend

DC Velocity July 13, 2020

The Covid-19 pandemic isn’t changing consumers’ spending plans for this holiday season, but it will alter their shopping methods and put pressure on retailers already struggling to keep pace with growing e-commerce demands, according to a tech firm study released this month. Pennsylvania-based omnichannel technology provider Radial surveyed 1,000 consumers across the United States about their 2020 holiday shopping plans and found that, despite the pandemic, most do not plan to change their spending significantly or shop earlier compared to 2019. The survey revealed a stronger preference for online shopping this year, however, with 66% of shoppers saying they expect to increase their online purchases this holiday season. The results indicate that this peak season may be more hectic than ever, as pandemic-induced e-commerce preferences add to the already growing business of online holiday shopping. This will put increasing pressure on retailers that have failed to put solid omnichannel buying solutions in place, the researchers said.

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Industry

Southeast US warehousing markets to grow as supply chains opt for China+1 strategies

Supply Chain Dive Matt Leonard July 13, 2020

As companies reevaluate their supply chains and turn to China+1 strategies — with sourcing in Europe and parts of Asia that can access the U.S. fastest through the Suez Canal — the American Southeast and Gulf Coast are expected to benefit from increased import volume, according to a new report from CBRE, "The Changing Flow of International Trade." "While we will not see a widespread exodus from China, we will see a shift in trade patterns that will trigger broader effects on U.S. supply chains, including increased industrial distribution development and increased domestic manufacturing," John Morris, the executive managing director for Americas industrial and logistics for CBRE, said in a statement.

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Class 8 Sales in June Drop 43.5%

Transport Topics Roger Gilroy July 13, 2020

U.S. Class 8 retail sales in June fell 43.5% year-over-year to just above 13,000, WardsAuto.com reported, as the nation worked to reopen businesses while cases of COVID-19 climbed. Sales reached 13,276 compared with 23,500 a year earlier. All truck makers posted double-digit declines compared with the 2019 period. The year-over-year declines ranged from a low of 21.6% at Western Star, a brand of Daimler Trucks North America, to the steepest decline, 51.9%, at Peterbilt Motors Co., a unit of Paccar Inc. Freightliner, also a brand of DTNA, remained the market leader with 4,732 sales, good for a 35.6% share. Sales dropped 42.4% compared with 8,215 a year earlier.

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COVID-19 has managed to wreck the delivery economy

Freight Waves Vishnu Rajamanickam July 13, 2020

Supply chains now contend with longer lead times, driven by social distancing practices across the value chain. For instance, social distancing within warehouses has meant fewer people working within the same setting, as warehouses cannot add more aisle space. “The only viable path forward is automation and digitization,” said Piller. Piller explained that delays during the COVID-19 situation have to do with the lack of visibility and not having the right quality data at the right time. “Managing processes with emails and spreadsheets just don’t work anymore. At project44, we provide high-fidelity data with proactive notifications when things are going wrong — helping companies recover in time and get the deliveries to their customers’ doorsteps when they expect it,” he said.

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Diesel Price Almost Flat, Inches Up 0.1¢ to $2.438 a Gallon

Transport Topics Connor D. Wolf July 13, 2020

EIA reported that the price of diesel increased by one-tenth of a cent, to $2.438 a gallon from $2.437 the previous week. This represents the sixth consecutive week the average retail price of diesel has risen. Diesel now costs 61.3 cents a gallon less than it did a year ago. The price increased in three of the 10 regions surveyed by EIA. California experienced the most significant decrease at 0.9 cent to $3.251 a gallon. The state remains the most expensive for diesel in the nation.

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Oil Falls on Signs OPEC+ Will Taper Cuts

Bloomberg/Transport Topics Hailey Waller July 13, 2020

Expectations are that the cartel will begin unwinding historic supply curbs as planned in August, and Russia’s top producers are also preparing to increase output next month. The additional supply will hit the market while the U.S. continues to struggle to control fresh outbreaks of the virus. An increase in tensions with China also hit market sentiment, and prices dipped going into the close. “Our view is the committee will focus on compliance first, and not formally opine on the need to extend the producer group’s deepest cut to August,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas.

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Government/Safety

FMCSA looking into petition to delay HOS rule changes

Freight Waves John Gallagher July 13, 2020

The Federal Motor Carrier Safety Administration (FMCSA) confirmed that it is studying a petition by safety groups and labor to halt the final hours of service (HOS) rule despite the agency strongly backing the changes it made that are scheduled to go into effect on September 29. Speaking at a meeting of FMCSA’s Motor Carrier Safety Advisory Committee on Monday, July 13, Mullen acknowledged that “not everybody agrees with [FMCSA’s position]. There’s a petition for reconsideration which we’re considering, but we do believe that the hours of service [changes] can provide the flexibility for drivers needed so that they can operate more safely.” The International Brotherhood of Teamsters and four safety groups, including Advocates for Highway and Auto Safety, filed a petition July 1 asserting that the four HOS rule changes issued last month will exacerbate driver fatigue. On the same day, the U.S. House of Representatives approved a $1.5 billion infrastructure investment bill that also includes a provision to delay the rule.

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FMCSA extends coronavirus HOS exemptions into August

Transport Dive S.L. Fuller July 13, 2020

 The FMCSA has issued a third extension on its COVID-19 emergency declaration, which implemented some HOS exemptions, according to a notice Monday. The declaration is effective starting June 15 through July 14 and covers the transportation of livestock and livestock feed; medical supplies and equipment related to the coronavirus; and supplies and equipment used for community safety and sanitation, including personal protective equipment (PPE).

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FMCSA to request safety data on last-mile delivery

Freight Waves John Gallagher July 13, 2020

The Federal Motor Carrier Safety Administration (FMCSA) will be taking a long look at last-mile delivery trucks’ involvement in crashes, given trends revealing a jump in the use of such vehicles in interstate commerce. Commenting on those plans following a presentation on small-truck crashes during the FMCSA’s Motor Carrier Safety Advisory Committee (MCSAC) meeting on Monday, FMCSA Associate Administrator for Policy Larry Minor said MCSAC will be calling on nine companies that have large fleets of vehicles that weigh 6,001 to 10,000 pounds — including Amazon (NASDAQ: AMZN) — to get a better sense of their safety management practices.

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Are truck drivers choosing marijuana over their jobs?

Fleet Owner Larry Kahaner July 13, 2020

When the Drug & Alcohol Clearinghouse published its first monthly report in June, it revealed that of the 18,860 drivers in “prohibited status” (they may not legally drive), marijuana was by far the most reported substance used—10,388 instances. More important, of this group, 15,682 drivers have not yet begun the Return-to-Duty (RTD) process so they can drive again. This suggests that some drivers may be choosing to use marijuana rather than drive.

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JB Hunt agrees to $6.5M settlement for California driver misclassification

Transport Dive Jim Stinson July 13, 2020

J.B. Hunt agreed to settle a February 2019 lawsuit alleging California drivers were misclassified as independent contractors, according to a July 6 filing made in the U.S. District Court in Central California. The drivers' filing seeks approval for the settlement, which would award 312 drivers an average of $20,000. The total value of the settlement was pegged at $6.5 million by law firm Marlin & Saltzman.

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Workforce

Last-mile delivery jobs are on the rise

Fleet Owner Josh Fisher July 13, 2020

Local delivery jobs are up 6.7% since February and nearly 12% year-over-year as of June. "One thing I want to plant the seed on is that it's not inconceivable that we could be seeing truck drivers taking these jobs," Vise said. "Normally, we don't see these two industries as competitors because, on average, trucking pays considerably more than local delivery does." But with more last-mile delivery jobs available and with the last-mile lifestyle allowing drivers to return home every night, it is becoming a more attractive industry and potential second job for professional drivers. It also — except for major parcel carriers — is a federally unregulated industry, Vise noted, which means drivers don't need a CDL, there are no electronic logging devices, and often there is no drug testing.

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