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Logistics Intelligence Brief
Wednesday, December 8, 2021

Trucking

Freight activity rebounds from Thanksgiving distortion

FTR Transportation Intelligence December 7, 2021

Dry Van: The Dry Van segment jumped more than 54% from the prior week to a level that was nearly 8% above the pre-holiday level. Volume in the segment is still about a third below the February spike, but it is nearly 165% above the pre-pandemic base.

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Industry

POLA and POLB push back consideration of container dwell fee until December 13

Logistics Management Jeff Berman December 7, 2021

Again citing “a combined 37% decline of aging cargo on the docks,” the Port of Los Angeles (POLA) and the Port of Long Beach (POLB) said this week that they are again postponing the implementation date for their ocean carrier Container Dwell Fee, which will not be considered before Friday December 13.
This follows previous joint announcements by POLA and POLB, whom collectively account for roughly 40% of United States-bound import volumes, indicating that consideration of the fee would be pushed back until November 22 and subsequently November 29, and December 6.
And the ports added that their respective executive directors will reassess fee implementation after another week of monitoring data.

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Stuck at Port for 54 Days: How One Ship’s Delays Hurt Small Businesses

The Wall Street Journal Stephanie Stamm et al. December 7, 2021

Subscription-Based

In late August, a small container ship called the A Kinka left Hong Kong loaded with, among other things, 50-inch Roku TVs, aluminum cookware and Fender guitars, as well as about 26,000 backgammon and chess sets destined for a small toy company in California.
It arrived off the coast of Los Angeles on Sept. 12, according to marine tracking data, steaming right into a traffic jam of dozens of ships. It floated in the Pacific Ocean for 54 days before it finally got a chance to unload its cargo.
More than 100 companies needed cargo on the 574-foot-long ship, including giants like Amazon.com Inc. But for smaller businesses that were waiting for just one or two containers, the delays have taken a heavy toll, leaving some with disgruntled customers and significant financial pain. One small firm had Halloween boots that missed Halloween. Another couldn’t get paid for $250,000 worth of lighting fixtures it had sold until they were delivered.

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Raw component costs send diesel exhaust fluid prices soaring

Freight Waves John Kingston December 7, 2021

A lengthy series of events has come together to drive the price of diesel exhaust fluid (DEF) higher, a trend that recently took another jolt higher in the spot market.
The spot price of DEF and its most important component, urea, have both climbed sharply in recent weeks after being on an upward inflationary ride for most of 2021. Those increases from earlier in the year already have hit the retail price of DEF, a product that diesel users need to blend into their fuel tanks for trucks, based on an Environmental Protection Agency regulation that dates back to 2010.

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Major US retailers tapping intermodal truckers to retrieve ocean boxes

The Journal Of Commerce Ari Ashe December 7, 2021

Subscription-Based

The use of drivers accustomed to hauling 53-foot containers to pick up 20-foot and 40-foot boxes shows how retail giants Walmart and Costco are pulling every lever to get truck power into the ports, often for cargo shipped on chartered vessels. And it comes as 70 container ships were at anchor or loitering, or at berth, in the LA/LB complex last Friday.
While it’s a novel approach to secure dray power, J.B. Hunt and Swift drivers are not immune to the shortage of marine chassis. Although J.B. Hunt owns a private chassis fleet, its 53-foot units are too large to haul ocean boxes. Swift has some 40-foot chassis, but not enough to handle all the international loads.

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Shippers/3PLs

Waiting for the dam to burst: Pent-up demand held back by supply chain

Fleet Owner Josh Fisher December 7, 2021

Manufacturers of cars, trucks, appliances, and phones struggle to acquire the essential components to complete the products that drive the U.S. economy and create the freight that keeps trailers full and trucking in demand. An improved supply chain would lead to an economic boost in 2022. But when in 2022?
“We’ve been stuck for nine months,” said Don Ake, FTR's VP of commercial vehicles. “We know that the supply chain is going to unclog at some point—we don’t know when—and that’s going to determine what number you get for 2022."
While the trucking industry faces a much-publicized driver shortage, there also is a growing new truck shortage. Slowed by a clogged supply chain of components, truck OEMs are poised to rebound as that supply improves in 2022, Ake said during FTR Transportation Intelligence’s quarterly webinar on trucking, the economy, and commercial vehicles.

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Workforce

Transportation hiring, but not trucking, surged in November

The Journal of Commerce William B. Cassidy December 7, 2021

Subscription-Based

The latest employment numbers from the US Bureau of Labor Statistics (BLS) underscore what one academic calls the “Great COVID-19 Reallocation” of truck transportation employment, with larger, for-hire carriers losing ground to smaller, local trucking companies and to couriers and others engaged in the last-mile of e-commerce fulfillment. Trucking’s job losses in November were courier’s gains.
The reallocation of trucking employment is occurring across trucking, from long-haul to short-haul carriers, and from traditional freight trucking to last-mile and local delivery jobs outside the typical subsectors of trucking employment. “By ‘reallocation’ I mean the reshuffling of employment across establishments,” said Jason Miller, associate professor of logistics at Michigan State University.
From October 2019 through October 2021, general freight local trucking employment increased by 28,000 jobs, or 10.6 percent, according to Miller. For the same period, long-haul truckload and less-than-truckload (LTL) carriers are 14,600 employees short, his analysis shows, with long-haul truckload employment down 1.7 percent and LTL employment 2.3 percent below October 2019 levels.
Link: Dr. Jason Miller Michigan State University LinkedIn Post The Great COVID-19 Reallocation In Trucking Jobs

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Amazon Emerges as the Wage-and-Benefits Setter for Low-Skilled Workers Across Industries

The Wall Street Journal Sebastian Harris December 7, 2021

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As companies across the U.S. fight to find workers, Amazon is emerging as a de facto wage-and-benefit setter for a large pool of low-skilled workers. Business experts have long researched what is known as the Amazon effect in disrupting traditional retailers. Now Amazon’s every move is causing ripple effects well beyond the retail space in local markets throughout America, including on inflation, regional job markets and labor standards, according to an examination of federal labor data and interviews with economists, researchers, local employment officials and current and former Amazon employees.
The nation’s second-largest private employer is planning mock fulfillment centers in high schools to plant the seeds of future careers, sending recruiters to local fairgrounds and bombarding job boards with promises of large sign-on bonuses and pay—in some cases nearly triple the federal minimum wage.

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Technology/Innovation

Amazon Web Outage Affects Delivery Operation

Bloomberg/Transport Topics Spencer Soper December 7, 2021

An Amazon Web Services outage is wreaking havoc on the e-commerce giant’s delivery operation, preventing drivers from getting routes or packages and shutting down communication between Amazon and the thousands of drivers it relies on, according to four people familiar with the situation.
Three delivery service partners said an Amazon.com Inc. app used to communicate with delivery drivers is down. Vans that were supposed to be on the road delivering packages are sitting idle with no communication from the company, the person said.
Amazon Flex drivers, independent delivery people who carry parcels in their own cars, can’t log into Amazon’s app to get assignments, another person said.

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Government/Safety/Sustainability

Truck driver concerns relayed to MCSAC

Land Line Mark Schremmer December 7, 2021

As part of Spencer’s report to MCSAC, some of those accommodations suggested by the subcommittee include compensating drivers for all of their time, providing more truck parking, and giving drivers some benefit of the doubt for such incidents as a light outage that are out of their control.
MCSAC Chair Lamont Byrd, director of safety and health for the Teamsters, agreed that listening and acting on drivers’ concerns is vital to improving recruitment and retention.
“It’s a really tough job, and I would agree with Todd that truck drivers don’t get enough recognition for the role they play in our supply chain,” Byrd said. “What can we do to recruit and retain drivers? What are things that should be done to make the job more appealing?”

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Yellen Says Supply-Chain Shift May Need Protectionist-Like Steps

Bloomberg Christopher Condon December 7, 2021

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Treasury Secretary Janet Yellen said that U.S. reliance on foreign supply chains has proved a vulnerability and that the country needs to produce more critical goods domestically in order to protect both its economic and national security.
“It’s possible that policies that people will describe as protectionist are going to be necessary in order to create the appropriate incentives to produce things at home,” Yellen said in an interview recorded on Monday for an online conference hosted by the Financial Times. She didn’t offer further specifics on the potential measures she envisioned.
Disruptions caused by the Covid-19 pandemic have limited the supply of many goods, including those of semiconductors found in a range of products from electronics to automobiles, leading to frustration for manufacturers and higher prices for consumers. Yellen said it may take “a couple of years” to resolve the bottlenecks for many products.

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