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Thursday, July 23, 2020
Logistics Intelligence Brief
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Trucking

Spot rates still rising, but so are inventory levels

DAT.Com Dean Croke July 22, 2020

From a freight recovery perspective, high inventory-to-sales ratios eventually translates to lower truckload volumes. Rising inventory levels need a market, and soon, especially if the trend continues where shippers are using slower-moving intermodal containers to supplement stretched warehouse capacity. Compounding the bearish freight outlook was last week’s CASS June report, which reported a 17.8% year-over-year decrease in freight shipments, although the latest result was an improvement on April – up 3.5% month over month. The big question for businesses operating on the spot market is whether the recent run of increasing rates can be sustained given that overall freight volumes remain depressed year-over-year. Some specific freight commodities (groceries, household goods, building materials and electronics) have seen volumes increase during the pandemic, but supply chains are still struggling to readjust to meet inconsistent consumer demand. That continues to create network imbalances for large carriers, resulting in some shippers looking for short-term capacity on the spot market.

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Truck freight remains strong but more volatile following the July 4th holiday.

FTR Transportation Intelligence July 22, 2020

Dry Van: The Dry Van segment has continued to surge since taking a holiday breather, but it had done so in a bit of a stair-step fashion. The post-crisis peak on July 16th is well above the prior peak a week earlier. Related:  FTR Spot market Insights Spot volume basically flat in week 28

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U.S. Bank Freight Payment Index

U.S. Bank July 22, 2020

The Q2 2020 U.S. Bank National Shipment and Spend Indexes reflect an economy in recession, an observation supported by the June 8 announcement from the National Bureau of Economic Research.1 As much of the U.S. remained in lockdown mode during the second quarter of 2020, the freight industry saw a significant downturn in freight shipments and spend volume. However, there were improved signs of economic and trucking activity. For example, the Southwest, where Texas stay-at-home orders expired on April 30, saw a small gain in shipments from the first quarter.

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Knight-Swift Reports Slight Profit Increase in Q2

Transport Topics Connor D. Wolf July 22, 2020

Knight-Swift Transportation Holdings posted a second-quarter profit increase of 1.2%, but revenue declined compared with the prior year, the company reported July 22. The Phoenix-based truckload motor carrier reported net income of $80.2 million, or 47 cents per diluted share, for the three months ending June 30. That compared with $79.2 million, or 46 cents, during the 2019 period. Revenue decreased by 14.6% to $1.06 billion from $1.24 billion. Results were mixed based on the expectations of Wall Street investment analysts, who had been looking for 35 cents per share and quarterly revenue of $1.08 billion, according to Zacks Consensus Estimate.

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Shippers/3PLs

Amazon plans new facility in El Paso, brings 700 jobs

Freight Waves Noi Mhaoney July 22, 2020

In the new 625,000 square-foot fulfillment center, Amazon employees will work alongside Amazon robotics to pick, pack and ship small items to customers such as books, electronics and toys.

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Walmart’s planned South Carolina warehouse will increase Port of Charleston volume 5%

Supply Chain Dive Matt Leonard July 22, 2020

Walmart will build a direct import distribution center in Dorchester County, South Carolina that will increase the retailer's throughput at the neighboring Port of Charleston, the South Carolina Ports Authority announced Monday. The $220 million, 3 million-square-foot facility is expected to increase the port's volume by 5%. It will serve "several" regional distribution centers that support about 850 Walmart stores and Sam’s Clubs. The groundbreaking on the facility is expected to happen in March 2021.

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Industry

Trailer orders roar back in June

Freight Waves Alan Adler July 22, 2020

U.S. trailer orders rose a head-snapping 333% in June over May as the improving freight market encouraged fleets to spend money on equipment. Orders of 13,441 units beat June 2019 by 112% after removing canceled orders, according to ACT Research.

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Technology/Innovation

TuSimple revenue falls short of expectations

Freight Waves Linda Baker July 22, 2020

TuSimple may be the country’s largest self-driving truck startup, but according to a Wednesday report in the Information, its revenues “are minimal.” One of its trucks was also involved in a freeway collision last fall on Interstate 10 between Tucson and Phoenix that resulted in an injury, the Information reported. The company confirmed that account to FreightWaves Wednesday morning. According to fundraising documents reviewed by the Information, TuSimple in 2016 forecast $284 million in revenue from U.S. operations in 2020 and nearly $1 billion in revenue in 2021. The company anticipated $171 million in revenue this year from its China operation and $776 million next year.  But its current revenue is far short of that amount, the Information reported, although the fundraising documents didn’t provide a specific figure.

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Government/Safety

US traffic fatality rate increases, even as pandemic shutdowns clear roadways

Transport Dive Kristin Musulin July 22, 2020

While causation of this increase has not been officially determined, NSC President and CEO Lorraine Martin and fellow panelists at a webinar Tuesday cited increased stress and anxiety among drivers, and increased alcohol sales and use of marijuana, among other reasons. "We do know that transportation and getting goods to and from our households has certainly increased and that last-mile has been a very big focus for a lot of safety-related issues for companies, as folks are getting their goods dropped off on their front porch or their doorstep," Martin said.

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The Rise of ADAS: The Fleet Experience

Truckinginfo.com Jim Park July 21, 2020

“You want drivers to be satisfied with the technology and appreciate what it can do for them,” says Brian Gigoux, vice president of equipment and maintenance at Groendyke Transport, a bulk tanker fleet, which has invested heavily in driver training from the time the first trucks equipped with roll-stability systems came online back in 2005. “That can require some coaching and encouragement, especially with something like adaptive cruise control.”

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