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Monday, July 27, 2020
Logistics Intelligence Brief
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Trucking

Volumes just won’t quit, up 27% year-over-year

Freight Waves Seth Holm July 25, 2020

Load volumes continue to impress. The outbound tender volume index (OTVI) ramped up another 2.4% this week and currently sits at 12,894. This freight level is remarkable for a few reasons. First, there are no signs of any sort of typical seasonality this year; secondly, other parts of the economy have stalled and unemployment remains extremely high; lastly, OTVI has crossed into unchartered territory by climbing higher than the March panic-buying spree. 2020 load volumes continue to distance themselves comparison wise – up 27% over both 2019 and 2018 levels.

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Freight volumes hold, albeit in an upheaval, as carriers and shippers enter contract season

CCJ James Jaillet July 24, 2020

After being jolted back to life in late May by lifted shutdown orders and the onset of the usual season spring freight season, “volumes peaked higher than we expected, and they haven’t come back down as fast or to the level we would have expected,” said Ken Adamo, chief of analytics at DAT Solutions. Though the service sector — restaurants, concerts, sports, movie theaters — has been hit hard by the COVID-19 pandemic, most of those industries aren’t big drivers of freight demand, and thus haven’t contributed significantly in suppressing freight volumes. Industrial volumes, like inbound and outbound manufacturing loads, have not caught up the way the retail side has, said DAT’s Adamo, and that’s part of what’s contributing to some ongoing upheaval in the supply chain. Since it’s built around normal freight flow patterns, both in terms of types of freight and geographically, “the supply chain is struggling” to make a shift to current freight demands, said Adamo.

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FTR COVID-19 Truck Freight Recovery Index

FTR Transportation Intelligence July 24, 2020

Dry Van • The Dry Van segment has continued its general upward trend but with near-term peaks and valleys. The latest data shows an uptick, and over the past month, each uptick has been fairly sustained. • Current Level: 171.1 // Bottomed at 42.6 on 4/24/2020

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Industry

Deloitte: Transport faces $30B profit loss in 2020, but some firms could emerge stronger

Transport Dive S.L. Fuller July 24, 2020

"Despite [COVID-19's] unfortunate challenges, there are opportunities for transportation companies to emerge stronger than before — particularly if they choose to address longstanding sector challenges," Erich Fischer, principal at Deloitte Consulting, told Transport Dive in an interview. According to Deloitte, those challenges are: lack of investment in new technologies; customer expectations; inefficiencies and congestion from inflexibility and changing trade patterns; sector fragmentation; workforce; and disruptive entrants.

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Union Pacific improves service metrics despite 20% volume drop

Supply Chain Dive Emma Cosgrove July 24, 2020

Union Pacific improved its service metrics despite a double-digit drop in volume in the second quarter, executives said on an earnings call Thursday. Total volume declined 20% year over year for the quarter, with automotive freight seeing the largest drop. Intermodal trip plan compliance was up 13% year over year for the railroad in Q2, coupled with four fewer hours of dwell time per car. "This is a direct result of our focus on improving network efficiency and service reliability as part of our operating model," said Union Pacific COO Jim Vena. The railroad's redesign of its Chicago intermodal operations will be complete by the end of 2020, he said.

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IMCs say space issues persist on LA intermodal rail services

The Journal of Commerce Ari Ashe July 24, 2020

Some intermodal marketing companies (IMCs) say they are still struggling to get space on intermodal trains in Los Angeles, but Union Pacific Railroad says the intermodal network is running smoothly after being caught by a surge of cargo. Three IMCs, who spoke on the condition of anonymity, said that it’s even harder to get a rail-owned container, a gate reservation, and a slot on a UP train than a month ago, which is a separate issue than service when cargo is on the move. A general manager for an IMC in California called conditions for IMCs, “the worst in my 40 years in the business.”

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Procurement focus over logistics weakens supply chains

The Journal of Commerce Dean Tracy et al. July 24, 2020

COVID-19 could not have come at a worse time for international logistics. Not because ocean carriers finally figured out how to eliminate sailings and prop up rates despite plummeting volumes. Nor because virtually all passenger plane belly “freight” capacity left the market, sending air freight rates and transport costs into the stratosphere. Those developments have been costly, but the real weaknesses that COVID-19 exposed in supply chains is more troubling for the long term. There has been a hollowing out of knowledge, experience, and relationships among companies and their logistics teams, and a shift toward a procurement mindset focused only on cutting costs. Those developments only exacerbate the already brutal pressure of operating in a COVID-19 environment longer than anyone could have imagined.

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Capacity-constrained air cargo raises red flag for COVID-19 vaccine distribution

The Journal of Commerce Greg Knowler July 24, 2020

“We are not prepared for when this vaccine will come to market and need to be distributed,” Neel Jones Shah, executive vice president and global head of air freight for online forwarder Flexport, told an air cargo webinar this week run by the STAT Times and Messe Munich. The scale of the distribution effort required can be seen in rough estimates by the industry that vaccines for 1 billion people would fill 1,000 Boeing 777 freighters. For perspective, fewer than 200 B777F aircraft have been produced by Boeing since the first freighter version entered service in 2009.

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Technology/Innovation

Logistics software needs to account for email’s staying power

The Journal of Commerce Eric Johnson July 24, 2020

Email is unlikely to be dislodged anytime soon from the collection of systems that the logistics industry uses on a daily basis, which is leading software providers to focus on maximizing the value of data typically locked away in inboxes, a technology provider said in a recent discussion on JOC Uncharted. That reality led Jenna Brown, CEO and co-founder of London-based data extraction software provider Shipamax, to reshape her thesis on how to get traction in the container shipping industry. Instead of trying to migrate the forwarders it is targeting as customers to an entirely new way of conducting their businesses, Shipamax realized it needed to accept the reality that email, in effect, serves as one of the few existing global systems standards. The company pulls data from core shipping documents such as bills of lading and invoices and uses machine learning to contextualize that data, making it more usable for forwarders.

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AI begins to take the wheel in trucking, from routing to driving

Transport Dive Jim Stinson July 23, 2020

Major fleets took notice a few years ago. At Schneider, the volume of requests and the size of tasks convinced it to look to AI, according to Brian Stuelpner, the fleet's VP of strategy, planning and architecture. The company began using AI to improve productivity and the customers' experiences. One frequent task that Schneider realized it could farm out to the machines was finding freight for customers or shippers who wanted to know the freight's real-time location. Giving it to AI would free up customer service representatives, Stuelpner told Transport Dive. So Schneider made freight location upon request one of the first AI tasks. If customers or shippers contacted the carrier, and the AI detected it was a "where's my freight?" question, the machines could answer within seconds.

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Government/Safety

Major Truck-Stop Chains Will Require Drivers to Use Face Masks

The Wall Street Journal Jennifer Smith July 24, 2020

The biggest U.S. truck-stop operators will require customers to wear masks starting next week, joining major retailers, restaurants and airlines in rolling out policies aimed at reducing the spread of coronavirus. The new rules cover more than 1,500 facilities across key transportation routes where truckers buy fuel, supplies and food. Pilot Co., which operates 780 travel centers under the Pilot Flying J and other brands, said its mandate will take effect July 28. Similar policies kick in July 29 at Love’s Travel Stops & Country Stores Inc. and TravelCenters of America Inc. sites.

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California Freight Mobility Plan includes several trucking-related objectives

Land Line Tyson Fisher July 24, 2020

Although the California Freight Mobility Plan expresses concern over truck safety, Caltrans notes that truck drivers are mostly not at fault for fatal crashes. In 2015, the California Highway Patrol reported that out of the 4,764 drivers involved in fatal traffic collisions, 315 collisions involved trucks, and the truck driver was at fault in 74 incidents, according to statistics included in the plan. “This data indicates that automotive drivers involved in fatal collisions with trucks were far more likely to be at fault than the truck driver,” Caltrans states.

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Senators Advance Diesel-Reduction Program

Transport Topics Eugene Mulero July 24, 2020

A program meant to improve air quality by reducing diesel emissions was included in the annual defense authorization bill the Senate passed July 23. The Diesel Emissions Reduction Act provision would reauthorize the U.S. Environmental Protection Agency program through fiscal 2024. The program aims to put out of circulation older, diesel-powered equipment. It also seeks to facilitate the freight industry’s upgrade of diesel engines that operate along waterways, rails and commercial corridors. “For almost 15 years now, federal money administered through the DERA program [has] replaced dirty, old, inefficient diesel engines with cleaner, American-made technology,” said Sen. Tom Carper (D-Del.) ranking member of the Environment and Public Works Committee. He was the provision’s sponsor.

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Workforce

The Work-From-Home Shift Shocked Companies—Now They’re Learning Its Lessons

The Wall Street Journal Christopher Mimms July 25, 2020

Lesson 2: People crave contact One thing that makes going remote so challenging is that personalities and job functions are so diverse, and the tools people use need to reflect that. But companies might not immediately know what those tools should be, or how to stitch them into workflows. In pair programming, a practice gaining in popularity, coders sit together at a single computer to bring more intellectual firepower to challenging problems. During the pandemic, many have turned to Tuple, a screen-sharing app originally developed by three coders who wanted to solve their own remote-work problems. Even those who have returned to the office continue to use it, says Tuple’s chief executive. Although many remote communication tools were in wide adoption before the pandemic, purpose-built hardware to facilitate this style of work is fairly new. Zoom, for instance, just announced its first dedicated at-home videoconferencing system, a 27-inch monitor with microphones and wide-angle cameras.

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