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Tuesday, July 28, 2020
Logistics Intelligence Brief
Brought to you by the YRCW Family of Companies

Trucking

Truck freight has been volatile, but the surge appears to have stalled at a strong level.

FTR COVID-19 Freight Intelligence July 27, 2020

Dry Van • The Dry Van segment remains very strong relative to the pre-pandemic environment, but the latest data suggests some softening. The index is significantly below its mid-July peak. • Current Level: 153.7 // Bottomed at 42.6 on 4/24/2020 – Peaked at 183.1 on 7/16/2020

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UPS and FedEx surcharges are here to stay. How do shippers negotiate prices?

Supply Chain Dive Deborah Abrams Kaplan July 27, 2020

Volumes common in peak season are occurring at this time of year, resulting in carrier surcharges. Delivery guarantees are also suspended as carriers face increased demand with customers ordering more online during the pandemic. Now 70% of UPS' deliveries are residential – up from 50% – and these are less profitable than commercial deliveries. Shippers large and small are getting hit with surcharges (some depending on volume) ranging from 30 cents per package for UPS Ground and SurePost, to $31.45 per large package shipped with UPS.

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Survey: owner-operators say freight rates and volumes plummet during pandemic

DC Velocity July 27, 2020

Seeking financial relief, 81% of owner-operators received the $1200 Economic Impact Payment, 53% applied for a paycheck protection program (PPP) loan from the U.S. Small Business Administration, and 30% received funding.

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Shippers/3PLs

General Mills Adds More Outsourcing Partners as It Aims to Meet Packaged-Food Demand

The Wall Street Journal Mark Mauer July 27, 2020

General Mills Inc. is relying more than ever on third-party manufacturers to meet heightened demand for its products, though asking others comes at a significant cost to the maker of cereal and soups. Packaged-food companies are striving to keep grocery shelves stocked during the coronavirus pandemic as consumers continue to eat more meals at home. Disruptions in the supply chain have made it hard for manufacturers such as Minneapolis-based General Mills to replenish stores with Progresso soups and Betty Crocker cake mixes, despite its factories operating at capacity.

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Industry

Diesel Dips for Second Consecutive Week

Transport Topics Dan Ronan July 27, 2020

Diesel fell for the second consecutive week, by six-tenths of a cent to $2.427 a gallon from $2.433, the Energy Information Administration reported July 27. With the decrease, the price of trucking’s primary fuel is 60.7 cents a gallon less than it was a year ago.

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Report: New USPS top exec DeJoy is focused on making changes to improve the bottom line

Logistics Management Jeff Berman July 27, 2020

What’s more, the article observed that the combination of the USPS’s fiscal outlook, the White House’s insistence on the USPS increasing its package rates, private sector competitors taking major steps to boost their respective delivery network, and USPS leadership saying at the onset of the COVID-19 pandemic that the USPS could be insolvent by October, are all looming, as the organization tries to right the ship. One way to do that, according to the article is for the USPS to position itself as a “low-cost package carrier, as parcels make up a growing portion go the agency’s volume and profits,” while volumes from paper mail continue to shrink. That has been evident in its earnings calls, which have, especially of late, pointed to the strength and growth of the USPS Shipping and Packages unit.

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Technology/Innovation

FBI poses 5 questions to assess ELD security

Transport Dive Jim Stinson July 27, 2020

The FBI issued a "Private Industry Notification" on Tuesday to warn carriers about the possibility of cyberattacks and hacking, done through ELDs. The FBI warned "cybercriminals" could look for weaknesses in ELD security. ELDs became mandatory for most carriers on Dec.16. The concern is that ELDs link vehicle components and wireless data transmission, allowing some components to be accessed remotely through wireless means or Bluetooth. ELDs use cellular connections but can also use satellite, Bluetooth or cables, connected to smartphones or tablets. The FBI urged carriers to lower the risk of cyberattacks by contacting the ELD manufacturer or supplier before using a system to ask about its security.

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Waymo: Human factor key to unlocking AV safety, public trust

Freight Waves Linda Baker July 27, 2020

Convincing the public Matthew Schwall, Waymo’s head of field safety, highlighted his experience working for an automotive testing firm a decade ago, when Toyota was forced to recall millions of vehicles due to concerns about runaway acceleration. Although a possible cause of the problem, a throttle-by-wire system, was subsequently cleared by NHTSA, public trust in the original equipment manufacturer was lost, Schwall said. “Toyota serves as a reminder that the public has a hard time trusting what they don’t understand,” he said. For that reason, outreach and transparency around autonomous vehicles is critical. Asked by moderator Chris Gerdes, director of Stanford’s Center for Automotive Research, how the company builds trust while protecting intellectual property, Schwall responded: “Fundamentally, in order to really convince the public and be compelling, what we need is to be simple. And the simpler it is, the less IP is an issue.”

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Workforce

Pandemic Forces Some Fleets to Furlough Drivers, but Others Have Been Quick to Hire Them

Transport Topics Mindy Long July 27, 2020

The current situation is similar to the 2008-09 recession, said Jeremy Reymer, CEO of DriverReach, a driver recruiting company based in Indianapolis. “In many cases, there were a lot of really good drivers available as a result of that. Through no fault of their own, they were out of work,” he said, adding that it was the same earlier this year. That afforded opportunities to companies that wanted to hire drivers due to new work or simply were looking to hire the best and safest drivers, Reymer said. There was a window of a few weeks where talent was available, said Jeff Jackson, senior vice president of operations for dedicated contract carriage at Penske Logistics. Penske was able to capitalize on some of it, even though it had to lay off drivers in some areas or move drivers to sectors that were surging. He added that demand picked up a lot faster than the company had anticipated.

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