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Friday, July 31, 2020
Logistics Intelligence Brief
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Trucking

YRC Freight Honored as FreightCenter’s 2019 Diamond Partner of the Year

YRC Freight Press Release July 30, 2020

“This recognition is an outstanding honor from FreightCenter, as our company’s work aligns perfectly with FreightCenter’s mission to create value for customers through custom shipping solutions,” said Jason Bergman, YRCW Chief Commercial Officer and HNRY Logistics President. “I’m extremely proud of YRCW companies’ employees for the level of service they dedicate to our customers, and I appreciate continued partnership with our customers, who provided such positive feedback on satisfaction and value in FreightCenter’s surveys.”

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US LTL demand recovery continues into mid-summer

The Journal of Commerce William B. Cassidy July 30, 2020

US less-than-truckload (LTL) carriers are recovering from the drubbing they took in April, regaining freight as businesses reopen and US surface transportation capacity tightens. That tighter capacity, especially evident on the West Coast, is affecting all types of domestic freight operations as August nears.

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Schneider eyes deployment of growing cash balance

Freight Waves Todd Maiden July 30, 2020

Currently, the carrier is seeing daily freight tenders exceed available capacity as the bulk of its customer base — retail consumables, food and beverage — continues to benefit from the stay-at-home environment created by COVID-19. This customer base has also indicated to Schneider the trend should continue. Management said based on conversations with customers, they see a “decent chance” for rates to be net positive for all of 2020, an inconceivable scenario just one quarter ago. While the carrier has completed 80% of this year’s bids, management said some prior contract negotiations completed earlier in the year may have to be addressed as those deals were inked well under current market rates.

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ACT: New COVID-19 cases threaten recovery, create ‘choppy’ path forward

Fleet Owner July 30, 2020

“As the virus flared in the weeks following Memorial Day, and exacerbated by the Fourth of July, segments of the economy will be turned off and back on as the authorities work to contain the widening spread of the disease,” said Kenny Vieth, ACT’s president and senior analyst. “While we do not believe state-level closures are likely from here, we note that the raging case counts in major Sunbelt states raise the risk of major supply-chain disruptions, if any of those states are shuttered for several weeks.” In addition, ACT Research recently released its latest monthly Transportation Digest report, which claims that the tug of war between positive and negative influences on the business environment and trucking reached a pivotal juncture at the end of June, but escalation in new COVID-19 cases since mid-June threatens to abort this nascent recovery.

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Shippers/3PLs

Ryder Steps in as Amazon Restricts Third-Party Sellers

Transport Topics Connor D. Wolf July 30, 2020

Ryder System Inc. is positioning itself to fill a major void left by Amazon.com Inc. after the online retail giant announced it will restrict warehouse space for third-party sellers. Fulfillment by Amazon helps vendors store and ship products they also sell through the website. Amazon is restricting space based on inventory productivity for those third-party sellers using the fulfillment service. “I think everyone was pretty shocked by the news,” Ryan Singerline, Ryder director of customer logistics, told Transport Topics. “I think it makes sense with the explosive growth we saw in the e-commerce space when COVID hit. They’re looking to gain capability in their network.”

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Demand for partitions and face shields is booming. How a plastic fabricator is adapting its supply chain

Supply Chain Dive Jen A. Miller July 30, 2020

The only way to get ahead of what’s happening in the here and now is to go back to old school talking to humans," she told Supply Chain Dive in an interview. "We had a bunch of customers come to us about PPE when everything hit. That was an impossible task for a data analytics company because everything was in motion." Buyer-supplier relationships have gained importance during this disruptive period as the two parties work together to keep supply chains flowing and support business continuity. Smart businesses are "literally picking up the phone and talking to customers and suppliers just to understand what they’re doing and what plans they have," Bisceglie said. She said smart businesses are also identifying weaknesses in their supply chains now, and making adjustments so that they’re ready for whatever the pandemic brings next — or the next pandemic brings.

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Industry

Year-Over-Year Average Price for Used Class 8 Trucks Drops Again

Transport Topics Roger Gilroy July 30, 2020

The year-over-year average price of a used Class 8 vehicle in June added another link to the chain of declines that now extends to 14 consecutive months, but the month’s less-steep slide also generated some sense that conditions are improving, ACT Research reported. The average price fell 10.2% to $36,519 compared with $40,687 a year earlier, according to ACT. Prices in April fell 22% and 15% in May. One analyst said the level of price decline was a cautious sign of improving conditions. “We are becoming less negative as we transition through the year,” ACT Vice President Steve Tam said. “Part of that is easier price comparisons, which was the expectation given the price curve we were dealt last year. From that perspective, things are playing out a little bit sooner and with a quicker recovery, adding to cautious optimism.”

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Technology/Innovation

Nikola’s Trevor Milton Says Future of Trucking Is Hydrogen Based

Transport Topics Dan Ronan July 30, 2020

Nikola Corp. founder and Executive Chairman Trevor Milton believes the hydrogen fuel cell technology that powers his company’s trucks can place Nikola at the forefront of global efforts to toughen clean-air rules while also providing a truck that meets the needs of commercial fleets. “When I built Nikola, I wanted to build a truck that would actually create a desire for people to move away from diesel with better performance, better efficiency. That’s what’s going to convert people away from diesel to zero-emissions,” he said July 28 during an appearance on Transport Topics’ Newsmakers program. That said, Milton believes that movement by governments around the world during the next 10 to 15 years to take diesel-powered trucks off the road will also drive the shift toward zero-emission vehicles.

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Government/Safety

Data shows hair testing raises bar on fleet safety

Fleet Owner John Hitch July 30, 2020

“Somebody could stop using for three or four days, come to orientation and pass a urine drug screen,” said Wilson Risinger, vice president of safety at KLLM Transport Services, on a recent webinar hosted by Psychmedics, the corporate drug testing company that developed hair testing in 1987. With urine tests, Risinger found drug abusers were finding ways to evade detection, which is nearly impossible to do via hair testing. “When somebody takes drugs and ingest them in their system, those drugs are metabolized into a person's bloodstream,” explained Charles Doucot, executive vice president at Psychmedics. These metabolites find their way into the hair, where they become trapped. Doucot called hair the body’s “tape recorder” because it logs “how much drugs you’ve taken and when you’ve taken it.” Detection in hair can extend up to 90 days.

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USPS outlines borrowing terms for $10 billion loan through the CARES Act

Logistics Management Jeff Berman July 30, 2020

With the $10 billion loan to the USPS secured, the USPS today issued a statement, laying out the terms in which it will provide the United States Department of the Treasury with specific information regarding the organization’s costs, revenues, and overall financial position, which includes providing Treasury, under strict terms of confidentiality, with those contracts that generate the most revenue for the Postal Service. “Providing this information is merely an acknowledgment of the fact that Treasury has been designated by Congress as the lender for the Postal Service, and it therefore has a legitimate interest under certain circumstances in understanding those factors that affect our current and projected financial position,” USPS said in a statement. “Other conditions, such as the requirement that borrowed funds only be used for operating expenses, and not for capital expenses, were expressly mandated by Congress in the language of the CARES Act.

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Economy

Q2 GDP Drops a Record 32.9%, but Trucking Holding Steady

Transport Topics Dan Ronan July 30, 2020

Costello noted that much of the damage done to the economy was in the service sector, which includes hotels, restaurants and bars. Spending in the service sector dropped 43.5% in the second quarter. At the same time, he said that spending on goods including groceries and so-called big-ticket items such as appliances and exercise equipment — along with other types of online spending — declined 11.3%. Costello noted that during the spring, many trucking companies shifted to goods-focused businesses to keep freight at a decent level. At the moment, the trucking industry overall is holding its own, he said. “The June trucking activity report numbers are good in terms of volume. All things considered, we are doing not too bad,” he said. “I think there is this initial restocking going on, and there is a surge of activity. Trucking didn’t get hit too hard.” Confirming Costello’s analysis, DAT Freight and Analytics said its June Truckload Volume Index, which is a measure of dry van, refrigerated and flatbed loads moved by trucking companies, increased 9.4% from June 2019 and 13.7% from May.

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