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Wednesday, September 2, 2020
Logistics Intelligence Brief
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Shippers/3PLs

Walmart rolls out same-day delivery service

Freight Waves Mark Solomon September 1, 2020

Walmart Inc. (NYSE:WMT) late Monday rolled out its Walmart+ subscription membership program that promises free same-day deliveries on groceries and general merchandise. The initiative, which will cost members $98 a year or $12.95 per month, expands a pure e-grocery delivery program that Walmart launched late last year. The new service will offer similar benefits to Amazon Prime, Amazon.com, Inc.’s (NASDAQ:AMZN) successful online offering, at a lower price. Amazon Prime costs $119 a year for unlimited one- and two-day shipping, and offers same-day deliveries for an additional fee. Prime has 150 million worldwide members. The Amazon Prime package also includes movies, music and other benefits, making it what is known in retail as a “category killer.” Same-day deliveries will be available on approximately 160,000 items on Walmart’s website, the Bentonville, Ark.-based company said. Amazon Prime has millions of products available on its site.

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Walmart to launch its Walmart+ membership service

Retail Dive Ben Unglesbee September 1, 2020

"Walmart's Walmart+ program will help retain new customers that it has gained as a result of COVID-19, as well as deepen relationships with long-standing customers, and as such is a positive for the company," Moody's vice president and senior credit officer Charlie O'Shea said in emailed comments. "It should not be considered a direct 'competitor' to Amazon Prime due to its focus on shopping and shipping/delivery benefits versus Prime's significant content offerings, which we continue to believe are a significant portion of the value proposition for Prime as fast or discounted delivery is becoming increasingly commoditized as it is easily replicable, and our view was validated in Q2 as Amazon called out streaming volumes of 2x 2019 levels."

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In-store pick and pack starts with inventory visibility

Supply Chain Dive Matt Leonard September 1, 2020

Each step of the accept, pick and pack stage of in-store fulfillment requires retailers to make adjustments to their operations, according to Mark Clendenin, a partner at Red Banks Consulting who has worked with clients on standing up omnichannel operations. "Accept, pick and pack is really hard, and it starts with ... the technology to know where to direct that pick and pack," Clendenin said. This is challenging, because the inventory in a store is much more fluid than in a warehouse, he said. Retailers have to consider the fact that inventory can be in a customer's cart before checkout and still be listed in the inventory system. "Historically, people have not had very accurate inventory in their stores," Clendenin said. Stores will need to integrate their in-store inventory with a point-of-sale system. This is not just insight into the inventory at the store level but how the inventory varies across stores.

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Industry

LMI: Logistics industry continues swift recovery

DC Velocity September 2, 2020

Economic activity in the logistics industry continued to grow in August, recovering to a level of 66 from an all-time low reading of 51.3 in April at the height of the coronavirus pandemic, according to the latest Logistics Manager’s Index (LMI) report, released today. LMI researchers said the August upswing was driven by transportation metrics, as prices continued to rise and capacity slowed dramatically. “We’re seeing this real hot logistics recovery,” LMI researcher Zac Rogers, assistant professor of supply chain management at Colorado State University, said this week, pointing to the strength of the consumer economy and the shift to e-commerce that is boosting demand for transportation, last-mile delivery, and warehousing services. “In some ways, we’re in a similar place to where we were before the pandemic in that we’re still largely consumer driven.” The LMI measures business activity across the logistics industry via a monthly survey of logistics and supply chain professionals; a reading above 50 indicates expansion in the industry and a reading below 50 indicates contraction. Since its April low, the index has risen to 54.5 in May, 61.7 in June, and 63 in July before hitting the current high of 66. LinkAugust 2020 Logistics Managers' Index

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Government/Safety

Proposed Hair Testing Rule Forwarded to Federal Register

Transport Topics Eric Miller September 1, 2020

A proposed rule authorizing the use of hair samples to test truck drivers and other federal workers has been forwarded to the Federal Register for publication soon, the chairman of a federal drug testing advisory board said Sept. 1. Ron Flegel, chairman of the Substance Abuse and Mental Health Services Administration’s drug testing advisory board, said the agency is seeking public comment and recommendations on the proposal for mandatory guidelines when it is published in the Federal Register. Drug testing using hair samples will offer an alternative to mandatory urine testing for federal employees, Flegel said. He said the proposed rule addresses previous concerns over any scientific issues using hair testing.

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Painting a fleet safety picture to reduce habitual speeding, driver fatigue

Fleet Owner Cristina Commendatore September 1, 2020

Commercial truck fleets are often inundated with data points that are essential to helping them improve their driver Compliance, Safety, Accountability (CSA) scores. The trick for many, however, is breaking down that data into actionable points to increase safety. One area in which trucking companies can improve their CSA scores is by pinpointing habitual speeding, which Mike Soricelli, senior product manager for Trimble Transportation, referred to as “the gateway drug of the road” and the number one cause of fatal crashes. During the recent Trimble virtual in.sight user conference, Soricelli suggested that fleets leverage the data and historical research available to them to help reduce the risk of collisions caused by speeding.

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Southeastern Motor Freight Files RICO Lawsuit in La. Staged Accidents Case

Transport Topics Eric Miller September 1, 2020

A New Orleans motor carrier has filed a federal Racketeer Influenced and Corrupt Organizations Act civil lawsuit against a New Orleans attorney and two convicted participants in a pair of staged accidents with tractor-trailers in 2017. The carrier, Southeastern Motor Freight Inc., alleged in the lawsuit that it was defrauded by attorney D. Patrick Keating of Nugent Keating law firm, saying Keating conspired with Damian Labeaud and Mario Solomon in a pair of June 2017 staged accidents. Earlier this year, Labeaud pleaded guilty to being a ringleader in the incidents, and Solomon admitted to being a “spotter,” or driver of a trailing vehicle, in the intentional crashes with tractor-trailers.

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FMCSA pilot program looks at providing extra flexibility

Land Line Mark Schremmer September 1, 2020

“Say that a driver wants to stop for an hour for whatever reason,” Matousek said. “(Under the upcoming rules,) instead of stopping for an hour, you’d have to stop for two if you wanted to pause your clock and use the split.” The provision in the pilot program would allow the driver to rest for one hour while pausing the clock and then get back on the road. “There’s not a huge difference in the way it might look on paper, but it would provide quite a bit of flexibility to drivers,” Matousek said. The pilot program – scheduled to operate for up to three years – would gather evidence to analyze the safety and feasibility of such a modification to the hours-of-service rules. FMCSA said the desired sample size is between 200 and 400 drivers.

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Workforce

Data from StayMetrics shows drivers resumed switching jobs at usual rate

Freight Waves John Kingston September 1, 2020

Driver retention during the first months of the pandemic was significantly stronger than in recent years, according to new data released by StayMetrics, but drivers are on the move once again. A report published by StayMetrics on Monday backs up a statement made by U.S. Xpress CEO Eric Fuller on the company’s first-quarter earnings call: “We could probably go back 10-plus years and we probably haven’t had a period of 4 to 6 weeks where we’ve seen our turnover where it is right now.” The data released by StayMetrics doesn’t go back that far, but it does show that turnover decreased significantly for drivers hired in March and April compared to the prior two years. But by May of this year, turnover already had gone back to more normal levels and had started to exceed that of 2019 and 2018. The data provided by StayMetrics is defined by the company as showing “the number of drivers hired by carrier clients each month and the percentage remaining at specific milestones after their date of hire: 7 days, 30 days, 45 days, 60 days, etc.” For example, the StayMetrics data shows that for drivers hired in March 2020, 83.1% were still on the job after 45 days. But a year earlier in March, that figure was 77.6%. And in 2018, the figure was 78.7%, indicating higher retention this year early in the pandemic.

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Economy

ISM report points to solid manufacturing growth in August

Logistics Management Jeff Berman September 1, 2020

Manufacturing output, for the month of August, headed up for the third consecutive month, according to data released today by the Institute for Supply Management (ISM). In its monthly Manufacturing Report on Business, ISM reported that the report’s key metric, the PMI, was 56 (a reading of 50 or higher indicates growth), which topped July’s reading by 1.8%. The PMI topped the 50 mark in June, at 52.6, and was followed by a 54.2 reading in July. And August’s PMI represents the highest PMI reading over the last 12 months and is 6.2% above the 12-month average of 49.2. ISM also noted that the overall economy grew for the fourth straight month in August, following a decline in April, which snapped a stretch of 131 consecutive months of economic expansion.

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