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Tuesday, September 8, 2020
Logistics Intelligence Brief
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Trucking

Outbound tender volumes continue to push higher

Freight Waves Seth Holm September 5, 2020

The Outbound Tender Volume Index (OTVI) climbed another 1.4% this week to a new all-time high of 16,053. OTVI has posted a string of consecutive all-time highs for many weeks now. It is important to note that OTVI does include rejected contract load tenders, so the true organic growth of load volumes is significantly lower than the indexed reading as we explain later. However, this does not mean the index is not directionally accurate or not indicative of the overall strength in the freight market. However, the rate of volume acceleration has begun to slow.

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Shippers/3PLs

Walmart tightens supplier delivery requirements ahead of holiday season

The Journal of Commerce Cathy Morrow Robinson September 4, 2020

Walmart suppliers will be required to deliver inventory to distribution centers on time and in full 98 percent of the time beginning Sept. 15, up from the existing 87 percent. The move, announced by the retail giant in a Sept. 1 memo posted on its online supplier portal, comes ahead of the upcoming holiday season and coincides with the launch of Walmart Plus, its new competitor to Amazon Prime. Suppliers who do not meet the new delivery requirements will be fined 3 percent the value of the goods. Walmart implemented on-time and in-full shipment requirements for suppliers in 2017 and has increased the required delivery percentage annually.

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Shopify, Suddenly Worth $117 Billion, Is One of the Biggest Pandemic Winners

The Wall Street Journal Inti Pacheco September 8, 2020

Shopify charges sellers a monthly fee and takes a percentage of every transaction on its platform. Its revenue nearly doubled to $714.3 million in the second quarter as the number of new stores created on Shopify increased 71% compared with the previous quarter. “We play a much more strategic and central role in the day-to-day businesses of our merchants, far more than any software company traditionally would,” Mr. Finkelstein said. Still, analysts say there are concerns about how many small U.S. businesses will survive the economic crisis and whether giants such as Walmart Inc. and Amazon will continue to capture more of Americans’ retail spending.

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Industry

August U.S. rail carload and intermodal volumes are mixed, reports AAR

Logistics Management September 4, 2020

Intermodal containers and trailers—at 1,122,954—were up 3%, or 33,115 units, annually.

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Government/Safety

FMCSA Pilot Would Allow Younger Drivers in Interstate Commerce

Transport Topics Eric Miller September 4, 2020

The Federal Motor Carrier Safety Administration has announced a proposal and request for comment on a new pilot program to allow drivers ages 18-20 to operate commercial motor vehicles in interstate commerce. A Sept. 4 Federal Register notice said the agency proposes to allow 18- to 20-year-old commercial driver license holders to operate CMVs in interstate commerce while taking part in a 120-hour probationary period and subsequent 280-hour probationary period under an apprenticeship. The proposed pilot also would allow participation by 19- and 20-year-old commercial drivers who have operated CMVs in intrastate commerce for a minimum of one year and driven 25,000 miles. American Trucking Associations President Chris Spear said, “This is a significant step toward improving safety on our nation’s roads, setting a standard for these drivers that is well beyond what 49 states currently require. This is an amazing block of talent with unlimited potential.” Related:  Bloomberg U.S. May Allow 18-Year-Olds to Drive Big Trucks on Long Hauls

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Judicial panel hears why AB5 should be kept out of California trucking sector

Freight Waves John Kingston September 7, 2020

Another issue that arose was whether AB5 is a law of “general applicability,” meaning it applies to all. Such a finding could impact whether an appellate court would uphold the law. AB5 specifically targets the trucking industry, Tauber said, and is not a law of general applicability. He pointed to specific statements made by AB5 sponsor Assemblywoman Lorena Gonazles, who described the independent owner-operator model as “outdated.” Tauber also noted the lengthy list of specific exemptions from the law in AB5, from surgeons to travel agents. Tauber said the CTA has presented evidence that AB5 will have a “significant effect” on motor-carrier operations like routes and prices, and trucking companies would be “compelled” to reclassify drivers. “That is a sea shift of major proportions,” Tauber said.

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DOT plans funding boost, regulatory rollbacks in national freight strategy

Supply Chain Dive S.L. Fuller September 4, 2020

With a patchwork of jurisdiction and responsibility between the federal government, state governments and private companies, the federal government's role in modernization and improvement can be unclear. But the four ways DOT said it will contribute — particularly with federal funding targeted specifically to freight projects and regulatory rollbacks — could yield tangible results, if followed through. DOT focuses on furthering its three strategic goals: infrastructure, safety and innovation. "Infrastructure condition looms heaviest overall," the Coalition for America's Gateways & Trade Corridors said in a statement. "When infrastructure fails – whether a failure of condition or capacity – safety, efficiency, performance and security all fail."

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Workforce

US trucking gained more jobs in August amid demand spike

The Journal of Commerce William Cassidy September 4, 2020

More truck drivers went back to work in the US in August, pushing non-seasonally adjusted trucking employment numbers up by 8,800 during the month as demand for trucking services increased, according to data released Friday by the US Bureau of Labor Statistics. The data shows trucking employment numbers are heading in a direction that would provide some capacity relief to shippers, but it will take some time to realize any such relief. Seasonally adjusted trucking payroll numbers rose by 10,000. The adjustments are meant to minimize the impact of regular seasonal events, but are less meaningful amid the worst economic recession since the 1930s.

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