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Thursday, September 10, 2020
Logistics Intelligence Brief
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Trucking

Loss of US truck drivers tightening capacity, raising rates

The Journal of Commerce William B. Cassidy September 9, 2020

“One large company I talk with that typically handles 300 to 400 loads a week is handling 1,000 a week right now, and could handle more if it could get the capacity,” Mike Regan, advocacy chair for shipper group NASSTRAC, told JOC.com. “Another large truckload carrier couldn’t add three trucks a night from Phoenix to Los Angeles for a big shipper. That’s how tight it is,” he added. Simply put, there are fewer drivers on the road than there were in April, despite the increase in trucking demand, especially from the retail sector. The year-over-year gap is narrowing, falling by 17,900 jobs from its peak of 103,700 workers in May, but is still significant. Trucking employment first passed 1.5 million in June 2018 and peaked at 1.56 million in July 2019.

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UPS hikes SurePost rates to match USPS peak surcharges

Freight Waves Mark Solomon September 9, 2020

UPS Inc. (NYSE:UPS) said it will increase rates by 24 cents on all parcels moving under its SurePost parcel-induction product with the U.S. Postal Service (USPS), effective Oct. 18. The per-parcel increase matches a 24-cent peak-season holiday surcharge imposed by USPS, the first time the agency has ever levied surcharges during the holiday season. The USPS charges will be levied on large commercial customers like UPS, which under the SurePost program dumps massive volumes deep into the postal infrastructure for last-mile residential deliveries. However, large postal users are expected to pass on the USPS increases in much greater magnitude, thus creating profit centers for that traffic.

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Shippers/3PLs

Retail’s unlikely pandemic winners

Retail Dive Caroline Jansen September 9, 2020

There is no denying the detrimental effect of the COVID-19 pandemic on the retail industry. It has forced some to permanently shutter stores, scale back growth plans, reduce workforce or, in some cases, file for bankruptcy. But the past six months have also allowed an unlikely set of winners to emerge: At Home, Wayfair and Overstock. Mass merchants like Walmart, Target and Costco — which remained open and stocked essential products throughout the crisis — posted sales gains, while many discretionary retailers reported steep losses as consumers pulled back on spending. However, the unique reality of the pandemic also boosted some retailers in categories traditionally considered discretionary when consumers realigned their focus.

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Walmart Tests Drone Delivery Amid Escalating Competition With Amazon

Bloomberg/Transport Topics Matthew Boyle September 9, 2020

The world’s largest retailer said it has started piloting drone delivery of grocery and household items from its stores in Fayetteville, N.C. The automated drones are from startup Flytrex Aviation Ltd., and can fly about 6.2 miles carrying packages up to 6.6 pounds, according to the company’s website. The move follows Walmart’s attempt to counter Amazon’s popular Prime service with its own membership offering, dubbed Walmart+, which debuts Sept. 15 and costs $98 a year. The two rivals have both acquired millions of customers during the pandemic thanks to their low prices and convenient shopping options, and the key now is to hold onto them by making it even easier to purchase the millions of items they carry.

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Industry

Omnitracs to Acquire Onboard Video Firm SmartDrive

Transport Topics Seth Clevenger September 9, 2020

Trucking technology supplier Omnitracs has agreed to acquire SmartDrive Systems, one of the transportation industry’s largest providers of onboard cameras and video-based safety systems. Omnitracs said it expects the deal to close in the third or fourth quarter. Financial terms were not disclosed. The acquisition would add SmartDrive’s video telematics and risk analysis services to Omnitracs’ expanding portfolio of fleet-management capabilities, which include in-cab communications, fleet tracking, electronic driver logs, routing and dispatch software and data analytics. By connecting all of these technology components, the combined company sees opportunities to enhance safety and improve productivity for drivers, fleet managers and their customers alike. Related: Freight Waves ‘Convergence’ key to Omnitracs’ acquisition of SmartDrive

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Panjiva data shows highest August import levels in nearly two years

Logistics Management Jeff Berman September 9, 2020

Data issued this week, for the month of August, by global trade intelligence firm Panjiva showed strong gains, amid the working thesis that an ongoing consumer surge is driving import and shipment levels. United States-bound August shipments headed up 12.9% annually, while containerized freight handling increased 5.9%, to top 2.70 million TEU (Twenty-Foot Equivalent Units), for the first time ever and eclipsing the previous high set in October 2018. Related:  Logistics Management Port Tracker report points to signs of import traction ahead of the holidays

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Retail imports jumped to unexpected levels in July, NRF and Hackett say

DC Velocity September 9, 2020

“It’s important to be careful how much to read into these numbers after all we’ve seen this year, but retailers are importing far more merchandise for the holidays than we expected even a month ago,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a release. “Some of these imports are helping replenish inventories that started to run low after consumers unleashed pent-up demand when stores reopened. But this is the clearest sign yet that we could be in for a much happier holiday season than many had thought.” Link:  National Retail Federation Imports spike as economy continues recovery and retailers stock up for holidays

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Kansas City Southern Rejects $20 Billion Takeover Offer From Investor Group

The Wall Street Journal Cara Lombardo and Miriam Gottfried September 9, 2020

Without commenting on the offer, Kansas City Southern said at an industry conference Wednesday morning that it was re-establishing the financial guidance it withdrew earlier this year in the early days of the coronavirus pandemic now that visibility has improved. It now expects 2020 earnings per share roughly in line with last year’s.

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Technology/Innovation

Gartner says IoT technology is two to five years from “transformational” impact

DC Velocity September 9, 2020

Gartner’s “Hype Cycle” also showed that six other technology concepts are further down the road to widespread adoption than IoT: end-to-end supply chain risk management, metrics and performance management, digital supply chain strategy, supply chain segmentation, cost-to-serve analysis, and network design. The three technologies on the very cusp of success are: center of excellence, diagnostic analysis, and descriptive analytics.

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Government/Safety

DOT drug tests Q&A: Can hair tests cut it?

Fleet Owner John Hitch September 9, 2020

FO: For random DOT tests, how do you feel about hair tests? JR: The deal with hair is that [the drug] doesn't get metabolized into the hair for about five days. If you take a drug, it's in your blood system, and your blood is nourishing your hair follicles, but the hair follicle doesn't grow out into hair that you can actually cut it off from for at least five to seven days. So for something like post-accident, a reasonable suspicion is really not even a consideration. Now, for randoms or pre-employment, there's more possibility. Generally speaking, there are about twice as many positives on hair, because it just has a much longer look-back window. So it goes back about 90 days.

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Coalition seeks one-year extension of FAST Act

Freight Waves John Gallagher September 9, 2020

“Failure to approve a one-year extension with increased funding for the purpose of stability would only exacerbate this dire situation,” the groups stated in a Wednesday letter to congressional leaders. The coalition urges Congress to pass legislation before Sept. 30 that includes: A turnkey, one-year extension of the current surface transportation law with increased investment levels. Emergency federal funding for state departments of transportation and public transit agencies – $37 billion and $32 billion, respectively. Provisions to ensure solvency of the Highway Trust Fund for the duration of the extension at a minimum.

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