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Monday, September 14, 2020
Logistics Intelligence Brief
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Trucking

Tender volumes stay strong in Labor Day distorted week

Freight Waves Set Holm September 12, 2020

Demand is simply outstripping capacity right now and nothing points to that changing anytime soon. Accepted tenders remain at a historically high level (despite high tender rejections), and carriers are exercising their options in searching for the highest rates and best loads. In doing so, carriers are being selective — accepting less than three of every four tenders. Drivers are particularly selective in the days leading up to a holiday, as they search for loads that lead them home. OTRI climbed nearly 5% this week and has now pulled even with the all-time high from March 2018 at about 27%.

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Truck freight index continues its steady growth well above pre-pandemic levels

FTR COVID-19 Freight Intelligence September 8, 2020

Dry Van • The Dry Van segment’s rebound remains the strongest of all segments and stands at nearly 120% above pre-pandemic levels. The index has not declined week over week since mid-August. • Current Level: 218.2 // Bottomed at 45.3 for week ending 4/24/2020.

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Freight markets buoyed by consumer buying shift from experiences to goods

DC Velocity September 11, 2020

North American commercial vehicle market metrics are showing positive results, even as other areas of the economy continue to suffer from pandemic-related economic impacts, according to a report from industry analysis firm ACT Research. One major factor that has pushed significantly better freight outcomes is a change in consumer behavior, the Columbus, Indiana-based firm said. As many shoppers have stopped commuting to schools and offices, they have shifted from spending on experiences—such as restaurant meals and movie theaters—to spending on physical goods that in turn create rising freight demand. “Consumer spending on durable goods in July was 10.5% higher than it was in January. Over the same period, spending on services fell 9.7%. On the supply side of the equation, considerable sidelined driver capacity has constrained the trucking industry’s ability to haul freight,” Kenny Vieth, ACT’s president and senior analyst, said in a release. “The current imbalance between freight demand and driver supply pushed dry van spot freight rates to all-time highs in August, a key barometer for new equipment demand.”

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Shippers/3PLs

Walmart tightens on-time, in-full requirements

Freight Waves Mark Solomon September 11, 2020

The change to the program, known in the retailing trade as “on-time, in-full” (OTIF), brings the two components into uniformity for the first time since Walmart launched it in mid-2017. Currently, 95% of all general merchandise orders must be filled exactly as Walmart wants it. For food and consumables, that figure is 97.5%. Talk Business & Politics, an Arkansas online publication that first reported the story, said OTIF compliance on the food and consumables segment has been well below Walmart’s requirements. The same uniform standards will apply to the time-in-transit portion. For truckload carriers, Walmart currently sets an 87% on-time threshold for a “prepaid” transaction where the supplier sets the delivery terms and pays the freight charges. It imposes a 95% requirement for a “collect transaction,” where the retailer handles the shipping and absolves the shipper of any responsibility should an in-transit issue like a truck breakdown affect delivery schedules. Less-than-truckload (LTL) carriers may face the most difficult adjustment. Their on-time requirements are currently set at 70%.

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Amazon Hiring 100,000 New Employees in U.S. and Canada

Bloomberg Nour Al Ali and Amy Thompson September 14, 2020

Amazon.com Inc. is hiring 100,000 full and part-time employees across the U.S. and Canada, offering starting wages of at least $15 an hour, the latest announcement in the Seattle-based e-commerce giant’s hiring spree. The new jobs include benefits and sign-on bonuses of as much as $1,000 in select cities and access to training programs, the company said in a statement on Monday. This is in addition to the 33,000 corporate and technology employees the Seattle-based e-commerce giant announced last week, it said.

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New Pop-Up Fleet offering from GlobalTranz focuses on shippers’ capacity needs

Logistics Management Jeff Berman September 11, 2020

GlobalTranz said that Pop-Up Fleets is geared towards high-volume shippers and shippers with private fleets needing supplemental capacity and whose customers have high service requirements, short lead times and strict on-time delivery requirements. And it added that the GlobalTranz team works consultatively with shippers to understand their needs and service requirements, and to quickly develop a Pop-Up Fleet solution at pre-set rates, eliminating the need to manage multiple brokers to cover loads. What’s more, the company noted that the Pop-Up Fleet solution helps shippers to control costs by minimizing their exposure to the truckload spot market.

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Industry

Transpacific rates more than double, capacity constraints create ‘nightmare’ for shippers

Supply Chain Dive Matt Leonard September 11, 2020

After months of canceled sailings, carriers have reinstated capacity and are telling shippers there's simply no room. Ships are completely booked through September and are fairly full through October. "The recovery in container shipping seen since April should continue during the third quarter of 2020 for most routes, driven by faster recovery in the consumption of goods than of services, the growth of e-commerce, and usual seasonality," CMA CGM wrote in its earnings release. "These factors recently drove freight rates to historically high levels, in particular on transpacific routes where the Group is the world leader."

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E-Commerce Growth Driving Shipping Surge, Investments at France’s CMA CGM

The Wall Street Journal Costas Paris September 11, 2020

The head of CMA CGM SA says the future of the world’s fourth-largest container line will increasingly be built on e-commerce. CMA CGM is seeing signs of changing distribution patterns in the recent container import surge that hit U.S. shores in the third quarter, Mr. Saadé said. “Amazon and Walmart are increasing significantly their volumes coming out of Asia to the U.S. People don’t go to the malls with the pandemic, but they buy on the internet,” he said. “These clients are increasingly asking for warehousing and last-mile services.”

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Government/Safety

What You Need to Know About Hours of Service Changes

Truckinginfo.com Deborah Lockridge September 11, 2020

The Short-Haul Exception With the expansion of the number of drivers who will be able to operate under the short-haul exception, DeLorenzo said this change has generated quite a few questions. The agency is extending the distance limit within which the driver may operate from 100 air miles to 150 air miles, meaning more drivers can take advantage of it, and is lengthening the drivers’ maximum on‑duty period from 12 to 14 hours. “Under the previous rule, a driver based in Peoria, Illinois, could not service Chicago and St. Louis,” DeLorenzo said. “The new rule allows the driver to service those two cities, as well as an additional two hours to do so, similar to what a long-haul driver is allowed to use. A 150-air-mile radius gives a significantly larger area.” The important thing to remember when considering this exception, he said, is that nothing else has changed. To use the exception, you still have to start and end your shift in the same location, you have to have at least 10 hours off between shift, and a time record is required.

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Workforce

The driver shortage: A big piece of the tight capacity puzzle

Transport Dive Jim Stinson September 11, 2020

The trucking sector is undergoing a capacity tightening, one that could last well into 2021, and a top factor is a shortage of available drivers. Driver retirements, career changes and the pandemic's effects on driver's licensing bureaus and training schools are contributing to the shortage. The industry could be down by as many as 200,000 drivers by year's end, according to a U.S. Xpress official, all while volumes climb. Many drivers are hesitant to return to work, likely because of the pandemic, said Dean Croke, principal analyst for DAT, and that contributes to the tightening capacity. The driver hesitancy mixes in with the usual suspects and some new players: surging volumes, not enough physical trucking capacity added back yet, and a national imbalance in freight volumes caused by the pandemic and uneven recovery, Croke said.

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