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Wednesday, September 30, 2020
Logistics Intelligence Brief
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Shippers/3PLs

Auto suppliers restart with leaner inventories, aggressive cost-cutting: Moody’s

Supply Chain Dive Matt Leonard September 29, 2020

  • Automotive suppliers have reopened and are prepared to meet demand that is expected to "improve sharply through 2021," according to a research note from Moody's, which changed its outlook for the industry to stable from negative.
  • The automotive suppliers have "proved fairly resilient, aided by aggressive cost-reduction and restructuring moves, leaner inventory levels, and cash-preservation strategies," the note reads. "Instead of encountering major issues, production restarts were largely smooth, and disruptions in the supply chain were no worse than expected."
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Costco CFO Juggles Managing Inventory For Products in High, Low Demand

The Wall Street Journal Mark Mauer September 29, 2020

Costco Wholesale Corp.’s finance chief is zeroing in on working capital and inventory levels to make sure the warehouse chain has the right stock for sale as the pandemic continues. The members-only retailer in recent months struggled to keep its shelves filled with popular products such as sanitizing wipes, baking yeast and laptops as consumers adjusted their shopping habits and manufacturers had trouble meeting heightened demand. “The supply chain continues to improve, but it will still take six to nine months on some categories or products,” Chief Financial Officer Richard Galanti said.  

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Target is throwing its own sale party on Amazon’s Prime Day

Retail Dive Ben Unglesbee September 29, 2020

One day after Amazon announced its Prime Day event for October 13-14, Target unveiled its own sales event for the same period. The retailer framed the sale event as the beginning of its holiday shopping season. "Target Deal Days" have historically been Target's answer to Prime Day, which in years past took place in July. The retailer also announced in a press release that there would be "Black Friday pricing" throughout November as well as an extended price match guarantee. This year, Target said there would be close to 1 million more deals than in 2019.  

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U.S. Retail Store Closures Hit Record in First Half

The Wall Street Journal Aisha Al- Muslim September 29, 2020

Retail store closings in the U.S. reached a record in the first half of 2020 and the year is on pace for record bankruptcies and liquidations as the Covid-19 pandemic accelerates industry changes, particularly the shift to online shopping, according to a report on the downturn’s severity. This year’s collapse in American retail could overtake that of 2010, when 48 retailers filed for bankruptcy in the wake of the 2007-09 recession, according to the report by professional-services firm BDO USA LLP. Including filings through mid-August, BDO said 29 retailers have sought bankruptcy protection in 2020, surpassing the 22 such filings recorded last year.

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Industry

Oil Extends Decline With Demand Recovery Concerns Rising

Bloomberg Elizabeth Low and Alex Longley September 29, 2020

Oil sank below $40 on Tuesday as a surge in coronavirus cases across major economies stoked demand concerns. The U.S. benchmark crude also ran into technical weakness, sliding below its 100-day moving average for the first time since June. On the supply side, the market faces rising output from Libya and the rest of OPEC+, with Russia the latest member likely to exceed its quota.

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‘Freight Transportation Forecast’ takes a look at past, present, and future trucking trends

Logistics Management Jeff Berman September 29, 2020

ATA highlighted various key takeaways of this year’s edition of the Freight Transportation Forecast, including:

  • total freight volumes in 2020 are likely to collapse by 10.6% to 14.6 billion tons, although truck freight volumes falls a smaller 8.8%;
  • trucking volumes are expected to rebound in 2021, rising 4.9% next year and then growing 3.2% per year on average through 2026; and
  • overall freight revenues in 2020 will total $879 billion, rising to $1.435 trillion in 2031
 
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Technology/Innovation

Why we’re still years away from having self-driving cars

Vox Eric Adams September 25, 2020

Everything from programming vehicles to follow the rules of the road to getting them to communicate with human drivers and pedestrians — forever ending, for instance, that infuriating indecisiveness we all encounter when trying to determine who should go first at a four-way stop — is giving engineers fits. Even further in the weeds: developing sensors that can work flawlessly in all kinds of weather and visibility conditions, and teaching cars how to respond to all the so-called “edge cases” they’ll encounter on the road, such as comprehending the difference between a flock of birds dashing across the road or wind-blown leaves that are fine to run down. Also, cars don’t drive in a vacuum — the roads and infrastructure, as well as federal, state, and local regulations, have to accommodate fleets of robocars, and the public has to be on board, too. Many puzzle pieces must fall perfectly into place.  

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Government/Safety

Confused about ‘mandatory’ hair testing regs for driver drug tests? Here’s what to know…

CCJ James Jaillet September 29, 2020

Despite lingering confusion, fleets will not be required to use hair sample testing in driver drug tests, nor will drivers be required to take a hair sample drug test in a blanketed rule. And those regs certainly aren’t “almost here.” In reality, fleets will be able to test drivers for hair in lieu of a urine test if they so choose. Thus, drivers applying for jobs at fleets that choose to do so must submit to that hair sample testing or face a flag in the U.S. DOT’s CDL Drug & Alcohol Clearinghouse – the database that tracks drivers who have failed or refused a drug test and that fleets must check when making hiring decisions. These changes would only take effect after DOT finalizes a rule to do so, which is still likely at least a year out — and potentially much farther. It wouldn’t be surprising to see the rule change dragged out several more years.  

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House Advances Diesel-Reduction Program

Transport Topics Eugene Mulero September 29, 2020

Specifically, the bill would authorize $500 million for each of fiscal years 2021 through 2025. The program at the U.S. Environmental Protection Agency looks to reduce older, diesel-powered trucks on the road, as well as facilitate the transition in the freight industry to newer equipment along waterways, rails and commercial corridors. According to EPA, minimizing exposure around the country to diesel exhaust from older engines is beneficial to people’s health, as well as the environment.

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