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Thursday, October 1, 2020
Logistics Intelligence Brief
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Trucking

Changes in inventory strategies add new wrinkle to fall shipping season

DAT.com Dean Croke September 30, 2020

On the demand side, many experts, including Deloitte, are forecasting holiday retail sales will be up about 1.5% compared to 2019 even though most U.S. consumers are in worse shape than they were last holiday season. Deloitte contends that retail spending should still rise in 2020 as consumers redirect spending on travel, eating out, and other entertainment to more holiday retail shopping. All good news for carriers in the retail sector, but for carriers heavily dependent on industrial manufacturing where freight shipments are down 7.8% y/y according to the U.S. Census Bureau, freight volumes should continue to be slow.

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Peak season pain looms for FedEx, UPS shippers

Freight Waves Mark Solomon September 30, 2020

As evidence of mounting negotiating pressure as Atlanta-based UPS gets closer to peak, several contract proposals that have been “lingering on the table a little too long” have since swung from huge savings to huge increases in just a few short weeks, Martinez said. For example, a shipper that two months ago was offered a contract that would save it $8 million a year is now facing a revised version that includes an 18% rate increase, Martinez said, citing a conversation regarding the customer of a rival consultant. What’s more, UPS would handle only a percentage of the customer’s volume, he said. A UPS spokesman declined comment, saying the company doesn’t publicly discuss customer relationships.

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Shippers/3PLs

Walmart plans online sale that parallels Prime Day

Retail Dive Ben Unglesbee September 30, 2020

Walmart is planning an online sale event with from Oct. 11-15, which includes the days Amazon recently announced for Prime Day (Oct 13-14). A Walmart spokesperson said in an email that the sale will feature "Black Friday-like savings on thousands of items," including electronics, toys, fashion, beauty products and others. The retailer will offer free two-day or next-day shipping on some eligible items with orders over $35, with store pickup available as well on some items. With three of the largest names in online retail launching mid-October sales extravaganzas, they are setting up a major shopping event and potentially a starter's gun for this year's holiday shopping blitz. Analysts have been anticipating an extended, earlier and online-heavy holiday period, as the pandemic continues to shape consumer behavior. Consulting firm AlixPartners went so far as to call the traditional November-to-December period "meaningless" and included for the first time the month of October in its holiday sales estimates. That makes mid-October a logical fit for Prime Day, which Amazon had to delay amid explosive sales growth and a focus on essentials in the early months of the pandemic.  

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Freightender, Portrix mesh forwarder quoting tools

The Journal of Commerce Eric Johnson September 30, 2020

Freightender has a standard request for quote (RFQ) management product that enables forwarders to quote accurately based on freight tenders submitted by shippers. It has a separate product, called TenderX, that allows forwarders to create an online profile to create matches with shippers needing to tender freight. “The biggest benefit is that a customer tender handled in our system can get automatically pre-filled via Portrix,” Freightender CEO Pieter Kinds told JOC.com. “Most forwarders still e-mail and use Excel and so having a database is nice, but you still need to fill tenders manually. Putting the two together puts tender management on steroids as you can fill the tenders to a high extent before you send it to the country organizations. That saves a huge amount of time. This was lacking for us and Portrix was lacking the layer that we have, so it’s a very good match.”  

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Industry

Mini-bids intensify US truck shipper data needs

The Journal of Commerce William B. Cassidy September 30, 2020

The move by US shippers toward shorter and more focused “mini-bids” with trucking partners is putting more emphasis on the real-time collection of data on carrier performance and changing shipping patterns and rapid data analysis, shippers and analysts tell JOC.com. That’s accelerating investment in technology that can provide analytical power and clarity. “There are a couple things shippers should be looking at, and one is being really accurate in your data, improving your forecast,” Ben Cubitt, senior vice president of supply chain and transportation at Transplace, a Dallas-based third-party logistics provider (3PL), said in an interview. “You really need to set up your bid so it is an opportunity to drive continuous improvement across your network.” That’s true even if the bid is only for a month or two months, which is becoming more common, Cubitt and other sources say. Historically, the bidding process has been manual, managed with spreadsheets. “Shippers are asking how to get out of this manual process, how do we partner better with carriers,” said Carly West, director analyst at consulting firm Gartner.

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‘We’re not jumping out of this – we’re climbing’: FTR’s forecast for truck and trailer orders

CCJ James Jaillet September 30, 2020

Ake spoke alongside FTR CEO Eric Starks and FTR’s Vice President of Trucking, Avery Vise, in an FTR Engage webinar Thursday, part of its ongoing series of virtual sessions being held in lieu of its annual FTR Conference. Much of the renewed order activity so far has been from larger fleets, said Ake, with smaller and medium-sized fleets holding out due to ongoing uncertainty and risk factors. “We’re not jumping out of this,” said Ake. “We’re climbing out. And we’re still in climb mode.” For truck and trailer orders, FTR projects a mostly flat market through 2021. Class 8 factory shipments in the first quarter of 2020 totaled 60,378, followed by a steep drop off to just 27,936 in 2020’s second quarter. They project Class 8 shipments in the third quarter, the current quarter, to total 55,300, and another small dip in the fourth quarter, to 50,686.

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CBRE research takes a look at the increase in regional distribution models

Logistics Management Jeff Berman September 30, 2020

A main thesis of the report addressed how “global occupiers, with an overdependence on one country or region may reassess their souring and manufacturing within each region (e.g., an Americas manufacturing hub),” adding that “a widespread exodus of manufacturing capacity from China is unlikely given the sophistication of the industry, the maturity of the supply chain, and China’s massive domestic consumer market. While there is no doubt that the number of small manufacturers in the Americas will grow significantly, the volume of goods produced in China and broader Asia likely will remain dominant.”

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Demand for Big-Box Warehouses Soars Under E-Commerce Surge, Report Says

The Wall Street Journal Jennifer Smith October 1, 2020

A key measure of demand for big warehouses soared 51% in the first half of 2020 as the pandemic-driven surge in online sales sent companies scrambling for space to store and deliver goods to locked-down consumers. The rush toward distribution centers was most pronounced at the largest end of the market, real-estate brokerage firm Colliers International Group Inc. said in a report released Thursday, as Amazon. com Inc. and other e-commerce and logistics providers accelerated a push toward sprawling facilities to process, package and ship digital orders. Companies are also looking for more space as they move away from lean just-in-time inventory practices following shortages early in the pandemic, when stockpiling shoppers emptied shelves and manufacturers struggled to ramp up production of in-demand goods such as toilet paper. “Right now we’re guessing companies are increasing safety stock by about 5% to 15%,” boosting their need for warehouse space, Mr. Quinn said. “We don’t see a lot of companies downsizing their distribution.”

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project44 and SAP herald new capabilities in their strategic Logistics Business Network partnership

Logistics Management Jeff Berman September 30, 2020

The new capabilities being introduced, for the SAP LBN, according to project44, include global ocean visibility and expanding B2B connectivity for truckload and less-than-truckload (LTL) freight contracting, which it said represent the next step in their partnership, with a keen focus on delivering on the companies’ joint, multi-modal visibility strategy.  

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TuSimple names former FMCSA administrator as chief legal and risk officer

Freight Waves Linda Baker September 30, 2020

Mullen’s experience leading the U.S. Department of Transportation’s FMCSA will “prove to be invaluable to our company as we work to introduce L4 autonomous trucks to the market by 2024,” said TuSimple President Cheng Lu in a statement. “Additionally, Jim brings over 15 years of legal experience in the trucking industry and that wealth of knowledge will support public and private partnerships as TuSimple continues to scale autonomous operations,” he said.

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Technology/Innovation

License Plate Scanners Aren’t Just for Cops Anymore

Bloomberg William Turton September 30, 2020

In addition to reading a license plate, the system can record a vehicle’s make, color, and body type. In October, Rekor will launch what it says is a “first of its kind” mobile app, which will let users scan license plates with their phone camera.

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Government/Safety

Knight-Swift Sets Goal to Cut Emissions in Half by 2035

Transport Topics Roger Gilroy September 30, 2020

Knight-Swift Transportation Holdings Inc., North America’s largest truckload carrier, announced a goal to cut its carbon emissions in half by 2035. The Phoenix-based company anticipates meeting this goal with alternative vehicles, engines and aerodynamic components, including:

  • Utilizing next-generation clean diesel engines.
  • Implementing next-generation tractor and trailer aerodynamic solutions.
  • Continuing deployment of advanced idle reduction technologies.
  • Operating zero-emission vehicles, including battery-electric and hydrogen fuel cell technology.
  • Executing various other strategies as technology is developed and introduced to the market.
 
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Court grants trailer manufacturers stay of NHTSA GHG2 rule

Freight Waves John Gallagher September 30, 2020

The Truck Trailer Manufacturers Association, which has taken the US Environmental Protection Agency and National Highway Traffic Safety Administration to court challenging the rule called the stay “welcome news” for trailer manufacturers. “This stay means they will be able to continue receiving orders and manufacturing trailers with certainty of which rules are in effect, while we await the final decision from the court on the legality of the both the NHTSA and EPA rules,” TTMA said in a statement. The 2016 joint EPA-NHTSA regulation—formally “Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles—Phase 2”—mandates new trailers must apply technologies such as low rolling resistance tires, aerodynamic devices, etc. to improve the fuel efficiency of a tractor-trailer combination unit.  

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