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Monday, October 12, 2020
Logistics Intelligence Brief
Brought to you by the YRCW Family of Companies

Trucking

YRC Freight Employee Named 2020 Tennessee Maintenance Professional of the Year

YRC Freight Press Release October 8, 2020

“The Tennessee Trucking Association is pleased to honor Andrea with this award in recognition of her outstanding accomplishments in this field,” said Donna England, VP Safety & Member Services for the TTA. “The Maintenance Professional of the Year promotes our high standards in the maintenance profession, and Andrea certainly is a shining example for others in the profession.” “I congratulate Andrea on this well-deserved accomplishment and am proud she is on the YRC Worldwide team,” said T.J. O’Connor, YRCW Chief Operating Officer. “Across our team of 30,000+ employees across North America, we count on each other to maintain a culture focused on safety, and employees like Andrea serve as a mentor and role model in embodying safety on the job.” Anderson oversees a YRC Freight shop with 57 mechanics, maintaining safety as the number-one priority while addressing the ongoing needs for training. She began her career as a machinist in the U.S. Navy and has more than 12 years of maintenance experience in the trucking industry. Anderson is an active member of YRCW’s Women in Action group, which focuses on developing women in leadership roles across the company.

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Executives See Bright Future for Savvy Fleets

Transport Topics Roger Gilroy October 8, 2020

They cited cloud computing, the Internet of Things, digitalization, video, predictive analytics and the need for cybersecurity. Also, each expected a shift to more electric powertrains, autonomous trucks and artificial intelligence. “The vast majority of our people still reported to a terminal every day,” as the pandemic deepened, Ringgenberg said. Optimization of YRC’s freight network was key, he said, as were the investments made in cloud computing so employees could manage back-office processes from home. “We were able to reroute freight to the next closest terminal to service customers as best we could when there were hot spots, flareups that didn’t allow the normal route,” Ringgenberg said. Ringgenberg said autonomy in freight movement comes with “huge societal questions.” He mentioned the potential concerns of a mom with kids in a minivan sharing the highway with an autonomous truck, and wondered what decisions insurance companies would make.  

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Truckload supply dictates price in imbalanced freight markets

DAT.com Dean Croke October 7, 2020

How long will this last? That’s the question on everyone's lips, with a general consensus that upward pressure on spot and contract rates could remain through the year-end as shippers in grocery and retail continue to replenish and stockpile depleted inventories and begin building “pandemic pallets”. Food companies are particularly concerned about another widespread outbreak of COVID-19 cases in winter and the possibility of new restrictions driving another surge in CPG demand on top of the upcoming holiday shopping season. Last week’s news that Walmart and Target plan to hold online sales events at the same time as Amazon Prime Day on October 13 explains in part the recent surge in e-commerce related imports and suggest peak holiday shipping season may have already occurred. At some point in the near term, capacity will catch up to demand but for the moment, market equilibrium is way down the road.  

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Spot rates, LTL volumes rise with e-commerce demand

Supply Chain Dive Jim Stinson October 9, 2020

Smaller shipments of goods via LTL and parcel trucks "have increased significantly" in the last few months, according to a Wednesday blog post by Vivek Vaid, chief technology officer at FourKites. September's LTL shipments were up 42% compared to March. Vaid said shipment counts declined in March and April, but then climbed in May, with a month-over-month growth rate of 2% in May, 20% in June, 8% in July and 1% in August. August was the peak month in the trend, with a 3% decline in September, Vaid said. The growth was not evenly spread through industries, as food, consumer packaged goods and retail companies accounted for about 80% of the growth, according to Vaid.

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Consensus for double-digit truckload rate increases forming

Freight Waves Todd Maiden October 9, 2020

The expectation for truckload (TL) contractual rates to increase by double digits in 2021 is growing. In a Wednesday note to clients, UBS (NYSE: UBS) transportation equities analyst Tom Wadewitz outlined the fundamentals supporting this projection. “The current extreme tightness in the TL spot market plus a constructive outlook on freight point to double-digit rate increases in 2021,” he concluded. Wadewitz said recent spot market metrics “show a market that remains on a trend of further tightening.” He noted all-time highs in the number of loads in the spot market and a lack of available truck capacity to haul those loads as catalysts for his thesis. He expects “demand to remain strong through peak season and into 2021 as inventory replenishment likely remains a tailwind.”  

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Spot rates ‘unseasonably strong’ for September 2020

Fleet Owner October 9, 2020

For the week ending Oct. 4, supply chain interruptions pushed freight to the spot market, raising overall available loads by 5% and allowing the spot van rate national average to reach a record high of $2.46/mile, according to DAT Freight & Analytics. DAT pointed to available capacity dipping 1.5% as a reason van, refrigerated, and flatbed load-to-truck ratios were higher. This builds on September, which DAT called “unseasonably strong” for national average rates.  Spot load posts more than doubled to 116% and truck posts decreased 6.2% year over year (YOY).

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Tender rejections reclaim their all-time high

Freight Waves Seth Holmes October 10, 2020

While volumes are notching record levels and capacity is as tight as it’s ever been, there is little volatility at the moment. The Outbound Tender Volume Index (OTVI) has been above 15,000 since the middle of August, and the accepted tender volume index value has run between up 16%-20% year-over-year for many weeks. There have been some regional shifts in volume. For instance, over the past 30 days many of the markets in the Midwest have gained market share. But on a national level, supply chains are healthy, albeit with higher transportation costs. The record imports into Los Angeles lend confidence that shippers believe the consumer rally will continue. However, tepid new ship orders for 2021 suggest confidence has not been fully restored. Both the University of Michigan and the Conference Board’s surveys of consumer households posted pandemic highs in September, which bodes well for trucking volumes moving forward. Carriers have been rejecting roughly one in four loads since mid-August, and that number is trending higher for the shippers.

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Capacity crunch could result in 700 million late parcel deliveries–Salesforce

Freight Waves Mark Solomon October 9, 2020

In the U.S., digital commerce will account for 30% of all holiday retail sales, according to Salesforce data. Globally, 18% of retail sales will be transacted digitally. Still, overall holiday sales are expected to be flat year-over-year as weakness in brick-and-mortar activity neutralizes the digital surge, the company said. The first test of the 2020 peak cycle starts Tuesday, when Amazon launches its two-day Prime Day shopping program, which was postponed from July, and rival Target Corp. (NYSE:TGT) goes live with its own two-day online-ordering program. Salesforce said that the mid-October launches could pull forward 10% of online sales that would normally occur during “Cyber Week,” the first full week after the Thanksgiving holiday. Cyber Week’s 2020 volume is still expected to grow 28% year-over-year, Salesforce said.  

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Shippers/3PLs

Sam’s Club adds 2,000 permanent supply chain workers, launches ship-from-store for peak

Supply Chain Dive Emma Cosgrove October 8, 2020

  • Sam's Club will hire 2,000 permanent, full-time supply chain workers to staff its fulfillment and distribution centers this holiday season, the company announced Thursday. Fulfillment center workers will receive a $2 hourly pay increase during peak season.
  • Sam's Club is launching a ship-from-store (or club) program for the first time this quarter covering roughly 100 stores. The company expects approximately one-fifth of all online orders to ship from Sam's Club locations, according to the announcement
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CBRE’s 2020 U.S. Retail Holiday Trends Guide examines seasonal logistics challenges

Logistics Management Jeff Berman October 9, 2020

Inventory was at the top of his list, citing the impact of inventories’ varied costs and also how managing inventory through e-commerce in more locations is more challenging and requires more working capital for retailers. And the same goes for transportation costs, which he said is 10-to-15 times more expensive for a box to a door than what used to be a pallet to a store. “Five-to-10 years ago, the Christmas transportation cost, to end the season, was simply to get a pallet of gifts to the back of the store,” he said. “It is now that piece of it in two more locations, with more inbound freight, and also small package freight and parcel freight, the boxes to every doorstep. That is an incredibly challenging part of transportation…and is what really makes that business hard to break even on sometimes.”

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More than 73% of consumers will shop on Amazon during Prime Day

Digital Commerce 360 April Berthene October 9, 2020

Target Corp. and Walmart Inc. are two of the retailers that have announced large sales during Prime Day that will offer deep discounts, with Walmart’s Big Sale event Oct. 11-15 and Target Deal Days Oct. 13 and 14. According to the Coresight survey, more than half of shoppers plan to either purchase or browse on Walmart or Target during Prime Day, with 13% planning to purchase and 37.3% planning to browse at Target, and 11.1% planning to purchase and 42.6% planning to browse at Walmart.  

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Industry

Ongoing U.S.-bound import push remains intact, says Port Tracker report

Logistics Management Jeff Berman October 8, 2020

NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in the report that consumers are buying again after adhering to shelter-in-place policies implemented earlier this year, due to the ongoing COVID-19 pandemic. “Retail supply chains are working overtime to keep up with demand,” said Gold. “Nothing about this year is predictable, but retailers are making sure their shelves and warehouses are well-stocked for the holidays. They are also stocking up earlier than usual because they know many consumers will be shopping early this year to avoid crowds and shipping delays. Some holiday merchandise that normally wouldn’t arrive until Halloween is already here.”

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Consumer-focused shipments remain front and center in a COVID-19 world

Logistics Management Jeff Berman October 9, 2020

A recent blog by Vivek Vaid, Chief Technology officer, for Chicago-based FourKites, a provider of real-time tracking and visibility solutions across transportation modes and digital platforms, observed that consumer packaged goods (CPG), food and beverage (F&B), and retail payments are leading the way for shipments and “continue to drive overall growth in shipment volumes across the U.S., with a huge surge in less-than-truckload and parcel shipments.” What’s more, Vaid explained that, in the short-term, this represents a significant shift in buyer behavior to purchase smaller volumes based on varying demands, and an indication of the impact of increased e-commerce volume due to COVID-19. Taking that a step further, he wrote that total shipments of U.S. goods saw steady growth in the summer months, before falling slightly in September, with May shipments up 2% sequentially, with June, July, up 8% and 1%, respectively, while September slipped 3%. When looking at those tallies, Vaid said that they come with the caveat that CPG, F&B, and retail shipments represented almost 80% of that growth.

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

Logistics Management Jeff Berman October 9, 2020

September U.S. intermodal containers and trailers—at 1,423,883—saw a 7.1%, or 94,351 unit increase, annually, with intermodal continuing to head back to pre-pandemic levels, driven, in large part, by rising U.S. import volumes from Asia, in advance of the holidays, with shippers restocking inventories. This represents the fourth highest monthly tally for U.S. intermodal units, according to AAR, as well as the largest monthly percentage gain since December 2016. What’s more, total U.S. third quarter intermodal volume was up 2.9%, well ahead of the second quarter’s 12.6% annual decline. Average weekly intermodal volume—at 284,777 units—was up 7.1% annually, ahead of July’s 1.4% decrease, at 259,192, and August’s 3% annual gain, at 280,739.  

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Executives Discuss Long-Term Effects of Pandemic on Supply Chain

Transport Topics Connor D. Wolf October 8, 2020

England also noted it’s becoming more difficult and expensive to provide expedited team-driver service, and believes the industry will experience reduced team capacity and a correlating increase in costs for team drivers. Wilkerson and England both expect more near-shoring of manufacturing in the future, including an increase in cross-border freight out of Mexico. They also both expect the jump in online purchasing compelled this year by the pandemic will accelerate existing growth of e-commerce going forward.

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Pandemic could level the playing field between small and large companies, MIT’s Yossi Sheffi says

DC Velocity October 8, 2020

While there have been some logistics failures during the pandemic, supply chains have generally performed heroically during the pandemic and maintained supplies of critical products such as food, Sheffi argues. That is critical because civilization depends on supply chains to convert the planet’s bounty into needed products and deliver those products to 7.8 billion human beings at an affordable price, he says. Looking forward to scenes of a post-pandemic future, Sheffi predicts that technological advances inspired by the crisis could level the playing field between small and large companies. Nimble small businesses can use a growing array of off-the-shelf cloud computing and mobile apps to narrow the competitive gap between themselves and larger rivals, he says. The “new normal” could also include phenomena such as the rise of telecommuting and the emergence of "business safe zones” that protect customers and workers from the contagion.  

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Fuel savings from intelligent cruise a profitable first step towards self-driving trucks

CCJ Aaron Huff October 9, 2020

Traditional adaptive cruise control has limited payback for fleets due to driver complaints, false alarms and an awkward driving style, Traxen said via news announcement. By contrast, iQ-Cruise uses AI to adapt speed automatically by monitoring road conditions to detect changes in elevation, curvature, traffic patterns and weather miles beyond the driver’s visual field. Traxen uses AI in its edge computing platform to sense the environment using data from radar sensors and high definition map data to control vehicle speed automatically while a driver steers. In addition to radar sensors, the system has a domain controller and a driver display. By continuously monitoring environmental data, iQ-Cruise learns how to drive different road segments better. “It gets smarter over time,” Traxen founder and Chief Executive Ali Maleki said during a media conference call.  

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Technology/Innovation

Patent Pending: Toyota’s plan to manage autonomous cross docking

Supply Chain Dive Matt Leonard October 8, 2020

Toyota envisions a system that uses an operations management system to control the flow of freight, which the patent says could be traveling on autonomous trucks. The OMS would determine how many trucks are needed for a given freight load and generate departure times for the trucks. Information on the freight including its size and weight would be used to determine the number of trucks needed. This information could be provided via bar codes. The system would also assign a guide vehicle to an autonomous platoon. And the patent says that a bus that carries workers from one place to another can be used as a guide or one of the transportation vehicles.  

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Government/Safety

Elaine Chao: Long-Term Plan Needed for US Infrastructure

Transport Topics Dan Ronan October 8, 2020

“We should be thinking strategically and long-term to address the infrastructure needs of our country, to address our economic competitiveness and productivity,” Chao said Oct. 8 during the Future of Freight and Supply Chain Management Symposium, a virtual event co-hosted by Transport Topics and CQ Roll Call. “We stand ready to work with Congress on a long-term measure to address our nation’s infrastructure needs. Certainly, for the states, the long-term transportation future is very important,” Chao said. The newly extended FAST Act will shore up the ailing Highway Trust Fund with a $13.6 billion infusion of cash from the general fund, with $10.4 billion allocated to the roads and bridges account, and another $3.2 billion earmarked for mass transit. It’s money that Chao said is desperately needed, but she noted that infrastructure planning demands more than one year. “A road or a bridge doesn’t take a year to be built, it takes several years,” Chao said.

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CSA Reform Bill Introduced in US House

Transport Topics Eugene Mulero October 9, 2020

Legislation meant to facilitate the employment of drivers through the use of accurate safety data was recently introduced in the U.S. House of Representatives. The CSA Reform Act, from Rep. Bob Gibbs (R-Ohio), would create a pilot program for carriers to request regular safety audits. Compliance, Safety, Accountability at the Federal Motor Carrier Safety Administration is a data-driven safety compliance and enforcement. “Truck drivers are a vital component of our nation’s logistics network,” Gibbs said Oct. 2. “Safe drivers ensure safe roads and the efficient delivery of goods, and the CSA program should work to enhance that safety at a regular, predictable schedule. The safety scores carriers rely on should be up-to-date and accurate. The CSA Reform Act will help shippers, brokers and intermediaries have access to that data.”  

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FMCSA Schedules Listening Session on Broker Transparency

Truckinginfo.com October 9, 2020

The Owner-Operator Independent Drivers Association requested that FMCSA require property carrier brokers to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed, and explicitly prohibit brokers from including any provision in their contracts that requires a motor carrier to waive its rights to access the transaction records.  

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