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Friday, October 16, 2020
Logistics Intelligence Brief
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Trucking

Barriers to new truck capacity rising: ATA’s Costello

The Journal of Commerce William B. Cassidy October 16, 2020

Truck driver pay is going up again, putting more pressure on carrier costs and the rates shippers pay, Costello said. But higher pay alone has yet to solve a labor problem that has been around as long as the truck itself. Long-haul truckload carriers will have an increasingly hard time hiring qualified drivers as competition drawing on the same labor pool becomes more intense. As e-commerce continues its explosive growth, more truck drivers will find opportunities in local driving jobs aimed at last-mile delivery to consumers or shorter-haul run between warehouses and fulfillment centers. Local trucking employment jumped from May through July, while long-haul trucking employment lagged, according to US Labor Department data. A surprisingly large number of truck drivers are disqualifying themselves, Costello said. Since the US Commercial Driver’s License Drug and Alcohol Clearinghouse opened in January, more than 30,000 truck drivers who tested positive are prohibited from driving, he said. “Nearly 24,000 of them have not even attempted to return to duty,” he said. “They’ve thrown in the white flag.”

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First 3Q earnings report is from Marten and it isn’t a blockbuster

Freight Waves John Kingston October 15, 2020

Total revenue was up just 0.4%, to $216 million from $214.9 million. That was significantly below consensus forecasts that revenue would hit $223 million, according to SeekingAlpha. But with improvements in cost control and other efficiencies, operating income was up 21.8%. Net income was $18 million, up 8.8%. At 22 cents per share, it beat consensus by 2 cents, according to Seeking Alpha. The sluggish increase in revenue was driven in part by a drop in truckload revenue to $93.6 million from $94.9 million. Intermodal revenue declined slightly, to $21.97 million from $22.29 million. Brokerage revenue took an even bigger hit, down to $22 million from $27.3 million in the third quarter of 2019. The one segment that showed a significant increase was the dedicated group, which has been driving Marten’s growth in recent quarters. Dedicated revenue was $78.3 million, up 11.4% from $70.3 million.

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Industry

Truck vs. train: Which has the upper hand as spot rates soar?

Transport Dive Jim Stinson October 15, 2020

Trucking's upper hand: speed and visibility Higher prices are helping intermodal companies and railroads get more freight business. But it's usually not the kind of freight that needs to get somewhere soon, said Dean Croke, DAT principal analyst. "If you have a load that doesn't need to be anywhere in a hurry, you put it on a train," said Croke. And rail freight is cheaper because of that. But only some types of freight translate easily between road and rail. Dry goods in containers are typically ideal for trucks, and they are also easy work for trains. They include consumer goods such as clothes, electronics, sporting goods and toys — almost anything that can go inside a container can be hauled in a dry van.  

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ShipStation research looks at consumer shipping expectations amid COVID-19 pandemic

Logistics Management Jeff Berman October 15, 2020

“Retailers who invest in tools that allow the consumer to initiate returns easily, whether with an RMA (return merchandise authorization) process and/or the return shipping label, as well as making packaging easy, will be the long term winners,” he said. Other key findings in the report were:

  • 79% have no preference when it comes to which carrier delivers their order;
  • 80% of consumers believe that it is ultimately the responsibility of the retailer to ensure products are delivered on time and as expected;
  • 90% of consumers saying a bad shipping experience negatively impacts their overall shopping experience and 87% say that it makes them less likely to shop with that retailer again in the future;
  • 93% of shoppers say that if a retailer acknowledges a poor delivery experience, they would still shop with them in the future;
  • 60% say that retailers offering discount codes for future purchases will keep them coming back. –79% agreeing that their experiences this year have increased expectations around brand communications when it comes to delays or cancellation updates; and
  • 89% expect brands to proactively address potential shipping delays prior to checkout
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Technology/Innovation

project44 rolls out new offerings to its supply chain platform

Logistics Management Jeff Berman October 15, 2020

When asked what the most significant benefits of main benefits of project44’s order and inventory level visibility, O’Donnell explained that in today’s complex global supply chain, systems and identifiers—such as purchase order, SKU, BOL, and more—are highly disconnected. “As a result, supply chains are either left with siloed and inconsistent information, or they spend time completing the manual and cumbersome task of associating load numbers with POs across systems,” he said. “project44’s enhanced order and inventory visibility provides a single view of associated SKUs, orders and shipments, while also predicting risk based on the industry’s only health scoring algorithm. On top of that, by automating the PO process, project44 can reduce the average PO processing time by about 20%, driving efficiency for supply chains.”

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Economy

Retail Spending Likely Rose in September on School Supplies, Vehicle Sales

The Wall Street Journal Harriet Torry October 16, 2020

Retail sales likely increased in September for the fifth month in a row, as consumers prepared for further months of working and studying from home by spending at home-improvement stores and on appliances and vehicles. “September is kind of a hinge month” between the back-to-school and holiday seasons, said Craig Johnson, president of Customer Growth Partners, a consulting firm. He added that this year’s back-to-school season pushed further into September because many schools delayed opening for in-person classes, giving sales of school supplies and computers a second wind. Economists surveyed by The Wall Street Journal predicted that retail sales increased a seasonally adjusted 0.7% in September from a month earlier. That would mark a slight increase from the 0.6% increase recorded in August.  

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