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Thursday, December 17, 2020
Logistics Intelligence Brief
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Trucking

COVID Drives Trucking Industry Consolidation

Transport Topics Connor D. Wolf December 16, 2020

“Trucking is an incredibly fragmented industry, especially the truckload space,” Roush told TT. “That being said, and whether COVID is the reason or not, anecdotally I can tell you that there is a lot of activity with both financial and strategic buyers that are buying up well-run carriers.” Roush added there is also some mismatch between the carriers that are selling and what buyers want because they’re in the market for companies that are already doing well. Strategic buyers won’t pay a lot for a mismanaged carrier while financial buyers want companies that can run themselves, he said.

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Dry Van pandemic-related freight myths debunked

DAT.com Dean Croke December 16, 2020

A recent analysis by Associate Professor Jason Miller at Michigan State University’s Eli Broad College of Business dispelled one of the pandemic-related freight myths that food manufacturing should be higher because Americans are cooking more. “This intuition is wrong for two reasons: 1) Restaurant meals are much larger than the average meal made at home. 2) Commodities like milk are in less demand with schools closed and folks not buying as many lattes,” noted Miller. According to the 2017 Commodity Flow Survey, by far the largest source of ton-miles for the for-hire trucking sector is Food Manufacturing, which accounted for ~17.7% of all truckload ton-miles in 2017. The analysis concluded that since total manufacturing employment is down 2.0% year-over-year as of November, we won't see employment rebound to 2019 levels in this sector until large scale vaccine distribution occurs. Top 10 Market Watch

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Shippers/3PLs

E-Commerce to Total a Quarter of Global Retail by 2024, GroupM Forecasts

The Wall Street Journal Alexandra Bruell December 16, 2020

“It’s a continued migration of talent sets to people who understand data and performance,” Mr. Juhl said. “On the supply side, publishers have to quantify the value of their inventory. We’re not settling for broad reach and awareness.” Online shopping habits are expected to stick. “After a year of sitting at home, a lot of our behaviors are going to be permanently oriented toward these direct- and digital-commerce behaviors,” said Jay Pattisall, a principal analyst at research company Forrester Research Inc., referring to an uptick in traditional e-commerce and consumer offerings like curbside pickup.

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Industry

US East Coast ports avoid gridlock despite rising volumes

The Journal Of Commerce Bill Mongelluzzo December 16, 2020

“It’s a different narrative here,” Sam Ruda, director of the Port Authority of New York and New Jersey, told JOC.com Tuesday. Although there is tightness throughout the New York-New Jersey supply chain, including mounting container dwell times at marine terminals and chassis dwell times at warehouses, “The gateway remains pretty fluid,” Ruda said. However, three non-vessel-operating common carriers (NVOCCs) said early warning signs surfacing at major East Coast gateways are similar to what they saw in Southern California this summer. The Federal Maritime Commission last month launched a fact-finding investigation into carrier practices in both Los Angeles-Long Beach and New York-New Jersey to determine if they are contributing to congestion at the two largest US gateways.

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Technology/Innovation

CloudTrucks nabs $20.5 million amid VC interest in small carrier software

The Journal of Commerce Eric Johnson December 16, 2020

A technology provider that enables small trucking fleets and independent owner-operators to digitize their operations has nabbed a $20.5 million funding round Wednesday, evidence that venture capital keeps flowing toward startups in the space. San Francisco-based CloudTrucks calls itself a “virtual carrier” or “business in a box,” providing a common technology platform for smaller carriers to reduce their operating costs, optimize their driving schedules, and secure better rates. It’s one of a host of software-as-a-service (SaaS) startups, including SmartHop, TrueNorth and Alvys, that’s emerged in the last two years aiming to empower small carriers with technology that was generally outside of their financial reach. Those tools, in theory, help make small carriers more viable as businesses and their capacity more visible to shippers.

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Government/Safety

Logistics trade groups say infrastructure should be top goal for Buttigieg at Department of Transportation

DC Velocity Ben Ames December 16, 2020

“As a presidential candidate, Pete’s infrastructure proposal for the country not only focused on fixing our existing roads and bridges, but also investing in the national passenger rail network, boosting public transportation, and investing in rural communities, all while putting an emphasis on 21st century needs such as broadband internet and electric vehicle infrastructure,” DeFazio said in a release. “The bottom line is with a forward-looking leader at DOT, our Nation has an incredible opportunity to create jobs, support U.S. manufacturing, reduce carbon pollution from the transportation sector, and create safer, more efficient infrastructure by investing in transportation.”

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Educated guesses on Biden’s presidency: Potential return of regs like speed limiters and apnea screening, and a renewed focus on emissions

CCJ James Jaillet December 16, 2020

Digging more specifically into trucking regulations, Biden’s presidency likely will more closely mirror President Obama’s than President Trump’s. There was a documented slowdown in regulatory filings under Trump, due in large part to Executive Orders (EO) issued in the first days of his presidency. Those included orders like the regulatory freeze and the “two-for-one” EO, which required agencies like DOT and FMCSA to nix two regulations for every new one enacted. It was obviously meant to stymie new regulatory activity. Likewise, Trump required agencies to establish regulatory review panels to target regs deemed outdated or unnecessary for possible removal.

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Workforce

Schneider National to raise drivers’ per-mile pay by 4 cents

Freight Waves Todd Maiden December 16, 2020

Schneider National (NYSE: SNDR) announced late Wednesday that it will raise driver pay next year. The press release said many of the company’s drivers will earn up to an additional 4 cents per mile starting Jan. 24. The pay increase applies to driver associates in both the company’s solo and team fleets. The Green Bay, Wisconsin-based transportation and logistics provider said the increase follows several initiatives totaling nearly $15 million made on behalf of its drivers in 2020. Those efforts included the addition of six paid holidays, raising truck speeds to 65 mph from 63 and a weekly program guaranteeing pay for inexperienced drivers. Link: Schneider Press Release Schneider Announces Driver Pay Increase To Begin In 2021

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Driver Turnover Rises in Third Quarter

Truckinginfo.com December 16, 2020

Truck driver turnover at both large and small truckload carriers rose by double-digit percentage points in the third quarter as the industry began bouncing back from a COVID-19 induced slump, according to figures from the American Trucking Associations. The annualized turnover rate at less-than-truckload carriers rose as well, but by a much smaller amount -- two points to 14%. Link: American Trucking Associations Press Release Truckload Turnover Rises in Third Quarter

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Economy

November retail sales remain on solid path in November, reports Commerce and NRF

Logistics Management Jeff Berman December 16, 2020

Commerce reported that November retail sales—at $546.5 billion—were down 1.1% compared to October and were up 4.1% annually. And it added that total retail sales, from September through October, saw a 5.2% increase compared to the same period a year ago, marking the sixth straight monthly annual gain. Looking at some specific sectors, Commerce said that retail trade sales slipped 0.8% from October to November and up 7.1% annually, with non-store retailers, which includes the ongoing COVID-19-driven surge in e-commerce, rose 17.2% annually, whereas the negatively pandemic-impacted food services and drinking places segment decreased 17.2%. NRF officials said November’s retail sales activity set the stage for a healthy holiday shopping season annually in light of the pandemic. Link: National Retail Federation November retail sales give holiday season solid start

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Business

CFOs Face Challenges Forecasting Capital Spending Plans for 2021

The Wall Street Journal Kristin Broughton December 16, 2020

Companies are also increasing investments in regional distribution centers, as retailers look to reduce the distance traveled by trucks to deliver their goods, said Josh Nelson, an associate principal at consulting firm Hackett Group Inc. E-commerce giant Amazon.com Inc. has been among the most aggressive investors in logistics and distribution globally. The company, whose sales have soared in recent months, spent $25.3 billion on capex during the first nine months of 2020, or about 50% more than during all of 2019.

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