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Friday, December 18, 2020
Logistics Intelligence Brief
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Trucking

Cass Transportation Index Report November 2020

Cass Information Systems December 17, 2020

Cass Freight Index - Shipments The shipments component of the Cass Freight Index® accelerated to 2.7% y/y growth in November 2020, after turning positive in October for the first time in almost two years. The acceleration was more than explained by an easier prior year comparison, as the Cass Shipments Index fell 2.2% in November from the October level. Seasonally adjusted (SA), the m/m decline was a narrower 1.0%. This small sequential pullback followed five consecutive months of strong recovery averaging 5.0% sequential improvement (SA), and is likely due to the worsening pandemic numbers impacting the trajectory of the recovery in November Freight Expectations Although the recovery in shipments stalled a bit in November, we feel that, based on low inventory levels at U.S. retailers and the continuing strength in intermodal volumes on the North American railroad network, freight trends look set to continue to move higher in the near term. While near-term risks from the pandemic remain elevated, recently begun vaccinations will reduce these risks in the coming months.

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Cass Freight Index shows November shipment and rate gains

Logistics Management December 17, 2020

Freight shipments and expenditures, for the month of November, were solid overall and highlighted an ongoing strong run of freight market improvements, according to the new edition of the Cass Freight Index, which was published this week by Cass Information Systems.

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2021 trucking outlook comes into focus

Freight Waves Todd Maiden December 18, 2020

Potential for an industrial uptick benefits LTL Many analysts believe a wide distribution of a vaccine will reopen more than just the consumer economy. As this occurs, companies that delayed investment in infrastructure, buildings, equipment and technology this year over uncertainty around COVID will need to play catch-up on their capex allocations. In his annual outlook to clients, Deutsche Bank (NYSE: DB) analyst Amit Mehrotra said his “long-held bullish stance on transportation equities continues unabated in 2021.” His optimistic expectations are based on a positive lift in the industrial economy, strong housing demand, continued inventory restocking and a release of pent-up consumer demand. Mehrotra is “most optimistic” about the prospects of the U.S. industrial economy expanding quicker than overall GDP. Deutsche Bank’s economics team is forecasting an average year-over-year growth rate of 7.8% in industrial production in the second, third and fourth quarters of 2021, with 4.5% growth in 2022. Mehrotra believes the industrial sector could move positively as soon as the first quarter as demand for gas, diesel and jet fuel improves along with aircraft production. He’s most bullish on the rails and LTLs given their industrial exposure. In an initiation of coverage report to clients, Evercore ISI (NYSE: EVR) analyst Jon Chappell outlined his trucking thesis, which recommends LTL carriers over TL carriers. He likes the industry’s high barriers to entry and expects service levels to improve through ongoing network optimization and efficiency initiatives. He sees ample room for market share growth in LTL as well.

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YRC Freight Driver James Banner Achieves Five Million-Mile Safety Milestone

YRC Press Release December 18, 2020

YRC Freight professional driver, James Banner, has achieved the prestigious milestone of logging over five million driving miles without a single preventable accident. Banner has been driving trucks for 50 years, with 42 of them spent driving for YRC Freight. Based in Chicago, he is now the longest-tenured employee at the Chicago Heights terminal. He drives an average of 3,084 miles every week on his current route from Chicago to Kansas City. “We are truly honored to have James on our team and congratulate him on this extraordinary accomplishment,” said CEO Darren Hawkins. “Like all our Million-Miler drivers, James sets the standard in how to work with a focus on safety day in and day out.” Banner advises anyone on the road to not jeopardize their safety and the safety of others by driving in a hurry. “Being in a hurry only makes you lose time. Let all the fast traffic go; you will never gain a significant amount of time by trying to keep up. Let them go past you, keep your eyes on the road ahead, and never drive faster than you can stop.” “We are tremendously proud of James and the professionalism he has demonstrated for decades,” said Tamara Jalving, Vice President, Safety. “Thank you for your continued dedication to keeping our highways safe and delivering award-winning service to our customers.”

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FedEx Revenue Jumps on Holiday Surge

The Wall Street Journal Paul Ziobro December 17, 2020

Shipping volumes at FedEx’s Ground unit surged 29% in the latest quarter, as consumers continued to buy everyday goods online, while retailers urged them to do their holiday shopping earlier than normal against the backdrop of the coronavirus pandemic. The combination of factors boosted revenue and profits at the delivery company for the three months ended Nov. 30, which included Black Friday. FedEx has raised prices and handled a surge in e-commerce packages this year, even after it publicly split ways in 2019 with Amazon, the biggest online retailer. FedEx has found more than enough packages to fill its network after parting ways with Amazon, helped by the overall growth of e-commerce during the pandemic and courting of new customers. Online sales rose 33% in the first nine months of 2020, FedEx said, compared with just a 1% gain in overall retail sales, excluding categories such as gas and food services.

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Industry

JB Hunt: Rail ramp congestion disrupts inbound, outbound intermodal loads

Transport Dive Matt Leonard December 17, 2020

Dive Insight: The nation's ports are facing unseasonably high import levels. And J.B. Hunt's alert shows that as this cargo moves away from the coast, it is slowing down inland terminals just as it has slowed ocean gateways. Norfolk Southern described "severe congestion" in its service alert about its Chicago gate closure. "The Chicago 63rd Intermodal facility will remain open during the ingate closures, and we encourage customers to outgate equipment from the facility in order to increase parking capacity," the alert reads. The congestion-induced sluggishness comes a week before Christmas, when railroads typically see lower volume and reduce capacity as a result, according to a holiday notice from BNSF this month. "BNSF's Intermodal holiday operating plan will adjust operations to account for this potential reduction in traffic," BNSF's notice reads. "As a result, shipments from Thursday, December 24, through Sunday, January 3, 2021, may experience delays of approximately 24 to 48 hours."

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Technology/Innovation

Amazon’s Chief Technology Officer Shares His Predictions for 2021

The Wall Street Journal Tom Loftus December 17, 2020

Werner Vogels, Amazon.com Inc.’s chief technology officer, predicts 2021 will see a much broader distribution of the technologies that have been powering big corporations. The shift, which includes connecting more devices to the cloud, and better access to machine learning, builds on recent advances in software and silicon as well as the acceleration of digital initiatives by companies over the past year. “I tried to stay with some of the things that I know will be happening because we have some control of them,” said Mr. Vogels. On Wednesday, he shared eight predictions based on customer-behavior patterns and technology investments by the company. Some highlights below. loud applications will be accessed from more devices. Part of the expansion will be driven by more points of presence, edge devices that can conduct more of the computing power, sensors and even the expansion of super-fast 5G networks. “Making sure you have this access to cloud-computing technology as close to the user of that technology as possible is crucial,” he said. The move will enable areas where low latency and high bandwidth matter, like home automation or self-driving trucks operating in hazardous environments. “There is a part of the cloud on that truck to make autonomous decisions as well as move data back to improve operations over time,” he said. Link: Amazon Blog Post 8 predictions on how technology will impact our lives in the coming year

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AscendTMS-Convoy integration shows small carrier software momentum

The Journal of Commerce Eric Johnson December 17, 2020

Transportation management system (TMS) provider AscendTMS has integrated with freight broker Convoy, the companies said Thursday, a further development in the rapid progression of software made available to small truckload carriers. The integration will allow carriers using AscendTMS’s free version to get instant load recommendations from Convoy’s shipper customers based on a carrier’s availability. Loads booked on the Convoy platform are then automatically added to a carrier’s master schedule.

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Government/Safety

Roadcheck Week results: ELDs may have slightly boosted HOS compliance

Freight Waves John Kingston December 17, 2020

The data on Roadcheck Week does show improvement in compliance. Last year, the law enforcement authorities conducting Roadcheck Week took 1,179 drivers off the road for HOS violations. This year, with the stricter ELD rules in place which theoretically should cut down on HOS violations, 1,128 drivers were taken out of service, a drop of 51 trucks. That figure is for all of North America. It’s striking that the percentage of total trucks taken off the road for HOS violations, as a percentage of all trucks removed during Roadcheck Week for driver violations, has not moved significantly even from 2017, when the ELD mandate was not fully in effect. That year, the Commercial Vehicle Safety Alliance, which conducts Roadcheck Week, said that 32.3% of all driver out-of-service (OOS) violations were for HOS violations. (It did not give a specific count.) Related: Transport Topics CVSA Roadcheck Shows 20.9% Vehicle Out-of-Service Rate Link: CVSA Releases 2020 International Roadcheck Results

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FMCSA Final Rule Adds Flexibility to CDL Skills Testing

Transport Topics Eleanor Lamb December 17, 2020

The Federal Motor Carrier Safety Administration has published a final rule to increase flexibility in the commercial driver license skills test process. Specifically, the final rule allows states to permit third-party test examiners to administer the CDL skills test to applicants to whom the examiners also have provided skills training. U.S. Department of Transportation leaders announced the final rule Dec. 17 as truckers were helping to transport initial loads of COVID-19 vaccines. “Under [Transportation] Secretary [Elaine] Chao’s leadership, the Trump administration has continued to examine ways to provide commonsense regulatory reform and help individuals seeking to enter the commercial driver industry,” FMCSA Deputy Administrator Wiley Deck said. “This new rule will provide states more flexibility during the ongoing public health emergency to test CDL applicants and allow more drivers to safely enter the industry.” Related: Truckinginfo.com Third-Party CDL Testing From Trainers OK, Says FMCSA Link: Federal Motor Carrier Administration Final Rule Third Party Commercial Driver’s License Testers

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Workforce

Truckload driver pay, job turnover rate both rising

The Journal of Commerce William B. Cassidy December 17, 2020

The number of US truck drivers leaving their companies for other motor carriers is on the rise, and so is driver pay, with truckload carriers rolling out double-digit percentage pay increases this month. That’s no coincidence. Driver turnover tends to rise when competition for drivers accelerates and driver pay increases. And a year-over-year shortfall of drivers and high freight demand make truck drivers a hot commodity across the transportation landscape.

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ATA reports Q3 gains in truckload driver turnover

Logistics Management Jeff Berman December 17, 2020

And the ATA’s Costello said around that time that anecdotally, carriers continue to struggle both recruiting and retaining quality drivers – leading to increasing wages, adding that the tight driver market should continue and will be a source of concern for carriers in the months ahead. “Turnover is not a measure of the driver shortage, but rather of demand for drivers,” he said. “We know that as freight demand continues to rise, demand for drivers to move those goods will also rise, which often results in more driver churn or turnover. Finding enough qualified drivers remains a tremendous challenge for the trucking industry and one that if not solved will threaten the entire supply chain.”

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