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Wednesday, January 6, 2021
Logistics Intelligence Brief
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Trucking

Transportation capacity loosens modestly in December, rates remain elevated

Freight Waves Todd Maiden January 5, 2021

The Logistics Managers’ Index report shows the pace of growth in several key areas of the supply chain slowed during December. The survey of leading logistics executives showed the overall index stood at 66.7% for the month, firmly in growth territory but not as robust as November’s 70.8% level. This was the first reading in four months to register below 70%, but still well ahead of the historic average of 62.3% and the year-ago reading of 54%. The LMI is a diffusion index wherein a reading above 50% indicates expansion and a reading below 50% indicates contraction. The survey is intended to capture the rate of change in supply chain trends in areas like transportation, inventory and warehousing. Transportation prices remained elevated at 85.1%. The subindex has been above 80% since August. “The strong upward pressure on transportation prices that gained momentum in the fall months of 2020 is still very strong, with the last five months having the highest transportation prices index levels recorded over the last two years,” the report stated.

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Bison Transport Sold to Canada’s James Richardson & Sons

Transport Topics Roger Gilroy January 5, 2021

Bison Transport Inc., one of North America’s largest diversified fleets that has been in an expansion mode over the past few years, announced it was acquired by privately held James Richardson & Sons for an undisclosed amount, effective Jan. 1. Bison’s senior management will continue to lead the company, based in Winnipeg, Manitoba. Bison is a unit of Wescan Capital Inc. Duncan Jessiman founded the motor carrier in 1969. Bison has expanded to 3,700 employees and contractors operating a fleet of 2,100 tractors and 6,000 trailers throughout North America.

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Industry

Q&A: Marion Whicker, deputy chief, supply, production and distribution for Operation Warp Speed

Logistics Management Jeff Berman January 5, 2021

LM: Looking at where things are and where things will be, when this is all done, what do you think some of the biggest logistics “lessons learned” may be coming out of this? Whicker: What General Perna did and what we did was take the end state of delivering the vaccines and what all of those steps were, and working our way back for what we had to do. While the clinical trials were going on in Phase Three, we were manufacturing the vaccine, and the vaccine was able to roll out timely, with the completion of the emergency use authorization. It was making sure all of those things—like the manufacturing, making sure that bioreactors or air handlers are available, as well as the bags and the vials—are set up. It is really the same thing we do at the Department of Defense for building a tank, in making sure the manufacturing lines are set up and the raw materials are ordered, and have a training plan developed and be able to field it. It is really a lot of the same thing as is done in my Army logistical training, which has enabled me here with this from an analytical perspective, while the product is different.

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Amazon adds 11 more cargo jets to its growing air fleet

DC Velocity January 5, 2021

E-commerce powerhouse amazon.com is expanding the capacity of its air freight network again, announcing today that it has purchased 11 Boeing jets from Delta Air Lines and WestJet Airlines. Scheduled to join the mega-retailer’s fleet in 2021 and 2022, the deal marks the first time that Seattle-based Amazon has purchased planes outright instead of leasing them from other owners. However, the company will continue to rely on third-party carriers to operate the new aircraft. The move comes at a time when the coronavirus pandemic has nearly frozen global air travel by passengers, pushing many airlines to ground large portions of their fleets in the face of spiraling financial losses. That move has also restricted those companies’ ability to carry cargo, because a large portion of air freight is stowed in the “belly holds” of passenger jets.

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Government/Safety

FMCSA Proposes to Add Truck Rear Underride Guards to Safety Checklist

Transport Topics Eric Miller January 5, 2021

The Federal Motor Carrier Safety Administration has issued a proposed rule amending federal safety regulations to specifically add rear impact guards as a required item on the list of annual inspections for motor carriers and roadside inspectors. The proposal, announced Dec. 29 in a federal register post, will, if finalized, mean that a check of truck rear underride guards will become a part of the CMV inspector process, said Collin Mooney, executive director of the Commercial Vehicle Safety Alliance. Currently, while motor carriers are required to maintain and annually inspect their underride guards, some CVSA inspectors do not cite a trucker when they observe a damaged or loose rear guard, Mooney said. However, if the new regulation becomes final, “then we obviously will inspect as well,” Mooney said. “We’ll be taking a closer look at underride guards.” Mooney said there is a current “catch all” regulation requiring that a trucker’s underride guard not be damaged, but the decision on whether to issue a citation differs among inspectors. “But you really don’t want rules to be subjective,” he said. “You want them to be pretty black and white.”

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Economy

ISM reports manufacturing finishes 2020 on solid footing amid an uneven year

Logistics Management Jeff Berman January 5, 2021

Manufacturing activity finished 2020 on a high note, growing for the seventh consecutive month, according to data issued today by the Institute for Supply Management (ISM). In its monthly Manufacturing Report on Business, ISM said that the report’s key metric, the PMI, came in at 60.7 (a reading of 50 or higher indicates growth), which was 3.2% above November’s 57.5, while the overall economy expanded for the eighth consecutive month. This represents the highest PMI reading for 2020, with October’s 59.3 and November’s 57.5 rounding out the top three months. And December’s PMI is 8.2% higher than the 12-month average of 52.5. Link: Institute For Supply Management Manufacturing New Orders, Production, and Employment Growing Supplier Deliveries Slowing at Faster Rate; Backlog Growing

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Business

Manufacturers Rethink Supply Chains, Eye Reshoring After Events of 2020

Transport Topics Jerry Hirsch January 4, 2021

A trade war with China and the disruptive effects of the COVID-19 pandemic have U.S. companies starting to question a decades-old strategy of shifting manufacturing operations to low-cost labor markets in China and other Asian nations. Some are starting to invest in expanding or building new factories in the U.S. and its nearby trade partners, Mexico and Canada. Such moves are known as reshoring — for the U.S. — and nearshoring in Mexico and Canada. If the trend accelerates, it would create a domestic manufacturing boom and alter trucking routes, shifting some import-centric traffic from Southern California’s massive port complex to manufacturing hubs across the U.S., according to analysts. A June survey by Thomas, a New York-based industrial sourcing platform, found that 69% of businesses said they are “likely” to “extremely likely” to reshore operations to bolster their supply chains — up from 54% in a previous survey in February, just before the pandemic took hold.

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