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Monday, February 15, 2021

Logistics Intelligence Brief

Trucking

Tight capacity puts pricing power in trucking’s hands as spot, contract rates rise

Supply Chain Dive Matt Leonard February 12, 2021

"Right now the consumer is standing up well," Hawkins said. "Construction is strong. Manufacturing is looking good. I am confident from a customer perspective and the demand levels we're seeing that pricing will remain favorable." With capacity tight and pricing power in the carriers' hands, shippers are having to shell out more to get capacity for their freight. Figures from the Coupa Business Spend Index show that business spending on shipping and freight was up more than 12% YoY in the last quarter.

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Shippers/3PLs

Walmart+ gains traction 5 months after launch

Retail Dive Maria Monteros February 12, 2021

Five months after Walmart's membership program, Walmart+, was released, data indicates that it has garnered between 7.4 million and 8.2 million members, signaling a promising start for a potential Amazon Prime rival, according to Consumer Intelligence Research Partners analysis released Wednesday. Customers spend an average of $1,000 at Walmart.com per year, which is "remarkably similar to the long-term figure for Amazon," said Josh Lowitz, partner and co-founder of CIRP. Walmart+ members currently account for about 13% to 14% of total Walmart.com shoppers as of Jan. 30, per the report.

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Industry

Gartner survey signals increased investment in resilience over the next two years

DC Velocity February 12, 2021

“Supply chain executives overwhelmingly recognize the necessity to make their networks more resilient and agile,” Geraint John, vice president analyst with the Gartner Supply Chain practice, said in a statement announcing the report this week. “At the same time, 60% admit that their supply chains have not been designed for resilience, but cost-efficiency. The challenge will be to create an operating model for supply chains that combines the best of both worlds and also delivers supreme customer service.” Gartner defines resilience as the ability to adapt to structural changes by modifying supply chain strategies, products and technologies, and agility as the ability to sense and respond to unanticipated changes in demand or supply quickly and reliably, without sacrificing cost or quality. Three-quarters of respondents believe that the additional costs caused by the investments in resilience and agility will be covered by the supply chain budget. That’s why CSCOs must take the lead in identifying where and how much to invest, Gartner said. Other key findings in the survey: National interests clash with competitive pricing demands: high tech, healthcare, and pharmaceutical organizations report that national interests will have increased influence over future supply chain decisions. At the same time, 45% of survey respondents think that their customers favor low pricing over domestic sourcing and production – particularly in industries with ferocious price competition, such as retail and fashion. Only 30% of survey respondents report that they are shifting from a global to a more regionalized supply chain model.

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Facing filling order books, truck OEMs staring down supply chain shortages and concerns

CCJ Jason Cannon February 12, 2021

Semiconductor availability thus far hasn't impacted heavy truck builds to the extent it has automotive builds, but FTR Vice President of Commercial Vehicles Don Ake noted "the computer chip shortage is limiting production." Daimler Trucks North America said in a statement provided to CCJ that the shortage of chips "is a situation we continue to monitor very closely, but [has had] no direct impact to our production plan to-date." Volvo Group Vice President of Public Relations and Corporate Affairs Mary Beth Halprin said the Mack and Volvo Trucks parent is "navigating our way through a number of supply constraints, including those involving semiconductors, due to the steep ramp-up of production across the globe," noting the company uses semiconductors in a number of components, including, for example, engine and transmission controls. "We’ve been able thus far to work our way through the issues without interrupting production," she said. "The situation is fluid, and we’re continuing to do everything we can to minimize the impact on customers."

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U.S.-bound imports remain elevated in January, reports Panjiva

Logistics Management Jeff Berman February 12, 2021

On the product side, for January, Panjiva reported the following import numbers: consumer discretionary products increased 26.3%, following January’s 34.3% annual gain; healthcare products rose 37.3%, with equipment and PPE imports up 37.9%, and pharmaceuticals, excluding SARS-COV-2 vaccines, up 28.4%; household/personal care products were up 50.5% while off 26.1% from the July peak; total consumer staples were up 34.8%, up from December’s 31.7% gain; consumer discretionary imports were up 26.3%; consumer electronics rose 17.2%; home furnishings rose 34.4%; textiles and apparel decreased 1.9%, down for the first time since August 2020; and total industrial imports were up 13.4%, down from December’s 19.2%

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U.S. rail carload and intermodal volumes are mixed for the week ending February 6, reports AAR

Logistics Management February 12, 2021

Intermodal trailers and containers—at 269,422—saw a 2.2% annual gain, trailing the weeks ending January 30 and January 23, at 289,323 and 298,951, respectively.

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Government/Safety

FMCSA extends national HOS waiver through May 31

Freight Waves John Gallagher February 13, 2021

The order applies to commercial motor vehicle operations that provide direct assistance supporting relief efforts related to the pandemic. It covers parts 390 to 399 of the federal motor carrier regulations for the 50 states and District of Columbia. In addition to HOS, the regulations also apply to inspection and maintenance of commercial vehicles, employee safety and parking rules, among others. The waiver is limited to hauling: Livestock and livestock feed. Medical supplies and equipment related to the testing, diagnosis and treatment of COVID-19. Vaccines, constituent products and medical supplies and equipment including ancillary supplies/kits for the administration of vaccines related to the prevention of COVID-19. Supplies and equipment necessary for community safety, sanitation and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap and disinfectants. Food, paper products and other groceries for emergency restocking of distribution centers or stores.

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Biden Says China Will ‘Eat Our Lunch’ on Infrastructure (Subscription Based)

The Wall Street Journal Andrew Restuccia February 11, 2021

Mr. Biden and his senior aides are already looking ahead to a second legislative package focused on the economic recovery that they hope Congress will pass in the coming months. At the center of that package, according to White House officials, will be an infrastructure measure. The president on Thursday gathered four senators to discuss infrastructure in the Oval Office: Environment and Public Works Committee Chairman Tom Carper (D., Del.); Small Business and Entrepreneurship Committee Chairman Ben Cardin (D., Md.); Sen. Shelley Moore Capito (W.Va.), the top Republican on the Environment and Public Works Committee; and Sen. Jim Inhofe (R., Okla.).

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Economy

Consumer Sentiment Unexpectedly Falls to Six-Month Low

Bloomberg/Transport Topics Julia Fanzeres February 12, 2021

Consumer sentiment unexpectedly declined to a six-month low in early February as the outlook for personal income deteriorated and more Americans anticipated faster inflation in the year ahead. The University of Michigan’s preliminary sentiment index fell to 76.2 from 79 last month, data released Feb. 12 showed. The median forecast in Bloomberg’s survey of economists called for a modest improvement to 80.9 and the result was weaker than the most pessimistic estimate. Consumers expect a year-ahead inflation rate of 3.3%, the highest since July 2014. A gauge of the outlook for consumers’ finances dropped to 116 in early February, the lowest since November 2014 and despite lawmakers’ latest round of negotiations on President Joe Biden’s $1.9 trillion stimulus plan.

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