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Thursday, February 18, 2021

Logistics Intelligence Brief

Trucking

Imports continue to create dry van demand

DAT.com Dean Croke February 17, 2021

Port congestion on the West Coast in 2020 pushed import volumes farther east and closer to major population centers on the East Coast. According to Port Houston, “December marked the second-highest month ever for loaded imports, with 126,771 TEUs handled, a 26% jump over December 2019. That activity was just behind the level recorded in October.” Dry van load post volumes surged by 14% w/w in the top 10 markets. As shippers raced to move freight ahead of this week’s winter storms, capacity tightened, pushing up spots rates by $0.05/mile on average. Outbound capacity tightened the most in Chicago, where outbound volumes jumped 33% week over week. Three-day average rates from Chicago to Los Angeles are now up $0.50/mile since the end of January, averaging $2.03/mile.

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Werner says weather hits Q1 earnings; capacity ‘cavalry’ not coming

Freight Waves Todd Maiden February 17, 2021

Weather challenges “Q1 weather has been a significant challenge to say the least,” said Derek Leathers, vice chairman, president and CEO of the 7,800-truck carrier. Poor weather has forced drivers to park their trucks, resulting in a freight backlog that could take a couple of weeks to unwind. The costs of paying drivers on downtime along with a higher frequency in roadside service events has created a “clear-cut impact to the quarter.” The company has had to shut down more than 1,000 trucks per day recently. In past winters, it would only see up to a couple hundred trucks idled for a few hours at a time, mostly waiting for the storms to pass and roads to reopen. Widespread power outages have also slowed operations in some areas this winter. ‘Extreme oversold environment’ Other than the disruption from weather, truck demand remains “above normal seasonality,” which Leathers indicated will only extend the current demand cycle. Heading into the stretch of adverse weather, Werner’s trucks were oversold on a daily basis. The current weather wrinkle places its capacity in an “extreme oversold environment.”

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Industry

Winter storms deal another blow to US supply chains (Subscription Based)

Journal of Commerce William B. Cassidy February 17, 2021

“Last week’s cold weather had an impact on spot prices, and this week’s double storm is going to have a profound impact I believe next week,” Croke said. A preliminary look at DAT rate data from early this week showed spot prices increasing in lanes connecting Dallas and Chicago, Denver, and Atlanta. “That speaks to tight capacity and desperation to get freight moved.” Yellow, the super-regional LTL carrier formerly known as YRC Worldwide, said it would deploy “additional resources” to company locations in need of assistance across its four brands. Its national subsidiary, YRC Freight, closed 22 terminals because of the storm and had another 25 sites that were operating on a limited basis, according to the company’s website. “Severe weather conditions are causing industry-wide disruptions to the supply chain,” spokeswoman Heather Nauert said Wednesday. “Yellow is working diligently to ensure employee safety while working closely with customers to meet their needs. We are updating our website multiple times each day to keep customers informed of our operating status.”

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Freight railroads curtail operations as extreme winter weather blasts through

Freight Waves Joanna Marsh February 17, 2021

Union Pacific Extreme winter conditions forced Union Pacific (NYSE: UNP) to close intermodal terminals systemwide. Union Pacific (UP) conducted the measure to avoid an imbalance of equipment across the network and enable a quicker recovery of operations, according Kenny Rocker, UP executive vice president of marketing and sales. BNSF In response to reports that grain routes to the Pacific Northwest are facing service issues because of the weather, BNSF (NYSE: BRK) told FreightWaves on Wednesday that it has been utilizing snow coaches, which allow the railroad to move crews safely on BNSF’s tracks when roads are impassable. These snow coaches have been strategically placed along the Columbia River Gorge and other locations in Washington state, in addition to other locations on BNSF’s network, BNSF said. Snow coaches are specialized land transportation vehicles that can operate over snow or ice.

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How Trucking Fleets Can Escape the Insurance Squeeze

Truckinginfo.com David Cullen February 17, 2021

In the American Transportation Research Institute’s 2020 survey of the top issues facing trucking, insurance availability and cost ranks fifth, right after the hot-button Compliance, Safety and Accountability enforcement regimen and just before that ever-recurring issue, driver retention. ATRI states in its latest annual Operational Costs of Trucking report, issued in November, that with fleets incurring substantial insurance cost increases over the last several years, the industry may have “reached a ceiling in its ability to continuously cover annual double-digit increases in insurance premiums.” That cost study shows that truck insurance premiums fell for the first time since 2012, dropping from a historic high of 8.4 cents per mile in 2018 to 6.8 cents per mile in 2019. ATRI'S Operational Costs of Trucking shows that truck insurance premiums fell for the first time since 2012, dropping from a historic high of 8.4 cents per mile in 2018 to 6.8 cents per mile in 2019. But that decrease came with a price. Insurance companies report, per ATRI, that “trucking fleets are assuming higher risk levels through higher deductibles, self-insurance, expanding use of insurance captives, and lower levels of excess liability coverage.”

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Technology/Innovation

Technology Brings Visibility to Supply Chains, Experts Say

Transport Topics Connor D. Wolf February 17, 2021

Walmart Canada has found that technologies such as blockchain and machine learning can help with end-user predictability, such as tracking how long a shipment may be delayed during a snowstorm. “We’re at a point where we’re really excited by everything that our stores can do with their phones,” said Francis Lalonde, the company’s vice president of transportation. “Between our [distribution centers] and stores, it doesn’t get any better than that in terms of visibility. And this enables us to start to have real-time, in-depth, super dynamic visibility almost end to end.” Lalonde noted that empowering staff to make decisions during disruptions like storms is one way the company can utilize data.

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Government/Safety

FMCSA Extends COVID-19 CDL, Med Card Waiver

Truckinginginfo.com February 17, 2021

• Permits (but does not require) states to extend the validity of CDLs due for renewal on or after March 1, 2020, beyond the eight-year maximum period of validity called for under federal regulations. • Permits (but does not require) states to extend the validity of commercial learners’ permits due for renewal on or after March 1, 2020, beyond the one-year maximum set in federal regulations without requiring the CLP holders to retake the general and endorsement knowledge tests. • Permits (but does not require) states to allow CLP holders to take the CDL skills test without waiting 14 days after initial issuance of the CLP. • Waives the requirement that CDL holders, CLP holders, and non-CDL drivers have a medical examination and certification, provided they have proof of a valid medical certification and any required medical variance issued for a period of 90 days or longer that expired on or after Dec. 1, 2020.

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White House Eyes Infrastructure After COVID-19 Relief Package

Transport Topics Eugene Mulero February 17, 2021

After work on a multi-trillion dollar pandemic relief package is finalized, the White House is likely to pursue an agenda that includes comprehensive infrastructure policy. White House Press Secretary Jen Psaki indicated legislation centered on infrastructure matters promises to garner bipartisan appeal on Capitol Hill, noting potential for advancing a climate change-centric agenda this year. Debate on a $1.9 trillion COVID-19 relief package continues, and congressional leaders have yet to schedule hearings or meetings on specific infrastructure funding proposals. “We’re focused right now on getting the American Rescue Plan [COVID-19 aid] passed. But the president is committed to engaging with a range of stakeholders. Of course, he had the meeting last week with senators about infrastructure. It’s one of the areas where there’s opportunity to work together,” Psaki told reporters Feb. 16.

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Trucking Takes On Lawsuit Abuse in Florida

Transport Topics Eric Miller February 17, 2021

The winds of change blew strong earlier this year when the association and its allies got credit for playing a role in urging the Florida Supreme Court to bring the state’s summary judgment law in line with federal standards and most other states in the U.S. The influential case that Florida’s high court used to change the law involved a trucking accident lawsuit that a state appellate court declined to dismiss, despite compelling truck dashcam video evidence that indicated the truck driver was not at fault. A little over a year ago, the association and the Florida Justice Reform Institute filed a joint amicus curiae brief with the Supreme Court, asking it to bring the antiquated summary judgment rule up to date. “That decision was a big one for us,” said Ken Armstrong, president of the Florida Trucking Association. “For decades, our Supreme Court took a different view of when summary judgment should be granted than most of the rest of the country — the federal standard and 38 other states.”

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Economy

Industrial Production Climbs 0.9% in January

Associated Press/Transport Topics Paul Wiseman February 17, 2021

American industry expanded for the fourth consecutive month in January, but it has yet to return to the level of activity that preceded the pandemic. U.S. industrial production — which includes output of factories, mines and utilities — rose 0.9% last month on top of increases of 1.3% in December, 0.9% in November and 1.1% in October, the Federal Reserve reported Feb. 17. Still, industrial production was down 1.8% from January 2020, reflecting lingering economic damage from the coronavirus pandemic. Manufacturing rose 1% even though auto production was held down by a shortage of semiconductors used in vehicles.

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January retail sales start 2021 off strongly, reports Commerce and NRF

Logistics Management Jeff Berman February 17, 2021

NRF officials noted that the increase in January retail sales built off of the strong momentum over the course of the November-December period, which it defines as the holiday shopping season, and saw an 8% increase, to a record tally of $787.1 billion. Some of the key retail sales sector data for January cited by the NRF included: Online and other non-store sales were up 11% month-over-month seasonally adjusted and up 22.1% unadjusted year-over-year; Sporting goods stores were up 8% month-over-month seasonally adjusted and up 22% unadjusted year-over-year; Building materials and garden supply stores were up 4.6% month-over-month seasonally adjusted and up 13.7% unadjusted year-over-year; Grocery and beverage stores were up 2.4% month-over-month seasonally adjusted and up 11.6% unadjusted year-over-year; and Furniture and home furnishings stores were up 12% month-over-month seasonally adjusted and up 9.3% unadjusted year-over-year Link: National Retail Federation January retail sales show strong increase boosted by stimulus funds and momentum from record holidays

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