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Wednesday, April 21, 2021

Logistics Intelligence Brief

Trucking

US truck freight tonnage rose 8.9 percent in March (Subscription Based)

The Journal Of Commerce William B. Cassidy April 20, 2021

LTL carriers are seeing more truckload freight arrive on their docks, as shippers break truckload shipments into three LTL shipments, sometimes exceeding 20,000 pounds. “When that type of freight bumps your dock, you take notice,” an LTL executive who did not want to be identified said Tuesday. “We can definitely tell that there’s a transfer of freight between truckload and LTL under way.” Not all of that freight will find a home in an LTL trailer, however. “We’ve got to prioritize and protect the customers who have helped our company,” the LTL executive said. Like the Class I railroads, LTL carriers are likely to turn away freight from new customers or shipments that exceed contractual agreements to prevent their networks from becoming choked with freight and to protect their operating margins.

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Industry

Snarled Supply Chain Trips Up Small Businesses (Subscription Based)

The Wall Street Journal Ruth Simon And Dave Sebastian April 21, 2021

The supply-chain disruptions rippling across the business world are taking a heavy toll on small U.S. companies, which have fewer resources to absorb or push back on price increases and less leverage to pass along the higher costs to customers. Forty-four percent of small businesses reported temporary shortages or other supply-chain problems in March, according to a survey of roughly 800 companies by Vistage Worldwide Inc., a business advisory firm. A U.S. Census Bureau survey of small businesses, completed in early April, found supply-chain disruptions in wholesale trade, manufacturing and construction, among others. Multiple forces are driving supply-chain woes, from coronavirus infections among employees and temporary business closures to increased demand as vaccines take hold and restrictions ease. A backlog at California ports, the temporary closure of the Suez Canal and weather-related problems have created additional challenges. Smaller companies typically have less sophisticated purchasing departments than larger corporations.

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Canadian National Makes $30 Billion Topping Bid for Kansas City Southern (Subscription Based)

The Wall Street Journal Cara Lombardo April 20, 2021

The move sets up a tussle for a key strategic asset poised to benefit from an expected surge in economic activity as the world emerges from the coronavirus pandemic. Either combination would create the first freight-rail network linking the U.S., Mexico and Canada by connecting ports in the three countries. Kansas City Southern, the smallest of the five major freight railroads in the U.S., plays a big role in U.S.-Mexico trade, with a network stretching across both countries. Its trains bring autos and other industrial products up from factories south of the border into Texas and the Midwest and haul U.S. farm goods back to Mexico. It also runs a rail link along the Panama Canal.

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Shippers/3PLs

Bed Bath & Beyond revamps supply chain with a tech stack and 4 warehouses

Supply Chain Dive Shefali Kapadia April 20, 2021

Bed Bath & Beyond is approaching its $250 million supply chain investment through a strategy that blends physical with digital. ERP upgrades, inventory management systems, distribution centers and store-to-fulfillment conversions are all parts of modernizing a supply chain previously described as "primitive." COO John Hartmann called the store replenishment "noncompetitive" last week on an earnings call. Currently, it takes 35 days for the retailer to replenish its stores with inventory. The goal is under 10 days. Bridging that 25-day gap starts with regional distribution centers, according to Hartmann.

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Workforce

Wheels turn, drivers earn as fleets test pay structures

Transport Dive Jim Stinson April 20, 2021

Fleets are pulling out tools from their pay toolbox to mend the ongoing struggle of attracting and retaining truck drivers. Some are paying more. Others are mixing pay-per-mile with guaranteed pay and dedicated lanes. But recruiting is still tough. Recently, one fleet hit the jackpot with 14 new hires, according to Jason Seidl, managing director of airfreight and surface transportation for Cowen. The 14 drivers were all cleared through the FMCSA's Drug and Alcohol Clearinghouse and accepted offers from the fleet, which Seidl did not name. The fleet set up an orientation day for the 14 drivers. None of the recruits showed up. Seidl said the fleet was stunned it went zero for 14, expecting some dropouts at most.

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Government/Safety

Is Amazon getting into the renewable natural gas business?

Freight Waves Alyssa Sporrer April 20, 2021

Amazon’s newly announced (NASDAQ: AMZN) agreement with Clean Energy Fuels (NASDAQ: CLNE) to provide renewable natural gas (RNG) raises many questions. The big one: Is Amazon getting into the RNG business? Amazon will be fueling some of its vehicle fleet with Clean Energy’s low- and negative-carbon RNG. Perhaps most interesting is that Amazon could end up owning 19.99% of Clean Energy’s common stock on a fully diluted basis.

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GOP senators float $600-800 billion infrastructure counteroffer

Politico Tanya Snyder et al. April 20, 2021

Republican senators Tuesday discussed a counterproposal to President Joe Biden’s infrastructure plan, likely coming in at $600 billion to $800 billion and paid for with user fees and unspent Covid relief money. The plan: Two people who attended Tuesday’s GOP lunch said the plan, spearheaded by Environment and Public Works ranking member Shelley Moore Capito (R-W.V.) on behalf of a group of centrist Republicans, would cost roughly $600 billion to $800 billion, depending how many years the plan lasted. One of the sources was more specific, putting the plan estimate between $550 billion and $880 billion. The latter number would be for an eight-year plan, the same duration as Biden’s $2.2 trillion proposal.

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