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Monday, May 3, 2021

Logistics Intelligence Brief

Trucking

Truckers Expect U.S. Transport Capacity Crunch to Persist (Subscription Based)

The Wall Street Journal Jennifer Smith May 2, 2021

Freight industry executives expect a squeeze on trucking capacity that has been driving up shipping costs for U.S. companies to persist through the rest of the year, as strong demand in a rebounding American economy collides with a shortfall in truck availability. “There’s more freight than trucks, or maybe I should say, than drivers,” David Menzel, chief operating officer at freight broker Echo Global Logistics Inc., said in an earnings call Wednesday. “The ports are backlogged, demand is strong, so rates are high. On the other hand, shippers are dealing with high rates, tight capacity and disrupted supply chains.” “We know how tight this market is,” Werner Chief Executive Derek Leathers said in a Wednesday earnings call. “I don’t think that you’re going to see any capacity relief coming in 2021.”

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Economy

From Apple to Domino’s Pizza, U.S. Companies Scramble to Meet Surge in Demand (Subscription Based)

The Wall Street Journal Thomas Gryta and Theo Francis May 2, 2021

Consumers are splurging on cars and furniture—and facing extended waits for delivery. Restaurants and gyms are reopening—and struggling to find workers. Factories and home builders are trying to ramp up—but are short on semiconductors or raw materials. But problems are acute for some individual businesses and even entire industries. Executives from gadget giant Apple Inc. AAPL -1.51% to mattress seller Tempur Sealy International Inc. TPX -0.78% said last week that supply-chain issues could curb their growth in the short term. Others have responded by raising prices on everything from diapers to air conditioners. Trucking company J.B. Hunt Transport Services Inc. is buying more shipping containers, trailers and support equipment to address transportation bottlenecks. It is also increasing wages and benefits to attract and retain truck drivers. “The industry is facing the most challenged driver market that I’ve seen in my 37-year career at J.B. Hunt,” said operating chief Nicholas Hobbs.

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Covid-19 Savings Stockpile Could Accelerate Economy—if Consumers Spend It (Subscription Based)

The Wall Street Journal Paul Hannon May 2, 2021

The amounts that households have chosen to or been forced to put aside since the start of the coronavirus pandemic are very large. In addition to normal savings, economists at Barclays estimate that since the pandemic began, the equivalent of 7% of annual economic output has been saved in the U.S., while U.K. savings total 6% of gross domestic product and eurozone savings are at 5%. Much of that savings appears to have been unplanned and stems from the inability of consumers to spend as normal. Businesses providing services to consumers that traditionally involve close proximity to other people—such as restaurants, bars, sports arenas and many tourism activities—have been closed or effectively off limits for those who fear infection.

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Shippers/3PLs

Amazon’s logistics build-out yields more data, accurate delivery estimates

Supply Chain Dive Matt Leonard April 30, 2021

Amazon's capital expenditures increased 80% in the trailing 12 months, compared to the previous 12-month period, as it builds out fulfillment, middle- and last-mile infrastructure for e-commerce delivery, CFO Brian Olsavsky said on the company's Q1 earnings call Thursday. The build-out of the delivery assets has resulted in more data and information that the company can use to better understand its network and provide more accurate delivery estimates, Olsavsky said. "We also see that there's a lot of cutoff times that we can extend, again, because we pretty much have perfect information between the order placement allocation to warehouses, where we're going to pick and box up the product and send it on its way," he said in response to an analyst's question on last-mile spending.

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Industry

Union ending strike at Volvo truck plant

CCJ Jason Cannon April 30, 2021

Once ratified, the contract will cover approximately 2,900 plant employees. Volvo's NRV operation employs more than 3,300 people and is in the midst of a $400 million investment for advanced technology upgrades, site expansion and preparation for future products. The plant has added 1,100 jobs since the current union agreement was implemented in 2016 and is on track to have a net increase of approximately 600 positions in 2021, according to Volvo

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North American intermodal volumes boom in Q1 for greatest jump since 2013

DC Velocity April 30, 2021

Intermodal freight volumes for North America rose 10.5% in the first quarter of 2021 compared to that period last year, showing their third consecutive quarter of growth and their largest year-over-year increase since 2013 as the economy continues to rebound from pandemic restrictions, an industry report shows. The recent increase was led by a 14.8% rise in international container volume, 4.4% for domestic shipments, and 20% for trailers, according to the Intermodal Association of North America (IANA)’s Intermodal Quarterly report. “Intermodal volumes were up for the third consecutive quarter through Q1. This growth is projected to continue through the remainder of the year,” Joni Casey, president and CEO of IANA, said in a release. “Even considering weak comparisons that supported the other segments, domestic intermodal posted solid 4.4% gains.”

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Government/Safety/Sustainability

What the “Infrastructure” Fight Is Really About

Politico Joshua Zietz May 1, 2021

President Joe Biden’s proposed infrastructure legislation has the political class seemingly locked in a debate about what “infrastructure” means. Biden and Democratic leaders—backed by a majority of the U.S. population—believe that “infrastructure” is more than just roads and bridges and encompasses all the structures that help modern society function. Their new bill reflects that understanding, including improvements to water pipes and the electrical grid, universal broadband access, charging stations for electric vehicles, physical upgrades to schools and universities, and—perhaps most innovatively—home care for the elderly and disabled, support for families with children, and expanded access to health care. Republican elected officials, on the other hand, are fiercely opposed to a broad definition of the old term. Biden’s plan is a “Trojan horse” (Mitch McConnell) for massive tax hikes and expanded federal authority. It’s a “Socialist agenda” (Steve Scalise)—a “kitchen sink of wasteful progressive demands.” It will set the nation on a “road to hell” (Rachel Campos-Duffy of Fox News).

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Congress starts down road to automatic braking mandate

Freight Wave John Gallagher April 30, 2021

Legislation introduced this week on Capitol Hill requiring automatic emergency braking (AEB) and lane-assist technology on all new trucks is being praised by safety advocates but rejected by small-business truckers. The Protecting Roadside First Responders Act, introduced through companion bills in the House and Senate, is aimed at reducing roadside crashes involving distracted driving. It requires advanced driver assistance systems, including AEB, lane-departure warning, lane-keeping assist and blind-zone detection systems on commercial vehicles weighing over 10,000 pounds. Similar to an AEB regulation included in an infrastructure bill passed by the House (but not the Senate) last year, the bill requires that the technology be installed on all new trucks for the model year beginning no later than two years after the date of the final rule. “To help save lives and reverse the alarming rise in first-responder roadside deaths, we must increase the use of crash-avoidance technologies and awareness of ‘Move Over’ laws,” said Sen. Richard Durbin, D-Ill., in introducing the legislation. “The Protecting Roadside First Responders Act will require lifesaving technologies in all new vehicles while providing states with the resources they need to help keep our first responders safe.”

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Texas House Passes Bill That Would Help Curb Lawsuit Abuses

Transport Topics Eric Miller April 30, 2021

“With this significant vote, Texas joins a growing number of states committed to stopping rampant lawsuit abuse by enacting measured, targeted and prudent reforms that restore balance and fairness to the civil justice system,” said ATA President Chris Spear. “For years the plaintiffs’ bar has been perverting the civil justice system into a profit center to line their own pockets, leeching off a critical link in the supply chain and the livelihoods of honest and hardworking truckers in their pursuit of Jackpot Justice. But those days are now coming to an end.”

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Using technology to prevent nuclear verdicts

Fleet Owner John Hitch April 30, 2021

According to a University of Michigan Transportation Research Institute in 2007, passenger cars are solely at fault 70% of the time, while truck drivers cause the crash 16% of the time. In 10% of cases, both parties failed to act in a safe and legal manner. The American Trucking Associations (ATA) used this study for a 2013 report, which received pushback from the Truck Safety Coalition, which called the report “a fallacious attack on victims of truck crashes” that had “no scientific basis.” There has not been any major research into the topic since the advent of advanced driver-assistance systems, which include collision mitigation and lane departure and blind-spot warnings. This technology should likely help reduce all crashes, though it’s unknown what impact that has on assigning fault in crashes between trucks and light vehicles. The Federal Motor Carrier Safety Administration is currently mulling a new Large Truck Crash Causal Factors Study (LTCCS) to better understand the issue.

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Trucking vows to fight back after California clears the way for AB5

Transport Dive Jim Stinson April 30, 2021

Joe Rajkovacz, director of government affairs for the Western States Trucking Association, said a new appeal will be up to the CTA. One of two options is an "en banc" request, Rajkovacz said, in which CTA asks a wider panel of the Ninth Circuit to review the decision. Or the CTA could go to the U.S. Supreme Court. But the problem with that route is the highest court is nearing the end of its legal year, Rajkovacz said. But some challenge will come, because implementing AB5 would be too damaging to the transport community, Rajkovacz said. And there is no easy fix for independent drivers trying to mesh with the law. If drivers seek their own authority from the FMCSA, they would still need to seek work through a broker.

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