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Wednesday, May 5, 2021

Logistics Intelligence Brief

Trucking

Transportation capacity ‘historically low’; prices ‘show no sign of slowing’

Freight Waves Todd Maiden May 4, 2021

A strong consumer, the need for inventory restocking and a severely diminished driver pool remain the catalysts for the tight capacity dynamic. Asked their expectations on the capacity situation one year from now, the respondents’ collective opinion deteriorated 5.6 percentage points from March to 44%. Transportation utilization, up 5.9 points from March to 71.9%, remained close to historical highs with transportation prices climbing 2 points to 92.6%, the highest level in the past 2.5 years. The one-year prediction on transportation prices from respondents increased 4.1 points from March to 86.2%. “Respondents have been faced with steep rates of price growth since last summer, and at this point they do not seem hopeful that there will be much relief over the next year,” the report found.

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Logistics Manager’s Index Growth is increasing for: Inventory Levels, Inventory Costs, Warehousing Prices, Transportation Capacity, Transportation Utilization, and Transportation Prices

Council Of Supply Chain Management May 4, 2021

The tightness that has been observed in the logistics industry over the last nine months continued unabated in April 2021. This month’s LMI comes in at 74.5, the second-highest reading in the history of the index. This seems to be largely driven by tight capacity, high prices for transportation and warehousing, as well as record-high levels of growth in Inventory Costs. This is a sharp turn from this time last year, when the April 2020 LMI read in at a record-low 51.3, when prices were low and a high level of slack capacity was available due to the COVID-19 lockdown. The logistics industry and overall economy we observe today is 180 degrees different from last year. Similar tightness is being reported for over-the-road networks. While rejection rates are down somewhat, the FreightWaves Tender Rejection Index still indicates that nearly one out of four potential loads are being rejected by carriers.

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Industry

Ascend-uShip integration a sign of increasing LTL demand (Subscription Based)

The Journal Of Commerce Eric Johnson May 4, 2021

Widely-used transportation management system (TMS) provider AscendTMS is partnering with US less-than-truckload (LTL) marketplace uShip to give Ascend users direct access to LTL capacity, the companies said Tuesday. The tie-up is another sign of flourishing partnerships between capacity and load aggregators, and also of the wider reach of technology in the booming LTL space. AscendTMS is a low-cost, browser-based TMS that has been primarily used by carriers, brokers, and shippers to manage truckload shipments. Shippers can get access to a free version of the software that caps the number of users and walls off some of the functionality in the system. The uShip integration allows shippers, in particular, to manage their volume across truckload and LTL in a “unified” way, Tim Higham, CEO of Ascend parent company InMotion Global, told JOC.com.

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Consumer Demand Drove U.S. Imports to Record High in March (Subscription Based)

The Wall Street Journal Yuka Hayashi May 4, 2021

Consumers and a fresh round of stimulus money pushed demand for U.S. imported goods to a record high in March, further expanding the trade deficit. The foreign-trade gap in goods and services expanded 5.6% from the prior month to a seasonally adjusted $74.4 billion in March, the Commerce Department said Tuesday. Imports rose 6.3% to $274.5 billion for the month, fueled by higher shipments of items including toys, furniture, cellphones, automobiles and semiconductors. The previous record for imports, on a seasonally but not inflation adjusted basis, was recorded in October 2018 when the U.S. purchased foreign goods and services worth $266.72 billion.

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Shippers/3PLs

How Shopify’s Network Of Sellers Can Take On Amazon

The Verge Nilay Patel May 4, 2021

Today I’m talking to Harley Finkelstein, president of Shopify. Shopify is one of those companies that makes the modern internet go — it makes software that allows businesses of all sizes to set up online stores, and from there it can handle everything from shipping orders to financing loans for expansion. The company went public in 2015, and as online commerce has exploded during the pandemic, it’s been on a tear ever since — it just posted $988 million in revenue in the first quarter of 2021, a 110 percent increase from last year. So you’re actually building fulfillment centers, shipping, you’re doing all that work? We are. Our business model around fulfillment is we believe that there are tons of empty warehouses all over the US, that’s where we’re starting right now. Think of the 3PLs that used to supply J.Crew, or used to do all the logistics for Forever 21. You have all these buildings all over the US with great people there. In fact, some of them are actually small businesses that run these fulfillment warehouses. The problem is none of them are connected. And so [what] we’re trying to do with SFN, with the fulfillment network, is connect them all using software.

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Technology/Innovation

Transport cybersecurity 101: No one is immune to hackers

Transport Diver Brad Forester May 4, 2021

Big-time hacks used to be few and far between. But they happen so often now that it's hard to keep up. While large carriers have perhaps invested in state-of-the-art cybersecurity, it's likely their smaller counterparts have not. Due to the thin margins on which the latter often operate, their technology may be outdated. And they may be deferring any upgrades until they absolutely have to — which may be too late. Any carrier, large or small, can be vulnerable to a sophisticated hacker. No one is bulletproof.

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Government/Safety/Sustainability

U.S. Push for Carbon-Neutral Ships Expected to Reveal Industry Divisions (Subscription Based)

The Wall Street Journal Costas Paris May 5, 2021

A new U.S. push to cut ship emissions will kick into high gear a multibillion-dollar quest for nonfossil fuels to power oceangoing vessels, but likely will face a backlash from Asian and South American nations that fear rising export costs. The U.S. has stayed on the sidelines of a multiyear effort by the International Maritime Organization, the United Nations’ global maritime regulator, to slash CO2 emissions from ships by half in 2050 compared with 2008 levels. But in April, U.S. Special Presidential Envoy for Climate John Kerry signaled a change of stance, saying the IMO should push for the tougher target of zero emissions in that time frame. “The United States is committing to work with countries in the IMO to adopt the goal of achieving zero emissions from international shipping by 2050 and to adopt ambitious measures that will place the entire sector on a pathway to achieve this goal,” Mr. Kerry said during a virtual climate meeting.

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California Trucking Association to Appeal AB 5 Decision

Transport Topics Eric Miller May 4, 2021

The California Trucking Association will appeal a court decision on the state’s independent contractor law that many in trucking deem unfavorable to the industry, CTA CEO Shawn Yadon said on May 3. A three-judge panel of the 9th Circuit Court of Appeals on April 28 rejected a lower court’s preliminary injunction that halted implementation of a new California law aimed at reclassifying independent contractors as employees. According to Yadon, CTA will now seek an “en banc” review by the full appellate court. The ruling by the 9th Circuit panel was an early round in what is shaping up to be a long-term fight in the appellate courts by CTA, which claims the state law, known as Assembly Bill 5, or AB 5, will make it impossible to continue with the independent operator model in the state.

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Business

A Checklist to Help You Grow Your Sales Team

HBR.org Andris A. Zoltners et al. May 3, 2021

#4: Focus on acculturation. When new hires come from multiple external organizations, you risk creating an incohesive culture mish-mash. To succeed, new salespeople must assimilate the desired culture. The manager is key. There is no substitute for frequent meet-ups with the salespeople in the first few months (formal and informal; one-on-one, and in group settings). Mentorship and sustained interaction with peers and supervisors help shape the workstyles of new hires to fit the culture, while also supporting new salespeople in navigating the unfamiliar environment. At one company, as part of the onboarding program, a new account executive spent two days each with four different peers to learn the ropes. Each peer helped the new salesperson acclimate while focusing on a specific area of learning — territory management, account planning, sales process execution, or product portfolio prioritization.

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