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Thursday, May 27, 2021

Logistics Intelligence Brief


California’s massive container-ship traffic jam is still really jammed

Freight Waves Greg Miller May 26, 2021

Peak shipping season is coming soon — and the “parking lot” of container ships stuck at anchor off the coast of California is still there, with Oakland surpassing Los Angeles/Long Beach as the epicenter of congestion. Shipping giant Maersk warned in a customer advisory on Wednesday that Los Angeles and Long Beach “remain strained with vessel wait times averaging between one to two weeks.” But it said “the situation is even more dire at the Port of Oakland, where wait times now extend up to three weeks.” West Coast port delays are having severe fallout for liner schedules. Congestion in California equates to canceled voyages as ships can’t get back to Asia in time to load cargo. Even as U.S. import demand soars, the effective capacity in the trans-Pacific trade is being sharply curtailed by voyage cancellations. For importers, that means even longer delays, even higher all-in freight rates and a cap on how much can be shipped at any price. Maersk said that 20% of its capacity from Asia to the West Coast has been lost year to date as a result of operationally induced “blank” (canceled) sailings. It currently expects 16% of its Asia-West Coast capacity to be lost from now until the end of June and 13% to be lost from now until the end of August. “This unfortunately means Maersk may not be able to fully honor its original allocations for all customers,” the carrier admitted.

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Choked US air hubs spur cargo shift to secondary gateways (Subscription Based)

The Journal Of Commerce Greg Knowler May 26, 2021

Forwarders are shifting greater volumes of US inbound airborne shipments to secondary airports to avoid ground handling bottlenecks at main air cargo gateways, which are being overwhelmed by surging demand. To avoid the bottlenecks that have developed at major air hubs such as Los Angeles and Chicago, forwarders are diverting inbound volume to smaller airports not traditionally used as the main entry points to the US. DB Schenker and Miami-based forwarder Senator International partially relocated operations from Chicago O’Hare to Chicago-Rockford International Airport (RFD) 85 miles to the northwest, joining Amazon Air, which is the airport’s main customer.

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The Challenge of Rebuilding U.S. Domestic Supply Chains

HBR.org Willy C. Shih et al. May 26, 2021

Shortages of essential medical supplies, semiconductors, and other goods and materials during the Covid-19 pandemic have dramatically exposed the vulnerabilities of global supply chains. U.S. government officials have been carrying out President Biden’s executive order to propose remedies to the risks that such networks pose to four specific areas (pharmaceuticals, strategic materials such as rare earth minerals, semiconductors, and large-capacity batteries) and six sectors of the economy (defense, public health, communications technology, energy, transportation, and food production). We think they will find one fundamental cause is the erosion of the U.S. “industrial commons” — the domestic capabilities needed to support the development and production of many goods deemed critical to U.S. interests. Addressing this decline requires an appreciation of factors related to both the supply side (the industrial capabilities for making these products) and the demand side (how these products are bought and sold).

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DAT, FourKites ink deal on spot truckload visibility (Subscription Based)

The Journal Of Commerce May 26, 2021

DAT Freight & Analytics said Wednesday that customers who book truckload freight through its site will be able to track drivers using FourKites’ shipment visibility platform. The agreement gives brokers and shippers who cover spot market loads through DAT, the largest load board in North America, the ability to track drivers automatically without the need for checking with the motor carrier or driver on estimated time of arrival (ETA), DAT CEO Claude Pumilia said in a statement. “We chose to partner with FourKites because of their market-leading data quality and proven ability to break down barriers to data-sharing and collaboration,” Pumilia said. “By working with carriers who already are part of the world’s largest visibility platform, both shippers and brokers on our network will benefit from greater efficiency and transparency.”

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BMO’s transportation sector write-offs fall to lowest level in 5 years

Freight Waves John Kingston May 26, 2021

Write-offs and other signs of distress in the transportation book of business at BMO (TO: BMO.TO) remained healthy in the midst of a strong freight market, showing only minimal signs of deterioration from the prior quarter. BMO’s transportation book is heavily weighted toward U.S. trucking. As a publicly traded bank that discloses quarterly data, its numbers are seen as a good indicator of industry strength or weakness. In the second quarter of 2021, the Canadian-based bank (which was formerly named the Bank of Montreal) had transportation sector write-offs of CA$10 million (U.S. $8.3 million) In the prior quarter, that figure was CA$11 million. More importantly, in the second quarter of 2020, the transportation write-offs were CA$35 million, and they were CA$30 million in the first quarter of last year. Just two quarters ago, in the fourth quarter of 2020, that figure totaled CA$23 million.

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The rise of the home improvement sector — and where it could go next

Retail Dive Caroline Jansen May 26, 2021

The surge in demand was evidenced in The Home Depot and Lowe's earnings figures for the year. For fiscal 2020, Home Depot reported net sales increased nearly 20% to $132.1 billion, while total comps rose 19.7% and U.S. comps increased 20.6%. Net income increased 14.4% to $12.9 billion. Meanwhile, at Lowe's, full-year net sales shot up 24.2% to $89.6 billion, while U.S. comps rose 26.8%. Net earnings increased 36.3% to $5.8 billion. Smaller rival Ace Hardware reported net sales increased 27.9% to $7.8 billion, while net income jumped 125.7% to $316.9 million

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Marijuana Workforce Drug Test Positivity Continues Double-Digit Increases to Keep Overall Drug Positivity Rates at Historically High Levels

Quest Diagnostics May 26, 2021

"Driven largely by surging rates of marijuana general U.S. workforce positives and steady rates of amphetamines positives, the rate of drug positivity remained stubbornly high despite seismic shifts to the workplace caused by the COVID-19 pandemic," said Barry Sample, Ph.D., senior director of science and technology, Quest Diagnostics. "However, as we see upticks in hiring and many employees returning to the workplace, it is important that employers consider workforce drug testing as a way to keep the workplace, their customers and the community safe." "Impairment, whether it be by drugs, alcohol, fatigue or stress, decreases the safety of the workforce," said Jenny Burke, senior director of impairment practice, National Safety Council. "The DTI results, reflecting decreases in many drug categories, occurred in a unique year. Even though these are down, we must continue to educate people about the impairing impacts of these substances. And, as states and the federal government consider changes to the legality of marijuana, we can't take for granted that they also understand the impairing impact of THC. The safety of people who share the roadways and workplaces with impaired people needs to be a priority."

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Safety ratings at risk for violators of proposed speed limiter law

Freight Waves John Gallagher May 26, 2021

Drivers who violate proposed laws mandating that their trucks be equipped with devices limiting speeds to no more than 70 miles per hour could have safety rating consequences even in states that have higher speed limits, a truck safety group points out. The latest such proposal, the Cullum Owings Large Truck Safe Operating Speed Act, was introduced in Congress on Tuesday by Reps. Lucy McBath, D-Ga., and John Katko, R-N.Y. Text of the bill was not available, but according to the Trucking Alliance, a truck safety group that supports the bill, the legislation sets the maximum speed for all commercial motor vehicles at 65 mph, or 70 mph if the truck is equipped with adaptive cruise control and automatic emergency braking (AEB). Trucks that were already operating with speed limiters installed would have to set the speed to a maximum 65 mph. Trucks manufactured without speed limiters would not be required to retrofit. “This will be a new federal motor carrier safety standard,” Lane Kidd, the alliance’s managing director, told FreightWaves.

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Bipartisan highway bill advances in Senate, offering a path through infrastructure morass

Politico Anthony Adragna May 26, 2021

A bipartisan proposal to spend hundreds of billions of dollars on highways advanced through a Senate committee Wednesday even as negotiations on a much bigger package continued to struggle — offering a possible off-ramp for Congress to make some progress on infrastructure this year. The bill approved unanimously Wednesday by the Senate Environment and Public Works Committee would allocate $311 billion over five years for roads and highways. Its bipartisan approval stands in contrast to floundering efforts to broker a deal between Senate Republicans and the White House on a multitrillion-dollar package that would fund everything from roads to broadband to blunting climate change.

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