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Friday, May 28, 2021

Logistics Intelligence Brief

Shippers/3PLs

Retailers Race to Keep Kayaks and TVs in Stock (Subscription Based)

The Wall Street Journal Micah Maidenberg May 27, 2021

The spending is adding to inventory challenges that surfaced last year when shoppers hurried to buy items such as toilet paper and bikes. Now, purchasing teams are dealing with a range of in-demand items along with pandemic-fueled strain on supply chains. They risk potentially losing out on sales as consumers have historic levels of money to spend. “It’s hit almost every aspect of the business, so we’re chasing all the time. We’re chasing everything. But we’ve gotten really good at it,” Lauren Hobart, chief executive of Dick’s Sporting Goods, said this week about finding some products. Executives have pointed to supply constraints for certain products, and in March said the company had been pushing to get fitness items, kayaks, golf equipment and athletic apparel. “We’re monitoring things like delays at the ports and other factors in the supply chain,” John Furner, Walmart Inc.’s U.S. chief executive, said earlier this month. He cited adult bicycles and some consumer electronics as product areas where the retailer is still pushing to get better stocked up.

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3PLs, last-mile fleets partner to tackle ‘Amazon Effect’

DC Velocity May 27, 2021

The research—which culminated in a white paper titled The Age of Amazon: Why 3PLs & Last-Mile Delivery Fleets Must Draw Closer—found that Amazon delivers to 72% of its Amazon Prime customers within 24 hours, pushing shippers, logistics companies, and service providers toward next- and same-day delivery. In response, 3PLs and final-mile providers have forged closer connections and created service opportunities in four key areas: 3)Combined services. Freight opportunities in the B2B last-mile sector abound for pallet-sized less-than-truckload (LTL) freight and heavier items that have unique service requirements, including after-hour deliveries to business and residential customers. “These are best met by a combination of 3PL and last-mile providers. Motor carriers and 3PLs are chasing opportunities in the last-mile of this sector to offer blended warehousing and delivery services that smooth order fulfillment for customers that experienced supply chain disruptions from Covid-19,” according to the research. Link: Transportation Intermediaries Association The age of Amazon: Why 3PLs & Last-Mile Delivery Fleets Must Draw Closer

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Best Buy comes roaring out of the pandemic era with 37% sales growth

Retail Dive Ben Unglesbee May 27, 2021

Dive Insight: Best Buy enjoyed a blockbuster quarter on most metrics. Along with blistering sales growth, the company's operating income more tripled from last year at this time, coming in at $769 million in Q1. Obviously, much of the growth is making up for ground Best Buy lost in Q1 2020, when it closed stores due to COVID-19's rise and pivoted to curbside fulfillment at its stores. The retailer's growth against 2019, though, shows the underlying health of Best Buy at the moment, as well as a robust market in the sector. Best Buy experienced growth across its product categories, with comp sales up 27.3% in computing and mobile, up 45.9% in consumer electronics, up 66.6% in appliances, up 32.1% in entertainment and up 33.2% in services.

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GM to Restart Several Factories Idled by Computer-Chip Shortage (Subscription Based)

The Wall Street Journal Nora Naughton May 27, 2021

The lack of semiconductors, used in engines, braking systems and other vehicle components, has led to factory disruptions across the auto industry and left dealers with nearly bare new-car lots. It is also prompting companies to reduce their manufacturing and earnings forecasts for the year. Rival Ford Motor Co. has also said it expects the effects of the chip shortage to ease later this year. The company said in April the shortage would force it to cut production by half in the second quarter and shave $2.5 billion from its bottom line this year. Stellantis NV, which owns the Jeep and Ram brands, has warned that disruptions caused by the chip scarcity could last into 2022.

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Industry

E2Open lays down $1.7 billion to buy BluJay Solutions

DC Velocity Ben Ames May 27, 2021

The logistics technology firm E2Open is paying $1.7 billion to acquire fellow supply chain software vendor BluJay Solutions, saying the move will enhance its supply chain execution capabilities with BluJay’s transportation management system (TMS) software and global trade capabilities. According to Austin, Texas-based E2Open, the combination creates a strong, software as a service (SaaS)-based business platform spanning supply chain planning and execution, and adds direct-to-consumer offerings to E2Open’s stable, including last mile, parcel, and dropship commerce. Finally, E2Open said the deal will expand its network and data pool by accessing BluJay’s trade network of over 50, 000 network participants, enabling greater data collection and insights for customers across the freight sector. Related: The Wall Street Journal E2open to Buy BluJay Solutions in $1.7 Billion Supply-Chain Technology Deal

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Economy

New CDC Guidelines Could Accelerate Economic Normalization

Truckinginfo.com Avery Vice May 26, 2021

For the “glass half empty” crowd, sharply stronger spending on services sounds like a threat to freight volume. After all, if the substitution of goods for services helped spur freight volume, wouldn’t a reversal of that trend lead to weaker freight volume? In theory, the shift could hurt freight volume, but we have solid reasons to doubt that will happen. For starters, further recovery in services will fuel a further recovery in employment, which should result in more goods spending by the newly reemployed. Also, trillions in stimulus produced what undoubtedly is the strongest level of consumer savings ever – and by a large margin. That money is available to maintain goods purchasing even if spending on restaurants, travel, etc., soars. Moreover, growth in some services – especially restaurants and bars – should result in a net gain in consumption. For example, we would not expect consumers to reduce their spending on groceries as much as they add spending at restaurants.

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Why lumber prices are spiking

Supply Chain Dive Jen A. Miller May 27, 2021

Bringing lumber prices back to earth Vitner, who has put off building a garage, said that he expects the labor part of the sawmill problem to start resolving itself later this year but expects prices to remain high into 2022. That lines up with what a wholesale lumber distributor and former lumber trader told CNBC. Analyzing seven bullish cycles over more than three decades shows cycles lasting as short as nine months and as long as 41 months, Sherwood Lumber COO Kevin Little said. This current cycle is in its eleventh month. Sourcing wood from Canada is also problematic. The U.S. Commerce Department lowered tariffs on Canadian Lumber to 9% from 20% in December.

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Workforce

Carriers Continue to Raise Wages Amid Driver Shortage

Transport Topics Connor D. Wolf May 27, 2021

Trucking companies are continuing to increase driver pay as labor capacity remains a challenge amid strong demand. Averitt Express on May 19 announced a pay increase for local drivers, shuttle drivers, diesel mechanics and dock associates, while Maverick Transportation announced May 11 higher pay for flatbed, glass, marine and dedicated drivers. WEL Cos. announced April 30 its drivers would see pay increase by 4 cents per mile. While he sees these moves as a natural market reaction, American Trucking Associations Chief Economist Bob Costello told Transport Topics that financial incentives alone cannot fully address elevated demand levels “There is so much going on here,” Costello said. “You can write a whole PhD thesis on this if you really wanted to. Things that come to mind include the natural market reaction to any situation where demand outstrips supply as price goes up. And so I am absolutely not surprised at all that pay is going up for drivers. It should go up, it will continue to go up. But it’s also sign-on bonuses and guaranteed minimum weekly pay. It’s all this sort of stuff. But as I say over and over and over, if this was only about pay, this would be easy to fix.”

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Government/Safety/Sustainability

Can highway billboard signs change driver behavior?

Marketplace Janet Nguyen May 27, 2021

Researchers conducted experiments with Virginia drivers, who were shown a range of messages about driving behavior and habits. They were surveyed about their perceptions, and asked questions like whether they thought drivers would change their behavior after seeing these messages. A neuroimaging instrument was then used on the participants to quantify how they received, processed and cognitively interpreted these messages. “The short answer is, yes, they’re effective, but not for everybody. And the message itself really matters,” said Tripp Shealy, one of the authors of the study and an assistant professor of civil and environmental engineering at Virginia Tech. “It’s complicated, partly because humans are complicated, and behavior change is really hard to do.” The study found that “messages about distracted driving, driving without a seat belt, and impared or drowsy driving are perceived as the most effective at changing behavior.” Those with humor or meant to elicit negative emotions were perceived by participants to be more effective than those without. And messages that used statistics, like the number of deaths on the roadway, were perceived to be the most effective.

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GOP Offers $928B on Infrastructure, Funded With COVID Aid

Associated Press/Transport Topics Lisa Mascaro And Jonathan Lemire May 27, 2021

Republican senators outlined a $928 billion infrastructure proposal May 27 that would tap unused coronavirus aid, a counteroffer to President Joe Biden’s more sweeping plan as the two sides struggle to negotiate a bipartisan compromise and remain far apart on how to pay for the massive spending. The Republican offer would increase spending by $91 billion on roads and bridges, $48 billion on water resources and $25 billion on airports, according to a one-page summary released by the GOP negotiators. It also would provide for one-time increases in broadband investments, at $65 billion, and $22 billion on rail. Republicans have rejected Biden’s proposed corporate tax increase to pay for new investments, and instead want to shift unspent COVID-19 relief dollars to help cover the costs. “It’s a serious effort to try to reach a bipartisan agreement,” said Sen. Shelley Moore Capito of West Virginia, the lead GOP negotiator. Related: Bloomberg/Transport Topics Biden to Meet GOP Next Week on Infrastructure After Latest Offer

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Study: Bottlenecks cause nearly ‘75,000 years’ of freight delays annually

CCJ Jason Cannon May 27, 2021

"Our examination brings into sharp focus the continued costs of congestion on America's highway network," American Road & Transportation Builders Association (ARTBA) Chief Economist Dr. Alison Premo Black said of the agency's recent study, Throttled: The Economic Costs of Freight Bottlenecks. "Legislation to address freight mobility through increased federal transportation investment would help alleviate these bottlenecks, increase business productivity, and power the economy for the next generation." "Highway freight shipments collectively experienced over 27 million days of delay in 2019 – the equivalent of nearly 75,000 years – with over one-third of the lost time occurring on the Interstates," Black noted in the report. Link: American Road And Transportation Builders Association Throttled: The Economic Costs of Freight Bottlenecks

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