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Thursday, June 3, 2021

Logistics Intelligence Brief

Trucking

US truck rate inflation may extend to 2022: Coyote

The Journal Of Commerce William B .Cassidy June 2, 2021

The US economic recovery is roiling rather than settling transportation markets — the US truckload market in particular — according to the latest quarterly forecast from Coyote Logistics. The US economy is expanding at 7.9 to 9 percent in the second quarter, according to IHS Markit, and that rapid growth is creating a “bullwhip effect” on supply chains, according to the Coyote Curve forecast. “We won’t know for sure until the end of June, but so far all indications are pointing towards yet another record peak,” Coyote said. That is a significant change from just last quarter, when the third-party logistics (3PL) provider predicted an end to the rate inflation that began last June and the beginning of the deflationary leg of the truck pricing cycle. “We called it a bit early,” Coyote said. Link: Coyote Curve Truckload Market Forecast: Q3 2021 Spot & Contract Freight Rate Trends

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Industry

E-commerce growth boosting US last-mile funding, M&A (Subscription Based)

The Journal of Commerce Cathy Morrow Roberson June 2, 2021

Last-mile struggles After increasing 32.4 percent year over year in 2020, US e-commerce sales remained elevated during the first quarter of 2021, increasing 39 percent from the first quarter of 2020, according data from to the US Census Bureau. With US GDP projected to grow around 6 percent this year, growth in e-commerce will remain strong even as vaccinations become more readily available and consumers begin to return to in-store spending. According to Brie Carere, vice president and chief marketing and communications officer of FedEx, the US domestic parcel market will hit 100 million packages per day by 2023, pulling volume projections forward by three years from the previous expectation, and 96 percent of that growth will come from e-commerce. Capacity constraints will likely be an ongoing concern, particularly in the US, where trucks — and drivers — of all kinds are increasingly difficult to come by. In addition, the complexities of cross-border e-commerce will see shippers seeking assistance in identifying alternative providers and services aside from nationwide parcel service providers FedEx, UPS, and the US Postal Service.

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Behind Your Long Wait for Packages (Subscription Based)

The Wall Street Journal Peter Tirschwell June 2, 2021

For more than a decade, disruption to the flow of goods has occurred repeatedly at U.S. ports, not to mention global incidents such as the Suez Canal blockage, container-ship infernos, fog-enshrouded ports and waves that send thousands of containers tumbling into the sea. Less than 1% of the $2.3 trillion Biden infrastructure plan is slated for ports and waterways. But no amount of spending could remove all the obstacles to a smooth flow of goods through U.S. ports. Why? The answer comes down to a complicated transportation market. Capacity is deployed according to shifting company and investor calculus, a complex system of handoffs between land and sea that has long resisted coordination. Longshore labor relations hinder improvements in productivity.

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Shippers/3PLs

Amazon to Hold Prime Day June 21-22

Associated Press/Transport Topics June 2, 2021

Amazon said that it will hold its annual Prime Day on June 21 and 22, the earliest it has ever held the sales event. Typically, Amazon holds Prime Day in July. Amazon has said it was holding it earlier due to the Olympics, which starts July 23 and takes people’s attention away. Last year, Amazon postponed Prime Day to October because of the pandemic and used the sales event to kick off holiday shopping early.

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Load Board Operators Streamline Processes Using Automation, Artificial Intelligence

Transport Topics Connor D. Wollf June 1, 2021

“It is a marketplace so you have to make sure demand and supply meet,” said Natarajan Subbiah, head of product at Uber Freight. “Every time I’ve talked to someone in the logistics space and the shippers of the world, no one ever has said they have a lot of free time. So this means that we have to make things super easy for them to basically improve their daily quality of life.” The modern freight-matching process is fundamentally based on technology, so technological advancements play a crucial role in it becoming more streamlined and effective. Those advancements can take many forms such as automation, machine learning and AI. “We are investing heavily in robotic process automation to eliminate any type of manual work, any type of data entry that we’re having to redo in various systems,” said Kristi Montgomery, vice president of innovation at Kenco. Kenco has a proprietary machine-learning AI tool, dubbed DaVinci AI, that’s used for predictive analytics on service failures and estimated time of arrival.

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Economy

The Economic Recovery Is Here. It’s Unlike Anything You’ve Seen. (Subscription Based)

The Wall Street Journal Gwynn Guilford And Sarah Chaney Cambon June 2, 2021

The U.S. economic recovery is unlike any in recent history, powered by consumers with trillions in extra savings, businesses eager to hire and enormous policy support. Businesses and workers are poised to emerge from the downturn with far less permanent damage than occurred after recent recessions, particularly the 2007-09 downturn. New businesses are popping up at the fastest pace on record. The rate at which workers quit their jobs—a proxy for confidence in the labor market—matches the highest going back at least to 2000. American household debt-service burdens, as a share of after-tax income, are near their lowest levels since 1980, when records began. The Dow Jones Industrial Average is up nearly 18% from its pre-pandemic peak in February 2020. Home prices nationwide are nearly 14% higher since that time.

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Fed’s Beige Book sees pickup in U.S. economic growth

Marketwatch Greg Robb June 2, 2021

The outlook: The U.S. economy grew at a faster rate in April and May than earlier in the year, according to the Federal Reserve’s latest Beige Book report released Wednesday. The economy expanded overall at a “moderate pace,” the report found. What happened: Consumer spending picked up as a result of increased coronavirus vaccination rates. Manufacturing activity increased despite notable supply chain challenges. Inflation pressures continued to build as both input and selling prices moved higher. Firms were adding to staff at a steady pace. Some companies reported it was difficult to find low-wage hourly workers. In some cases, this led some businesses to reduce their hours of operation. There were reports of record traffic at East Coast ports. Link: The Federal Reserve Beige Book June 2021

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Workforce

Melton Truck Lines announces driver pay increase

Freight Waves Noi Mahoney June 2, 2021

Melton Truck Lines is implementing the largest overall increase for driver pay in its history, according to Chairman and CEO Bob Peterson. The Tulsa, Oklahoma-based fleet will start student drivers at 47 cents per mile and will give the most experienced drivers 63 cents per mile.

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Amazon ends marijuana testing for new hires in effort to keep DC jobs filled

DC Velocity June 2, 2021

Under pressure to fill open jobs in its DCs and to fend off accusations of fostering harsh working conditions, mega-retailer amazon.com Inc. will stop screening new hires for marijuana use, announcing Tuesday that it is changing its drug testing policy for warehouse employees and other logistics jobs following the rise of increasingly lenient state laws that have legalized pot for recreational and medical use. “In the past, like many employers, we’ve disqualified people from working at Amazon if they tested positive for marijuana use. However, given where state laws are moving across the U.S., we’ve changed course,” Dave Clark, Amazon’s CEO for Worldwide Consumer, said in a release. “We will no longer include marijuana in our comprehensive drug screening program for any positions not regulated by the Department of Transportation, and will instead treat it the same as alcohol use. We will continue to do impairment checks on the job and will test for all drugs and alcohol after any incident.”

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Government/Safety/Sustainability

Trucking Notches Wins in Lawsuit Abuse Legislation

Transport Topics Eric Miller June 2, 2021

As legislators in many states close out their sessions and head home, trucking association leaders are reporting noteworthy progress this year in attacking state laws they say too often enable plaintiff attorneys to seek inflated jury verdicts in truck-involved accident litigation. “The efforts that our state associations have made have been terrific,” said David Bauer, vice president of state and tax policy for American Trucking Associations. “It’s very, very difficult to go up against the trial bar in a statehouse. They make it very tough, particularly with appeals they make to their base and constituency, and how they’re able to frame their messaging.” John Esparza, president of the Texas Trucking Association — which scored a big win in the Texas Legislature — said that getting bills passed is a complex endeavor that takes hard work, the support and help of a large coalition, good timing and even a little luck. “It’s a giant game of chess played on the ceiling,” he said of the process. “I’ve even lost bills that were quote, ‘easy bills,’ to political fights that had nothing to do with the bill.”

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Labor Shortage Draws Attention of U.S. Lawmakers (Subscription Based)

The Wall Street Journal Kate Davidson June 3, 2021

While some Republicans and business groups, including the U.S. Chamber of Commerce, have called for an immediate end to the extra payments, some policy analysts have said it may make sense to consider scaling back the payments gradually or creating incentives for hiring to help guide the labor market back to full health. “We are very, very much in uncharted territory right now,” said Peter Ganong, a University of Chicago economist who has studied the expanded jobless benefits since the start of the pandemic. “This is a great time for us to do a lot of experiments, try a lot of stuff, and see what kinds of policies to stand alongside [unemployment insurance] that will help get workers back to work.” Pairing a return-to-work bonus with an expanded employer tax credit could go a long way toward boosting hiring this summer, said Matt Haller, senior vice president of government relations at the International Franchise Association. He said many business owners, worried about passing higher costs on to consumers, are reluctant to raise wages to attract workers.

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