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Monday, June 7, 2021

Logistics Intelligence Brief

Workforce

US trucking firms add jobs, but not enough of them (Subscription Based)

The Journal of Commerce William B. Cassidy June 4, 2021

Trucking did not lose jobs in May — real, unadjusted payroll numbers show a 10,800-job employment gain — but that was still a smaller increase than expected, and not enough to meet surging freight demand. The gain in new hires during May brought the total number of actual trucking jobs added during the past three months to 25,100, according to preliminary, unadjusted data from the US Bureau of Labor Statistics (BLS). That is a sign trucking industry efforts to increase employment, and thereby capacity, by raising pay are succeeding. As of May, US for-hire trucking employment is 51,000 workers above its year-ago level. But the trucking jobs gained in May, which include drivers and other workers, were still fewer than expected. The data show the BLS anticipated trucking would add about 12,700 jobs, which meant trucking fell 1,900 jobs short after seasonal adjustment. That adjustment does not mean trucking “lost” 1,900 jobs, but indicates hiring numbers did not rise to meet expectations based on seasonality.

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Did trucking jobs rise in May? It depends

Freight Waves John Kingston June 4, 2021

The monthly employment report for the truck transportation sector is a tale of two markets. Seasonally adjusted figures reported by the Bureau of Labor Statistics showed a drop in employment between April and May. This occurred even as virtually every trucking company under the sun has a Help Wanted sign out, along with a package of pay increases, bonuses and other incentives. But the decline in seasonally adjusted figures was not matched by the report for not-seasonally adjusted figures. The not-seasonally adjusted figures for all sectors are considered by economists to be the poor stepchild of data, and news reports inevitably focus on seasonally adjusted data. But the not-seasonally adjusted data does exist, and not all economists ignore it. A definition of seasonally adjusted data supplied by the BLS said that the process to produce that number “attempts to measure and remove the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month.”

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Despite Retention Issues, Most Truck Drivers Not Looking for Work

Transport Topics Connor D. Wolf June 3, 2021

The majority of truck drivers are not actively looking for a new job, but a robust recruiting environment makes it easy for them to find one should they want to make a move, a recent industry survey found. The survey also found that addressing the issues that matter to drivers can help fleets retain those they have. “It is a competitive market right now. And I think where you’re seeing a lot of the turnover is drivers that are just finding another job — not because they’re looking, but because it sought them out,” said Scott Dismuke, director of operations for The Professional Driver Agency, which helps carriers with retention efforts. “Drivers aren’t necessarily looking for jobs, but they’re not having any issue changing jobs.” According to the “Data Download: Examining Driver Opinions in Today’s Driver Market” report — released May 27 and completed in partnership by PDA and recruiting firm Conversion Interactive Agency — 63.6% of drivers are not seeking other employment. Of those, 73.6% said they were happy with their current jobs, and therefore were not looking for a new one.

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Industry

Where have all the carriers gone?

Freight Waves Mark Solomon June 7, 2021

The U.S. parcel industry has two network carriers — FedEx Corp. (NYSE:FDX) and UPS Inc. (NYSE:UPS) — that large shippers can consistently trust. The LTL industry, which had hundreds of carriers at the dawn of truck deregulation in 1980, is now dominated by the 10 largest carriers that control about 70% of a $40 billion industry. Other than on domestic maritime routes protected by the 101-year-old Jones Act, there is no longer a U.S.-flag maritime industry 27 years after it was deregulated by the Shipping Act of 1984.

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Drayage demand at record levels in Southeast amid import surge (Subscription Based)

The Journal of Commerce Ari Ashe June 4, 2021

Major port trucking companies in the US Southeast warn they are running out of capacity as a 12 month surge of US imports from Asia pushes drayage demand to record levels. National and regional drayage providers in the Southeast are fully booked with core customer business and do not have capacity to serve new clients, leaving ocean carriers and importers scrambling to find smaller truck carriers and paying extra to get their import containers pulled from Charleston, Savannah, and Norfolk. Combined imports through the three ports jumped 27 percent between January and May compared with the same five months of 2020, and are up 15 percent compared with the 2019 period, according to PIERS, a sister product of JOC.com within IHS Markit. Imports in Savannah have surged 31 percent in the first five months compared with a year ago, and 20 percent compared with pre-pandemic 2019. Ben Banks, vice president of drayage provider TCW Inc., said dray capacity in Savannah has been unable to keep pace.

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What now? UAW members reject second tentative agreement at Volvo Trucks

Freight Waves Alan Adler June 6, 2021

United Auto Workers members at Volvo Trucks North America (VTNA) rejected a second tentative agreement with the truck manufacturer on Sunday, casting greater percentages of no votes than the first proposed contract they rejected in May. Local 2069 members voted 91% against salary language and 90% against hourly and common language in the proposed six-year agreement, according to a tally sheet posted on the local’s Facebook page.

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May Class 8 Orders Fall to 22,900

Transport Topics Roger Gilroy June 3, 2021

ACT President Kenny Vieth estimated there are thousands of “red-tagged” units that are essentially built, but unfinished and waiting for parts. “Based on anecdotal conversations, we would put the current number of red-tagged units at around 5,000 units industrywide,” he said. FTR pegged orders at 23,600 based on the preliminary data and calculated there have been 420,000 Class 8 orders over the past 12 months. “I didn’t expect the May number would be that impressive,” said Don Ake, vice president of commercial vehicles at FTR. “My information is the truck makers are not taking 2022 orders yet, so they are just filling up 2021.”

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Shippers/3PLs

C.H. Robinson Petitions Supreme Court to Hear Negligent Hiring Case

Transport Topics Eric Miller June 4, 2021

The dispute dates to 2016, when C.H. Robinson, a federally registered property freight broker, was hired by Costco to arrange for the transportation of certain goods from Sacramento, Calif., to Salt Lake City. C.H. Robinson then hired a federally licensed motor carrier to move the load. However, en route to Utah in December 2016, a tractor-trailer driven by Ronel Singh traveling eastbound on Interstate 80 in Elko, Nev., lost control, crossed the median and hit a vehicle traveling westbound, seriously injuring the occupant, Allen Miller. Miller sued C.H. Robinson, Singh, and his employer, Rheas Trans Inc. and Kuwar Singh dba RT Service, for negligence in federal district court. However, the district court approved a summary judgment in favor of C.H. Robinson, saying holding it accountable would violate federal pre-emption. But on Sept. 28, the 9th Circuit, in a 2-1 vote, reversed the district court’s dismissal, ruling that C.H. Robinson “negligently selected an unsafe motor carrier resulting in plaintiff’s serious injuries in a motor vehicle accident.”

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Dollar Tree: ‘Upside down’ ocean market sends import rates skyward

Supply Chain Dive S.L. Fuller June 4, 2021

For Dollar Tree, freight-market conditions have "continued to deteriorate" over the last few months, CFO Kevin Wampler said during an earnings call last week. The biggest headwinds stem from higher rates on import freight, he said. Costs associated with inbound and outbound domestic freight are also on the rise, Wampler said. A lack of truck drivers, coupled with elevated trucking demand, means shippers "maybe be paying surge rates to get goods moved," he said. "We are now expecting costs to be significantly higher than originally projected, led by import freight due to the continued disruption in the global supply chain from equipment shortages and capacity issues," Wampler said. "If these disruptions affect the timing of inventory receipts, it could affect sales and mix." Costs will have the largest impact in Q2 and Q3, he added.

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Economy

ISM Services PMI reading sets new record in May

Logistics Management Jeff Berman June 3, 2021

The Institute for Supply Management (ISM) said today in its Services ISM Report on Business that that services sector economic growth saw another strong month in May, reaching its highest level on record. The reading for the report’s key indicator—the Services PMI (formerly the Non-Manufacturing PMI)—at 64 (a reading of 50 or higher indicates growth is occurring) —headed up 1.3% from April to May, with the index growing, at a faster rate, for the twelfth consecutive month

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Government/Safety/Sustainability

Truck broker guidance, ELD data research rolled into highway bill

Freight Waves John Gallagher June 4, 2021

The bill contains a slew of proposals opposed by trucking — small-business owner-operators in particular — that were included in the reauthorization bill that passed the House last year, among them: • Review of hours-of-service changes made in 2020. • Increasing minimum insurance requirements from $750,000 to $2 million. • Requiring automatic emergency brakes on new trucks. • Sleep apnea screening and testing rules. • Performance standards for side underride guards. • Time and/or distance caps on using a truck for personal conveyance. • Requiring driver safety scores be made publicly available.

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Business

U.S. businesses to spend additional $140 billion in Q2

DC Velocity June 3, 2021

“B2B spending is an important bellwether for the overall health of the economy, and the GBSI study shows U.S. businesses are investing and spending more, whether to [adapt] to the new ways of operating during the pandemic, or to digitize and streamline their operations,” Dean Henry, executive vice president, global commercial services at American Express, said in a statement announcing the launch of the report. “It also reveals that some of the trends that have emerged or accelerated during the pandemic, such as payments automation and new approaches to managing the supply chain, are likely here to stay.” Across nine B2B spending categories, the fastest growth rates were in raw or processed materials and technology spending, according to the survey. Spending on materials such as lumber, metals, and chemicals rose by an average of 6.2% between the first quarter of 2020 and the first quarter of 2021, equating to an estimated $37 billion in additional spend, the researchers said. The trend is expected to continue, with U.S. businesses surveyed anticipating another 6.4% rise in spending in this category from Q1 to Q2 2021. Technology spending increased 4% from the first quarter of 2020 to the first quarter of 2021, and is expected to increase 4.3% between the first and second quarters of 2021.

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