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Thursday, June 10, 2021

Logistics Intelligence Brief


Estes sees no end to supply-demand imbalance

Freight Waves Mark Solomon June 9, 2021

Estes said the prolonged strength spawned by demand spikes and tight capacity is unlike anything he’s seen in his four-plus decades in the industry. Estes is the largest privately held transportation provider in North America. All carriers have been affected by the merging of capacity challenges and demand increases in the wake of the COVID-19 pandemic. Unlike truckload carriers, the $40 billion LTL industry from which Estes generates most of its business is highly concentrated. It has been estimated that the top 10 LTL carriers control about 70% of all revenue. The post-pandemic recovery of the industrial economy, the LTL industry’s bread and butter, has been another tailwind for the carriers. Benefiting from high barriers to entry and pricing discipline that has held following the industry’s near-death price wars emerging from the Great Recession, LTL carriers have regularly raised rates for the past 10 years. Estes told George Abernathy, FreightWaves’ president, that a large customer began refusing to take the company’s calls because it didn’t want to be notified of yet another rate increase.

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Logistics Providers See E-Commerce Momentum Continuing Post-Pandemic (Subscription Based)

The Wall Street Journal Jennifer Smith June 9, 2021

“There may be some adjustment, but overall … that leap we took from the pandemic is here to stay,” said Kraig Foreman, president of e-commerce for DHL Supply Chain North America, a unit of Deutsche Post AG. The push to online shopping has fueled strong growth at retailers like e-commerce behemoth Amazon.com Inc. as well as bricks-and-mortar store owners like Walmart Inc. and Target Corp. that have extensive digital capabilities. U.S. e-commerce sales rose 42% last year to $813 billion from 2019, according to Adobe Analytics, which tracks activity on thousands of websites. The explosion in digital business drove robust growth in distribution operations and spurred millions of dollars of investments in supply-chain technology and businesses like Shopify Inc., Radial Inc. and ShipBob Inc. that offer services aimed at meeting online shopping demand. The growth of last year has moderated, however, and recent reports suggest business is returning to physical stores and restaurants as states lift lockdown restrictions.

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Commercial Classes 3-8 Trucks Cutting GHG Emissions

Transport Topics Roger Gilroy June 9, 2021

Zero-emission electric commercial vehicles appear likely to become routine in the years ahead, but now 49% of all Classes 3-8 commercial vehicles, or nearly 5.5 million trucks, already are using advanced diesel engine technology to reduce greenhouse gas emissions, according to a new study. “This advanced generation of diesel is a bridge technology that is delivering carbon dioxide reductions that are very important now,” Diesel Technology Forum Executive Director Allen Schaeffer said during a recent online presentation. The study predicted the growing number of more efficient diesel trucks on the road will eliminate 1.3 billion tonnes of carbon dioxide between 2020 and 2030.

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Drivers’ impact on fuel efficiency

Fleet Owner Michael Roeth June 9, 2021

The first area the article focused on was speed—or rather reducing speed. I know some fuel-efficient drivers have been experimenting with driving faster to see if they can still put up good MPG numbers. The article reminded drivers that for every mile per hour over 60 mph fuel economy is reduced by one-tenth of a mile per gallon. The facts about speed and fuel efficiency allows drivers to understand the consequences of their decision to drive fast.

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Inside the push for VMT, or a miles tax, to fund roads as Connecticut’s legislature sends truck-only tax bill to guv

CCJ Todd Dills June 9, 2021

After years of failure in a bid to levy truck-only tolls in Connecticut, Gov. Ned Lamont early this year proposed a miles tax on heavy trucks using roadways in the state. The legislature passed such a measure within the last 24 hours. Under the terms of the bill, starting in January of 2023, carriers would be required to calculate and file returns monthly with Connecticut based on miles run on roads in the state. Fees would be set up to depend on weight, ranging from 2.5 cents a mile at the 26,000-28,000-lb. range to 17.5 cents/mile for 80,001 pounds and above. The bill levies 10 cents a mile on rigs weighing in at 78,001-80,000 pounds, which Connecticut-based independent owner-operator Joe Bielucki described as "huge, about $4,000 to $5,000 a year for me."

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Connecticut lawmakers send truck tax to governor

Land Line Keith Goble June 9, 2021

‘Easy target’ OOIDA Director of State Legislative Affairs Mike Matousek said it is not a surprise that Connecticut legislative leaders are singling out truck drivers. “This is yet another effort by Gov. Lamont and his anti-trucking allies to raid the bank accounts of some of the hardest working people on the planet,” Matousek said. “Big trucks – especially out-of-state trucks – make for an easy target and elected officials have picked up on that.” As an industry, we need to figure out a way to change that dynamic and hold lawmakers more accountable for their bad decisions.” Truckers in the state say that out-of-state operations will avoid travel in Connecticut. In-state businesses will be left to pay the tax. Critics add that truck fees will result in additional costs for all consumers. As a result, the state’s economy will suffer. Senate Republican Leader Kevin Kelly of Stratford said the truck tax is a bad look for the state. “The very people we praised as frontline essential workers during the pandemic, who went above and beyond to transport necessities to us when we could not go very far ourselves, would be the target of this tax,” Kelly said during Senate floor discussion. “And the tax will be passed on to our families.”

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Better pay alone doesn’t retain drivers, Heartland finds

Freight Waves John Kingston June 9, 2021

In a presentation to the UBS Global Industrials and Transportation conference earlier this week, two executives from the company told the virtual gathering that while Heartland had increased pay, it was finding that other steps to address driver concerns — and not just another round of increases in the company’s per-mile rate — were having a positive impact on retention. In comments that at times echoed those told to FreightWaves in a recent interview with USA Truck, CFO Chris Strain said Heartland is learning that “some drivers are willing to take less in pay for the trade-off of being home every night.” That has helped squeeze driver supply but also in the mix are other reasons frequently cited for the current code red level of difficulty in hiring drivers: lingering health concerns from the pandemic and the loss of drivers effectively kicked off the roads by their record in the federal Drug and Alcohol Clearinghouse. “We see this extending for quite some time,” Strain said. “We have not yet seen the inflection point that says there is something here and drivers are starting to come back into the industry.”

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Miners’ Efforts to Attract More Female Workers Fall Flat (Subscription Based)

The Wall Street Journal Alistair MacDonald and Rhiannon Hoyle June 10, 2021

A drive by mining companies to hire more women has stalled, leaving the industry as one of the world’s most male-dominated professions and exacerbating a looming recruitment crisis in many key roles. Mining giants including BHP Group Ltd. Rio Tinto RIO and Freeport-McMoRan Inc. have used apprenticeships, direct recruiting, and more flexible working practices to appeal to women in recent years, hoping to rebalance their mostly male workforces and help fill vacancies. However, a Wall Street Journal analysis of government and company data shows that, over the past decade, increases in female workers have plateaued and even fallen back at some companies. Women are put off by the industry, say female workers and recruiters, citing a lack of flexibility in a career that can include months away from home at isolated sites.

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MIT report examines predictive analytics in supply chains

DC Velocity June 9, 2021

MIT’s Center for Transportation and Logistics (CTL) has released a summary report of a recent roundtable discussion on predictive analytics in supply chain, officials said. The virtual roundtable was held last fall for CTL’s Supply Chain Exchange Partners and featured presentations by academics and industry experts on the challenges and opportunities for using predictive analytics in the supply chain. The subsequent report was made available for download this month. The report summarizes key concepts and the main algorithmic methods for doing predictive analytics, and explains how participants are using the technology in supply chain operations. Demand forecasting, predicting the timing of events (driver availability, container unloading, and shipment events, for example), and anomaly risk prediction (manufacturing scrap rates, anomalous orders, and service failures) are among the applications participants cited. Forecasting was the most prevalent application, with 70% of participants saying they use predictive analytics for that reason.

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