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Logistics Intelligence Brief
Monday, August 2, 2021


LA–Chicago truck rates soar amid intermodal delays (Subscription Based)

The Journal Of Commerce William B. Cassidy And Ari Ashe July 30, 2021

A massive wave of US imports is colliding with tight intermodal rail capacity in the Los Angeles–Inland Empire market, driving up spot truckload rates despite predictions of a seasonal slowdown in national rate hikes between July 4 and Labor Day. Dry-van spot rates from Los Angeles and Ontario, California, to Chicago surged in June. Los Angeles-to-Chicago shipper-paid spot rates leapt $0.19 month over month to $2.90 per mile in June and are on pace to rise to $2.99 in July, according to a JOC analysis of data from DAT Freight & Analytics, LaneMaster, digital broker Loadsmart, and other third-party logistics providers. Those rate increases are higher than those for the entire US market in the last two months. JOC’s Shipper Dry Van Spot Rate Index rose only $0.02 sequentially to $2.92 per mile in June and was on pace to rise $0.06 to $2.98 per mile nationally this month through July 22. In July 2020, when truckload markets began to bounce back from the earliest days of the COVID-19 pandemic, the national shipper dry van rate was $2.23 per mile.

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No End In Sight to Supply-Chain Snarls, So Now What?

Bloomberg Brooke Sutherland July 30, 2021

The big question, of course, is how long industrial supply-chain leaders need to keep coming up with new ways to make and ship products. Some of the component bottlenecks and high raw-material costs will work themselves out as the economy settles into a more sustainable growth rate. But absent an economic slowdown that no one wants, the only real way to rectify the semiconductor shortage and a dearth of ocean-freight capacity is to build more chip factories and shipping containers. That takes time. Freight broker C.H. Robinson Worldwide Inc. warned this week that the cargo logjam will last at least through the Chinese New Year holiday next February. Even that is something of a guess or wishful thinking. At this point in the earnings season, it’s telling that I can’t think of one CEO who expressed much optimism about a near-term ease to the supply snarls. “I’m not ready to say we have turned a corner,” Rockwell CEO Blake Moret said in an interview. “It’s not going to be over quickly. But we’re dealing with it.”

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Amazon rushes to boost fulfillment capacity as it plays ‘catch-up’ to demand

Supply Chain Dive Max Garland July 30, 2021

Amazon's focus is "squarely on adding capacity to meet the current high customer demand," Director of Investor Relations Dave Fildes said on the company's Q2 earnings call Thursday, as the e-commerce giant and others rush to create more space in their networks ahead of peak season. The company has nearly doubled the size of its fulfillment network in the past 18 months ending June, said CFO Brian Olsavsky. But Amazon has still "been playing catchup pretty much since the pandemic started," leading to inventory storage constraints for its third-party sellers and retail operations. "We don't think we're the only ones who had that issue, and that's why we're building out our network so quickly," Olsavsky said, adding that most of the company's building openings for its network are planned in the second half of the year.

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Tractor Supply plans to add 3 distribution centers in 5 years, accelerate supply chain investments

Supply Chain Dive Edwin Lopez July 30, 2021

Dive Insight: Tractor Supply laid out its five-year plan to investors in October, and new distribution centers are a key aspect. "Our goal is to provide one-day delivery to 99% of our customers while improving our profitability," said Robert Mills, Tractor Supply's chief technology, digital commerce and strategy officer at the time. But "fulfillment is not a one-size-fits-all," Mills said. Tractor Supply has a wide assortment of products, from lawn mowers to pet supplies, which require a variety of fulfillment options to make next-day delivery possible. As a result, Mills said the company needs to be able to ship from stores as well as directly from distribution centers, and offer both curbside pickup and buy online, pickup in store to meet customers' varied needs. "A critical component of this strategy is how we leverage our order management systems to optimize how we route orders across our different fulfillment channels, allowing us to deliver quickly and cost effectively to the customer," Mills said.

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Senate Introduces $1 Trillion Infrastructure Bill

Associated Press/Transport Topics Kevin Freking And Lisa Mascaro August 1, 2021

After much delay, senators unveiled a nearly $1 trillion bipartisan infrastructure package Aug. 1, wrapping up days of painstaking work on the inches-thick bill and launching what is certain to be a lengthy debate over President Joe Biden’s big priority. The Infrastructure Investment and Jobs Act clocked in at some 2,700 pages, and senators could begin amending it soon. Despite the hurry-up-and-wait during a rare weekend session, the final product was not intended to stray from the broad outline senators had negotiated for weeks with the White House. Senate Majority Leader Chuck Schumer (D-N.Y.) said a final vote could be held “in a matter of days.” A key part of Biden’s agenda, the bipartisan bill is the first phase of the president’s infrastructure plan. It calls for $550 billion in new spending over five years above projected federal levels, what could be one of the more substantial expenditures on the nation’s roads, bridges, waterworks, broadband and the electric grid in years.

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Mudslides Close 46 Miles of I-70 in Colorado

Associated Press/Transport Topics August 2, 2021

Mudslides from heavy rains caused “extreme damage” to Interstate 70 in Glenwood Canyon, Colo., Aug. 1, and transportation officials closed the road and advised long-distance truckers to detour north onto Interstate 80 through Wyoming. I-70 is a major transportation corridor between the Rocky Mountains and the West Coast. An approximately 46-mile stretch of the interstate was closed, including Exit 87 (West Rifle), Exit 109 (Canyon Creek), Exit 116 (Glenwood Springs) and Exit 133 (Dotsero). The mudslides left the interstate blocked with piles of boulders and logs, Colorado transportation officials said Aug. 1, as forecasters warned of more flash floods in the coming days across the Rocky Mountain and Great Basin regions.

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How does Congress want to make trucking safe in 2022?

Freight Waves John Gallagher July 31, 2021

Large-truck crash study The committee stated that it “remains alarmed” by truck safety trends, noting that injuries to people involved in large-truck crashes in 2019 increased more than 5%, while deaths increased 36% since 2010. Last year’s appropriations bill included $30 million for a truck-crash study, and the committee wants FMCSA to brief both the House and Senate appropriations committees on the progress of the study within 90 days of enactment of the FY2022 budget bill.

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Distracted driving: What drivers who crash are looking at

CCJ Alex Locke August 1, 2021

The study found the "observation rate" (observations per 1,000 hours) for distracting behaviors for drivers involved in a collision and compared it to drivers that didn't get into a collision. Itfound a strong correlation between certain behaviors and unsafe driving. Using data from the weeks leading up to a distracted truck driver's crash, Omnitracs produced the above graph. The graph shows that of drivers who had a collision, they were 90.3% more likely to have been talking on a mobile phone, 60.7% more likely to have been texting, and 42.8% more likely to have been engaged in grooming activities than drivers that didn't crash. The graph shows a weaker correlation between crashing and activities like smoking or talking on a phone with a hands free setup. The data makes a strong case for hands free mobile phone use, as handheld mobile devices used for phone calls present a nearly 73% stronger correlation with collisions than voice assisted or speaker phone systems.

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The Log Book: Walmart honors driver in Every Day Heroes program

Freight Waves Grace Sharkey July 31, 2021

Walmart honors driver in Every Day Heroes program Walmart recently honored a driver from Mint Hill, North Carolina, as part of its Every Day Heroes program, created in partnership with PepsiCo to celebrate team members who go above and beyond for customers and individuals in their communities. April Coolidge’s dedication during a time of personal and COVID pandemic-related challenges placed her among 12 employees who will be recognized on the Walmart (NYSE:WMT) website for their goodwill and passion for making a difference, particularly during the challenges of the pandemic. The associates will also be featured on various Frito-Lay products and marketing materials where consumers can use a QR code to learn more about the workers’ efforts. While Coolidge has only been driving for Walmart for two and a half years, a passion for driving trucks runs in her blood. “My dad was a truck driver and he provided a very good life for our family and I had a wonderful childhood because of it,” she said in an interview.

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Paccar’s New CTO Sees Electrification, Autonomy Transforming Truck Market

Transport Topics Seth Clevenger July 30, 2021

Rich, whose long career at Ford included time as director of autonomous vehicle technologies and director of global strategy, sees autonomous trucks as a compelling opportunity to improve safety and efficiency in the trucking industry. “The technologies will work,” he said, but added that it will take time to do it right and do it safely. “You have to be patient with it.” Level 4 self-driving trucks could help ease the trucking industry’s “massive” driver shortfall, Rich said, especially in longhaul trucking, where it has become increasingly difficult to recruit drivers for jobs where they will be out on the road for weeks at a time. “If we can relieve some of that pressure and improve the quality of jobs for people to actually get home and get to see their families in a hub-and-spoke model, it’s a wonderful thing for everyone,” he said. “I firmly believe in the safety, job quality and efficiency improvements that are possible.”

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