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Logistics Intelligence Brief
Wednesday, September 1, 2021

Trucking

Volumes surged with inventory restocking and Hurricane Ida

DAT.com Dean Croke August 31, 2021

After lacking direction for the prior few weeks, the spot market found some energy last week as shippers continue to restock depleted retail inventories ahead of the Labor Day long weekend.
Adding to last week’s volume surge was the news that Hurricane Ida was taking aim at the Gulf Coast over the weekend. This caused inbound New Orleans spot market volumes for dry van trailers to jump by 5% last week. Shippers also moved as much freight as they could out of the way of the devastating storm, driving up spot volumes by 19%.
Outbound spot rates from New Orleans were up $0.05/mile last week to an average of $2.44/mile. Spot rates for loads on the 348-mile run from New Orleans to Houston increased by $0.26/mile to an average of $2.65/mile last week.
Spot rates
After remaining flat for the last month, dry van spot rates increased by $0.02/mile last week to a national average of $2.45/mile. Compared to the same week last year, dry van rates are $0.40/mile higher and $0.65/mile higher than the same period in 2018.
Of our Top 100 lanes (for loads moved), spot rates:
Increased on 49 lanes (compared to 33 the week prior)
Remained neutral on 31 lanes (compared to 41)
Decreased on 20 lanes (compared to 26)

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FTR: Dry Van Load Postings Increase

FTR Transportation Intelligence August 30, 2021

Dry van load postings increased 8.5% after a 1.9% gain during the prior week. The segment had seen only one weekly gain that was larger since late June. Dry van load postings were the strongest since week 19, which was related to the International Roadcheck disruption. Dry van volume was about 33% above the same 2020 week and close to triple the five-year average volume for the week.

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Hurricane Ida battering truck capacity ahead of peak

The Journal of Commerce William B. Cassidy August 31, 2021

Subscription-Based

Shippers far from New Orleans and Hurricane Ida’s path inland will feel disruption from the storm in coming weeks, according to DAT Freight & Analytics. Ida brings more disruption to an already congested and turbulent market as peak season freight moves inland from US ports, DAT executives said in the company’s weekly market update broadcast via LinkedIn Tuesday.
The result will be tighter capacity across the Southeast, from Atlanta to Dallas and Houston, as trucks are diverted to hauling relief and rebuilding supplies to the areas of Louisiana and Mississippi hit hardest by the storm, said Ken Adamo, chief of analytics for the load board operator and data analytics company. “We’re seeing storm disruption in a period of peak demand and port congestion,” Adamo said.
“Any stress on the system has an impact at this point,” he said. “Adding days [of delay] adds a lot of extra congestion and inefficiency downstream, especially when you add two, three, or four days. We’re already pressed for warehouse and cross-dock capacity.” DAT expects spot market volumes from Los Angeles to Chicago to increase 20 percent next week, and 60 percent the week after.

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Shippers/3PLs

Walmart Will Add 20,000 Workers to Supply-Chain Operations This Year

The Wall Street Journal Jennifer Smith September 1, 2021

Subscription-Based

The new hires will be permanent positions aimed at supporting Walmart through the holiday surge and beyond, the retailer said Wednesday. The full- and part-time jobs range from order pickers, freight handlers and forklift operators to technician and management roles at more than 250 Walmart and Sam’s Club distribution and fulfillment centers and transportation offices.
Walmart said the average wage for its supply-chain workers is $20.37 an hour. The company also is offering its field-based workers, including those in supply-chain operations, a $150 cash bonus for getting the Covid-19 vaccination. Walmart warehouse jobs pay at least $15 an hour, although pay rates vary depending on the role and the region. The company also is offering bonuses to many warehouse employees as it ramps up for the holidays.
“The pay rate has to be competitive because that’s the first thing hourly associates look for,” said Brian Devine, senior vice president of logistics-staffing firm ProLogistix, which works with companies such as Walmart Inc. and Target Corp. The firm’s average starting pay for warehouse workers was $17.31 an hour in the week ended Aug. 14, he said, up nearly 14% from the same period in 2020.

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Industry

CN Rail’s Kansas City Southern Deal Imperiled by STB Ruling

Bloomberg/Transport Topics Thomas Black August 31, 2021

Canadian National Railway Co. was dealt a potentially fatal blow in its $30 billion effort to acquire Kansas City Southern as U.S. regulators rejected a plan to use a voting trust to make the purchase.
“Applicants have failed to establish that their use of a voting trust would have public benefits,” the U.S. Surface Transportation Board ruled Aug. 31. Using a voting trust “would give rise to potential public interest harms relating to both competition and divestiture.”
Kansas City Southern had demanded the trust — a means to pay shareholders even before the deal gets a final antitrust nod — for any merger deal. The STB ruling could prod Kansas City Southern to rethink Canadian National’s offer and send the U.S carrier back into the arms of Canadian Pacific Railway.
The takeover battle will determine which Canadian company will become the first railroad to have tracks through Canada, the U.S. and Mexico. Kansas City Southern gets about half its revenue from Mexico, which is poised for an investment surge as companies seek to shorten supply lines that stretch to Asia.

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Government/Safety/Sustainability

2021 HDT Fact Book: Sustainability Focus Not Slowed By Pandemic

Truckinginfo.com Deborah Lockridge August 31, 2021

Meanwhile, traditional diesel drivetrains continue to get greener. The Environmental Protection Agency’s Phase 2 Greenhouse Gas Standards for Medium and Heavy-Duty Engines and Vehicles went into effect with model year 2021. When fully phased in by 2027, these standards will require GHG reductions of up to 25% from MD/HD vehicles and 4-5% from engines.
But as the State of Sustainable Fleets Report points out, traditional drivetrains face increasingly stringent regulatory initiatives (including outright bans) and growing expectations from sustainability-oriented customers and the public.
Ultimately, the pace of widespread fleet adoption of new sustainable vehicle technologies comes down to whether they can compete with traditional drivetrains in terms of performance and total cost of ownership.

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