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Logistics Intelligence Brief
Monday, September 13, 2021

Industry

UPS buys into same-day delivery with Roadie

Freight Waves Brian Straight September 10, 2021

UPS is jumping into the same-day delivery game, announcing Friday that it is acquiring Roadie.
Terms were not disclosed. The transaction is expected to close in the fourth quarter of 2021.
“Roadie’s leading technology, combined with UPS’ portfolio, will open doors for new growth opportunities,” UPS said in a statement announcing the acquisition. “Roadie’s technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities.”
UPS said Roadie will continue to operate under the same name and will not carry goods from the UPS network, and packages transported by Roadie will not cross into the UPS network.
Roadie is an “on-the-way” delivery platform that counts some of the nation’s largest retailers among its clients. The company leverages technology and gig economy drivers to handle last-mile, on-demand and same-day deliveries.
The Home Depot is an investor in Roadie and one of its largest customers. During the pandemic, Roadie expanded its services for the home improvement giant in March 2020 by increasing same-day delivery to 600 Home Depot stores. It added 300 more stores in April and by the end of 2020, Roadie was handling same-day delivery at over 1,300 Home Depot locations.

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Kansas City Southern Picks Canadian Pacific Bid

The Associated Press September 12, 2021

Kansas City Southern has decided that a $31 billion bid from Canadian Pacific is the best of two offers on the table to buy the railroad.
The Kansas City, Mo., company said in a statement Sept. 12 that it has notified rival bidder Canadian National that it intends to terminate a merger agreement and make a deal with Canadian Pacific.
But it’s not final yet. Canadian National still has five business days to negotiate amendments to its offer, and the Kansas City Southern board could determine that a revised CN offer is better.
In its own statement, Canadian National said it’s evaluating its options. “CN will make carefully considered decisions in the interests of all CN shareholders and stakeholders and in line with our strategic priorities,” the railroad said.
Under the Canadian Pacific offer, each share of Kansas City Southern common stock would be exchanged for 2.884 CP shares and $90 in cash.

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Fleet Breakdown Frequency Improving; Parts, Labor Costs Increasing

Truckinginfo.com September 12, 2021

Truckload carriers averaged 23,769 miles between breakdowns, an 8.8% increase in miles from the previous quarter. The time between breakdowns for LTL carriers increased to 46,186 miles in the second quarter from 44,380 in the first quarter of 2021. The tank sector saw a smaller improvement, running 18,241 miles in the second quarter, up from 17,420 in the previous quarter.
Items from the five most frequently repaired VMRS (Vehicle Maintenance Reporting System) systems accounted for 66% of the breakdown and unscheduled repairs reported by participating fleets. Lighting-related repairs produced the greatest gain, driven by the truckload cohort, which realized a significant improvement over the first quarter last year – 384,000 reported instances in the first quarter of this year, compared to 304,000 last year.

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U.S. rail carload and intermodal volumes are mixed, for the week ending September 4, reports AAR

Logistics Management September 10, 2021

Intermodal containers and trailers—at 266,212—fell 7.3% annually, trailing the week ending August 28, at 269,756, and the week ending August 21, at 270,519.

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Most recent Freight TSI reading, for July, is mixed, reports BTS

Logistics Management September 10, 2021

The July reading—at 134.5—fell 1.6% from July, seeing a decline for the third consecutive month. And compared to July 2020, it eked out a 0.5% gain.
When compared to the all-time high reading, of 141.9 recorded in August 2019, the July 2021 Freight TSI came in 5.2% below that level.
BTS said that the 1.6% sequential June to July decline was due to seasonally-adjusted decreases for rail carloads, rail intermodal, trucking, water, and pipeline, with the decreases taking place amid mixed results for other key economic indicators.
Over the last three months through July, the Freight TSI has fallen a cumulative 2.3% going back to April, its fourth decrease over the previous seven months. What’s more, BTS said that the July Freight TSI is at its lowest level going back to November 2020 and 7.3% above the April 2020 pandemic low.
On a year-to-date basis through July, the Freight TSI is down 0.3% compared to the same period in 2020.
Link: Bureau Of Transportation Statistics Transportation Services Index

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Shipping Options Dry Up as Businesses Try to Rebuild From Pandemic

The Wall Street Journal Costas Paris September 12, 2021

Subscription-Based

The top six container operators control more than 70% of all container capacity, according to maritime data provider Alphaliner. As businesses try to restock after the lifting of the Covid-19 restrictions, they are paying at least four times more to move their products compared with last year and face long delivery delays, industry executives say.
“A few years ago we would get a half-dozen competitive freight offers from shipping companies within a couple of hours,” said Mark Murray, owner of DeSales Trading Co., a North Carolina-based importer of rubber threads and elastic bands. “Now it’s a couple of days to get an offer from one of the big boys, you have to pay crazy freight rates and your shipment is months late. Our hands are tied.”

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Shippers/3PLs

Echo deal pushes private equity deeper into logistics

The Journal of Commerce William B. Cassidy September 10, 2021

Subscription-Based

Echo Global Logistics will be acquired by private equity firm The Jordan Company (TJC) for approximately $1.3 billion, a deal that takes Echo private and gives it additional funding for technology and data science development. That, in turn, will enhance its value to shippers and carriers, the third-party logistics (3PL) provider and brokerage said in a statement Friday.
The Echo-TJC deal underscores intense interest in logistics from investors amid global supply chain disruption caused by the COVID-19 pandemic, as well as high demand for advanced logistics technology from shippers, including domestic and international shippers. The Echo-TJC deal follows Uber Freight’s $2.25 billion bid for Transplace in July, and the June merger of GlobalTranz and Worldwide Express.
Acquisitions are taking place among mid-sized and smaller 3PLs as well. “There’s a lot of money chasing this industry and looking to build value,” Chris Ball, president and CEO of chemical industry logistics provider Quantix, told JOC.com Thursday. Quantix, formerly A&R Logistics, has grown rapidly in the past two years through acquisition, backed by private equity firm Wind Point Partners.

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Government/Safety/Sustainability

The day after: Trucking ponders what vaccination mandate means for industry

Freight Waves John Kingston And John Gallagher September 10, 2021

“A lot of the concerns I’ve heard from our members is the 100-employee threshold,” Kendra Hems, president of the New York State Motor Truck Association, told FreightWaves. Conceding that many drivers chose that career path “because they don’t like being told what to do,” Hems said she is hearing from some of the larger carriers in her organization that “they are concerned that they may see drivers leaving their companies for smaller ones who are not required to follow the mandate.”
It isn’t just a concern that drivers will go to a smaller trucking company, Hems added. She is also hearing anxiety that they might go to a sub-100-worker company that isn’t even in the trucking business.
More than 1,000 miles away, Shannon Newton, the president of the Arkansas Trucking Association, is hearing the same thing.
“I doubt that it is unique to trucking, but certainly the carriers that have less than 100 drivers are eyeing an opportunity to pick up drivers from larger employers,” Newton said. “I have received more than one message from employers of less than 100 employees who have said they might stand to benefit in attracting drivers.”

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Trucking org pushes back on Biden’s ‘discriminatory’ vax mandate

CCJ Jason Cannon September 11. 2021

According to a CCJ survey conducted this month, 91% of for-hire and private carrier respondents said they had not mandated that employees receive a COVID-19 vaccine and/or agree to undergo regular testing, and almost 60% said they didn’t plan to enact such a measure. Among for-hire carriers with 101 or more trucks – a size large enough to be swept up in Biden’s mandate – 93% thus far have yet to implement testing or vaccinations and 52% said they don’t plan to.
"If these mandates are designed to protect Americans, then why the discriminatory 100-employee threshold, picking winners and losers for both employees and employers," Spear asked. "As this proposal moves forward, ATA is examining all options and will choose a path that protects our industry so that it can continue delivering on behalf of our country."

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