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Logistics Intelligence Brief
Friday, October 15, 2021

Industry

The Great Supply Chain Disruption (Podcast 36m)

The New York Times Sabrina Tavernise October 15, 2021

The Daily Podcast
Throughout the pandemic, businesses of all sizes have faced delays, product shortages and rising costs linked to disruptions in the global supply chain. Consumers have been confronted with an experience rare in modern times: no stock available, and no idea when it will come in.
Our correspondent, Peter Goodman, went to one of the largest ports in the United States to witness the crisis up close. In this episode, he explains why this economic havoc might not be temporary — and could require a substantial refashioning of the world’s shipping infrastructure.

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What’s behind supply chain breakdowns? (Video 6m)

CBS Sunday Morning David Pogue October 10, 2021

In recent months, supply chain problems have been blamed for shortages affecting just about every sector of industry and commerce. But what exactly is broken, and why? Correspondent David Pogue asked the experts to supply answers.

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U.S. supply chain too snarled for Biden Christmas fix, experts say

Reuters Nandita Bose and Lisa Baertlein October 14, 2021

Frank Ponce De Leon, International Longshore & Warehouse Union Coast Committeeman summarized the problem at U.S. ports, which the Commerce department estimates handle 76% of all trade, during comments last week.
"You don't build a church for Christmas and Easter; you build it for a regular Sunday service," he said. "With the unprecedented influx of cargo, it's like Christmas and Easter on the docks every single day, with more ships coming in and the pews have been full for months, and there's nowhere left to sit - or stand."

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Crunch Time at Southern California Ports as Black Friday Nears

Transport Topics Dan Ronan October 14, 2021

One day after announcing the Port of Los Angeles will begin operating 24/7, port officials said they were working feverishly to get ready for what promises to be a busy stretch.
“We’re moving as fast as possible,” said Gene Seroka, the facility’s executive director, during an Oct. 14 news briefing. “We are only 4½ weeks away from Black Friday. We have a lot of work ahead of us, but all of that conversation is pushing forward to getting everybody to open up each day of the week.”
Seroka added, “We have to get this orchestra of participants in the supply chain to adjust and get on the same schedule, the same calendar. It’s going to take some pulling. Others are volunteering, and that’s the goal; to get everyone synchronized to the best of our ability to get this container flow going.”

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11th Annual Rail/Intermodal Roundtable: Looking for signs of normalcy

Logistics Management Jeff Berman October 13, 2021

LM: With that in mind, how would you summarize the intermodal market from a volume and demand perspective?
Larry Gross: Since the recovery from the pandemic lockdowns began last year, the intermodal sector has struggled to meet demand. The timing and speed of the snap-back took the industry by surprise, and the congestion that resulted from this initial shock has not abated. Continued strong demand has simply not provided the industry with the breathing room to recover. Productivity has suffered from congestion and equipment imbalances and shortages.
Due to the situation, this has limited the volume that the intermodal sector has been able to process. Intermodal revenue moves per month have declined by 12% from March to July, according to IANA data. This is due not to declining demand, but rather operational difficulties, shortages of containers and chassis due to lower equipment velocity and resulting volume constraints. As a result, vessel backlogs are continuing to grow and transit times are suffering.

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Diesel Prices Spike

Truckinginfo.com Deborah Lockridge October 14, 2021

In its latest Short-Term Energy Forecast, the EIA noted that oil prices have increased over the past year as result of sustained draws on global oil inventories. Prices increased after the Oct. 4 announcement by the Organization of Petroleum Exporting Countries that the group would keep current production targets unchanged.
The WSJ adds that Energy Secretary Jennifer Granholm said recently that the U.S. is considering releasing oil from the Strategic Petroleum Reserve. President Biden has twice urged OPEC to increase oil production more quickly, but so far the oil cartel has brushed off his requests.
According to Politico.com, the White House has been consulting with the oil industry on how to address rising fuel prices. Politico points out that this is “an awkward shift for the Biden administration, which has pledged to move the country away from fossil fuels and has drawn criticism from the industry and Republicans for pausing lease sales of federal land for oil and gas development.”

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Oil Hits $85 a Barrel With Global Energy Costs Soaring

Bloomberg Alex Longley October 14, 2021

Crude futures have jumped in recent weeks as natural gas prices hit records. On Thursday, the International Energy Agency said the crisis is spilling into oil markets and could add 500,000 barrels a day to demand in the coming months. That is deepening inventory draws as the Organization of Petroleum Exporting Countries and its allies only gently ease output restraints.
Spiraling prices of everything from oil and gas to coal are boosting global inflation and posing a challenge to policymakers. While it helps raise revenue of producing countries, it risks slowing down economies that are emerging from a pandemic-driven slump. Bank of America Corp. has even talked up the prospect of crude hitting $100 a barrel.

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project44 veers into booking with new truckload product

The Journal of Commerce Eric Johnson October 14, 2021

Subscription-Based

Freight visibility provider project44 has taken its first steps into the cargo booking realm by adding a new product that enables truckload freight brokers to connect project44’s visibility data to available capacity, the company said in a statement Thursday.
If, for example, a broker has insight into where a particular shipment — or truck — is going and when it is likely to be delivered, then it can estimate where and when that capacity will become available and book against it.
The launch of the new product, called Cooperative, further expands project44’s growing reach, which until now has seen the Chicago-based technology company use two allotments of venture capital funding to make a series of acquisitions in the ocean and parcel visibility space.
The move is a sign the company sees the connectivity to carriers it has created as useful for more than just in-transit and predictive arrival visibility. It also places project44 into a competitive landscape of broker-enabling technology that includes the likes of Truckstop.com, DAT Solutions, Trucker Tools, and Cargo Chief.

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Shippers/3PLs

Walmart boosting off-peak container processing in LA by up to 50%

Freight Waves John Gallagher October 13, 2021

Big-box retailers including Walmart, along with FedEx and UPS, have detailed plans to expand container operations at the ports of Los Angeles and Long Beach as part of the Biden administration’s efforts to unclog a massive bottleneck at the country’s largest container terminal complex.
“Moving goods during off-peak hours can help move goods out of ports faster. For example, at the Port of LA, goods move 25% faster at night than during the day. These commitments will help unlock capacity in the rest of the system — including highways, railroads and warehouses — by reducing congestion during the day.”
Walmart the nation’s largest retailer, has committed to increasing its nighttime hours at the ports “significantly,” according to the White House, and projects that throughput could increase by as much as 50% over the next several weeks. The Home Depot committed to move up to 10% additional containers per week through the port complex. Target — which is already moving half of its containers through the ports at night, the White House stated — will increase that by an additional 10% over the next 90 days.

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Workforce

4.3 Million Workers Are Missing. Where Did They Go?

The Wall Street Journal Josh Mitchell et al. October 14, 2021

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Scarce labor is becoming a fixture of the U.S. economy, reshaping the workforce and prodding firms to adapt by raising wages, reinventing services and investing in automation.
More than a year and a half into the pandemic, the U.S. is still missing around 4.3 million workers. That’s how much bigger the labor force would be if the participation rate—the share of the population 16 or older either working or looking for work—returned to its February 2020 level of 63.3%. In September, it stood at 61.6%.
The absence comes as U.S. employers are struggling to fill more than 10 million job openings and meet soaring consumer demand. In another sign of just how tight the labor market is, jobless claims—a proxy for layoffs across the U.S.—fell to 293,000 last week, the first time since the pandemic began that they fell below 300,000, the Labor Department said Thursday.
Workers are quitting at or near the highest rates on record in sectors such as manufacturing, retail, and trade, transportation and utilities, as well as professional and business services.

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How Companies Can Improve Employee Engagement Right Now

HBR.org Daniel Stein et al. October 13, 2021

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The evidence is clear. Engaged employees perform better, experience less burnout, and stay in organizations longer. Given engagement’s critical importance, we’ve created the Employee Engagement Checklist: a distilled, research-based resource that practitioners can execute on during this critical period of renewed uncertainty.
To develop the checklist, we reviewed the academic literature, compiled a list of the 20 most important drivers of engagement, collected original data about what makes employees engaged in the post-Covid era, compared that to what managers predicted would boost their employees’ engagement, and formulated a series of evidence-based recommendations to promote it.
Our findings highlight that the three most important levers managers have at their disposal right now to boost their employees’ engagement are to (a) help employees connect what they do to what they care about, (b) make the work itself less stressful and more enjoyable, and (c) reward employees with additional time off, in addition to financial incentives.

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Government/Safety/Sustainability

What the Supply Chain Crisis Reveals About American Infrastructure | Opinion

Politico Rich Lowry October 14, 2021

Yet the situation also highlights how, as Scott Lincicome of the Cato Institute persuasively argues, our logistics system is beset by idiotic policies and practices that make it hugely inefficient. There is a tendency in the political debate over infrastructure to assume that more — and more spending, in particular — is better, but it matters how you are making use of what you already have.
Consider our ports. U.S. facilities are nowhere near the top-performing facilities around the world. They are generally less automated and less efficient than those in other advanced economies. It takes, for instance, twice as long on average to move a container from a large ship at the Port of Los Angeles than it does at top ports in China. Ports in Asia operate 24 hours a day, matching the 24-hour-a-day pace of factories, whereas, until now, the Ports of Los Angeles and Long Beach were operating only 16 hours a day.

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Western countries waking up to freight infrastructure needs: DHL CEO

The Journal Of Commerce Mark Szakonyi October 14, 2021

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“Infrastructure is fundamentally important for global trade. I think, particularly, the Western countries probably have not invested enough in that in the last 10 years, and we see that now because the demand, of course, is in a peak higher at the moment than normal,” Appel said. “Therefore, the problem is bigger, and that has then a domino effect on other aspects [of the supply chain]. If the ships can’t be unloaded, then the capacity is missing.”
With the largest global economy by GDP, the United States can easily become a bottleneck for the world, Appel said. North America was the only region to see higher than 2 percent container volume growth over the last two years, with total import/export traffic jumping 8.4 percent since July 2020, according to maritime analyst Sea-Intelligence Maritime Analysis, citing data from Container Trade Statistics. Unsurprisingly, container lines have shifted capacity from other trades to the trans-Pacific to take advantage of the growth in demand, only to see US port congestion eat up functional capacity as ships sit in the harbor awaiting berthing space.

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