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Logistics Intelligence Brief
Monday, October 18, 2021

Trucking

Trucking expects LTL, TL rates to soar through 2021

Transport Dive S.L. Fuller October 15, 2021

Truck capacity will likely stay tight through the year, according to multiple analysts. That means carriers can expect continued benefits from elevated rates in the TL and LTL sectors.
Rate per mile in the TL market is set grow through the end of 2021, according to the recently launched Cowen/AFS Truckload Freight Index. On the LTL side, the report projected that rate per pound will grow sequentially in Q4, despite the fact that weight per shipment has been decreasing since March.
Morgan Stanley said in an Oct. 6 report that sentiment in the trucking industry "remains notably hot." Industry respondents said they don't see an end to current freight conditions, and 2022 TL rates are expected to be up approximately 5.25% compared to this year.

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J.B. Hunt Expects Strong Freight Demand to Extend Into 2022

The Wall Street Journal Jennifer Smith October 15, 2021

Subscription-Based

Freight bellwether J.B. Hunt Transport Services Inc. expects bottlenecks at West Coast ports to intensify heading into the holidays, with congestion continuing to snarl labor-strapped logistics networks and strong shipping demand extending into 2022.
“While peak season is upon us, we believe the bottlenecks on the West Coast are going to compact and even intensify further peak-season capacity needs into November and December,” Shelley Simpson, J.B. Hunt’s chief commercial officer, said on a conference call Friday to discuss the company’s third-quarter earnings.
“This year, we have reached all-time highs in the need for company drivers in all segments,” J.B. Hunt Chief Executive John Roberts said on the earnings call. The company sees “persistent irregularities in demand patterns substantially resulting from port, labor and inventory challenges with our customers,” he said.

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Supply chain hurdles not high enough to thwart J.B. Hunt’s Q3 beat

Freight Waves Todd Maiden October 18, 2021

Labor was the main talking point of J.B. Hunt Transport Services’ third-quarter earnings call with analysts Friday. Management from the Lowell, Arkansas-based transportation company said many of the nation’s supply chain obstacles are rooted in a shortage of workers.
“The thing that has been the most difficult for us to get eyes on is customer warehouse labor,” said J.B. Hunt (NASDAQ: JBHT) intermodal head Darren Field. “That’s where there is a significant bottleneck — our customers’ ability to unload the demand that they have.”
In efforts to have customers flip boxes faster, J.B. Hunt began enforcing accessorial charges for excessive delays more stringently. However, Field said that the results of the initiative “have been mixed,” noting that the goal was to “move more volume and provide more capacity for customers, which was not the case in the quarter.”

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Industry

LaserShip names Mike Roth, top Amazon logistics executive, interim CEO: Source

Freight Waves Mark Solomon October 15, 2021

Regional parcel delivery carrier LaserShip, which is poised to acquire fellow regional carrier OnTrac for about $1.3 billion, has named Mike Roth, a longtime Amazon.com Inc. operations executive, as its interim CEO, according to a person familiar with the matter.
Barring an unforeseen event, Roth will steer the integration of the two companies, which is expected to lead to the development of the first national parcel delivery network built from regional players. Roth succeeds Brett Bissell, who remains a consultant to the company, the person said.
For nearly 10 years, Roth has been Amazon’s (NASDAQ:AMZN) vice president, North American operations, responsible for fulfillment center, supply chain and transportation operations, according to his LinkedIn profile. Prior to that, he spent four years in three different high-level roles at Amazon’s North American supply chain and transportation business. He was also director of the company’s EU supply chain for a year. Roth joined Amazon in 2004.

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POLA and POLB September volumes hit record or near-record levels

Logistics Management Jeff Berman October 15, 2021

September volumes, for the Port of Los Angeles (POLA) and the Port of Long Beach (POLB), came in at record, or near-record levels, according to data respectively issued by each port.
Total POLA volume—at 898,941 TEU (Twenty-Foot Equivalent Units)—posted a 1.7% annual gain, marking the best September in the port’s 114-year history, topping the previous high set in 2020 by nearly 2%. POLA said that the final September TEU tally will change slightly, as the TEU count from one ship is still pending.
“The cargo surge we have experienced for more than a year continues,” said POLA Executive Director Gene Seroka on a media conference call this week. “The surge continues to be driven by the American consumer, which is good news for our economy. We have been averaging more than 900,000 container units for the past 14 consecutive months. The duration of this cargo run is quite remarkable.”

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Shippers/3PLs

September retail sales see gains, according to Commerce and NRF data

Logistics Management October 15, 2021

Commerce reported that September retail sales, at $625.4 billion, were up 0.7% compared to August and up 13.9% annually. And it added that total retail sales, from July through September, saw a 14.9% annual increase compared to the same period a year ago.
Retail trade sales saw a 0.8% gain, from August to September, and food services and drinking places saw a 29.5% annual gain.
The NRF observed that September retail sales gains were driven by concerns over the Delta Variant leading to gains in consumer spending, as opposed to services-based activities like dining and travel, despite the pairing of supply chain disruptions and inflation.
And it added that its calculation of retail sales, which excludes automobile dealers, gasoline stations, and restaurants to focus on core retail, showed a 0.7% seasonally-adjusted increase, from August to September, with September up 11% unadjusted annually. The organization added that retail sales were up 10.7% unadjusted annually on a three-month moving average.

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Economy

Supply-Chain Bottlenecks, Elevated Inflation to Last Well Into Next Year, Survey Finds

The Wall Street Journal Gwynn Guilford And Anthony DeBarros October 17, 2021

Subscription-Based

Concerns about limited supply are the main cloud over the outlook. Around half of respondents cited supply-chain bottlenecks as the biggest threat to growth in the next 12 to 18 months, while nearly one-fifth pointed to labor shortages. They also expect supply-chain woes to weigh on the economy through much of next year. Some 45% estimate that it will take until the second half of 2022 for bottlenecks to have mostly receded, compared with two-fifths expecting major improvement before then.

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Government/Safety/Sustainability

What can Feds do to aid 24/7 supply chains?

Freight Waves John Gallagher October 17, 2021

But beyond merely coordinating among the various modes and their customers, what can Biden and the federal government do?
One solution — according to a handful of ports pushing for it — is to tap into a provision within the National Defense Authorization Act called the Maritime Transportation System Emergency Relief Program (MTSERA). The program authorizes the U.S. Maritime Administration to award grants due to emergencies, including the current pandemic. In addition to ports, those eligible for receiving money from the fund include vessel owners and terminal operators. Eligible costs for relief include workforce retention and infrastructure repair.
The American Association of Port Authorities had sought $3.5 billion worth of funding through the program earlier this year for COVID relief. But container ports on both coasts — including the ports of Oakland, Seattle-Tacoma, New York and New Jersey, and Norfolk, Virginia — are now urging the Biden administration to ask Congress for emergency funds through MTSERA to help port authorities fund operations and establish incentives aimed at unclogging the supply chain, according to a letter obtained by FreightWaves.

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Trucking industry not confident in Biden’s 24/7 port plan

CCJ Tom Quimby October 17, 2021

“Port throughput is not just taking containers off steamships, but having the capacity in the yard to position those containers, the chassis to put the containers on, the drivers to take the freight from the ports, and capacity in the rail network to facilitate the hoped for acceleration in port throughput,” said Kenny Vieth, president and senior analyst at ACT Research. “While the President’s recognition of the situation is welcome, and will undoubtedly help at the margin, this effort resembles squeezing a balloon: The problem appears likely to be pushed to the next mode with insufficient capacity."

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