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Logistics Intelligence Brief
Thursday, November 18, 2021

Trucking

October Cass Freight Index shows shipments and expenditures gains

Logistics Management November 17, 2021

October freight expenditures—at 3.960—saw a 37.2% annual increase, up from September’s 32.2% annual spread, and below August’s 42.2% annual gain. Expenditures rose 3.7% compared to September and were up 3.9% compared to September on a seasonally-adjusted basis.
“If normal seasonality were to play out for the rest of this year, the full-year increase in this index would be 34% in 2021, after a 7% decline in 2020 and no change in 2019,” wrote Denoyer. “Tougher comparisons in the coming months will naturally slow these annual increases further, but normal seasonality implies double-digit increases through most of the first half of 2022.”

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Industry

Empty containers become a focal point in push to ease Los Angeles port congestion

Supply Chain Dive Edwin Lopez November 17, 2021

"We've got about 65,000 empty container units sitting on the docks right now," said Seroka. Clearing these can help "speed our imports to market," and the "propensity is there" to do just that based on recent conversations among port stakeholders.
The Port of Los Angeles alone helps reposition 90,000 empty containers on an average week, according to Seroka. But this year has been different. The port is receiving 30% more empty containers, and they're not moving out as quickly as they come in.
"We've got to double our efforts to get these empties out and back to Asia to preposition those assets for the next round of imports. But this is where it becomes a math problem," Seroka said, before touching on various discreet ways the port was pushing to help clear empty containers.

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Truckers Steer Clear of 24-Hour Operations at Southern California Ports

The Wall Street Journal Paul Berger November 17, 2021

Subscription-Based

The Biden administration pressed ports in Southern California to open 24 hours a day to help ease supply-chain bottlenecks. The move has barely made a ripple.
One terminal at the Port of Long Beach flung open its gates around the clock for truckers in mid-September, from Monday to Thursday. But no trucks showed up, prompting the terminal to tighten the rules. In late September, it said it would open during overnight hours only if 25 trucks made appointments. Since then, those criteria were met only one night, and only five big rigs showed up.

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Warehouse space remains the big challenge for major freight and port markets

DAT.com Dean Croke November 17, 2021

The Port of Savannah is the nation’s fourth-busiest port. It handled 10% of inbound containers in October. Volumes were up 12% sequentially in October and are now up 14% compared to last year.
To put that into perspective, Savannah has handled just over one million more total containers in the first 10 months of 2021 compared to the same period last year. That’s a 50% increase since the start of the year.
Space remains the big challenge for everyone at the moment. Ports, intermodal ramps, warehouses and distribution centers are all full. But none more so than the nation’s largest port complex in Los Angeles where 35% of all containerized imports arrive.
There are 83 container vessels loaded with 589,081 containers waiting to unload an average of 16.9 days. It’s looking increasingly like some of these containers won’t make it to their final destination in time for the holiday shopping season.
Shippers have already been shuffling goods from one warehouse to another when goods arrived too late for summer sales, and now they’re competing with winter stock for space.

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Consumer prices to rise until supply chains unclogged: UNCTAD

The Journal Of Commerce Greg Knowler November 18, 2021

Subscription-Based

A return to "normal" freight rates will take at least 18 months, according to Sea-Intelligence Maritime Analysis in its latest Sunday Spotlight newsletter. The analyst looked at rate increases and declines over the past 23 years and based its 18-month timeline largely on the reversal of rate levels in the period following the global financial crisis in 2008/2009.
The UNCTAD report outlined reasons for the high demand, with consumers spending on goods rather than services during pandemic lockdowns and restrictions. Working from home, online shopping, and increased computer sales all placed unprecedented demand on supply chains.
But the large increase in demand for containerized trade crashed into supply-side capacity constraints. The mismatch between surging demand and reduced capacity led to bottlenecks across ports and logistics chains in Asia, the US, and Europe. Vessel capacity is being absorbed by the port congestion, schedule reliability is at record low levels, there are shortages in equipment and labor, and on and off COVID-19 restrictions across port regions are further limiting manpower. As a result, rate levels have soared.

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Trailer Orders Fail to Clear 17,000 in October

Transport Topics Roger Gilroy November 17, 2021

October was another month in which not much improved for trailer makers — not the out-of-kilter supply chain prompting shortages or labor constraints, or rising raw materials, or stressed suppliers. The constant was fleets’ ongoing strong, but largely unmet, demand for new equipment.
October’s preliminary net orders were 16,700, according to ACT, which cited trailer makers’ initial data that will be revised shortly. In the 2020 period, orders were 55,175, trailing only September 2018’s all-time high of 57,790, according to ACT.
“There are so many orders on the order board that the trailer makers are trying to manage things to make sure they don’t get overextended,” Frank Maly, ACT’s director of commercial vehicle transportation analysis, told Transport Topics. “Orders a year ago were part of the COVID quarantine rebound as everybody was coming back online, getting their plans in order.”

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Shippers/3PLs

Target, TJX Post Strong Sales, Say They Have Plenty in Stock for Black Friday

The Wall Street Journal Sarah Nassauer And Charity Scott November 17, 2021

Strong consumer demand for everything from apparel to electronics to hardware is boosting sales at several of the biggest U.S. retailers, despite rising prices. Executives said this week they have been able to pull forward the inventory they need for the critical holiday season, though they have had to absorb higher wages and freight costs.
Target said comparable sales, those from stores or digital channels operating at least 12 months, rose 12.7% for the quarter ended Oct. 30. The company’s operating profit margins declined as the discounter absorbed higher expenses.
Target—like Walmart Inc., Home Depot Inc. and others—has pulled forward some shipments of goods and chartered its own vessels to counteract transportation disruptions heading into the holiday season when most retailers earn a significant portion of annual revenue.

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Technology/Innovation

Waymo Adds UPS as Second Partner to Test Autonomous Trucks

Transport Topics Roger Gilroy November 17, 2021

Self-driving truck technology developer Waymo announced it expanded its partnership with UPS Inc. to include autonomous freight movement with Class 8 vehicles.
The Mountain View, Calif.-based company, in a release Nov. 17, called the new arrangement using Waymo Via, its autonomous goods delivery unit, “a natural next step following the strong and successful partnership we’ve had testing local delivery.”

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A Trucker Shortage? Bring on the Robots.

Bloomberg Editorial Board November 17, 2021

Autonomous trucks are already plying American interstates. Startups such as Aurora Innovation Inc. and TuSimple Holdings Inc. have lured significant funding while putting promising new technologies on the road. Shipping stalwarts such as Walmart Inc. and FedEx Corp. are investing heavily. Beer runs have proved to be a natural starting point.
If these efforts pan out, they could transform the $800 billion trucking industry. An analysis by McKinsey & Co. estimated that automation could reduce logistics costs by as much as 40% and operating expenses by 45%. For consumers, that should translate into quicker deliveries, cheaper goods and more reliable service.

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Workforce

ATA Presses Congress on Workforce Development Amid Supply Chain Woes

Transport Topics Eugene Mulero November 17, 2021

Policies aimed at boosting the trucking industry’s workforce would play a major role in addressing supply chain woes around the country, the leader of American Trucking Associations told the U.S. House of Representatives’ transportation panel Nov. 17.
ATA President Chris Spear called on federal transportation policymakers to consider proposals aimed at resolving supply chain disruptions. Such proposals would include tackling a truck driver shortage, as well as pursuing workforce development initiatives industrywide.
With the shortage of truck drivers at 80,000, Spear pressed the Transportation and Infrastructure Committee for funding that would target training across critical freight sectors. The pandemic, he stressed, significantly amplified workforce concerns.

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Seniors to the rescue? New truckers over 50 could solve driver shortage

Freight Waves Noi Mahoney November 17, 2021

Laura Reny has been an over-the-road truck driver since 2014. The Idaho resident got into the trucking industry full time to pay the bills after her husband passed away from a long illness.
She was 63 when she first took the wheel with her CDL as a widow. She’s now 70 — and has no plans to stop anytime soon.
“I enjoy truck driving, I tell a lot of people that it’s a good job for women and old people, and I’m both,” Reny said.
Ed Falls, 57, retired from a 30-year career as a school band director before he became a truck driver full time about two years ago. Falls wanted a change from teaching and driving a truck seemed like something he could do for a living.
“It was just time for me to do something else and I always like driving,” Falls said. “I like over-the-road stuff. I like the freedom.”

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O’Brien extends lead in race for Teamsters presidency

Freight Waves Mark Solomon November 17, 2021

Sean M. O’Brien widened his lead Wednesday in the race for the Teamsters union’s general-presidency as he captured the lion’s share of votes tabulated by midafternoon across the union’s eastern region.
As of 3 p.m. ET, O’Brien had garnered 13,593 of the 19,620 votes that had been counted in the east, according to results posted by the Teamsters’ Office of Election Supervisor. O’Brien’s opponent, Steve Vairma, received 6,027 votes.
O’Brien, 49, began Wednesday with a commanding lead after handily winning the Teamsters’ central and southern regions. In both regions, O’Brien received two and a half times the votes of Vairma.

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Government/Safety/Sustainability

Vaccine Mandate Challenges Consolidated in Single Court

Truckinginfo.com Deborah Lockridge November 17, 2021

What's Next?
"The first order of business for the Sixth Circuit, absent motions to transfer venue, will almost certainly involve whether to lift the stay currently neutralizing the ETS," said the trucking attorneys at Scopelitis, Garvin, Light, Hanson & Feary in an email alert. "The Fifth Circuit’s stay not only prohibited OSHA from enforcing the ETS but also prohibited OSHA from taking steps to implement the ETS, likely forestalling any further guidance or clarification about the requirements and applicability of the ETS. Therefore, a flurry of requests to lift the temporary stay will almost certainly be made in the coming days."
Whether the ETS will survive, according to Scopelitis, will be decided by the courts – perhaps even the Supreme Court – on a timeline yet to be established by the courts.
There is a possibility that the stay could get lifted. It it does, we still don't really know the extent of how it would affect trucking.
"We know the ETS does not apply to independent contractors (likely using the economic realities test to determine independent contractor status)," Scopelitis said. "We also know there are reasonable arguments for why the ETS may not apply to many truck drivers based on the text and rationale for the ETS. OSHA will have the first opportunity to weigh in on that question."

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Detention time issue under fire at supply chain hearing

Land Line Mark Schremmer November 17, 2021

Solving the supply chain crisis is less like a detective show and more like a reality weight loss show, says transportation expert David Correll.
The analogy from the lecturer at the Massachusetts Institute of Technology Center for Transportation and Logistics suggests that there is not a single culprit, but rather a need for the reordering of priorities.
Those priorities include better utilization and improved treatment of truck drivers.
“We’re all sort of living with the consequences of the prioritizations we made in America over years and over the pandemic, and the only way we can do better is to reprioritize in a way that respects truck drivers’ time and respects truck drivers’ dignity and harmonizes the system,” Correll said.
His statements served as part of his testimony for a House Transportation & Infrastructure hearing focused on supply chain challenges. The hearing on Wednesday, Nov. 17, examined such issues as detention time and the lack of truck parking. Correll was joined by ATA President Chris Spear, Port of Long Beach Executive Director Mario Cordero, Association of American Railroads President Ian Jefferies, Transportation Intermediaries Association President Anne Reinke, and Transportation Trades Department President Greg Regan as witnesses on the panel.

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California Increases Truck Weight Limits to Ease Port Snarls

Bloomberg Augusta Saravia November 17, 2021

California will increase weight limits for trucks carrying goods in and out of its ports in an effort to ease supply-chain bottlenecks and clear containers off the docks of Los Angeles and Long Beach.
Starting Wednesday, the state will issue temporary permits that will bring weight restrictions for trucks to 88,000 pounds (39,900 kilograms), up from 80,000 pounds, Governor Gavin Newsom said at a briefing with reporters at the Port of Long Beach. The extension will apply through June 30.

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