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Logistics Intelligence Brief
Thursday, January 6, 2022

Trucking

DAT: Spot Rates Start 2022 at All-Time Highs

Truckinginfo.com January 5, 2022

The national average van load-to-truck ratio increased from 6.0 to 10.4 last week, meaning there were 10.4 available van loads for every van posted to the DAT network. The reefer ratio was 34.3, up from 14.9 the previous week, and the flatbed ratio increased to 72.4 from 53.8. These ratios are considerably higher than the same period in 2020, when the van ratio was 7.0, the reefer ratio was 15.8, and the flatbed ratio was 52.1.

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Chicago spot truck rates surging from East, Gulf coast ports

The Journal of Commerce William B. Cassidy January 5, 2022

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US spot truckload rates that rose in December are hitting fresh record highs as 2022 begins, especially in lanes connected to US seaports and border crossings. Freight volumes moving inland from ports are still strong and truck capacity that tightened over the holidays has not loosened. That’s raising alarms for shippers preparing to enter annual contract talks with their trucking partners.
“Shippers are putting a lot of thought into where contract pricing is going to settle and whether those prices will hold” throughout 2022, Ken Adamo, chief of analytics for DAT Freight & Analytics, told JOC.com Tuesday. A more than robust spot market keeps pressure on contract rates, and the spot truckload market in January is beyond robust, according to DAT principal analyst Dean Croke.

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Workforce

Walmart to Hire 3,000 Drivers to Expand In-Home Delivery

Bloomberg/Transport Topics Brendan Case January 5, 2022

The retailer’s InHome delivery option will become available to 30 million U.S. households by the end of the year, five times more than the current level, according to a company statement Jan. 5. Walmart, which hasn’t disclosed how many customers use the service, plans to hire more than 3,000 drivers and build out a fleet of electric delivery vans to support the program.

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Industry

New index measures supply chain pressure — and it’s really high

Freight Waves Greg Miller January 5, 2022

Researchers at the New York Federal Reserve have a new way to measure the logistics chaos that’s being partially blamed for consumer price inflation: the Global Supply Chain Pressure Index (GSCPI).
The new measure aggregates 27 indicators — including two shipping indexes, the Baltic Dry Index (BDI) and Harpex index — into a standard deviation from the average since 1997. It’s designed to provide “a more comprehensive summary of potential disruptions affecting global supply chains.”
So, how high is it?
In October and November (the latest two months available), it measured 4.43 and 4.37 standard deviations above average, respectively. To put that in the lingo of financial traders, the current situation is an extremely rare “four sigma” event.
Link: The Federal Reserve Bank Of New York A New Barometer of Global Supply Chain Pressures

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US Needs to Guard Exports From Supply Chain Snarls, Envoy Says

Bloomberg/Transport Topics Jennifer Jacobs/Jenny Leonard January 5, 2022

In the U.S., “it’s hard to tell whether the supply-chain pressures have peaked,” Porcari said. “What is clear is that the pandemic laid bare what was the underlying reality, which was that the supply chain was stressed even before the pandemic. We clearly have changes to make to build a more durable, resilient supply chain.”

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Oliver Wyman examines 2022 rail and intermodal pricing outlook

Logistics Management Patrick Burnson January 6, 2022

He notes that until intermodal delivers a more reliable service product it will continue to be whipsawed by the trucking market. Intermodal rates as usual will lag general trucking trends, creating demand as rates rise, but suffering faster defections when truck rates fall.
“A restocking of inventory in the face of falling demand will favor intermodal for several months as transit time and reliability will be less of a factor until demand and inventory levels reach a new equilibrium,” says Kuehn.

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For Logistics Events, the Show Must Go On

The Wall Street Journal Jennifer Smith And Paul Berger January 5, 2022

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The National Retail Federation expects some 20,000 people in New York City this month for its annual event, a major forum for supply-chain technology and logistics providers. The Journal of Commerce and parent IHS Markit Ltd. also plan to go forward with their annual TPM conference, a pivotal gathering for the trans-Pacific maritime shipping sector that went virtual during the pandemic, starting in late February in Long Beach, Calif.
Meeting organizers say they are following local health mandates and taking additional steps to ensure the safety of attendees. The NRF and TPM events will require proof of vaccination and participants to wear masks indoors, and both groups will provide access to Covid-19 tests at the venues.

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Government/Safety/Sustainability

Guide to the Supreme Court’s hearing on federal vaccine-or-test rules

Fleet Owner January 5, 2022

Any High Court decision that follows oral arguments on Jan. 7—which start at 10 a.m.—may hinge on whether the agency that issued the rules for U.S. workplaces, the Occupational Safety and Health Administration (OSHA), has the power to do so. One expert argues that OSHA clearly does, under well-established law, have that broad authority.
Regardless, as if this were a sporting event on Friday, trucking stakeholders will be among numerous trade groups and other parties before the Supreme Court arguing for halting the mandate. (The justices also will hear argument during that session on the health-care worker vaccination requirement issued by the Centers for Medicare and Medicaid Services.)

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Economy

Can US cash in on reshoring manufacturing opportunities?

Freight Waves Noi Mahoney January 6, 2022

“Now thinking about moving that freight is just as or more important as the FOB price,” Moser said. “Now companies have to consider the freight’s availability, about getting their products. Increasingly, companies also have to think about geopolitical risks with Taiwan, Hong Kong, etc. Supply chains closer to home can save money and reduce risk.”

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Consumer Demand for Goods Likely Drove U.S. Import Surge During Holidays

The Wall Street Journal Harriet Torry January 6, 2022

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U.S. consumer demand for goods and an easing of supply-chain constraints likely drove a surge in imports in November, pushing the trade deficit to a record.
“It’s the ongoing strength of U.S. retail spending that’s one of the big drivers of this,” said Andrew Hunter, senior U.S. economist at Capital Economics Ltd., referring to strong demand for consumer goods manufactured overseas.

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