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Logistics Intelligence Brief
Wednesday, January 12, 2022


Outlook 2022: High demand, disruption remain the norm for US LTL

The Journal of Commerce William B. Cassidy January 11, 2022


US less-than-truckload (LTL) networks are continually evolving as spikes in freight demand cause delays and backups, putting pressure on LTL carriers to manage more selectively what comes in and what goes out of their trailers and terminals. For shippers, the result is higher rates, surcharges, and more rejected freight.
Continued high freight demand and supply chain disruption linked to the COVID-19 pandemic will complicate shippers’ LTL plans in 2022. One thing shippers can’t plan on is a return to pre-pandemic norms in LTL. Rising e-commerce volumes, inventory restocking, and increased manufacturing output will continue to boost already strong LTL demand.
“The LTL market is changing rapidly, demand is growing rapidly, and it’s not just because of the diversion of freight from intermodal rail and truckload, as some people think,” Satish Jindel, president of transportation research firm SJ Consulting Group, told JOC.com in November. “It’s a fundamental change in how goods are moving from where they are produced or imported and how they are showing up at the doorsteps of consumers.”

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Trucking Trade Group Warns of Continued Shortages, Bottlenecks

Bloomberg Thomas Black January 11, 2022


U.S. trucking will remain plagued with equipment and driver shortages this year, according to an industry trade group.
Though freight growth is slowing from last year’s pace, it “is leveling off at a very high level, and in some sectors it can continue to grow,” said Bob Costello, chief economist for the American Trucking Associations.
The industry is short about 80,000 drivers even as pay has jumped, and truck makers can’t keep up with demand, he said in an interview. “Supply remains challenged this year in the trucking industry, even if we do add some more drivers.”
But new entrants who paid “outrageously high” prices for used equipment could face a shock at some point, Costello said.
“I am worried about what happens to those folks when we get out of this environment of really tight capacity and booming freight,” he said. “You could see a lot of capacity exit this industry in the next downturn.”

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Midsize businesses are ‘thinking big’ for supply chain workarounds: survey

Supply Chain Dive Max Garland January 11, 2022

Nearly two-thirds of midsize businesses have used strategic stockpiling to alleviate recent supply chain disruptions, according to JPMorgan Chase's 2022 Business Leaders Outlook Survey released last week.
Other popular workarounds for the 1,602 respondents included adding suppliers from new geographies (51%) and allocating more funds to account for higher costs to move products (48%). The survey, conducted in November, defined midsize businesses as having annual revenues ranging from $20 million to $500 million.
"To stay competitive in the global economy, more midsize companies appear to be moving away from a small-business mindset and thinking big—like their large, multinational counterparts," according to the survey findings. "They've indicated that they're diversifying their supply chains and taking a more strategic approach to sourcing and stocking goods."
Link: J.P. Morgan 2022 Business Leaders Outlook

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Cascading Flight Cancellations Snarl Airfreight Shipments

The Wall Street Journal Lydia O'Neal January 11, 2022


The tumult has freight forwarders “literally playing whack-a-mole” as they try to rebook cargo, said Marc Schlossberg, executive vice president of airfreight at Unique Logistics International Inc., a New York-based freight forwarder.
On Dec. 30, a flight flying from Hanoi to the U.S. loaded with cargo for a Unique Logistics fashion retailer customer was canceled because there weren’t enough crew members due to Omicron-related quarantines. It took several days for Unique Logistics to get the goods on another jet out of Vietnam, Mr. Schlossberg said.
The disruptions have delayed air cargo shipments by two to four days in recent weeks, said Brian Bourke, chief growth officer at Seko Logistics LLC, another freight forwarder based in Itasca, outside Chicago.

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Southern California Ports Struggle to Trim Cargo Backlog as Omicron Surges

The Wall Street Journal Paul Berger January 11, 2022


About 800 dockworkers—roughly 1 in 10 of the daily workforce at the ports of Los Angeles and Long Beach—were unavailable for Covid-related reasons as of Monday, according to the Pacific Maritime Association. Absentees included workers who tested positive for the virus, were quarantining or awaiting test results, or who felt unwell.
The association, which secures labor for terminal operators on the West Coast, said the number of daily worker infections has risen rapidly in recent weeks, escalating from several cases a day to dozens and then hitting about 150 a day last week.

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China Covid-19 Lockdowns Hit Factories, Ports in Latest Knock to Supply Chains

The Wall Street Journal Stella Yifan Xie et al. January 11, 2022


With Covid-19 flaring up across China, major manufacturers are shutting factories, ports are clogging up and workers are in short supply as officials impose city lockdowns and mass testing on a scale unseen in nearly two years.
The prospect of continued disruptions in the world’s second-largest economy, which has a zero-tolerance strategy for combating the pandemic, is heightening fears that the disruptions will ripple through the global economy. Already, companies including memory-chip maker Samsung Electronics Co., German auto maker Volkswagen AG and a textiles company that supplies Nike Inc. and Adidas AG are suffering production hitches.

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Consumer expectations remain high despite delays, shortages, and higher prices

DC Velocity January 11, 2022

When it comes to online buying in 2022, the research found that: 57% of respondents are less likely to order an item that requires shipping from overseas than a year ago; 56% find shipping time the most frustrating aspect of ordering online; 49% expect same-day in-store pickup for any item they order online; 42% say they will look elsewhere if delivery or pickup of an item is more than two days; 42% say they are buying more online and having purchases delivered directly to them.

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USDOT Updates Innovation, Technology Principles

Transport Topics Eugene Mulero January 11, 2022

Specifically, the department noted officials would benefit by pursuing policies that would facilitate the development of infrastructure capable of withstanding the impact of severe weather events. Such infrastructure resilience would need to complement the adoption of technologies that would boost safety and communication across transportation modes.
“The department must play a meaningful role in future-proofing infrastructure, enabling adaptability and resilience, and helping communities and public sector partners to bring legacy systems into the digital age,” according to the document. Additionally: “The department should identify opportunities for interoperability among innovations and foster cross-modal integration. In addition, DOT’s posture must remain nimble, with a commitment to support technologies that further our policy goals.”

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Study Suggests Cocaine Use More Prevalent than Marijuana Among Truck Drivers

Truckinginfo.com Deborah Lockridge January 11, 2022

Is marijuana really the drug most commonly used by truck drivers? National Drug and Alcohol Clearinghouse statistics say it is by far, but hair-testing advocates cite new research finding that truck drivers abuse cocaine more than cannabis.
“Our research found that DOT is seriously under-reporting the actual use of harder drugs by truck drivers, such as cocaine and illegal opioids,” said Doug Voss, professors of Logistics and Supply Chain Management at the University of Central Arkansas, in a news release. He was citing an analysis prepared for the Alliance for Driver Safety & Security, also known as The Trucking Alliance, late last year.

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Buttigieg vows to fight container-rate inflation

Freight Waves John Gallagher Janauuyry 11, 2022

“Not only is this about presents under the tree, but essential goods like medical goods needed in this moment of continued public health challenges. The other side of the coin is that as long as the pandemic persists, as long as we are making up for decades of past disinvestment, we are going to see impacts on shipping times and shipping costs.”
To counter those impacts, Buttigieg, along with LA and Long Beach port directors Gene Seroka and Mario Cordero, touted recent and future investment at the ports. In late December DOT’s Maritime Administration announced a $52.3 million grant to support an on-dock rail project at the port of Long Beach. The grant was part of a $241 million package of 25 port projects awarded in 19 states.
“And that was with the funds that we had from last year,” Buttigieg said. “I cannot wait to put to work the funds from that $17 billion being committed to ports thanks to the bipartisan infrastructure law,” also known as the Infrastructure Investment and Jobs Act, which was signed by President Joe Biden in November.

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Aurora, TuSimple Have High Expectations for 2022

Transport Topics Roger Gilroy January 11, 2022

In late December, TuSimple made an 80-mile, nighttime run in Arizona with a Class 8 and trailer. No driver was in the truck, which was carrying water ballast to simulate freight.
In 2022, the company looks to expand the driver-out scenarios on roads to include daytime driving and multiple routes, and increase the use of simulations.
“And that’s because we are just not getting the number of road events and disengagements in our testing that we used to,” Dillon said. “It’s very infrequent now. We are not getting some of the edge [extreme] cases that we used to. So in order to speed up the development and continue to work on training the algorithms, simulation will be a bigger and bigger part of that.”

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