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Thursday, May 7, 2020
Logistics Intelligence Brief
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FreightWaves LIVE @HOME: Industry keynote with Derek Leathers, CEO, Werner Enterprises and George Abernathy, President, FreightWaves

Freight Waves Todd Maiden May 6, 2020

Talking about a post-COVID-19 recovery, Leathers said “[we] still have some tough times ahead of us,” pointing to data that is still moving in the wrong direction. He watches consumption of diesel fuel as a proxy for how much truck freight is actually moving. “If diesel’s not flowing, if diesel’s not being consumed, then you know that U.S. freight volumes are slowing,” he commented when referring to consumption declines in April. Leathers believes that there is a good amount of pent-up spending that will occur once the mandates are lifted. He’s expecting a slow May, a slow rebound in June with economic acceleration occurring in July through the second half of the year. He said he’s not sure if the economy will get back to pre-COVID-19 levels by year-end, citing the potential for a second wave of the virus and climbing unemployment as headwinds.

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Do Low Spot Freight Rates Mean Brokers Are Gouging Truckers?

Truckinginginfo.com Deborah Lockridge May 6, 2020

“Brokers don’t set prices; the market does,” explained Transportation Intermediaries Association President and CEO Robert Voltmann in a video. “We shut down a $22 trillion economy overnight…. When there are too many trucks chasing too few loads, rates go down. Shippers, like all buyers, want to get the lowest price possible.” According to the most recent TIA 3PL market report, Voltmann said, brokers’ average margin was 16%. That means if a shipper pays $1,000, the broker keeps $160 to cover their costs.

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Costco’s Sales Fall for First Time in Over a Decade

The Wall Street Journal Sarah Nassauer May 5, 2020

Comparable sales, those from stores and digital channels operating for at least 12 months, fell 0.5%, excluding the impact of gasoline and currency fluctuations, for the four weeks ended May 3. Including those items, sales fell 4.7% as low gas prices further pushed sales down. “April sales were negatively impacted by Covid-19,” said the company, one of the few retailers that still reports monthly sales. Costco cited stay-at-home orders, social-distancing restrictions and some mandatory closures for the lower traffic and sales, as well as scaled-back service in areas such as the food court and optical department.

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Pandemic tests Wayfair’s operational efficiency as orders increase, losses continue

Supply Chain Dive Emma Cosgrove May 5, 2020

Wayfair's internal logistics operations faced a roughly 20% uptick in retail revenue as quarantined shoppers outfitted their homes in the first quarter, according to earnings released Tuesday. ​"We believe there are clearly definable long-term advantages accruing to Wayfair in this period," said CEO Niraj Shah of the opportunity shifts in shopping habits the pandemic presents for Wayfair.com, along with the company's other brands AllModern, Birch Lane, Joss & Main and Perigold.

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Instacart’s Frantic Dash From Grocery App to Essential Service

Bloomberg Business Week Ellen Huet and Lizette Chapman May 6, 2020

“Every day, we would see that the volume was 20% higher than the last day,” Mehta says. “In a matter of a couple of weeks, we were already ahead of our end-of-year goal. A week later, we were ahead of our 2021 goals, and a few days after that, we were ahead of our 2022 goals. It’s tough to overstate how unready the company’s 600-ish software engineers and 180,000 shoppers were to meet the needs of millions of new customers. The models that had helped predict which items would be in stock and how long deliveries would take proved useless. To keep things running, many staffers have logged 18-hour workdays and seven-day workweeks. Nonetheless, the service has suffered, because how could it not? Deliveries used to be easy to get in an hour; the pandemic meant it could be hours, days, or as long as two weeks. Instacart became Eventuallycart.

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Werner opens innovation arm to develop technology for trucks and drivers

DC Velocity May 5, 2020

Innovations from the Werner Edge unit include:

  • a telematics solution that run on an untethered tablet, supporting a safer and more efficient experience, providing professional drivers with a smart workflow, best-in-class navigation, improved safety features, and reduced manual data entry.
  • a “Critical Event Management” platform powered by machine learning, that identifies and responds to safety events more effectively, providing drivers with coaching and accolades in real-time.
  • a “Breakdown Management” system that uses a cloud-based solution to simplify the repair order process during a road breakdown, getting drivers back on the road safely and without delay.
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Logistics AI Startup Covariant Reaps $40 Million in Funding Round

The Wall Street Journal Jennifer Smith May 6, 2020

The Berkeley, Calif.-based company makes AI software that it says helps warehouse robots pick objects at a faster rate than human workers, with a roughly 95% accuracy rate. Covariant is working with Austrian logistics-automation company Knapp AG and the robotics business of Swiss industrial conglomerate ABB Ltd., which provide hardware such as robot arms or conveyor belts to pair with the startup’s technology platform. “What we’ve built is a universal brain for robotic manipulation tasks,” Covariant co-founder and Chief Executive Peter Chen said in an interview. “We provide the software, they provide the rest of the systems.”

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NHTSA Forecasts Slight Increase in Truck Crash Fatalities for 2019

Transport Topics Eleanor Lamb May 6, 2020

Fatalities in crashes involving at least one large truck are projected to have increased by 1% in 2019, while overall traffic fatalities are projected to see a decline, according to National Highway Traffic Safety Administration estimates. NHTSA on May 5 released preliminary figures for the Fatality Analysis Reporting System data for 2019. FARS provides to Congress and the public annual data regarding fatal injuries in motor-vehicle traffic crashes. Link:  NHTSA Early Estimates of 2019 Motor Vehicle Traffic Data Show Reduced Fatalities for Third Consecutive Year

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OOIDA pushes Congress for full transparency in broker transactions

Land Line Tyson Fisher May 5, 2020

Truckers across the nation have been complaining about ultralow freight rates amid the COVID-19 pandemic. Addressing the issue, the Owner-Operator Independent Drivers Association has sent a letter to Congress, urging for greater transparency in transactions with brokers. On Wednesday, May 6, OOIDA sent out a letter to members of Congress to address concerns from truckers regarding “feeble rates” and “utter lack of transparency between brokers and motor carriers.” Per federal regulation 49 CFR 371.3, brokers must keep records of transactions with motor carriers. One subsection of that regulation gives each party to the transaction, including the carriers, the right to review the record. This provision allows truckers to see exactly what their cut is of the full rate that the shipper paid the broker.

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DMV closures slow CDL process, threaten recovery

FleetOwner John Hitch May 6, 2020

“We are licensing a fraction of the commercial drivers as would have been produced under ‘normal’ circumstances,” said Don Lefeve, president and CEO of the Commercial Vehicle Training Association (CVTA), which represents nearly 200 training providers. “Given this impediment, and other impediments such as CDL skills testing backlogs, we believe that our nation will produce an estimated 60% of the drivers of the commercial drivers compared to a normal year.” CVTA members train 50,000 commercial drivers annually. According to industry estimates, prior to the coronavirus, there was a shortage of 60,000 drivers.

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