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Logistics Intelligence Brief
Friday, September 23, 2022


FedEx to Raise Shipping Rates by 6.9% as It Combats Slowdown

The Wall Street Journal Esther Fung September 22, 2022


FedEx Corp. said it plans to raise shipping rates by an average of 6.9% across most of its services starting in January as the delivery giant copes with a global slowdown in business.
The rate increase is higher than previous years and comes days after the company slashed its profit and sales forecasts. FedEx and rival United Parcel Services Inc. raised shipping rates by an average of 5.9% for 2022—the first time in eight years that either had strayed above 4.9%.
Related: Freight Waves FedEx announces largest general rate increase in its history

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CSCMP session examines factors driving truckload rates

Logistics Management Jeff Berman September 22, 2022

Getting past headline themes of how truckload rates work and function, for non-transportation and logistics executives in shippers’ companies is key in order for them to better understand how rates are viewed and explained.
That was a key point made by Kelson Hardwick, Director of Transportation Procurement, for global retail shipper Walmart, at a session at this week’s CSCMP Edge conference in Nashville.
The session, entitled, “What Drives Truckload Rates and What Can a Shipper Do?”, addressed what the session’s description referred to as “the art, practice, and science behind rates.”

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Rate drops, surcharge absence signal weak intermodal rail peak

The Journal Of Commerce Ari Ashe September 22, 2022


Union Pacific Railroad (UP) is reducing domestic intermodal rates out of Southern California and J.B. Hunt Transport Services is delaying its peak season surcharges, clear signals that the peak season in Southern California is much quieter than it was the last two years, when shippers were hit with surcharges as high as $5,000 per container.
UP on Sept. 20 cut rates on 18 lanes out of Los Angeles, the western US railroad said in a statement Tuesday, a sharp turnaround from the pricing increases it imposed in August 2020 and September 2021.
From Los Angeles to Chicago, for example, UP lowered the ramp-to-ramp spot rate to $1,750 per container from $1,958 per container, putting it at or below contractual rates on this lane, according to JOC’s Intermodal Savings Index. Across all 18 lanes, which include other high-volume lanes such as Los Angeles to Atlanta, Los Angeles to Dallas, and Los Angeles to Houston, UP lowered rates 13.5 percent off the previous rates.

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August Trailer Orders Reflect Complicated Market

Transport Topics Roger Gilroy September 22, 2022

FTR pegged preliminary August orders at 16,400, and noted demand continues to be exceptionally robust, but the fleets struggle to add replacement trailers and find the opportunity to bring on additional equipment.
This is the mixed backdrop: Trailer prices are rising, and so are the costs to build them. The supply chain, as it has for months, clunks forward, then does not, then does. The availability and cost of labor is more of a factor. Backlogs are dropping as build rates increase a little. More trailer makers opened up their order boards for early 2023.

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Gulf, East Coast Port Volume Rises; West Coast Activity Lags

Transport Topics Dan Ronan September 22, 2022

Container volumes at West Coast ports are beginning to moderate but remain at a strong pace, while facilities on the Gulf and East coasts are seeing increases.
The gain stems from some shippers moving cargo from the Pacific Ocean to the Atlantic due to labor concerns as the International Longshore and Warehouse Union and Pacific Maritime Association continue to negotiate.
At the Port of Los Angeles, the nation’s busiest, volume of 20-foot equivalent units fell 15.6% in August to 805,314 TEUs compared with 954,377 a year earlier.

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North American Transborder Freight up 19.1% in July 2022 from July 2021

Bureau of Transportation Statistics September 21, 2022

Total Transborder Freight by Border in July 2022, Compared to July 2021:
Transborder freight between the U.S. and North American countries (Canada and Mexico) in July 2022:
• Total transborder freight: $132.6 billion of transborder freight moved by all modes of transportation, up 19.1% compared to July 2021 (1)
• Freight between the U.S. and Canada totaled $67.4 billion, up 21.0% from July 2021
• Freight between the U.S. and Mexico totaled $65.2 billion, up 17.2% from July 2021
• Trucks moved $77.5 billion of freight, up 12.9% compared to July 2021
• Railways moved $17.5 billion of freight, up 11.3% compared to July 2021

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Annual 3PL study released at CSCMP Edge highlights a need to get ‘back to basics’

Logistics Management Jeff Berman September 22, 2022

Other key data points highlighted in the study included:
• -domestic transportation remains the most frequently outsourced activity, at 69% (up from 67% last year), with freight forwarding up to 60% from 44%, and international transportation up to 52% from 44%, with warehousing down to 43% from 63%; and
• -shippers said that 14 of the 19 IT capabilities in the study were must-haves, with transportation management-planning (62%), transportation management-scheduling (57%), and warehouse/distribution center management (48%) leading the way

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Ford searches for chief supply chain officer after supplier costs mount

Supply Chain Dive Sarah Zimmerman September 22, 2022

• Ford Motor is searching for a global chief supply chain officer as the automaker looks to overhaul operations following higher supplier costs and parts shortages in the third quarter.
• The automaker said Thursday it is creating a global chief supply chain officer to support “efficient and reliable sourcing of components.” The position will also assist in internal technological developments and cost-cutting efforts.
• CFO John Lawler will “oversee a makeover of Ford’s global supply chain operations” until the position is filled, the company said. Jonathan Jennings, vice president, supply chain, will take on additional responsibilities related to “supplier technical assistance and quality.”

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AutoZone adds ‘direct import facilities’ to manage safety stock

Supply Chain Dive Kate Magill September 22, 2022

• Autozone launched a new California-based direct import facility earlier this month to more efficiently move direct import products, CEO Bill Rhodes announced on the company’s Q4 earnings call.
• The site will receive imported products from the auto supply retailer’s foreign production sites and send them as needed to AutoZone’s distribution network.
• The direct import facility is the second announced in recent months, and aims to cut down on AutoZone’s safety stock through the postponement of inventory allocation by approximately 45 days.

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Walmart to Offer Free Return Pickups at Home for Some Members

The Wall Street Journal Alyss Lukpat September 22, 2022


The retailer said Thursday that some of its subscription members can get their returns picked up free starting next month, a new perk ahead of the busy holiday shopping season.
Walmart+ subscribers in some markets can use the company’s app to schedule a pickup for their return items, which don’t have to be boxed or labeled, the company said. Walmart+ is a membership program similar to Amazon.com Inc.’s AMZN -1.04%▼ Prime, offering subscribers free shipping, free grocery delivery and other benefits.
Walmart, the country’s largest private employer, said it was offering free home-return pickup and other benefits, including curbside return service, to save customers time during the holiday shopping season.

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Changing driver profile requires new retention strategies, experts say

Transport Dive David Taube September 22, 2022

• Companies recruiting workers need to adjust to employee needs, addressing changes to a younger, more diverse workforce, The National Transportation Institute CEO and President Leah Shaver said during FTR’s annual conference.
• Companies that want workers to adapt to a business’ need, such as being a nomad for weeks on the road, will have a harder time finding drivers, Shaver said during a panel on how the truck industry is changing.
• “The companies that are saying, ‘I will only take a driver that has this particular profile and will do this particular job’ are the most challenged at seating their trucks,” she said.

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Tentative rail agreement provides medical leave for workers — but there’s a catch

Freight Waves Rachel Premack September 22, 2022

The most contentious point of rail workers’ negotiations with their employers was the question of time off. North American Class I railroads have revamped their operations in recent years, leaving them with better profit margins but fewer employees. As a result, rail conductors and engineers are more likely to be on call and unable to take time off for medical reasons.
The tentative agreement now guarantees one additional paid day off for workers. Unionized rail employees will be permitted three annual periods off for medical care visits, and cannot be penalized for that time off by their employers. Hospital admissions or surgeries cannot be penalized.
However, there’s a catch.
The medical care visits must take place on a Tuesday, Wednesday or Thursday and be scheduled at least 30 days in advance.

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Can software simplify the supply chain? Ryan Petersen thinks so

The Verge Nilay Patel September 20, 2022

Ryan Petersen is currently the CEO of Flexport. Flexport builds software that integrates all the different shipping vendor systems you might run into as you try to get a product from a factory in China to a consumer in Idaho: rail, sea, or truck.
It’s a good time to talk to Ryan since it feels like we’ve been in the middle of a supply chain crisis since the pandemic began in 2020. We’ve talked about the supply chain and inventory management on Decoder with a lot of our guests, and sorting out how to get products made and delivered on time is a pretty universal problem.

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Don’t Count Out the Internal Combustion Truck Engine

Truckinginfo.com Jack Roberts September 22, 2022

The tried-and-true internal combustion engine has been largely absent from the conversation. Some truck makers announced they were shifting their research and development investments away from ICEs to focus on ZEVs. If ICEs were mentioned at all, it was usually to point out diesel and gasoline engines would remain important in trucking for many years during a gradual transition to zero emissions.
This year, however, brought a renewed focus on internal combustion designs that run on lower carbon alternative fuels. Fleets worried about the viability of battery or fuel cell technology will have more clean-burning options to power their trucks in the near future.

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