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Logistics Intelligence Brief
Monday, September 26, 2022

Workforce

Perspective: Truckers Are Undeniably Essential

Transport Topics Chris Spear September 23, 2022

The term “essential” came into sharp focus during the pandemic. The urgency of the moment forced Americans to recognize the many hands at work that keep our society going. There was an outpouring of gratitude for our nation’s truck drivers, rightfully so, as they persevered through adversity to keep stores stocked and hospitals supplied.
But the true meaning of essential isn’t momentary. It isn’t fleeting like our country’s attention span. It doesn’t come and go like the news cycle. To be essential is a duty that endures. It’s constant. And as the severity of the pandemic wanes, the indispensable role that truckers play in our daily lives remains as vital today as it ever was.

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Trucking

UPS unveils all-in pricing without delivery surcharges

Freight Waves Mark Solomon September 23, 2022

UPS Inc. has rolled out a pricing program that offers shippers one all-in rate while waiving almost all delivery surcharges, according to sources familiar with the effort.
UPS (NYSE: UPS) is marketing the initiative as a simplified way to pay for shipping and a convenience to shippers, the sources said. However, the convenience might come at a price.
Rates in the new program are not as deeply discounted as they are in the original pricing version. The net result is that shippers could easily be paying more under the revised formula than under their original pricing matrix, one source said. The traditional formula breaks out each surcharge as line items in contractual agreements.

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FedEx to hike rates by 6.9% ‘given the inflationary backdrop’

Supply Chain Dive Max Garland September 23, 2022

“To ease the blow, shippers need to think like the carrier thinks, and ship like they want them to ship,” Caleb Nelson, chief growth officer at logistics software provider Sifted, said in an email. “They’re really punishing long distance shippers, for example…Whether it’s zone skipping or considering a new distribution center, shippers should do anything they can to maximize in-region fulfillment.”
Adding to shippers’ woes, UPS is “extremely likely” to mirror FedEx’s 6.9% general rate increase, Nelson said. UPS hasn’t yet announced a 2023 rate increase, but the two rivals have historically moved in lockstep on rate increases. UPS “probably doesn’t want” a flood of FedEx clients drawn in by lower rates as it would challenge the company’s network, Nelson added.
Related: Fleet Owner FedEx to cut costs, increase freight rates

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Industry

Trans-Pacific blanking static despite falling US imports

The Journal of Commerce Bill Mongelluzzo September 23, 2022

Subscription-Based

Trans-Pacific carriers in October intend to blank about the same amount of capacity as they did last October, but this will do nothing to stem rapidly falling spot rates, as retailers forecast that year-over-year US imports from Asia will drop each month for the rest of the year.
Container carriers in October plan to blank capacity totaling 698,505 TEU, or 23.8 percent of total capacity to the East and West coasts, according to data from Sea-Intelligence Maritime Analysis. In October 2021, carriers blanked 669,460 TEU, or 23.6 percent of total capacity in the Asia–US trade.

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Covid-19 Vaccine Rollout Carries Lessons for Pharma Supply Chains, Says Pfizer Executive

The Wall Street Journal Liz Young September 24, 2022

Subscription-Based

“Supply chain has probably done just as much, if not more” than the innovative science that Pfizer and other drug companies used to produce the new vaccines that have been distributed around the world, Jim Cafone, Pfizer’s senior vice president of global supply chain, told a supply-chain industry conference this week.

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Shippers/3PLs

Amazon plans Prime Day-like sales event next month

Digital Commerce 360 Jessica Young And James Melton September 23, 2022

Amazon’s ‘Fall Prime Deal Event’
Fahim Naim, head of Amazon at Advantage Unified Commerce, an ecommerce consulting agency that works with Amazon sellers, also says the October event is happening.
“Amazon has shared with its sellers and vendors that there is a ‘Fall Prime Deal Event,’ which appears to resemble Prime Day,” Naim tells Digital Commerce 360. Based on the cut-off dates Amazon shared with retailers using its Fulfillment by Amazon services, it appears the event will start on Oct. 11 or possibly Oct. 18, he adds.

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Retailers Face Pressure to Offer Discounts While Battling Inflation

The Wall Street Journal Kristin Broughton September 23, 2022

Subscription-Based

Major retailers including Macy’s Inc., Walmart Inc. and Target Corp. in recent months have used markdowns to clear out excess stock after miscalculating customer demand earlier in the year. General and specialty retailers saw their days of inventory outstanding—a metric that describes how long a company holds its stock before turning it into sales—increase to an average of 63.7 days in the second quarter from 57.4 days a year earlier, according to Hackett Group Inc., a business advisory firm. Across all industries, that figure has remained about flat at an average of 46.5 days in the second quarter, according to a Hackett survey of the largest 1,000 U.S. companies by revenue.

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Government/Safety/Sustainability

Are ELDs making the trucking industry safer?

Freight Waves John Kingston September 25, 2022

But the Truck Safety Coalition argues that FMCSA mandated the use of ELDs “in part because [they] bring about improvements in safety by making it difficult for drivers and carriers to falsify drivers’ duty status, which in turn deters violations of the [hours-of-service] rules,” the group noted in its comments on Brown’s petition.
The coalition further contended that the devices are “a crucial component” of efforts to ensure trucks are safely operating since they are used in on-site and off-site motor carrier inspections. It also cited recent FMCSA reports revealing that the two most common critical violations in carrier audits are not using the appropriate method to record hours of service and false reports of duty status records.

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