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Wednesday, May 20, 2020
Logistics Intelligence Brief
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April Tonnage Down 11.3% Year-Over-Year

Transport Topics Dan Ronan May 19, 2020

April truck tonnage declined 11.3% compared with year-ago levels, the steepest year-over-year decline since 2009, American Trucking Associations reported. ATA on May 19 announced that its monthly, seasonally adjusted For-Hire-Truck Tonnage registered 104.9 in April, down from 118.4 a year ago. On a sequential basis, April was down 12.2% from March, when the index registered 119.5 (in calculating the index, 100 represents 2015 levels). “April’s monthly decline was the largest in 26 years when there was a labor strike in April 1994,” ATA Chief Economist Bob Costello said in a statement. “Considering that April factory output and retail sales plummeted, the large drop in truck freight is not surprising.” Related:  Logistics Management April truck tonnage drops to lowest level since 1994, reports ATA

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Covenant pushes forward with strategic plan as freight market stabilizes

Freight Waves Todd Maiden May 19, 2020

“Our first quarter was marked by three big themes: internal energy around our strategic plan, our response to COVID-19 and a declining used equipment market,” stated Chairman and CEO David Parker. Parker was referring to the company’s strategic plan, which includes increasing business in offerings like contract logistics and expedited, lowering overhead costs, and optimizing its terminal network. Recent progress on the plan included several changes to the C-suite, naming John Tweed and Joey Hogan as co-presidents, and disposing of terminals in Orlando, Florida, Dallas and Texarkana, Texas.

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Walmart Sales Surge as Coronavirus Drives Americans to Stockpile

The Wall Street Journal Sarah Nassauer May 19, 2020

Walmart’s U.S. foot traffic fell in the quarter, but spending per transaction rose 16.5%. Walmart sales got a boost in April when shoppers spent government stimulus money, the company said. E-commerce sales jumped 74% as millions of customers switched to ordering online for home delivery or picking up groceries in the company’s parking lots. “It is a big advantage being an omnichannel retailer and I think that is showing right now. We had backups in our fulfillment centers too” but were able to quickly use stores to fill online orders, Walmart finance chief Brett Biggs said in an interview. “That is something that our competitors, they can’t all do it.” Link:  Walmart Press Release Walmart U.S. Q1 comp sales1 grew 10.0% and Walmart U.S. eCommerce sales grew 74%

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Walmart expands ship-from-store to 2,500 locations to handle e-commerce volume bump

Supply Chain Dive Emma Cosgrove May 19, 2020

Walmart is shipping e-commerce orders from 2,500 stores after temporarily expanding the existing program to keep up with a boom in e-commerce order volume brought on by the pandemic, executives said on a first-quarter earnings call Tuesday. E-commerce sales grew 74% year over year in Q1. Shipping from stores has been part of Walmart's long-term plan as it heads toward a more holistic omnichannel strategy, but it hasn't bought into the concept as thoroughly as Target, which has been extolling the virtues of the model for several quarters (and reports Q1 earnings Wednesday). Marc Lore, Walmart's CEO of e-commerce U.S. called the company's thinking on omnichannel concepts "fluid" at an investor meeting in February. Less-essential retailers, such as DSW and Levi's have also seen the benefit of ship-from-store with so many states still restricting retail. Related:  Retail Dive Walmart nixes Jet as pandemic shopping pushes digital sales up 74%

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Cramer: Earnings from retailers like Walmart, Home Depot show ‘survival of the fittest economy’

CNBC Kevin Stankiewicz May 19, 2020

I mean, Home Depot literally had to keep traffic back. Costco is doing the same thing. They had to hold back traffic because they were trying to do it safely,” said Cramer, who complimented Walmart’s preparedness and response to the pandemic. He specifically praised Walmart CEO Doug McMillon for investing in its e-commerce business.

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Home Depot Reports Higher Revenue Despite Coronavirus Impact

The Wall Street Journal Matt Grossman May 19, 2020

Sales from Home Depot’s digital platforms grew by about 80% in the quarter as people favored online shopping over in-person browsing during the pandemic, Mr. McPhail said. He added that the online sales bore out the company’s past technology investments. “Demand for buy online, pick up in store really took off,” Mr. McPhail said. Customers spent an average of $74.70 per transaction during the quarter, up 11% from a year earlier, while the number of transactions fell 3.9%The pattern reflected people’s desire to limit trips to the store, Mr. Menear said.

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Target Gains Strength During Coronavirus

The Wall Street Journal Sarah Nassauer May 20, 2020

Mr. Cornell said the retailer saw a drop-off in store traffic when shelter-in-place orders went into effect in the middle of the quarter. By the middle of April, he said, there was “a rapid increase in traffic and sales” driven by a surge in discretionary categories such as apparel and kitchenware. Electronics, grocery and beauty-product sales grew fastest overall, he said. Target has invested heavily in recent years to add e-commerce buying options for shoppers, including home delivery and curbside pickup. Those services helped the company gain market share during the quarter as more shoppers stayed away from physical stores, said Mr. Cornell. Around five million people used Target.com for the first time and over 2 million tried ordering online for pickup in store parking lots, he said.

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Kohl’s swings to $541M loss as closures decimate sales

Retail Dive Daphne Howland May 19, 2020

Kohl's is entering a period of cautious reopening of stores with meaningful advantages over some rivals, not least that 95% of its stores are away from malls. Gass called that a unique advantage because those stores, which she called "the lifeblood of Kohl's," are "located ... where our customers live and work," and characterized them as having an advantage in social distancing as stores reopen. Research shows that U.S. consumers remain leery of shopping at traditional enclosed shopping centers, which analysts believe will accelerate the closure of many of those malls, and the department stores that anchor them.

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US ecommerce sales jump 14.5% in Q1, but numbers are too early to show full coronavirus impact

Digital Commerce 360 May 19, 2020

Online spending represented 16.2% of total retail sales for the quarter, according to a Digital Commerce 360 analysis of U.S. Department of Commerce data. Figures, captured through March 31, don't yet reflect the pandemic's effect on the retail industry, and analysts anticipate Q2 will capture more of the shift in online shopping behavior as consumers remain homebound. Link:  U.S. Census Bureau Quarterly Retail E-commerce Sales

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Aiming to lock down truckload capacity, Amazon goes nationwide with its freight brokerage

CCJ James Jaillet May 19, 2020

The company confirmed to CCJ via email that it has expanded its brokerage arm to the entire lower 48 states, coming roughly 18 months after the online retail giant launched a small pilot program of its brokerage in five Northeast states. The company has opened up its freight.amazon.com portal to more shippers and is trying to lock in capacity from small- and mid-sized fleets.

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COVID-19 may put industrial distribution back in the game

Supply Chain Dive Rich Weissman May 19, 2020

Manufacturers traditionally made large batches of products and pushed that inventory into distribution channels where customers like me could purchase what we needed. The manufacturers would not accept orders directly from most customers, referring them to their network of authorized distributors. A large portion of my purchases were from distributors, based on my relatively small lot sizes, existing channel agreements between manufacturers and distributors, and the distributor acting as my source of inventory management and technical service. It was a traditional model that seemed to work well. Until it didn’t.

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U.S.-bound shipments see April gains but concerns remain, says Panjiva

Logistics Management Jeff Berman May 19, 2020

While United States-bound waterborne shipment volume took a major hit in March, due to the COVID-19 pandemic, according to data from global trade intelligence firm Panjiva, April, in terms of numbers, was not nearly as bad, but that comes with a few caveats. April shipments—at 1,126,970—saw a 13% annual increase, well ahead of March’s -10% reading, and on a year-to-date basis through March, U.S.-bound shipments—at 3,836,078—were off 1.6% compared to the same period a year ago, an improvement over the -6.8% year-to-date drop through March.

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Owner-operators seek DOT enforcement of broker regulations

Freight Waves John Gallagher May 19, 2020

“Brokers have been deliberately skirting federal transparency regulations for decades,” said Owner-Operator Independent Drivers Association (OOIDA) President and CEO Todd Spencer. “We certainly don’t think exempting yourself from federal regulations is legal, but this is precisely what is happening. It has to stop.” A source familiar with the matter speaking on background told FreightWaves that Federal Motor Carrier Safety Administration (FMCSA) Acting Administrator Jim Mullen was scheduled to meet with White House officials to discuss the issue on May 20. The U.S. Department of Transportation (DOT) did not immediately respond to confirm the meeting. Related: Land Line  OOIDA officially petitions U.S. DOT for more transparency with brokers

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US, Canada Extend Border Closing; Trucking Remains Exempt

Transport Topics Dan Ronan May 19, 2020

U.S. and Canadian officials have reached an agreement to keep the 5,525-mile border closed to nonessential traffic until June 21, even as parts of the countries begin to reopen. At the White House on May 19, President Donald Trump expressed an eagerness to allow the border to return to normal. “We’re both going to want to do the normal,” Trump told reporters. “We want to get back everything. We want to get back to normal.”

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