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Logistics Intelligence Brief
Thursday, January 19, 2023

Trucking

US truckload spot market nearing its floor: analysts

The Journal Of Commerce William B. Cassidy January 19, 2023

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US truckload spot prices will finally hit a new floor this quarter, most likely in February or March, but contract truckload rates are still tumbling and have further to fall before settling, trucking analysts say.
Spot prices, whether paid by shippers or brokers, rose month to month in December for the first time in 2022, bouncing off lows hit in November. Preliminary data shows those rates climbing in early January, although sources have told the Journal of Commerce they could fall further.
The data may be showing a shift in freight toward the spot market as shippers take advantage of low rates on certain lanes.

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J.B. Hunt hopeful for Q2 demand inflection

Freight Waves Todd Maiden January 18, 2023

On a quarterly call with analysts Wednesday, management from J.B. Hunt Transport Services said it was hopeful for a positive demand inflection at some point during the second quarter.
“We have had good signals from our customers about Q2 … having a more normal environment. We’re not sure at what point that is in Q2,” President Shelley Simpson told analysts. “We have confidence from what our customers are giving us and the data points that they have [about] what they’re going to be doing from an ordering perspective.”
She said J.B. Hunt is feeling the impact from import declines but noted its customers have indicated the diminished volumes are tied to what will likely be a near-term inventory correction.
Related: The Wall Street Journal J.B. Hunt Expects Freight-Demand Volatility to Ease This Year

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Industry

Oil Demand to Hit Record Level This Year as China Reopens, IEA Says

The Wall Street Journal Will Horner January 18, 2023

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In its report, the IEA pointed to “a faster than anticipated reopening of China” and a “somewhat improved economic outlook,” as well as lower oil prices, for the upward revisions to its oil demand forecasts.
China’s demand for oil makes up most of the revision. The IEA raised its forecast for Chinese demand by 100,000 barrels a day to 15.9 million barrels a day.
Link: International Energy Agency Oil Market Report - January 2023

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Volvo Trucks’ Head of Technology Predicts Driverless Trucks on Highways Soon

The Wall Street Journal Chip Cummins January 18, 2023

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Texas, in particular, he said, has become a key testing ground for the industry, in part because of the weather. “This technology is of course challenging if you talk about snow, if you talk about those kinds of situations,” he said. “You should start where you have--between brackets--the simplest use case, and then you should grow it from there.”

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Shippers/3PLs

Retail Sales Fall 1.1% in December as Inflation Takes a Toll

Associated Press/Transport Topics Anne D'Innocenzio January 18, 2023

Americans cut back on spending in December, the second consecutive month they’ve done so, underscoring how inflation and the rising cost of using credit cards slowed consumer activity over the crucial holiday shopping season.
Retail sales fell a worse-than-expected 1.1% in December, following a revised 1% drop in November, the Commerce Department reported Jan. 18. In October, retail sales ticked up 1.3%, helped by early holiday shopping
Auto sales declined as rising interest rates for auto loans crimped demand. That, and falling gas prices, helped to pull overall retail sales lower. The December figure marked the biggest monthly decline in 2022.

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Holiday retail sales tanked, but trucking data shows e-commerce wasn’t the issue

CNBC Lori Ann LaRocco January 18, 2023

• DHL Supply Chain is investing heavily in North American e-commerce operations.
• The retail holiday sales data for 2022 was a disappointment, but DHL said it is “continuing to see large growth in e-commerce.”
• Categories including autos, engineering, manufacturing, and high-end consumer goods are doing well.
• Core consumer retail may rebound in the mid-to-late second quarter, DHL’s head for North America tells CNBC.
Link: National Retail Federation 2022 Holiday Sales Grew 5.3% to $936.3 Billion

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Government/Safety/Sustainability

DOT Unveils Strategic Safety Plan

Transport Topics Eugene Mulero January 17, 2023

Evaluating existing technologies and supporting emerging technologies will facilitate the adoption of safety programs for the country’s mobility corridors, a new strategic plan from the Department of Transportation determined.
In its “Research, Development and Technology Strategic Plan” specific through 2026, DOT officials proposed devoting further attention to safety strategies associated with human factors, cybersecurity and data-driven systems for road users. DOT’s aim is to minimize and, potentially, eradicate fatalities throughout the nation’s transportation system.
Link: U.S. DOT Building a Better Transportation Future for All Strategic Plan FY22-26 Fact Sheets

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Amazon, CBRE among new backers of California drayage electrification venture

Fleet Owner Geert De Lombaerde January 18, 2023

The goal for that funding: To rapidly build out a charging network for heavy-duty trucks used in California’s port complexes and to help fleet operators and drivers electrify their operations. The California Air Resources Board (CARB) is considering requiring all of the roughly 30,000 California drayage trucks—most of them owned by small fleets—to be zero-emission by 2035, a move the California Energy Commission says would require the installation of more than 150,000 chargers by the end of this decade.

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California Trucking Group Rekindles Legal Battle to Block AB 5

Transport Topics Eric Miller January 18, 2023

The California Trucking Association has asked a federal judge to issue a new preliminary injunction in an attempt to continue its legal battle to block enforcement of California’s AB 5 law that CTA maintains will force owner-operators to become motor carrier employees.
Claiming it has new legal arguments, CTA on Jan. 11, asked federal district Judge Roger Benitez to temporarily block enforcement of the law that it said “effectively eliminates owner-operators from any role in motor transport in California.”

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Green Push Sees Clock Tick for Diesel Trucks at Top US Ports

Bloomberg Todd Woody January 18, 2023

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The clock is ticking for California ports to electrify highly polluting, heavy-duty diesel “drayage” trucks that haul shipping containers to inland warehouses.
Under a proposed regulation likely to be approved in the coming months, only zero-emission trucks will be added to a state registry of vehicles authorized to work at some of the busiest US ports beginning in 2024.
All 34,000 active diesel drayage trucks in California would be phased out by 2035 to help meet the state’s ambitious climate goals. Drayage trucks, for instance, account for 40% of the greenhouse-gas emissions at the twin ports of Los Angeles and Long Beach and their toxic exhaust has been linked to health problems in the low-income communities surrounding the ports.

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Economy

Producer Price Index Sees Biggest Decline Since April 2020

Bloomberg/Transport Topics Reade Pickert January 18, 2023

The PPI data showed food prices tumbled 1.2%, the most in two years. Final demand services edged up just 0.1%, the smallest gain since April. The modest advance largely reflected a surge in margins for fuel retailing.
Producer prices excluding food, energy, and trade services — which strips out the most volatile components of the index — increased a less-than-forecast 0.1% from the prior month and 4.6% from a year earlier.
Link: Bureau of Labor Statistics Producer Price Indexes

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