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Logistics Intelligence Brief
Monday, March 13, 2023


Truckers waiting out slow first half of year in hopes of solid demand later

Logistics Management John D. Schulz March 10, 2023

"It’s softer now than we would like,” Greg Orr, president of CFI, a major truckload carrier that is part of Canada-based TFI International. “The spring push is around the corner. You will see things improve as inventories go down.”
Still, Orr said the “big question mark in my mind is what’s happening in China.” China, the key starting point for many trucking products in the extended worldwide supply chain, is enduring a slowdown. Exports from China fell nearly 10% last December, the third straight month of declines. It’s the largest drop since the coronavirus struck in early 2020.
“Inbound quantities are down, specifically in truckload,” Orr told LM. “Still, I think the back half of year will be a lot better than the first half.”

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Crude shipping revs up; supertanker rates top $100,000 a day

Freight Waves Greg Miller March 10, 2023

Spot rates for very large crude carriers (VLCCs) — tankers that carry 2 million barrels of oil — just breached the $100,000-per-day threshold. It could be a taste of things to come. Analysts and investors are increasingly confident that the tanker business is headed into a long, sustained upcycle.
“VLCC rates have surged at the end of the week,” said Clarksons Securities analyst Frode Mørkedal on Friday. Brokerage Fearnleys reported “frenzied activity” in VLCC charter market.

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Mexico starts 2023 as top US trade partner

Freight Waves Noi Mahoney March 12, 2023

Mexico ranked as the United States’ top trading partner for the second consecutive month in January, according to the most recent data from the U.S. Census Bureau.
Mexico’s total trade with the U.S. increased 12% year over year (y/y) to $64 billion, compared to the same period in 2022. Mexico exported $27 billion in goods and services in January, while recording $37 billion in imports.
The U.S.-Mexico port of entry in Laredo, Texas, rated No. 2 among the nation’s 450 airports, seaports and border crossings in January. Port Laredo’s trade increased 16% y/y to $25 billion.
Chicago O’Hare International Airport ranked No. 1 among U.S. gateways in January, accounting for $27 billion in trade. The Port of Los Angeles was third with $24 billion.
Link: U.S. Census Bureau Top Trading Partners - January 2023

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The German Startup Racing Uber to Uber-ize Trucks

Bloomberg Austin Carr March 12, 2023


The big rigs rolling along highways and beeping back into warehouses move the world’s cargo. Amazon boxes, furniture crates, pallets of bananas, perhaps the gadget you’re using to read this story—really, every item within your reach has likely been hauled on multiple semis. Yet this diesel-gulping industry is also a marvel of inefficiency, rife with problems that have proved shockingly immune to the magic wand of technology. For about 20% of its miles on the road, the average freight truck carries nothing. Such “empty miles” are a sad joke in the business: The planet’s most shipped good is air.

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Low-cost, faster freight lets auto shippers hold down inventory

Freight Waves John Paul Hampstead March 10, 2023

Some supply chain analysts speculated that after years of disruption and unpredictable service levels in freight markets, shippers might return to just-in-case rather than just-in-time models for inventory, pivoting from a perceived overemphasis on “lean” to make their supply chains more resilient with an extra buffer of inventory.
But Klein said that if anything, he’s seeing automotive shippers start to prefer premium, expedited-style services that facilitate tight inventories and higher freight velocities. Some automotive customers ask for transloading in port cities, preferring the speed and visibility of truck movements to intermodal rail. Both trucking and intermodal contract rates have fallen hard in 2023, and the spread between the two has compressed.

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Alphabet’s Wing expects drone network to deliver millions of packages by mid-2024

Supply Chain Dive Max Garland March 10, 2023

• Wing, a drone delivery company owned by Google parent Alphabet, expects its drone delivery network will be able to handle millions of deliveries at a lower cost than ground transportation by mid-2024.
• Driving this expansion will be the Wing Delivery Network, which CEO Adam Woodworth said in a blog post is a decentralized, automated system able to support high-volume delivery activity. “The network is managed by logistics automation software that constantly allocates hardware resources at a city or metro-wide scale.”
• Wing’s drones can support curbside pickup and can easily be integrated into retail and restaurant operations, according to Woodworth. The company plans to roll out parts of the network’s capabilities over the next 12 months and demonstrate them in new locations worldwide.

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Underride guards notice expected to publish soon

Land Line Mark Schremmer March 10, 2023

An advance notice of proposed rulemaking aimed at determining the effectiveness of side underride guards on tractor-trailers has cleared the White House and will soon be published in the Federal Register.
In January, the National Highway Traffic Safety Administration sent the notice to the White House Office of Management and Budget for review. The White House concluded the review on Feb. 16, and the release of the advance notice of proposed rulemaking is expected soon.
“This rulemaking would consider requirements for side underride guards on trailers and semitrailers to mitigate underride crashes into the side of these vehicles,” the rule’s summary stated. “This rulemaking would respond, in part, to a Sept. 12, 2013, petition for rulemaking from Ms. (Marianne) Karth and the Truck Safety Coalition to start studies and rulemakings on side guards and front override guards on trucks.”

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Hydrogen, Alternative Fuels Advancing Steadily, Natso Panelists Say

Transport Topics Dan Ronan March 10, 2023

The early consensus among attendees appears to be that the market share for battery-electric trucks has the potential to significantly grow, especially for regional delivery companies such as Amazon.com Inc., UPS Inc., FedEx Corp., and the U.S. Postal Service, which often send their drivers on routes that are less than 200 miles per day.
“Is it hydrogen going to be the entire heavy-duty trucking market? No, certainly not,” said Bill Zobel, Pilot Flying J director of alternative fuels. “Electric trucks, diesel, biodiesel and others will play a role for a very long time, but hydrogen’s time has come.”

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Railroad Group Warns of Loose Wheels on Some Railcar Models

The Wall Street Journal Kris Maher And Esther Fung March 10, 2023


The American Association of Railroads issued a rare advisory Thursday calling for certain rail cars to be taken out of service and inspected amid concerns that loose wheels might increase the risk of derailments.
The industry group said that one of its railroads had experienced three loose wheels on cars designed to carry coiled steel. The cars had wheels that were mounted between August of last year and March by National Steel Car, an Ontario-based rail car manufacturer, according to AAR. It said that any cars, loaded or empty, that are found to have these wheel sets must be removed immediately from service.

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Decline in truck transportation jobs 3rd biggest in last decade

Freight Waves John Kingston March 10, 2023

The job losses suffered by the truck transportation sector in February have almost no precedent in the last 10 years, except for the massive drop in April 2020 and a similar drop almost 10 years ago.
Bureau of Labor Statistics data reported Friday showed the truck transportation sector saw a decline of 8,500 jobs in February, coming in at 1,599,900 on a seasonally adjusted basis.
In the downloadable data provided by BLS in its report, a review of every month going back to January 2013 turns up no other month in that period, except for the April 2020 bloodbath, in which the number of jobs in truck transportation jobs fell by that much. Outside of April 2020, the only bigger one-month decline was 9,000 jobs in March 2013.
The decline in April 2020 was 84,500 jobs.
Before the February report, there had only been three months since the pandemic began in which truck transportation jobs declined, with the largest one-month drop coming in March of last year, when jobs declined 3,100 jobs. Other than those three months, it had all been gains.

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Slowdown in E-Commerce Hitting Logistics Companies’ Payrolls, Experts Say

The Wall Street Journal Liz Young March 2023


Logistics operators slashed nearly 17,000 jobs last month as consumer spending shifts to services from goods, and e-commerce growth stalls.
Trucking, warehousing and parcel-delivery companies cut a combined 16,900 jobs in February, following a drop of 2,200 jobs in January, according to seasonally adjusted preliminary employment figures released Friday by the U.S. Bureau of Labor Statistics.
The pullback came as the broader U.S. economy added 311,000 jobs, driven by growth in service sectors such as restaurants, hospitals and nursing homes.

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