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Logistics Intelligence Brief
Friday, March 17, 2023


J.B. Hunt, Ryder execs see a slightly shakier market

Fleet Owner Geert De Lombaerde March 16, 2023

Speaking to the JPMorgan 2023 Industrials Conference, J.B. Hunt President Shelley Simpson said on March 14 that executives of the carrier, (No. 4 on the 2023 FleetOwner 500: For-Hire list), have spent the past three weeks checking in with about 100 key customers to get a feel for their outlook on 2023. Those companies, she said, “haven’t changed their tune much” and are still generally upbeat that the second half of the year will be better than today’s environment, in which a number of them are still working through some excess inventory.

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CP-KCS could benefit from rising tide of cross-border freight from Mexico

The Journal Of Commerce William B. Cassidy March 16, 2023


Manufacturing expands
The trend established during the COVID-19 pandemic pointed toward a substantial increase in US imports from Mexico, even ahead of a potential wave of manufacturing nearshoring as more companies move production and sourcing away from China. A rising tide of freight is likely to lift both trucks and trains, creating opportunities for operators in both modes to build volumes in the coming years.
Mexico’s manufacturing sector moved from contraction to expansion in February, with the S&P Global purchasing managers index (PMI) for Mexican manufacturers climbing from 48.9 in January to 51.0 last month. Although manufacturing has been contracting in the US, in Mexico the PMI has been positive in five of the last six months, according to S&P Global, parent company of the Journal of Commerce.

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Could future supply chain crisis hit diesel shipping, not containers?

Freight Waves Greg Miller March 16, 2023

The number of new product tankers on order is historically low. Given construction lead times and shipyards chock full of orders for container ships and LNG carriers, the world has no choice but to make due with roughly the same ocean transport capacity for diesel, gasoline and jet fuel until 2026, no matter what happens to global fuel demand.
If demand stagnates, problem solved. If it doesn’t, the world could conceivably face a replay of the supply chain crisis it just went through with containerized goods, only this time, with fuel.

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52% of Retailers Plan to Modernize Their Supply Chain Processes

PYMNTS March 16, 2023

Retailers, dependent on supply chains, are making modernization moves to better facilitate keeping their inventory stocked, as indicated in the PYMNTS collaboration with Corcentric, “Digital Payments: Modernizing the Procurement Process.” Although less than one-third of sector businesses surveyed currently invest in automating their procurement systems, more than half say they are making plans to.
Some other sectors surveyed for the study are mainly investing in digital procurement technology to reduce overhead costs or expand their businesses. However, 66% of retailers say they are doing so to modernize their processes, with 41% specifically doing so to upgrade their systems for supplier data.

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EPA 2027 and Beyond: How Will New Low-NOx Rules Affect Fleets?

Heavy Duty Trucking Jim Park March 16, 2023

Cost and Complexity of Reducing Truck Emissions
There’s very broad agreement that these new rules are going to be costly and difficult to comply with, starting with the hardware required to make the 82.5% step down in NOx emissions from 2 milligrams to .035 mg.
Comments submitted when EPA first proposed this rule last year had references to cost increases from $25,000 to as much as $35,000. Thorough analysis of the final rule, however, has analysts agreeing the upfronts will be somewhat less.
“More recent thinking — because the EPA has pared things back [from the proposed rule] — has everyone settling more in the $20,000 to $25,000 range on the national level,” says Tim Denoyer, vice president and senior analyst at ACT Research.
Denoyer says about $5,000 will be direct equipment costs, such as the additional SCR system and the cylinder deactivation hardware. There are also some re-engineering costs. He warns that the biggest piece of the cost increase will come from the increased useful life and warranty provisions in the regulations.

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Companies Are Balking at Spending for Green Freight Transport

The Wall Street Journal Paul Berger March 16, 2023


Freight operators are rolling out a growing array of options for shippers looking to reduce pollution, from low-carbon aviation and marine fuels to electric trucks.
But some shipping executives say companies are proving reluctant to pay the higher prices for alternative fuels and zero-emissions vehicles that can easily double or triple transport costs.
The gap between environmental goals and implementation highlights a growing fault line in the logistics arena as research on sustainable alternatives to traditional freight transport starts moving into real-world operations.

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U.S. Postal Service Trucking Contractors Must Now Disclose Serious Traffic Accidents

The Wall Street Journal Christopher Weaver March 15, 2023


The U.S. Postal Service ordered its trucking contractors to immediately notify the agency of serious accidents, a reversal from past practices that will give officials there a new window into the safety records of those carrying its mail, an email reviewed by The Wall Street Journal shows.
The new instruction to contractors that the Journal reviewed doesn’t address any past safety deficiencies. But it does amount to a major change in how it approaches crashes involving its contracted carriers, calling for details to immediately reach top officials.

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What Do Your B2B Customers Really Want?

HBR.org Ron Friedman March 16, 2023


Customers prefer choice over problem-solving.
We asked respondents which of the following they would prefer from a service provider:
a) having a problem solved with a single solution, or
b) being offered a few solutions and asked to choose.
Although the first option (having a problem solved with a single solution) takes less time and ensures the issue is resolved, 58% of respondents preferred the opportunity to make a selection. In other words, the experience of choice was viewed as desirable even when it did not provide additional utility and came at the expense of extra time.

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