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Logistics Intelligence Brief
Monday, March 27, 2023


What Do Q1 Freight Volumes Tell Us?

Heavy Duty Trucking Jeff Kauffman March 25, 2023

In mid-March, many less-than-truckload carriers reported quarter-to-date tonnage and yield results that had volumes down about 6.2%, below expectations.
While the gross of fuel yields are up about 6.2%, roughly in line with our view, we thought it would be helpful to discuss various volume lead indicators for trucking as a whole. Given the uncertainty in the larger economy, what are these numbers telling us?
Freight Volumes
Volumes were slightly above expectations in January and below expectations in February, which we attribute to better-than-expected winter weather across much of the country in January. Cass shipments declined 3.2% in January from the previous month, but normal December-to-January drops are about 8% — so shipments improved versus normal seasonality.

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What is NMFTA and what does it do?

Freight Waves Todd Maiden March 26, 2023

The National Motor Freight Traffic Association (NMFTA) is a nonprofit trade group that publishes the National Motor Freight Classification (NMFC). The NMFC is essentially a coding system that universally identifies differences in commodities for freight shipments being transported interstate, intrastate and abroad.
Freight classes and codes are determined by “density, handling, stow-ability and liability,” establishing the “transportability” of a commodity, the organization states.
There are 18 unique freight classes, ranging from highly dense metal products (Class 50) to low-density, lightweight items like pingpong balls (Class 500). Shipments are also assigned NMFC codes to identify commodity type, dimensions, packaging and handling specifications, and risk or liability.
“By analyzing commodities based on the four transportation characteristics and ONLY based on those characteristics, the NMFC provides both carriers and shippers with a standard by which to begin negotiations and greatly simplifies the comparative evaluation of the many thousands of products moving in today’s competitive marketplace,” the group’s website states.

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Port of Oakland reports slow February container volumes as retail activity sputters

DC Velocity Ben Ames March 24, 2023

The Port of Oakland has reported another slow month for container volume flows, mirroring a global trend that has seen maritime shipping demand slump from its hyperactive pandemic highs.
Port leaders cited four reasons for the drop, saying first that domestic inventories have remained high since retail sales fell in February, which has dampened cargo volumes for U.S. West Coast ports. And second, a strong dollar is impeding export volumes. Those economic trends echo recent reports on cargo imports by the National Retail Federation (NRF).
A third factor causing lackluster volume out west is that West Coast ports have been losing market share to ports on America’s East and Gulf Coasts, the Port of Oakland said. That analysis aligns with statistics from the Georgia Ports Authority (GPA) showing that the Port of Savannah recently recorded the second-busiest February in its history.
Link: Port of Oakland February container volume declined

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U.S. rail carload and intermodal volumes are down, for week ending March 18, reports AAR

Logistics Management March 24, 2023

Rail carloads—at 227,454—were down 2.7% annually, trailing the week ending March 11, at 229,246, and the week ending March 4, at 237,413.
Intermodal containers and trailers—at 226,046—were off 15.2% annually, trailing the weeks ending March 11 and March 4, at 229,383 and 236,778.

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UP shippers facing delays on key Chicago-LA corridor

The Journal Of Commerce Ari Ashe March 24, 2023


Intermodal providers have told the Journal of Commerce they are struggling to bring 53-foot containers into UP’s terminals in Chicago and nearby Joliet, Illinois, causing delays of several days to move cargo to the West Coast.
UP told the Journal of Commerce there are a few factors behind the delays shippers are experiencing.
“We are seeing strong demand in the Chicago to Southern California lane,” the railroad said in a statement Thursday. “Weather issues, including those in the West and Midwest, have impacted our car cycle times. Union Pacific has ample intermodal well cars running in the network to support the demand.”

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Amazon aims to reduce grouped delivery issues

Supply Chain Dive Max Garland March 24, 2023

Dive Insight:
As Amazon continues to insource more of its last mile delivery operations, it is also taking steps to limit issues that could occur during the package drop off process. Better service can help the company keep businesses using Fulfillment by Amazon, in which Amazon handles delivery and other fulfillment steps for sellers, and end customers satisfied.
Amazon likened the Risk Aware Delivery program to a guardrail for drivers in the memo. Its overall aim is to reduce future delivery defects, particularly when it comes to packages that have been delivered but not reported as received by end customers.

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Retailers Reaping Big Savings on Ocean Transport Costs

The Wall Street Journal Paul Berger March 25, 2023


Retailers are gaining huge savings on ocean container transport as once sky-high shipping prices tumble toward prepandemic levels and companies delay signing annual contracts so they can bargain rates down even further.
The average price for Asia-to-U.S. container trade has “fallen as dramatically as we’ve ever seen it fall,” said Jon Cargill, senior vice president and chief financial officer of Hobby Lobby Stores Inc.
Spot market rates have crashed more than 90% from pandemic-era highs as shipping demand has declined. The average spot rate to ship a container from Asia to the U.S. West Coast as of Thursday was $1,289, according to Norway-based transportation data specialist Xeneta, about $668 lower than the contract price.

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Foot Locker builds out inventory visibility as it chases digital-savvy peers

Supply Chain Dive Ben Unglesbee March 24, 2023

• Foot Locker is investing in an inventory visibility system that will better track product across its footprint as it tries to catch up with its more digitally-savvy peers.
• “By 2024, we expect to have our inventory synced across stores, DCs and our digital channel to give the customer and our [associates] a near real-time picture of not only what’s available but where it sits in the network and how we can get it to them,” Peter Scaturro, Foot Locker SVP of strategic planning and growth, told analysts this week.
• As the footwear retailer builds out its inventory capabilities and makes other investments, it plans to increase capital spending by 50% over the next four years, executives said.

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Florida Truckers Celebrate New Law Trouncing Lawsuit Abuse

Transport Topics Noel Fletcher March 24, 2022

After years of hard work, the Florida Trucking Association and truckers are celebrating a law signed March 24 by Gov. Ron DeSantis that sends a crushing blow to a cottage industry there of unscrupulous attorneys targeting companies with frivolous lawsuits.
“Florida has been considered a judicial hellhole for far too long, and we are desperately in need of legal reform that brings us more in line with the rest of the country,” DeSantis said. “I am proud to sign this legislation to protect Floridians, safeguard our economy and attract more investment in our state.”
The governor’s office stated that the law, which took effect immediately, “prevents predatory practices of trial attorneys that prey on hardworking Floridians.” It also modifies a bad-faith framework, eliminates one-way attorney fees and fee multipliers, and “ensures that Floridians can’t be held liable for damages if the person suing is more at fault.”

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New trucking coalition looks to set realistic decarbonization path

Fleet Owner Josh Fisher March 24, 2023

It's a long drive between trucking reality and climate politics. But five major industry trade groups are banding together to promote what trucking has accomplished and setting pragmatic expectations for supply chain decarbonization.
"The key to our shared success will be in establishing a realistic timeline and multiple-solution approach that ensures productivity for drivers and reliability within the supply chain for consumers," said Jim Ward, president of the Truckload Carriers Association.
Just last month, ATA President and CEO Chris Spear said the industry's future depends on trucking finding one voice over the journey to zero emission. "The next decade could, if we do not stand up as one and speak rationally, reshape our industry and, as a result, our economy," he said during a speech at ATA's Technology & Maintenance Council annual meeting.

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Under-21 pilot program – the party no one is going to

Land Line Mark Schremmer March 24, 2023

In January 2022, the Federal Motor Carrier Safety Administration announced the establishment of the pilot program.
Soon, those teenagers would be lining up to be truck drivers, and everything would be just peachy.
Wait … what did you say? The under-21 pilot program hasn’t reached 3,000 participants yet?
OK. Nothing to be alarmed about, I’m sure. How many do they have, 2,500? No.
2,000? Still less, you say?
1,000? What? A lot lower?
There has to be at least 500, right? Still not close?
I give up. How many?
I’m sorry, my ears aren’t too good. I thought you said, “four.”
Wait. You did?
Yep. That’s correct. Sen. Cindy Hyde-Smith, R-Miss., said at a Senate subcommittee hearing on Thursday, March 23 that only four apprentices are in the program.

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Union Pacific becomes second railroad to drop push for one-person crews

MarketWatch/Associated Press March 26, 2023

Union Pacific has become the second major freight railroad in the past week to back away from the industry’s longstanding push to cut train crews down to one person as lawmakers and regulators increasingly focus on rail safety following last month’s fiery derailment in Ohio.
The Omaha, Nebraska-based railroad said in a statement Saturday that it had reached an agreement with the union that represents conductors to drop its proposal to take those workers out of the cabs of locomotives just months after it was pressing to test out the idea of stationing conductors in trucks in parts of its 23-state network. Norfolk Southern NSC, +0.42% made a similar announcement several days earlier.

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What’s Behind Train Derailments and Are They Happening More Often

The Wall Street Journal Ming Li et al. March 25, 2023


Recent train derailments, including one in a small Ohio town, have prompted officials to examine what is causing the accidents and whether they are happening more frequently.
Derailments rank as the most common type of accident involving major freight railroads, federal data shows. Equipment failures are increasingly responsible for derailments, and problems with equipment and train tracks accounted for nearly 60% of derailments nationwide last year.
To better understand train derailments, The Wall Street Journal analyzed data that railroads filed with both the Federal Railroad Administration and the Surface Transportation Board. When possible, the data reflects accidents and derailments on so-called main lines, encompassing incidents outside of rail yards and on tracks that pass through communities such as East Palestine, Ohio, the site of a Feb. 3 derailment involving Norfolk Southern Corp.

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FMCSA shuts door on brokers in rate transparency dispute

Freight Waves John Gallagher March 26, 2023

The Federal Motor Carrier Safety Administration has denied a rulemaking petition by the Transportation Intermediaries Association (TIA) to remove a requirement that freight brokers disclose to carriers transaction records between brokers and shippers.
FMCSA’s denial, published Friday, was issued just a day after the agency agreed to initiate a formal rulemaking by two groups representing small-business truckers – the Owner-Operator Independent Drivers Association and the Small Business in Transportation Coalition (SBTC) – requesting that brokers be prohibited from denying carriers the ability to access such records.
Link: FMCSA Denial of Petition Letter to Transportation Intermediaries Association

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Shipping interests urge White House intervention in West Coast labor talks

The Journal of Commerce Bill Mongelluzzo March 24, 2023


A coalition of 238 US shippers and transportation interests, frustrated by the lack of progress in West Coast labor negotiations and the resulting diversion of cargo, urged the White House on Friday to intervene in the talks that have dragged on for more than 10 months.
The plea to the Biden administration comes just days after the Pacific Maritime Association (PMA) said the latest job action by dockworkers linked to the stalled negotiations caused “significant delays” at some marine terminals at the ports of Los Angeles and Long Beach.
“Negotiations have been ongoing for over 10 months, with little to no progress towards a new long-term agreement,” the letter from the groups said. “It is imperative that administration work with the parties to quickly reach a new agreement and ensure there is no disruption to port operations and cargo fluidity.”

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Pay and respect top influences on why drivers leave a carrier

CCJ Jason Cannon March 27, 2023

More pay. More home time. Respect. A clear career path that moves them from the cab and possibly to the office. The answer to what truck drivers want from a potential employer/carrier is "all the above."
Throwing more money at more driver applicants might be the lowest of the low-hanging fruit, but it's not the be-all, end-all when it comes to why a driver would join any given fleet over thousands of others, according to the results of CCJ's most recent What Drivers Want survey, a poll of more than 800 leased owner-operators and company drivers.
Link CCJ What Drivers Want Report

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Job, Career, or Purpose?

MIT Sloan Management Review Charn P. McAllister And Curtis L. Odom March 23, 2023


We believe workplaces comprise three types of employees: the job-oriented, the career-oriented, and the purpose-oriented. Just as important as recognizing that not everyone is purpose-oriented is knowing and accepting that it’s OK for employees to not share in the organization’s purpose; they can still make meaningful contributions. This approach requires a massive shift in our thoughts on purpose, because although it is always worth trying to help people buy into an organization’s purpose, it is equally important to understand when they simply want a job or a career.

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