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Logistics Intelligence Brief
Thursday, May 18, 2023


Top US Shippers: Component shortages putting brakes on auto export growth

The Journal Of Commerce Teri Errico Griffis May 17, 2023


Supply chain ‘hiccups’
Alberto Cabrera, director of cargo sales at the Jacksonville Port Authority (Jaxport), said demand for US-made vehicles and parts remains strong, but supply chain disruptions are still getting in the way of exports.
“We’re definitely not seeing doom and gloom at all,” Cabrera told the Journal of Commerce. “It’s kind of a wave. You’ll see these guys push out a bunch of volume, but all of a sudden, they’ll hit some kind of hiccup, whether it’s on the employee or manufacturing side.”
Those “hiccups” begin at the manufacturing plants that still can’t get enough parts on a regular basis to fill orders for new vehicles and trickle all the way down to the auto repair shops. More parts are needed these days to repair used vehicles that might otherwise have been turned in for new ones, if enough were available.

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Target Stands By Its Annual Outlook

Transport Topics/Bloomberg Brendan Case May 17, 2023

The mixed picture underscores Target’s push to regain its footing after a pandemic-era sales boom ground to a halt last year, leaving the company with stockpiles of unwanted goods. While that problem has been largely resolved, Target pointed to a worsening blow from organized retail theft, which is increasingly driving “shrink” — the industry term for when a store has fewer items in stock than in its inventory records.
The pressure from shrink is expected to erode profit by an additional $500 million compared with last year, when Target was already contending with rising theft.
“We are making significant investments in strategies to prevent this from happening in our stores and protect our guests and our team,” Chief Executive Officer Brian Cornell said in the statement. “We’re also focused on managing the financial impact on our business so we can continue to keep our stores open.”
Link: Target Q1 2023 Earnings Infographic

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E-commerce 3PL gains $100 million funding for its network of Mexican warehouses

DC Velocity May 17, 2023

The e-commerce third party logistics provider (3PL) XB Fulfillment plans to accelerate its expansion thanks to a $100 million round of private equity backing, the company said today.
San Diego-based XB, which is known formally as X Border Holdings LLC, says it provides fast-growing, U.S.-based e-commerce and omnichannel brands with bespoke fulfillment and value-added warehousing services.

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U.S.-bound imports see a slower rate of decline in April, reports S&P Global Market Intelligence

Logistics Management Jeff Berman May 17, 2023

On a year-to-date basis, April’s 15% decrease was preceded by an 11% January decrease, a 20% February decrease, and a 23% March decrease. Home furnishings imports fell 33% in April, compared to a 45% drop-off in March, and household appliances and consumer electronics saw matching 13% decreases. Textiles and apparel were off 37% annually, compared to a 37% March decrease.
In an interview, Chris Rogers, Head of Supply Chain Research, S&P Global Market Intelligence, attributed a key driver of ongoing import declines to inventory drawdowns across various sectors.
“If you look at a lot of consumer demand figures, like retail sales and so on, they're actually not too bad,” he said. “Clearly, there are a lot of retailers that have been reporting annual revenues are down anywhere between 5% and 20%. But I think I always want to be wary of some of the kind of macro numbers like U.S. retail sales, which never seem to quite pair up with what companies are reporting in terms of their actual financials.”

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Green Energy Is Helping Drive U.S. Industrial Real-Estate Growth

The Wall Street Journal Liz Young May 17, 2023


Renewable-energy companies are taking up a growing share of U.S. industrial real estate as manufacturers of solar panels, electric vehicles and EV batteries build out their supply chains, providing a boost to warehouse operators amid sagging demand for e-commerce business.
Companies that make and distribute electric vehicles and EV parts such as lithium batteries more than doubled their leasing in the first quarter of the year compared with the same period last year, according to data from real-estate services firm CBRE.
The growth came as e-commerce leasing fell about 66% as the surge in online retail sales during the Covid-19 pandemic receded.

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American Workers Testing Positive for Marijuana Is at 25-Year High

The Wall Street Journal Ann Marie Chaker May 18, 2023


As legal marijuana expands in the U.S., a record share of workers is testing positive for the substance in workplace drug screening.
Overall drug use among workers tested by employers generally held steady last year, according to an annual tally from Quest Diagnostics, one of the country’s largest drug-testing laboratories. In drug tests given to workers after accidents on the job, marijuana positives rose sharply last year, hitting the highest level in a quarter-century.
Of the more than six million general workforce tests that Quest screened for marijuana in 2022, 4.3% came back positive, up from 3.9% the prior year. That is the largest marijuana positivity rate since 1997. Positivity rates last year for certain classes of opioids and barbiturates declined.

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California’s Green-Fuel Program Gets Too Popular for Its Own Good

The Wall Street Journal Bob Henderson May 16, 2023


A boom in the production of green trucking fuel is punishing renewable-energy producers across the country, thanks to the shifting market for California’s low-carbon fuel credits.
U.S. production of so-called renewable diesel, which is made from feedstocks such as beef tallow and soybean oil, has tripled over the past three years. Truckers and fuel producers say the gains are driven by federal incentives and the state’s Low Carbon Fuel Standard program, which issues resellable credits to firms that sell low-carbon fuels such as ethanol in California.
Those credits can make biofuels far more lucrative for producers than their petroleum-based relatives. And because producers earn California’s credits only for renewable diesel sold into the state, the vast majority of the country’s production ends up there.

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FMCSA: HOS Violations Rise After Rule Change

Transport Topics Eric Miller May 17, 2023

Amendments to the hours-of-service rule that went into effect in late 2020 may have increased flexibility for truck drivers, but the percentage of HOS violations rose “significantly higher” the first year of the rule’s implementation, according to a new analysis sent to Congress this month.
However, the Federal Motor Carrier Safety Administration analysis did not show an increase in overall crash trends the year after the rule was amended.
The final rule, primarily intended to address flexibility concerns by drivers, went into effect Sept. 29, 2020.
Link: FMCSA The Effects of the Hours of Service Regulations Report to Congress - 2021

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OOIDA calls out flaws in CSA Safety Measurement System proposal

Land Line May 17, 2023

OOIDA said that the system needs a comprehensive overhaul that will incorporate better data, encourage states to implement the National Highway Traffic Safety Administration’s Model Minimum Uniform Crash Criteria and support standardized enforcement programs across different states and geographic regions.
“OOIDA acknowledges the difficulties associated with applying an IRT model for the trucking industry,” the Association wrote. “However, we are concerned that outright rejecting the IRT model will mean that FMCSA does not give proper consideration to the panel’s other findings, given IRT was the NAS’ top recommendation.
“We adamantly disagree that the current and proposed system can be considered transparent or effective given the performance of these safety measurement programs since their implementation.”

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Bill urges DOT to improve lackluster driver apprenticeship program

CCJ Jason Cannon May 17, 2023

Bi-partisan legislation introduced into the House Wednesday seeks to spur participation in the Safe Driver Apprenticeship Pilot Program, a truck driver recruiting initiative that to date could at best be categorized as lackluster or, at worst, a flop.
The Safe Driver Apprenticeship Pilot (SDAP) program allows drivers under the age of 21 to drive interstate under certain conditions. Launched in 2022, the program was capped at 3,000 participating drivers at any one time, but fewer than a dozen driver participants have enrolled. Currently, 16 fleets have been approved to hire drivers for the SDAP program.
American Trucking Associations President and CEO Chris Spear said the program's failure is partly due to extraneous Department of Transportation requirements for program participation – like requiring driver-facing cameras and that participating motor carriers be part of a Department of Labor-approved Registered Apprenticeship Program (RAP) – that were not included in the bipartisan infrastructure law.
Related: Freight Waves Lawmakers look to bolster ranks of young truck-driver program

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Job Prospects for Black Workers Have Never Been Better—In Ways That Might Last

The Wall Street Journal Sarah Chaney Cambon and Gwynn Guilford May 18, 2023


The tightest job market in generations is transforming the employment prospects for Black Americans in ways that could be more long-lasting than in past economic expansions.
The unemployment rate for Black workers fell to a record low 4.7% in April. That was still above the national average, but below 5% for the first time in Labor Department records of employment for Black Americans, which began in 1972. About 1.1 million more Black Americans held jobs last month than in February 2020, just before the pandemic took hold. That increase accounts for nearly half the total gain in employment during that time.

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