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Logistics Intelligence Brief
Friday, May 19, 2023


Flexport Taps Uber Freight Executive to Build Truck Brokerage

The Wall Street Journal Liz Young May 18, 2023


Flexport plans to build a truck brokerage operation to move goods more efficiently within North America, as the freight forwarder looks to build on its acquisition of Shopify’s logistics assets by extending its business into a factory-to-door distribution service.
The San Francisco-based company said Thursday it has hired Bill Driegert, a former Amazon.com executive who most recently led operations at Uber Technologies’ Freight division, to establish its own trucking services business.
“His mission in this new role will be to develop and scale our end-to-end customer offering for trucking,” Chief Executive Dave Clark wrote in a memo to Flexport employees.
Related: Freight Waves Flexport names Uber Freight chief to lead digital truck unit

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Brokerage fraud costs could surpass $800M, TIA president says

Transport Dive Colin Campbell May 18, 2023

Brokerage fraud is costing brokers, carriers, shippers and consumers $800 million or more, Transportation Intermediaries Association President and CEO Anne Reinke said last week.
A lack of enforcement has allowed bad actors using hundreds of different federal motor carrier numbers to impersonate carriers and conduct fraud, theft and other schemes, the brokerage association leader said.
“We are in the midst of a fraud epidemic in the supply chain,” Reinke testified before a Congressional subcommittee on Capitol Hill.

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TJX looks to capitalize on an ‘outstanding buying environment’

Supply Chain Dive Ben Unglesbee May 18, 2023

• TJX is ready to “take advantage of the outstanding buying environment” as the off-price retailer’s inventory levels recede from last year, CFO John Klinger told analysts on a conference call Wednesday.
• The company’s total inventory fell more than 8% YoY in Q1, according to the discounter’s latest earnings. The fall was due to a decline in in-transit inventory compared to a year ago, when delays still held up supply chains.
• “We feel great about our balance sheet and store inventory levels,” Klinger said. The executive added that the retailer expects “better buying” to benefit the retailer’s margins in the coming quarter, while falling freight expense will increase margins for the full fiscal year.

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Walmart sales up 7.6% as shoppers hunt for low prices

Retail Dive Nate Delesline lll May 18, 2023

• Walmart’s total global revenue for the first quarter was $152.3 billion, up 7.6%, the retailer reported on Thursday. Operating income rose 17.3% to $6.2 billion, while Walmart’s e-commerce sales increased 27% thanks to strong performance in pickup and delivery.
• Comp sales for Walmart U.S. rose 7.4%, while net sales for the U.S. grew to $103.9 billion, up 7.2% from a year ago. The retailer reported $5 billion in operating income in the U.S., up from $4.5 billion a year ago.
• Although economic uncertainty remains a concern, the company raised its full-year guidance on Thursday. Walmart now expects its consolidated net sales to rise about 3.5%.
Link: Walmart Press Release Walmart Reports First Quarter Results

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Lower volumes translate into better North American intermodal service: survey

The Journal Of Commerce Ari Ashe May 18, 2023


CSX Transportation and J.B. Hunt Transport Services were the top-performing intermodal providers in North America through the first four months of 2023, according to a Journal of Commerce survey of more than 100 shippers and intermodal marketing companies (IMCs).
The survey, with 113 respondents, was conducted via SurveyMonkey between March 1 and April 30.
Overall, customers were satisfied with domestic intermodal service in early 2023, according to the survey, known as the Intermodal Service Scorecard. Three-quarters of IMCs and shippers said that fluidity was getting better, and that service was headed in the right direction.
“Service is definitely much improved, even though there are still inconsistent transit times on some lanes and railroads are slow to notify containers as available on other lanes,” one IMC wrote.

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Logistics providers expand operations in Mexico, leveraging nearshoring as a strategy

Supply Chain Dive Alejandra Salgado May 18, 2023

Logistics companies are ramping up operations in Mexico to take advantage of an expected surge of businesses nearshoring production to south of the U.S. border.
Chicago-based Redwood Logistics announced last month that it would expand operations in Mexico, noting major investments in the country from the automotive, pharmaceutical and food and beverage industry. Meanwhile, BlueGrace Logistics is establishing a dedicated Mexico office, bringing on a new leader to oversee the expansion of its cross-border services.
As more businesses look to shorten lead times and diversify their supply chains away from China, many shippers are turning to Mexico given its location and trade relationship with the United States.

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Texas and New Mexico led U.S. crude oil production in 2022

Energy Information Administration May 18, 2023

U.S. crude oil production grew 5.6%, or 0.6 million barrels per day (b/d), in 2022 compared with 2021, averaging 11.9 million b/d according to our Monthly Crude Oil and Natural Gas Production report. The two states the Permian Basin spans—Texas and New Mexico—contributed the most growth to U.S. crude oil production in 2022.
The Permian Basin, a productive oil basin located on the border of West Texas and eastern New Mexico, leads in oil production for these two states. In 2022, for the third consecutive year, crude oil production grew more in New Mexico than in any other U.S. state. New Mexico production grew by 0.3 million b/d to 1.6 million b/d, a record for the state.

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US-Mexico cross-border trucking expanding on manufacturing demand, nearshoring

The Journal Of Commerce May 18, 2023


The US trucking market may be in the doldrums, but not at the US-Mexico border. High demand for manufactured goods and produce is pushing up the volume and the value of goods moving north from Mexican factories and farms into the US. And that is keeping northbound truck rates from Mexico high compared with US national averages, according to Jordan Dewart, president of Redwood Mexico.
Steady gains in Laredo
In March, the value of imported goods from Mexico on a Customs basis rose 5.7% year over year to $42.8 billion, a new monthly high, according to data from the US Bureau of Economic Analysis. The US Bureau of Transportation Statistics (BTS) recorded a 5% year-over-year increase in trucks entering the US at Laredo in March. That followed a 7.9% gain in February and a 9.6% increase in January.

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April Trailer Orders Down 49% Year-Over-Year

Transport Topics Connor D. Wolf May 18, 2023

U.S. trailer orders dropped by nearly half from the year-ago total to an estimated 10,000 units in April, ACT Research reported.
Preliminary data show orders decreased 49% year-over-year from 19,614, according to ACT. They also fell 40.5% sequentially, with the prior month hitting 16,800 units. Every month has experienced a year-over-year decline since closing out last year at the second-highest level on record.
“Seasonal expectations called for orders to pull back in April, particularly given the near record-level order backlogs and supply chain challenges being experienced by the industry,” said Jennifer McNealy, ACT’s director of commercial vehicle market research. “Demand appears to be softening, albeit against strong comparisons. That said, backlogs remain robust."

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Canadian Carrier to Appeal Nuclear Verdict

Transport Topics Eric Miller May 18, 2023

A Canadian motor carrier plans to file an appeal of an $82 million jury verdict in a 2018 fatal crash in Michigan for which it has admitted fault, on grounds primarily related to the amount awarded.
“Our legal team has carefully assessed our position and believes the amount awarded to be excessive and not in line with the evidence presented and was the result of numerous factors, including decisions made by the state court judge during trial,” the carrier, Challenger Motor Freight, said in a statement. “We are committed to pursuing a fair outcome based on the evidence presented and will navigate the legal proceedings diligently to ensure a comprehensive reflection of the circumstances surrounding this unfortunate and isolated incident.”

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Roadcheck 2023: Eyeing trucks at I-40 Memphis

Fleet Owner Scott Achelpohl May 18, 2023

The section of Interstate 40 cutting through Memphis and its suburbs is among the busiest freight corridors in the country, notorious among truckers and other motorists. Every day, 50,000 vehicles cross the Hernando de Soto bridge connecting Tennessee and Arkansas across the Mississippi River. A2021 shutdown of the bridge cost the freight industry $2 million per day, per an Arkansas Trucking Association estimate. Withconstruction on I-55 near Memphis projected to continue until 2026, congestion has heightened as yet more traffic is diverted to I-40, according to Arkansas Highway Police Lt. F. Caballero.

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Post-Accident Workforce Drug Positivity for Marijuana Reached 25-Year High in 2022, Quest Diagnostics Drug Testing Index Analysis Finds

Quest Diagnostics May 18, 2023

• Increase Seen in the General U.S. Workforce Started Same Year First States Legalized Recreational Marijuana
• Overall Workforce Drug Test Positivity Persisted at Two-Decade High Across All Workers
• Marijuana and Amphetamines Positivity Climbed in Key Industries
"Intoxicating cannabis products, including marijuana, can have a major impact on safety at work and have been proven to slow reaction time, impact memory and impair skills essential to driving. State legalization of the drug creates new challenges for employers," said Katie Mueller, a senior program manager at the National Safety Council focusing on cannabis safety. "The Quest data provide compelling evidence that increased use of cannabis products by employees can contribute to greater risk for injuries in the workplace. It is imperative employers take the proper steps to create and maintain a policy that addresses cannabis use, build a safety-focused culture and educate the workforce to keep all workers safe on and off the job."

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B2B Sales Teams Can’t Afford to Ignore Midsize Customers

HBR.org Yal Kwon And Jason McDannold May 18, 2023


Selling to middle-market B2B customers is a challenge for many large, multinational companies. While midsize enterprises are the core of their supplier base, when it comes to selling to them, large enterprises are far less capable. Unlocking the potential of these middle-market customers can open new avenues and options for growth during and after the current economic slowdown.

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Bed Bath & Bankruptcy: Lessons for Senior Leaders

MIT Sloan Management Review Jonathan Knowles et al. May 18, 2023


Understanding the Core Issue: Consumer Value Creation
The engine of sustainable business success is customer value creation. A core tenet of leadership is that value must be created before it can be captured. This means it is critical for leaders to understand what is driving its relevance to its customers and what the sources of its distinctiveness are.
In our article “Changing How We Think About Change,” we described fit to purpose as a way to evaluate the size of the market that a business can serve, while relative advantage evaluates the opportunity for pricing power and margin. For sustained success, a business needs both scale and margin — and neither should be pursued without explicit consideration of its impact on the other.

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