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Logistics Intelligence Brief
Wednesday, May 24, 2023


Tonnage in April Drops 3.4% Year-Over-Year

Transport Topics Dan Ronan May 23, 2023

“While the broader economy continues to surprise and thus far stave off an expected recession, the freight economy is starkly different,” Costello said. “The goods portion of the economy is soft, and as a result even contract truck freight is now falling, albeit not nearly as much as the spot market.”
Costello added, “The tonnage index hit the lowest level since September 2021 in April and has now fallen on a year-over-year basis for two straight months.”ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight.

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Walmart opens store-based fulfillment center in Arkansas

Retail Dive Max Garland May 23, 2023

• Walmart opened a store-based fulfillment center in its hometown of Bentonville, Arkansas, the retail giant announced Monday.
• The facility, known as a market fulfillment center, will increase the number of daily orders a store is able to fulfill and frees up store employees to handle other tasks, the company said. It’s Walmart’s second market fulfillment center nationwide, the first being a proof-of-concept center in Salem, New Hampshire.
• Like Salem, the Bentonville facility uses a proprietary storage and retrieval system named Alphabot. Robotics automation company Alert Innovation designed this system specifically for Walmart before being acquired by the retailer.
Link: Walmart Press Center Walmart Opens First Market Fulfillment Center in Arkansas as the Retailer Doubles Down on Store Fulfillment

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Seko Logistics warns of puny peak season for shipping

Freight Waves Eric Kulisch May 23, 2023

This year’s peak shipping season could be anemic, and arrive later than normal, as merchants remain shy about pulling the trigger on new import orders even after clearing out excess inventory, freight transportation providers are realizing.
Executives at Seko Logistics said during a virtual briefing with reporters on Monday that customers across industries, including fashion, technology, defense and medical devices, are being very cautious about placing purchase orders because of elevated uncertainty about the economy and consumer confidence.
That means the traditional wave of ocean and air shipments that starts mid-summer to fill store shelves for the holidays is more likely to be a ripple. Meanwhile, manufacturing in major economies is contracting.
“Our customers are expecting a mild peak that breaks toward the back half of the year unless there is some disruption that artificially tightens capacity, versus July, August and September,” said CEO James Gagne.

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Lowe’s lowers full-year guidance as DIY spending softens in Q1

Retail Dive Nate Delesline lll May 23, 2023

CEO Marvin Ellison said a late start to spring chilled the company’s Q1 performance.
Ellison said the company’s do-it-yourself customers represent 75% of its business and many seasonal categories are concentrated in the DIY segment. “As weather improves, we’re optimistic that customers will reengage with spring projects and we are ready to support the increased demand with our best in-stock position and staffing levels in three years,” he said.
Related: Digital Commerce 360 Online sales drop for Home Depot, grow for Lowe’s in Q1 2023

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Weekly Transportation Update: Retail Sales Hold Steady

Industrial production and manufacturing
The most interesting takeaway from the Federal Reserve’s industrial production data release for April is that motor vehicle and parts production jumped 9.3% to a seasonally adjusted all-time high, surpassing December 2018 for the distinction.
The fact that a December – a month that normally includes significant holiday downtime – previously held the seasonally adjusted record should signal caution in interpreting the data. On a not seasonally adjusted basis, December 2018 ranks 95th in automotive output since the data series began in 1972.
While April was a record for seasonally adjusted output, it was only 13th on an unadjusted basis. March’s unadjusted output was stronger than April’s but was only 45th all time, seasonally adjusted.
Automotive output was mostly responsible for the 1% seasonally adjusted increase in manufacturing output. Excluding motor vehicles and parts, manufacturing production increased 0.4%.
Overall industrial production increased 0.5% in April after no change in February and March following revisions. Mining output increased 0.6% while utilities output fell 3.1%.

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Ports Record Steep Drops in April Cargo

Transport Topics Dan Ronan May 23, 2023

The slump in container volumes at ports on the East and West coasts continued in April as some of the largest facilities saw year-over-year double-digit drops.
The Port of Los Angeles reported a 22.5% decline when measured against 2022’s strong year. The port processed 688,109 20-foot-equivalent unit containers compared with 887,357, or a decline of more than 199,000 TEUs.
“A cooling global economy, warehouses laden with aging inventory and prolonged West Coast labor negotiations have all contributed to a slowdown in trade,” Port of Los Angeles Executive Director Gene Seroka said. “If economic conditions improve and we get a labor deal in place, that will help improve volume the second half of the year. We are prepared for the next cargo surge, whenever it comes.”

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AI opens new frontier in supply chain planning

Supply Chain Dive Ben Unglesbee May 23, 2023

An executive survey by McKinsey from early 2022 found that spreadsheets are still the primary planning tool for supply chain leaders, with 73% of respondents relying on them.
But, 43% said they planned to use artificial intelligence and machine learning for some planning activities. Another 17% said they planned to use AI and machine learning for most activities at some point.
A survey this year from BlueYonder, a supply chain software company, found that demand forecasting and inventory optimization are among the top uses of AI and machine learning technologies by supply chain executives.

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House transportation committee OKs $755M to expand truck parking

Freight Waves John Gallagher May 23, 2023

“Truckers are the backbone of the supply chain carrying over 70% of America’s freight, yet there is only one parking spot for every 11 trucks on the road,” said Todd Spencer, president of the Owner-Operator Independent Drivers Association, on the advancement of the bill. “We encourage the U.S. Senate to follow their lead by stepping up to address American truckers’ top safety concern.”
The bill was part of a slate of 16 supply chain-related bills marked up by the committee, which advanced several bills aimed at expanding truck sizes and weights, implementing ocean shipping reforms, and reforming the CDL exam process, among others.
Some of the bills included in the markup — such as the truck parking measure — could advance on their own. But the markup is also intended to produce a supply chain legislative package that can have bipartisan support in the House and Senate.

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House votes in favor of EPA emission regs rollback

CCJ Jason Canon May 23, 2023

The U.S. House of Representatives on Tuesday voted to revoke the recently implemented Environmental Protection Agency's (EPA) Heavy Duty Truck Rule, joining the Senate who narrowly passed the same measure last month. The vote is hardly a win in either chamber and is likely little more than ceremonial, as it now heads to the desk of President Joe Biden who said last month that he would veto it.
“Truckers care about clean air as much as anyone else, but are also on the front lines of the supply chain with over 70% of America’s freight relying exclusively on trucking," said Todd Spencer, president of the Owner-Operator Independent Drivers Association (OOIDA). "Mandating equipment that has historically led to major engine reliability issues under an unrealistic timeline will have devastating effects on the reliability of America’s supply chain and ultimately on the cost and availability of consumer goods."

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Companies Unveil Details About Supply-Chain Financing Under New Rule

The Wall Street Journal Mark Mauer May 23, 2023


The Financial Accounting Standards Board last year approved a rule requiring U.S. companies to disclose the terms and size of their supply-chain-financing programs starting this year. The rule mandates that companies provide a general description of payment terms and any assets pledged as securities or other forms of guarantees the company or its affiliated entities offered to the finance provider.

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