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Logistics Intelligence Brief
Monday, July 17, 2023


Annual demand dip paints incomplete picture of California markets

Freight Waves Zach Strickland July 15, 2023

Truckload tender volumes have dropped about 18% out of Southern California over the past year while tender rejection rates are currently exceeding the previous year’s levels. This seemingly contradictory data shows that even in a loose aggregate environment, capacity is not just about the number of trucks in the U.S.
The recent decline in carrier acceptances is not a straight example of aggregate capacity correcting, but of carrier networks becoming unbalanced as natural freight flows shift.
After many retailers recognized their overordering methodology had filled their warehouses in early 2022, they did what anyone would do: They turned off the faucet. And over the past year, carriers have responded by positioning less equipment out West.

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Never Mind the Delivery, More Online Consumers Are Turning to Store Pickup

The Wall Street Journal Liz Young July 14, 2023


The line between e-commerce sales and in-person shopping is blurring as more shoppers place orders online and then go pick up their goods rather than wait for a delivery van to reach their home.
Costs associated with home delivery are equivalent to 10% to 15% of an e-commerce brand’s sales, versus 2% to 3% when a truck delivers goods to stores, according to Deutsche Bank Research.
“The last mile of e-comm is expensive. So having that curbside capability, where the vast majority of our orders get shipped from store or get fulfilled from store, that last-mile cost has come down significantly compared to where 2019 used to be,” Navdeep Gupta, chief financial officer of Dick’s Sporting Goods, said at a Bank of America consumer and retail conference in March.

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Oil Surge to $80 Shows Long-Awaited Market Tightening Is Here

Bloomberg Grant Smith July 16, 2023


After languishing for months, crude surged above $80 a barrel in London last week as fuel demand in China and elsewhere recovers from the pandemic to reach new highs. That’s happening just as production cutbacks by Saudi Arabia and its OPEC+ allies are set to rapidly drain storage tanks around the world.
“We’re expecting a sharp tightening of the market,” Toril Bosoni, head of oil markets at the International Energy Agency in Paris, said in an interview with Bloomberg television. “As demand increases seasonally, we do think there’s a risk that prices will continue to increase into the third quarter.”

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Are You Ready for the Next Supply Disruption? (Webinar 55m)

MIT Sloan Management Review M. Johnny Rungtusanatham et al. July 14, 2023


Supply disruptions triggered by the COVID-19 pandemic caught many companies off guard. To prepare for future “black swan” threats to supply chains, managers must think differently.
M. Johnny Rungtusanatham and David A. Johnston have researched the triggers and performance consequences of supply disruption. Their ADDAPT framework can help leaders better manage disruptions and maintain product flow.
In this webinar, you will learn:
• Why traditional risk management may not be adequate to prepare for the next catastrophic supply disruption.
• Why you need to develop six capabilities — anticipate, detect, diagnose, activate, protect, and track — to prepare for and manage for supply disruptions.
• What changes you need to make to your business strategy, practices, processes, and systems to improve supply chain resilience.

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Electric Big Rigs Hit the Streets, but Chargers Are Scarce

The Wall Street Journal Jennifer Hiller July 16, 2023


Heavy-duty electric trucks are rolling out across the country. The electric grid upgrades and equipment needed to plug them in aren’t.
As automakers deliver new electric trucks to fleet customers, parking lots that once needed enough power for a few floodlights now might need to draw as much power as a skyscraper. But the necessary grid improvements could take years.
In January, California utility PG&E told charging provider FreeWire Technologies that one of its large fleet customers wouldn’t be able to charge trucks for a few years during summer afternoons when California electricity use peaks. The company would be unrestricted during cooler months, according to an email reviewed by The Wall Street Journal.

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Economists Are Cutting Back Their Recession Expectations

The Wall Street Journal Harriet Tory And Anthony DeBarros July 15, 2023


In the latest WSJ survey, economists expected gross domestic product to have grown at a 1.5% annual rate in the second quarter, a sharp uptick from 0.2% in the previous survey. They still expect GDP to eventually contract, but later, and by less, than previously. They expect the economy to grow 0.6% in the third quarter, in contrast to the 0.3% contraction expected in the prior survey, followed by a 0.1% contraction in the fourth. Forecasters said GDP would increase 1% in 2023, measured from the fourth quarter of a year earlier, double the previous forecast of 0.5%.
Nearly 60% of economists said their main reason for optimism about the economic outlook is their expectation that inflation will continue to slow.

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