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Logistics Intelligence Brief
Monday, July 24, 2023


Teamsters Halt Yellow Strike Plan After Benefits Extended

Transport Topics Dan Ronan July 23, 2023

An agreement between the International Brotherhood of Teamsters and the Central States Pension Fund averts, for now, a strike that could have begun as soon as July 24 against Yellow Corp.
The union announced on July 23 that a deal had been struck in which Central States is reversing its decision from July 17, and Central States will continue to provide health care benefits to the unionized drivers and their families.
The deal gives Yellow 30 days to reimburse the health and welfare fund, the union says, with the understanding the money will be repaid within the next two weeks.
“As long as there is not a strike that is imminent, there is a chance for them to survive,” Miller said. “They’ve been downsizing operations for the last couple of years as they try to integrate their subsidiaries and divisions together and identify opportunities for improvement and also get freight out of their network that really isn’t profitable.”

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5 things to know with the UPS-Teamsters clock ticking

Freight Waves Mark Solomon July 21, 2023

UPS moves about 24 million packages worldwide each day. About 18 to 20 million is in the U.S. alone, depending on the source of the information. The company’s pilots have said they will honor any Teamster picket line in the U.S., and they have contractual language allowing them to engage in a sympathy work stoppage, both domestically and internationally. No alternate carrier is as efficient as UPS in handling such mass volumes on a daily basis, so there will be, to say the least, hiccups.
UPS shippers who’ve yet to sign third-party contracts should be adding buffer stock of critical items immediately, said Alan Amling, assistant professor of practice at the University of Tennessee’s Global Supply Chain Institute. “The more stock they can get close to consumers, the more last-mile options they have,” Amling said. “That said, most shippers have agreements with other carriers and have begun to execute those contracts after the recent breakdown in negotiations.”
Amling said he had long been optimistic there would be no work stoppage. “At this point, my question is not if there will be a work stoppage, it’s how long it will be.”

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Mega-facility leasing activity shrinks materially in 1st half, CBRE says

Freight Waves Mark Solomon July 22, 2023

Lease signings for big-box facilities–those greater than 1 million square feet — fell 36% in the second quarter over the 2022 period, according to data from real estate services firm CBRE Group Inc. (NYSE: CBRE) published Friday. This triggered an 18% decline in total industrial space leased during the first six months to 373 million square feet, CBRE said.
Year-over-year declines were seen across the entire big-box space. Leasing activity fell 29% for buildings between 300,000 and 700,000 square feet. Leasing dropped 28% for buildings between 700,000 square feet and 1.2 million square feet. Activity dropped 46% for facilities larger than 1.2 million square feet, according to the data.
Overall leasing activity dropped to 373 million square feet in the first half, CBRE said.
The average size of the top 100 transactions in the first half was 789,471 square feet, well below the 926,683 square feet recorded in the first half of 2022, CBRE said.

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U.S. rail carload and intermodal volumes are mixed, for week of July 15, reports AAR

Logistics Management July 21, 2023

Rail carloads—at 225,609—eked out a 0.9% annual increase, topping the weeks ending July 8 and July 1, at 197,086 and 223,254, respectively.
Intermodal containers and trailers—at 252,544—were down 5.3% annually, topping the week ending July 8, at 210,757, and trailing the week ending July 1, at 261,189.

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Trans-Pacific preps for weak, shorter peak season before new capacity hits

The Journal Of Commerce Mark Szakonyi July 21, 2023


Research firm Armada Corporate Intelligence estimates that 61.5% of US businesses are still overstocked, with only 23.7% holding “effectively balanced” inventories and 11.3% understocked.
In another indicator, positive shipper sentiment about inventories fell 24 percentage points, from 57% in the second quarter index to 33% for the third quarter, according to the Logistics Confidence Index. The index showed approximately 50% of shippers held a “neutral” sentiment about freight demand over the next three months, up from 30% previously, “indicating a growing uncertainty,” said BlueGrace Logistics, which produces the index.
The peak trans-Pacific shipping season traditionally begins ramping up in June and July, when seasonal back-to-school retail goods begin arriving. This year, Deloitte is warning those retailers to plan for sales to fall by an average of 10% per US student.

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Commercial Trucks Are a Key Part of EV Adoption. What’s Holding Them Back?

The Wall Street Journal Bart Ziegler July 23, 2023


But getting there faces speed bumps. Several technologies (batteries, fuel cells or burning hydrogen in a modified internal combustion engine) are competing to replace diesel engines. That’s a technological split that the car industry doesn’t face, and it could make truck buyers hesitate to commit to any one path. It also could require massive funding to build two “filling station” networks—one with high-power chargers for battery trucks and another to replenish the hydrogen tanks of others.

Another big hurdle: Battery trucks can cost more than three times as much as a similar diesel model—a vastly greater premium than the 15% to 25% extra that consumers pay for many electric cars over nonelectric versions, not counting tax incentives that can reduce this added cost. And there are downsides with the battery trucks’ weight, lengthy charging times and limited driving range.

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OOIDA: Side underride guard mandate ‘premature and shortsighted’

Land Line Tyson Fisher July 21, 2023

Limited data
The Association notes that NHTSA estimated that the actual number of fatalities associated with side underride was 78% higher than reported in the Fatality Analysis Reporting System (FARS). However, the report only examined one-year of crash data from 2017.
“NHTSA must examine a wider range of FARS data in conjunction with other sources to more accurately assess estimated injury target population,” OOIDA states in the comments. “The 2017 police crash report (PCR) review using FARS data did not account for critical information such as road conditions or geographic area.”

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