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Thursday, June 25, 2020
Logistics Intelligence Brief
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DAT: Spot load posts increased 15% last week; truckload rates respond

Fleet Owner June 24, 2020

Trendlines Vans near year-ago levels: After the massive spike in load posts in early March when the pandemic shutdown took hold in the U.S., load posts have returned to season norms and now track closely with 2019 levels. At 3.6 loads per truck, the national average van load-to-truck ratio is ahead of the June 2019 average. Average rates fell on just 11 of DAT’s top 100 van lanes by volume last week. The biggest drop was on the lane from New Orleans to Dallas, where prices had previously spiked due to Tropical Storm Cristobal. Rates were back down 15 cents to $1.68 per mile last week.

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Spot truckload posts and rates are gaining traction, reports DAT

Logistics Management Jeff Berman June 24, 2020

The national monthly average van spot rates through June 22, were: Van: $1.76 per mile, 16 cents higher than the May average; Flatbed: $2.04 per mile, 14 cents higher than May; and Reefer: $2.11 per mile, 9 cents higher than May. DAT officials explained that those are “rolling averages for the month,” and current rates are trending higher. For comparison’s sake, it highlighted how on June 1, the van spot rate was $1.72 a mile, the flatbed rate was $1.98, and the reefer rate was $2.08. What’s more, DAT noted that following the urgent orders, or restocking of retail goods, due to the ongoing coronavirus pandemic in early March, there has been a return to normal seasonal patterns and trends for load posts, which are now more in line with 2019 levels.  And it added that the current loads per truck ratio—at 3.6—is ahead of June 2019’s average.

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COVID-19 creates dangerous shipper divide: CSCMP

The Journal of Commerce William B. Cassidy June 24, 2020

The CSCMP report, released Tuesday, suggests both shipper camps need to focus their supply-chain strategies on longer term objectives, rather than short-term gain, to ensure they are positioned to survive the next cycle of tight trucking capacity and higher rates that will eventually follow the recovery from the deepest recession the United States has experienced since the Great Depression. “The longer the post-COVID-19 recession, the tighter the ensuing capacity crunch,” the organization said in its report. The best preparation for that crunch, CSCMP suggests, is to remember the lessons of 2018, the last point of tight capacity, and to partner more closely with transportation and logistics suppliers. In other words, to be a “shipper of choice.”

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Is Amazon on the hunt? Analyzing rumored Macy’s, J.C. Penney acquisitions

Freight Waves Brian Straight June 24, 2020

Sitting on approximately $27 billion in cash and enjoying robust economic growth during the COVID-19 pandemic — with second-quarter sales expected to grow more than 27% — Amazon (NASDAQ: AMZN) is rumored to be on the acquisition hunt. One often mentioned target is iconic retailer Macy’s (NYSE: M). Another is J.C. Penney (OTC: JCP). Both have faced their share of struggles in recent years as more consumers shift to online buying, and with the pandemic shutting large portions of the economy, plenty of retailers are forecasting dire financial years, giving a company like Amazon and its cash-powered room to maneuver.

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Gartner survey: 33% of companies are moving their supply chains out of China

DC Velocity June 24, 2020

And while the Covid-19 pandemic is certainly one of the top reasons for the trend, other powerful factors are the U.K.’s economic withdrawal from the European Union, known as Brexit, and rising tariff costs incurred by President Trump’s trade war with China, the Stamford, Connecticut-based firm said. Gartner’s “Weathering the Supply Chain Storm” survey gathered data from 260 global respondents between February and March 2020. Participants were responsible for supply chain and related functions across a range of industries, including high-tech, industrial, and food & beverage.

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COVID-Scrambled Supply Chains Require More Flexibility Than Ever

Truckinginfo.com Deborah Lockridge June 24, 2020

E-commerce The pandemic has made it clear that omnichannel is here to stay, Zimmerman said, and that will affect how carriers and 3PLs work with their customers. “They are clearly looking to their 3PL partners to help them think through and implement e-commerce solutions,” he said. “It’s a struggle.” It’s easy to boil down omnichannel into a “buy-anything-get-anywhere” acronym, or BAGA, but it’s a lot harder to translate that into IT, order reconciliation, decisions on which inventory to allocate to an order, what inventory to keep where, and so forth. If shippers want flexibility in their supply chain to help control costs, he said, “someone has to absorb that by being more agile, and shippers are looking to 3PLs to do that.”

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Big Oil’s Long Bet on Hydrogen Offers a Climate Lifeline

Bloomberg Will Mathis and Akshat Rathi June 25, 2020

Hydrogen burns cleanly, leaving only water behind. That’s made it an attractive alternative fuel source—not just for governments looking to satisfy climate mandates, but also for oil companies trying to ensure their continued relevance. Oil-and-gas majors such as Shell, Equinor, and BP have spent tens of millions of dollars on pilot projects. Now in the face of record-low oil prices, frozen international travel, and growing shareholder unease over greenhouse gas emissions, investing in hydrogen has taken on a new urgency.

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FEMA winds down PPE flights as ‘supply chain is stabilizing’

Supply Chain Dive S.L. Fuller June 24, 2020

C.H. Robinson CEO Bob Biesterfeld told Supply Chain Dive that, even though the frenzy of sourcing PPE overseas the past few months may be calming down, PPE procurement is nowhere near any form of normal. The virus is still spreading and freight capacity remains shaken up. C.H. Robinson is part of the Minnesota Task Force that brought together public and private expertise to help the state acquire PPE.

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Logistics Costs Increase to $1.63 Trillion in 2019

Transport Topics Connor D. Wolf June 24, 2020

Business logistics costs increased marginally in 2019 as conditions in the sector normalized, but the COVID-19 pandemic has brought uncertainty to the outlook for 2020, the Council of Supply Chain Management Professionals announced in a June 23 report. The 2020 CSCMP State of Logistics Report found that United States Business Logistics Costs increased 0.6% to $1.63 trillion last year, a figure that comprised 7.6% of the nation’s total $21.43 trillion domestic gross domestic product. The marginal growth in costs last year reflected a return to balance for the logistics sector after soaring costs in 2018, said Michael Zimmerman, a partner with A.T. Kearney, which co-authored the report.

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New technology offering from Convoy has a sharp focus on safety

Logistics Management Jeff Berman June 24, 2020

The company explained that this offering identifies the safest carriers into its network, resulting in 16% fewer accidents than the industry average, as per FMCSA data, by processing millions of records on a daily basis, in order to better gauge, or correlate, the relationship between carrier safety events like speeding violations or vehicle maintenance, as well as related crash data. What’s more, Convoy also explained that by providing shippers with access to a safer carrier network, the subsequent results include an increase in on-time deliveries and shippers’ cost savings, a byproduct of lower claim rates and fewer cargo incidents.

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Hyliion CEO: Merger will pave way for high-volume hybrid tech production

Transport Dive Jim Stinson June 24, 2020

Hyliion, an electrified powertrain company that specializes in upgrading Class 8 trucks, will become a publicly traded company by merging with Tortoise Acquisition, an acquisition firm focused on green commercial transportation. The announcement follows a similar and recent path taken by Nikola's March 3 merger with VectoIQ. Nikola agreed to merge with the acquisition company to create a company focused on the development of zero-emission trucks. The new company remained NASDAQ-listed under a new ticker symbol, "NKLA." Nikola began trading as such on June 4.

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FMCSA’s Mullen says agency looking into carriers’ claims of broker transparency violations

CCJ June 24, 2020

Mullen said the agency had received allegations of violations of the provision – instances where a motor carrier hadn’t signed away its right to review a transaction record, which some brokers require in their contracts, yet the broker failed to “provide the data required by the regulation,” Mullen said. “It’s not a lot” of cases. “Maybe five to ten allegations. … We’re investigating those. There’s been a notice of violation issued to a broker that didn’t provide it and we verified that the motor carrier didn’t waive it.”

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California regulator: ‘A remarkable time in history’ for clean truck innovation

Freight Waves Linda Baker June 24, 2020

California air quality regulators are poised to rev up the state’s electric truck industry. On June 25, the Air Resources Board is expected to approve the nation’s first electric truck sales mandate, which would require truck manufacturers to sell an increasing percentage of zero emissions vehicles. By 2035, about 60% of all medium and heavy-duty trucks sold in the state would need to be electric. Years in the making, the proposed standard is considered a key piece of the California strategy to reduce air pollution and greenhouse gas emissions while accelerating the transition to a clean transportation economy.

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Nuclear Jury Awards Against Truckers on the Rise, ATRI Study Shows

Transport Topics Eric Miller June 24, 2020

“Five particular factors brought against a defendant yielded 100% verdicts in favor of the plaintiff. These issues included hours-of-service or log book violations, lack of a clean driving history, driving under the influence of controlled substances, fleeing the scene of the crash and health-related issues.”

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HOS, clearinghouse top of mind for TCA, FMCSA leaders

Fleet Owner Jon Hitch June 24, 2020

“Flexibility was our big issue: that 14-hour clock and the ability to stop that,” Heller said. “Finding that 7/3 split and being able to break up the day is paramount.” He said the TCA would have preferred a 6/4 and 5/5 split, but technology may make way for that possibility in the next few years. “We've got tools and devices on our trucks nowadays that are tracking some of these things, and we’ll know much better a year or two down the road whether that window to a six and four split or five and five split can actually be opened again,” Heller said. Nemo believed the 5/5 split going away led to drivers leaving. “I really think that the 'empty-nester type' husband and wife teams would come back,” he said, asking Mullen if that may someday return. “The door certainly is not shut to that,” Mullen said. “An option is to do a pilot program on allowing six and four or five and five to study it that way.

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Pandemic, recession overshadow USMCA

The Journal of Commerce William B. Cassidy June 24, 2020

USMCA on its way, but overshadowed The economic ruin is overshadowing the implementation of the United States-Mexico-Canada Agreement, or USMCA, which will replace the 1994 North American Free Trade Agreement July 1. “This should be a wonderful moment for North America,” said Patrick Ottensmeyer, president and CEO of Kansas City Southern Railway (KCS). “We’ve removed a cloud of uncertainty.” The agreement “creates years of certainty in the investment and trade climate” for Mexico as well as the United States and Canada, Ottensmeyer said. “I do believe we’ve removed that impediment to investment. There were many moments along the rollercoaster ride of negotiating a new agreement that many of us said it’s not going to happen,” he said.

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