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Monday, July 6, 2020
Logistics Intelligence Brief
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Trucking

ATA Member Companies, Drivers Recognized During Salute to America

American Trucking Associations Press Release July 4, 2020

Today, drivers from several American Trucking Associations member companies were guests of President Trump as part of the White House's "Salute to America" Independence Day celebration. "Our members and drivers are continuing to keep our nation moving despite the challenges presented by the COVID-19 pandemic," said ATA President and CEO Chris Spear. "While we as a country take time to celebrate our freedoms today, we appreciate that Americans – from the president on down – are continuing to recognize our industry's important role in supporting our frontline responders, while continuing to deliver to stores, homes and markets across the country." Drivers from nine ATA member companies were part of the White House's event honoring the efforts of frontline workers during the ongoing response to the COVID-19 pandemic: Holland – Herschel Evans YRC Freight – Steve Fields

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US lifeline to YRC Worldwide calms LTL market

The Journal of Commerce William B. Cassidy July 2, 2020

The loan depended on certification by US Secretary of Defense Mark Esper that YRC Worldwide “is critical to maintaining national security”. With $4.9 billion in annual revenue last year, YRC Worldwide was not “too big to fail”, but it apparently is too big of a supplier to the US military to be allowed to fail. YRC’s importance to commercial shippers here is secondary. “This isn’t a bailout, it’s a loan,” Darren Hawkins, CEO of Overland Park, Kansas-based YRC Worldwide, told JOC.com Wednesday. “It comes with an equity issuance to the government and to the taxpayer. It’s our intent to make sure the appropriate investments are made that provide return to the government as a shareholder.” The loan matures in September 2024. “We have a more than three-decade relationship with the government,” he said. “We’ve got an entire department that provides customer service and support to military bases across the US. We move meal kits, protective equipment, anything that needs to move base to base. We’re in and out of most military installations on a daily basis, handling 300,000 shipments a year.” The LTL operator will now be free to concentrate on its long-term plan to reorganize and consolidate its separate subsidiaries into one network with five distinct brands: YRC Freight and regional trucking companies Holland, Reddaway, and New Penn, and non-asset subsidiary HNRY Logistics. Those plans have been on hold since March, but are now under way, Hawkins said.

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JOC Uncharted: Digitalization will reduce LTL costs, improve service

The Journal of Commerce Ari Ashe July 3, 2020

Less-than-truckload (LTL) shippers concerned with costs and customer service should examine whether they are fully integrating technology to eliminate inefficiencies and extra labor costs in their supply chains, analysts and transport executives told JOC Uncharted this week. “With a TMS [transportation management system] connected to your ERP [enterprise resource planning] system, you’re going to find efficiencies right away at your warehousing level,” said John Conte, founder of Conte Logistics Consulting. “All you have to do is scan a barcode, type in a purchase order number, or sales order number, and it'll pull from your ERP and populate everything needed for a bill of lading to be generated.” He added that digitization is more important now because fewer employees are working in centralized offices during the COVID-19 crisis. “If you have a distribution center in Portland, Oregon, and your headquarters are in New Jersey, you have accessibility when a digital supply chain is implemented,” Conte, former director of logistics and operations for automotive manufacturer Holman Enterprises, said in the JOC Uncharted webcast. “You are going to need to be able to run locations, regardless of where they are located geographically, as efficiently as you would if you were right there on the ground on the spot.”

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Volumes up 45% year-over-year this week (yes, 45%)

Freight Waves Seth Holm July 4, 2020

Volumes have continued to burst all around the country this week. Carriers are rejecting loads at rates only seen during the March panic-buying spree buildup. Spot rates have been bid up above 2019 levels in many markets around the country, but it is unlikely that this trend continues given there is typically a significant drop-off in outbound volume after the Fourth. However, volumes are so high currently that even a significant decline could still keep OTVI above 2018/2019 comparables.

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Per-mile spot rates jumped and trucking added 8,100 jobs in June’s economic uptick

CCJ James Jaillet July 2, 2020

Though the surge in coronavirus cases entering July threatens to stall the recent recovery momentum of the U.S. economy, data points in so far for June relative to trucking show strength. Total employment in the for-hire trucking industry rose by 8,100 jobs in the month, according to the Department of Labor’s preliminary Employment Situation Report for June. That builds on May’s gains of 2,000, which followed a massive loss in April — 92,000 jobs on a seasonally adjusted basis, according to the DOL. The U.S. economy as a whole in June added 4.8 million jobs, according to the DOL’s preliminary report, and the unemployment rate fell to 11.1% — down from May’s 14.3%. Trucking industry employment totaled 1,440,700 in June — its lowest point since late 2014, the prior two months aside.

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Industry

Vehicle insurance report paints grim picture for industry, rates

Freight Waves John Kingston July 5, 2020

The commercial auto insurance market, which includes truck insurance, has been a weak performer for years. That isn’t likely to change anytime soon. That’s the conclusion of a report by the AM Best ratings agency. The very title of the report — “Profitability Remains Elusive” — signals that any relief for truckers coming from an improvement in the finances of the insurance industry in general will be a tough hill to climb. In the same way that operating ratio is the most basic measuring stick of trucking and transportation profitability, combined ratio is the benchmark for insurance. Just like an OR of more than 100 signals unprofitability, so does a combined ratio in insurance.

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U.S. rail carload and intermodal volumes see annual declines in June, reports AAR

Logistics Management July 2, 2020

Intermodal containers and trailers—at 1,004,933—fell 6.6%, or 70,944 units.

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June Class 8 truck orders rebound to four-month high

Freight Waves Ala Adler July 3, 2020

Preliminary new Class 8 truck orders in North America rose 139% in June over May, following rebounding freight rates to set a four-month high. But industry experts do not expect a sustained comeback until later this year. The 16,000 orders more than doubled combined bookings in April and May. That’s when shelter-in-place regulations led to a near collapse of the economy. Orders exceeded the same month a year ago by 23%, according to ACT Research.

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Technology/Innovation

TuSimple is laying the groundwork for a coast-to-coast autonomous trucking network

The Verge Andrew J. Hawkins July 1, 2020

TuSimple aims to be making nearly 100 delivery runs a week, doubling its current number of freight hauls, but the ramp-up will take place over the next four years. The company will start by building on its existing partnership with UPS hauling cargo for it between Phoenix and Tucson, Arizona, adding cities in Texas like El Paso, Dallas, Houston, and San Antonio. This fall, TuSimple says it will open a new shipping terminal in Dallas, allowing the self-driving truck company to service customers in the “Texas triangle.”

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Government/Safety

Teamsters, safety orgs cite driver fatigue concerns in petitions to delay HOS final rule

Transport Dive S.L. Fuller July 2, 2020

Five organizations filed a petition asking FMCSA to delay the HOS final rule's implementation date, currently slated for Sept. 29. Advocates for Highway and Auto Safety (AHAS), International Brotherhood of Teamsters, Truck Safety Coalition (TSC), Citizens for Reliable and Safe Highways (CRASH) and Parents Against Tired Truckers (PATT) filed the petition dated Tuesday.

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It’s Time to Try Congestion Pricing in L.A.

Bloomberg Donald Shoup July 2, 2020

With 134 million vehicle miles driven per day, Los Angeles has the busiest urban highway network in the United States. But its famous freeways are hardly free: Congestion slows traffic down for much of the day, and drivers pay for this congestion in wasted time. Tolls for low-occupancy vehicles in its Express Lanes could change that.

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Workforce

Trucking, Warehouse Companies Boost Hiring in June

The Wall Street Journal Elaine Chen July 2, 2020

Logistics operators hired at a brisk pace in June as companies serving the e-commerce market brought on more than 80,000 workers and factories started resuming production following coronavirus-triggered shutdowns. Trucking companies also added 8,100 jobs from May to June, the biggest one-month gain in the sector since September 2018, according to seasonally adjusted preliminary employment figures the U.S. Bureau of Labor Statistics released Thursday. Employment in trucking has been gradually increasing after companies slashed jobs in March and April, when lockdowns aimed at slowing the spread of the coronavirus led to a collapse of economic activity. Trucking companies, largely focused on industrial shipments, have added more than 10,000 jobs since then, but payrolls in the sector are still down about 95,000 from a year ago.

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