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Wednesday, July 8, 2020
Logistics Intelligence Brief
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PPP loans supporting 30 percent of US for-hire trucking jobs

The Journal of Commerce William Cassidy July 7, 2020

Roughly 30 percent and perhaps more of US for-hire trucking jobs are being supported by government loans, according to data released this week by the US Small Business Administration (SBA) about companies that received Payroll Protection Program (PPP) loans. That alone indicates the PPP loans may have prevented a trucking capacity crunch in June by keeping a large number of truck drivers paid, if not always behind the wheel, when freight demand plummeted during the COVID-19-linked business shutdowns of April and May. The data, released Monday and analyzed by JOC.com and Jason Miller, associate professor of logistics at Michigan State University, shows the SBA oversaw the disbursement of approximately $7.6 billion in PPP loans of $150,000 or more to 11,738 trucking companies.

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Report: More than 3,200 long-haul trucking companies received PPP loans

Land Line Jami Jones July 7, 2020

The truckload sector was awarded 2,886 PPP loans while the less-than-truckload sector was awarded 319 loans. Only 33 companies, truckload and LTL combined, received between $5 million and $10 million in PPP loans. The vast majority of loans, 52%, detailed in the report going to trucking companies were valued at $150,000 to $300,000.

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PPP money poured into trucking; did it keep capacity alive?

Freight Waves John Kingston July 7, 2020

A quick glance at the data creates the impression that a large chunk of the trucking industry has been kept afloat by PPP money. And that was the point of the entire PPP program: to keep employees employed and companies operating as the country closed down to throttle back the pandemic. But if you take time to do the math, as Aaron Terrazas, the director of economic research at Convoy, did, the picture changes. Terrazas, in an email to FreightWaves, compared the number of companies that received PPP loans of all types — under $150,000, where the identity is not disclosed, and above $150,000, where it is — and came to this conclusion: About 8.5% of all trucking companies in the U.S. got money from PPP. (To get the number of companies under $150,000, as Terrazas did, you would need to aggregate the state-by-state spreadsheet of all 50 states).

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Walmart’s Amazon Prime competitor will launch in July

Recode Jason Del Rey July 7, 2020

When Walmart+ launches, the $98 annual membership is expected to include unlimited same-day delivery of groceries and other goods from Walmart Supercenters, reserved delivery slots and open-slot notifications, as well as some access to Walmart’s new Express two-hour delivery offering, though not unlimited usage. During the pandemic, customers have run into issues securing grocery delivery slots in some parts of the country as companies like Walmart and Amazon struggled to handle drastic increases in demand for online grocery services.

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Walmart Jumps With Amazon Prime Challenger Nearing Debut

Bloomberg/ Transport Topics Matthew Boyle July 7, 2020

Walmart+, as the service is known, will cost $98 a year and include perks like same-day delivery of groceries and general merchandise, Recode reported earlier, citing unidentified people. Walmart’s Chief Customer Officer Janey Whiteside is spearheading the development of the service, which expands on an existing grocery-delivery subscription that Walmart introduced last year. Grocery is the one category online where Walmart maintains a firm leg up on Amazon, but profit margins on food are lower than those for more discretionary items like apparel and home decor. So Walmart’s aim is to get its grocery shoppers to add nonfood items to their basket — items that they’re probably currently buying on Amazon.

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Walmart’s front-end experiment adds service to self-checkout

Retail Dive Sam Silverstein July 7, 2020

Walmart is conducting an experiment at a supercenter in Fayetteville, Arkansas, to find out if swapping traditional checkout lanes for a cluster of self-checkout stations staffed by a team of roaming associates can help it serve customers more effectively, according to a post on the retailer's website. Walmart has installed 34 customer-operated checkout stations in an open area at the front of the store. The new stations entirely replaced the store's former checkout lanes. All of the store's cashiers have been reassigned to more flexible "host" roles, which allow them to move around and assist customers with aspects of their orders beyond ringing up items.

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Amazon to build massive Little Rock fulfillment center

Freight Waves Chris Gillis July 7, 2020

“We greatly appreciate the strong support from local and state leaders as we look to open our first fulfillment center and second delivery station in the state of Arkansas,” said Alicia Boler Davis, Amazon’s vice president of global customer fulfillment, in a July 7 statement. Arkansas Gov. Asa Hutchinson’s office also praised the deal. “Arkansas has a trained workforce and is centrally located with easy access to miles of interstate, rail and navigable waterways,” he said. Along with the employees, Amazon said a robotic system will be used to pick, pack and ship small items to customers, such as books, electronics and toys.

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Logistics sector growth surges in June

DC Velocity July 7, 2020

Researchers said the post-Covid 19 reopening of the economy this spring played a key role in the growth, as retailers and others increased inventory levels, warehouse space remained at a premium, and transportation metrics began to move in the right direction again. The LMI reached 61.7 in June, up from 54.5 in May and 51.3 in April. An LMI above 50 indicates expansion in the logistics sector; a reading below 50 indicates contraction. Link:  CSCMP Logistics Managers Index

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Intermodal shippers pushing hard on container fees

The Journal of Commerce Ari Ashe July 7, 2020

US shippers are more aggressive than they were six months ago in negotiating terms of their intermodal partnerships, demanding a waiver of all container rental fees as a precondition for contracts, four intermodal marketing companies (IMCs) tell JOC.com. Shippers are linking their cost-conscious approach to the COVID-19 pandemic, the IMC sources noted.

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June Class 8 orders, job growth show fleets’ increasing confidence

Transport Dive Jim Stinson July 7, 2020

Preliminary orders for Class 8 trucks went up in June, to 15,500 units, increasing 130% from May, according to a Friday report from FTR. The surge also puts Class 8 orders up 20% from June 2019, at 158,000 units through 12 months. ACT Research found roughly the same, pegging June orders at 16,000 units, a 139% rise from May, and up 23% from June 2019.

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Startup aims to bridge gap between trucking optimization, execution

The Journal of Commerce Eric Johnson July 7, 2020

A startup born out of decades-old research on freight transportation optimization has nabbed a $4 million seed round from venture capital investors to help trucking companies plan the deployment of freight capacity further in advance than traditional transportation management systems (TMSs) allow. The company, Optimal Dynamics, was founded in 2017 by Daniel Powell and his father Warren Powell, who managed CASTLE Labs, an affiliate of Princeton University focused on models and algorithms for transportation and logistics optimization. The elder Powell, who has spent nearly four decades as a professor of engineering at Princeton, was a pioneer in the use of algorithmic optimization in the trucking industry, particularly in the development of less-than-truckload (LTL) routing and hub-and-spoke models.

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Do marijuana legalization efforts give a false sense of safety?

Fleet Owner Erica Schueller July 7, 2020

“When you look across the country, it's kind of a patchwork of what's legal, what's not legal, what's medical, what's not, what’s decriminalized, what's not,” explained Darrin Grondel. “The easy part for commercial vehicle operators is they know that they can't consume at all.” Grondel, vice president of traffic safety and government relations for the Foundation for Advancing Alcohol Responsibility, known as Responsibility.org, shared insights on the impact of marijuana usage on commercial vehicle drivers, an overview of different cannabis products in use today, and telltale signs that someone may be impaired during the Truckload Carriers Association’s recent Virtual Safety and Security Conference.

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U.S. Adds More Than 200,000 IT Workers in June

The Wall Street Journal Angus Loten July 7, 2020

U.S. employers added more than 200,000 information-technology workers in June, the sharpest pace of growth since hiring was derailed by the Covid-19 outbreak, according to IT trade group CompTIA. Despite the gains, continued layoffs in the technology sector kept the unemployment rate for IT workers across the economy unchanged at 4.3%, the group said Thursday. The results are based on an analysis of last week’s nationwide Labor Department data, which reported 4.8 million new jobs being added in June, lowering the unemployment rate to 11.1% from 13.3% in May.

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Non-manufacturing sees major gains in June but COVID-19-related concerns remain

Logistics Management Jeff Berman July 7, 2020

ISM reported that 14 of the 17 non-manufacturing sectors it tracks saw gains in June. Most of the report’s equally weighted sub indexes that directly factor into the NMI saw gains in June, including:

  • business activity/production up 25%, to 66, stopping three months of declines, for its largest single month gain;
  • new orders rose 19.7%, to 61.6, ending two months of contraction;
  • employment headed up 11.3%, to 41.3, ending three months of contraction; and
supplier deliveries, at 57.5 (a reading of 50 or higher indicates contraction), slowed at a slower rate for the 13th consecutive month
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