- Virginia joined a state trend allowing defendants in Motor Vehicle accidents jury trials to introduce evidence that injured drivers or passengers had not buckled their seat belts. Trucking leaders hail the bill as a step in the right direction to reform the industry’s litigation environment.
- The chip shortage is illustrating how vulnerable some industry supply chains are as GM and Food recently announced production cuts due to chip supplies growing tighter. The chip shortage has had some impact on product launches to include the iPhone 12 and PlayStation 5.
- MercuryGate International, Inc. announced its acquisition of Cheetah Software Systems. The acquisition extends MercuryGate’s TMS into the last mile arena across the modes of parcel and LTL that also brings an enhanced fleet management capability.
- U.S. retailers finished at a 1.19 inventory ratio illustrating inventory levels are well below pre-pandemic levels of 1.4 to 1.5. Imports will remain at a very high level thru August resulting in continued tight capacity.
- According to JOC, large publicly owned truckload carriers have begun adding capacity to a tight market. The capacity added in Q4 illustrates a slight uptick but nowhere near enough to change market dynamics. The fleet additions are moved in dedicated and shortfall operations.
- In distribution news, workers at the Amazon Fulfillment Center in Bessemer, Alabama, voted down plans to unionize with the Retail, Wholesale and Department Store Union, as announced by the National Labor Relations Board with No votes registering 71% of the vote count.
- Driver turnover has taken a recent downturn, with smaller carriers defined as under $30 million in annual revenue dropping 2 percentage points to a 72% turnover rate. Turnover is defined as the number of new driver hires within a year’s time against the total driver count. The turnover rate may be defined by only 30% of the driver pool which is in a continued state of turnover.
- Canadian Pacific Railway and Kansas City Southern Railway are seeking to merge, giving them the only continuous track within Canada, U.S., and Mexico. The task at hand is to convince regulators that the merger will not set off a wave of class 1 consolidations.
- Union Pacific entered into agreement with Savage, a rail and logistics company, to develop the first intermodal terminal in Idaho at UP’s Pocatello rail yard. The intermodal terminal will direct containers to the ports of Tacoma and Seattle in an effort to reduce drayage truck traffic for agriculture exports bound to Asian ports.
- The Suez Canal blockage impact has yet to be fully understood as supply chains recover. Q1 saw 36% of container volume destined to the ports of New York and New Jersey come from the Suez Canal.
The U.S. EPA defines the transportation sector as cars, trucks, commercial aircraft, commercial railroads and other sources that contribute to end-use sector emissions. As a result of both private, public and commercial traffic, the transportation sector generates the largest amount of U.S. greenhouse gas emissions, making up 29% of the overall output in 2019. A close second is Electricity generation, which has 62% of the electricity generation coming from coal and natural gas.
A deeper look at the Transportation sector in 2018 shows the emissions by the source was led by light-duty vehicles with 59% of the overall emission rate. This is followed by medium-heavy duty trucks at 23%, aircraft at 9%, rail and ships coming in at 2% each. Standards around emissions and fuel economy have been implemented over the last two decades, pushing the industry to engineer cleaner burning engines and cleaner fuel with higher fuel economy standards. As a result, in 2018, medium-heavy duty trucks accounted for 20.9% of the emissions compared with 53.1%
for light-duty vehicles even though the medium-heavy duty truck grew by 90.1% from 1990. The overall trend illustrates real-world CO2 emissions fell from 410 g/mi in 1990 to 344 g/mi in 2020. The trend toward electric vehicles and hybrid vehicles in heavy-duty trucks will continue the downward trend for CO2 emissions.
Class 8 Orders.
In still positive news with the economy, Class 8 truck orders continue to show strength in March with 40,800 units on order. This will make the ninth month in a row that Class 8 orders have exceeded 40,000 units according to FTR and ACT Research. Overall, the last nine months illustrate a 20% annual increase in orders with 372,200 units being ordered in the last 12 months. The challenge at the moment: computer chips. Supply chains across many industries are being impacted by a chip shortage and much like the port backup, it is expected to last into mid to late summer.
On the Consumer Spending Front
Showing a bit of a slowdown in consumer spending month over month, consumers saw a 7.1% decrease in personal income in February, while consumer spending decreased 1% according to the U.S. Bureau of Economic Analysis.
The $2.80 cent barrier for a gallon of gas has been broken following diesel’s climb to $3.17 on the national average in March. The first part of April is showing costs leveling off with the first week at $3.14 on average for diesel. Even more challenging has been the meteoric rise in truckload rates as we move into produce season and further import volume.
The good news for the first half of April are rates flattening after the continued increase per mile rates in March. Halfway through April and the Rockfarm Index is illustrating rates settling back 8% to 12% below highs posted in March.
Challenges ahead include produce season, the push to fill depleted inventories due to the consumer demand ramping up in late 2020 and the ongoing spending from the C19 relief packages. All resulting in our greatest challenge, meeting the increasing demands of capturing market share through increased levels of service
to our customers.
Truck Miler per Gallon
Graphic of the day brought to you by geotab.com. The below graphic illustrates the average miles per gallon of class 7 and class 8 trucks within each state. The results were compiled by Geotab from a sample of 31,170 trucks of mixed make and model from 2000 to 2018 for one year spanning 2016 and 2017. The North American Council for Freight Efficiency reports the average mile per gallon is 5.83.
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Lamb, Eleanor, (2021 April). Trucking Leaders Hail West Virginia Bill as Step Against ‘Seat Bel Gag Rule’ Transport Topics https://www.ttnews.com/articles/trucking-leaders-hail-west-virginia-bill-step-against-seat-belt-gag-rule
Associated Press, (2021 April). Chip Shortage Forces More Production Cuts by GM, Ford, Transport Topics https://www.ttnews.com/articles/chip-shortage-forces-more-production-cuts-gm-ford
Mongelluzzo, Bill, (2021 April). US retailers signal no import let up through summer https://joc.com/maritime-news/container-lines/us-retailers-signal-no-import-let-through-summer_20210407.html
Cassidy, W. B., (2021 March). Largest US truckload carriers adding trucks, but not many https://joc.com/trucking-logistics/truckload-freight/largest-us-truckload-carriers-adding-trucks-not-many_20210331.html
SC Editorial Staff, (2021 April). Supply Chain News: Amazon Workers Just Say No to Unionizing http://www.scdigest.com/ontarget/21-04-11_Amazon_Workers_Say_No_to_Union.php?cid=18573&ctype=content
Cassidy, W.B. (2021 March). US truckload driver turnover flattens as wages, demand rise: ATA https://www.joc.com/trucking-logistics/truckload-freight/us-truckload-driver-turnover-flattens-wages-demand-rise-ata_20210330.html
Szakonyi, Mark, (2021 March). CP-KCS plan to merge to create first US-Canada-Mexico railroad https://www.joc.com/rail-intermodal/class-i-railroads/canadian-pacific-railway/cp-kcs-plan-merge-create-first-us-canada-mexico-railroad_20210321.html
JOC Staff, (2021 March). UP adding ag shipping capacity through PNW Ports https://www.joc.com/rail-intermodal/intermodal-shipping/adding-ag-shipping-capacity-through-pnw-ports_20210324.html
Russon, Mary-Ann, (2021 March). The cost of the Suez Canal blockage https://www.bbc.com/news/business-56559073
EPA GOV, (2021 April). Sources of Greenhouse Gas Emissions https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions
LM Staffe, (2021 April). Preliminary North American Class 8 net truck orders impressed again in March. https://www.logisticsmgmt.com/articlepreliminary_class_8_truck_orders_are_strong_in_march_according_to_ftr_and_a