you may also enjoy
As media outlets and newspapers turn their attention to the clash between Teamster President Sean O’Brien and GOP Senator Markwayne Mullin (R-OK), many in the transportation industry are thinking of the bigger picture: with negotiations looming at multiple companies, including TForce and UPS, is an emboldened Teamster leadership willing to strike? But that’s not the only news in the transportation industry; from the Teamsters to Target and from drones to Dole, here are the thirteen headlines you need to know.
In a Mar. 8 confrontation between Markwayne Mullin (R-OK) and Teamsters President Sean O’Brien, voices were raised as the two debated during a Senate Health, Education, Labor, and Pensions Committee hearing on union busting. During the confrontation, the GOP Senator accused O’Brien of “sucking the paycheck” from workers. The Teamsters President responded that Mullin was “out of line,” according to reporting from Yahoo.
Negotiations between the Teamsters and LTL carrier TForce Freight began in earnest on Mar. 6th, with representatives from both sides meeting in Washington to begin negotiations on a new master agreement. The current contract is set to expire on July 31st.
“We will negotiate the strongest contract possible at TForce so that we can protect our members and restore pride in the freight industry,” Teamsters General President Sean M. O’Brien said in a statement, “We are demanding a national contract that raises wages and resets standards. We won’t settle for anything less.”
As parcel carriers search for innovative solutions to provide shippers with affordable, reliable service amidst falling demand, UPS and USPS have partnered to provide shippers with a new service. UPS Mail Innovations® combines the capabilities of USPS and UPS–two of the nation’s largest parcel carriers–by shipping parcels to the UPS facility nearest the final destination, then using USPS for final mile transportation. UPS Mail Innovations® presents a bold innovation in the world of parcel delivery, offering shippers the best of both public and private parcel transportation.
As Amazon continues adapting to a dynamic volume landscape, the e-Commerce giant is reshaping transportation strategies. Amazon has increased flights out of its largest air hubs to optimize air cargo operations while decreasing activity elsewhere within its air supply chain. This model, focused on key air hubs, more closely resembles that employed by UPS and FedEx than Amazon's previous strategies.
“Amazon Air’s network is starting to look more like the hub-centric models of air cargo giants FedEx and UPS as it reduces its reliance on point-to-point flying,” reports Supply Chain Dive, “This approach allows the company to benefit from faster connections between hundreds of flight combinations while also complementing its trucking network.”
For years, smaller carriers have struggled to compete with legacy parcel giants FedEx and UPS. While smaller carriers may offer flexible solutions and innovative ideas, the sheer size of FedEx and UPS, paired with their ever-expanding delivery ranges and options, leave small carriers with little recourse.
However, digital platforms may allow smaller shippers to compete with big players like FedEx and UPS. Digital platforms are incentivized to host as many carriers as possible, giving shippers a broad range of options. In a recent interview with Supply Chain Dive, Andy Whiting, CEO and Co-Founder of carrier Better Trucks, said, “A service allowing shippers to try multiple carriers out is valuable to us, because we’re winning on merit.”
Following a successful pilot in 2022, mega-retailer Target announced plans to institute curbside returns nationwide. The service, which streamlines the often complicated returns process by allowing customers to stay in their vehicles while returning purchases, will be available nationwide by the end of summer 2023, according to reporting from Supply Chain Dive.
A survey by the Owner-Operator Independent Drivers Association Foundation, or OOIDA, revealed dismal attitudes among the nation’s owner-operators, with many blaming declining spot rates as the source of their financial troubles.
According to reporting from Supply Chain Dive, “Fifty-four percent of the Freight Rate Survey’s respondents reported a negative forecast for 2023, citing concerns such as high fuel costs, increased regulation, inflation, overcapacity and a cooling economy. More than 300 OOIDA members responded to the 35-question survey, which the association sent to members on Dec. 1.”
Google parent company Alphabet has set high expectations for its drone delivery program, according to Supply Chain Dive, which writes that Wing’s “[...] drone delivery network will be able to handle millions of deliveries at a lower cost than ground transportation by mid-2024.”
“Wing’s ultimate vision is to deliver people’s packages more efficiently and safely as part of an automated logistics system that routinely moves packages by the millions. The economics of drone delivery improve dramatically with scale, and all of the salient metrics (access, safety, and sustainability) become far more meaningful at large volumes,” said Wing CEO Adam Woodworth in a Mar. 9 blog post.
Uber Freight, Uber’s in-house digital freight brokerage, is considering a shift away from its parent company, according to reporting from FreightWaves. After years of ups and downs, however, the value of Uber Freight remains in question.
“Using various metrics, Post concluded that a sale of Uber Freight would likely come in at about 1x estimated 2024 revenue,” writes FreightWaves, “which he put at approximately $7.85 billion. He also estimated Uber Freight’s EBITDA this year to be $139 million, which would be an enormous increase from how the company exited 2022, posting EBITDA red ink.”
In a blow to regional carrier LaserShip/OnTrac, Moody’s Investors Service downgraded parent company LaserShip, lowering the company’s status from Caa1 to B3. By describing the decision's thought, Moody’s points to high financial leverage and low liquidity in a crowded e-commerce residential delivery market.
According to FreightWaves, reporting on the Moody’s analysis, “LaserShip’s network capacity growth in 2022, spawned by its late ’21 acquisition of West Coast regional carrier OnTrac, enabled it to operate successfully during the ’22 peak season, according to Moody’s. However, package delivery volumes were less than expected in the second half of 2022, which impacted earnings for the year, the agency said.”
For years, leading carrier Yellow Corp. has employed a yield-at-all-cost strategy. The strategy saw significant pushback from Teamsters as the carrier sought to bring different operating brands under a single header. Despite Yellow Corp.’s persistence in restructuring, however, the strategy now appears to have backfired.
“Stacking the monthly comps for the last two years showed Yellow’s tonnage was down 33.1% in January and off 26.1% in February,” reports FreightWaves, “By comparison, two-year stacked comps for LTL competitors like Old Dominion (NASDAQ: ODFL) and Saia (NASDAQ: SAIA) range from flat to up low-double-digit percentages for the same months.”
As the bird flu continues to ravage poultry farms and markets throughout the U.S., the disease is taking its toll on the poultry industry.
According to reporting from Supply Chain Dive, “Hormel CEO Jim Snee said on its most recent quarterly earnings call that commodity turkey volumes decreased by 80% year-over-year. The company, which owns turkey brand Jennie-O, is facing reduced capacity in its turkey production facilities because of the ongoing impact of highly pathogenic avian influenza (HPAI).”
Officials at Dole have announced that the company doesn’t expect to recoup losses sustained in a Feb. ransomware attack fully. The attack focused largely on disrupting North American operations and also affected Chilean operations and Dole’s fresh vegetable business.
“During a conference call on Tuesday, company executives were asked whether they would be able to recover any of the disruption amount later in the year through supplier recovery or insurance coverage,” Supply Chain Dive reports, “‘I suppose the simple answer on that is no we don’t expect to recover on either of those categories,’” CEO Rory Byrne said during the call.”
As retailers struggle in an economy increasingly predisposed toward e-Commerce purchases, Macy’s has stood out as an exception. Analysts and company executives say this is partly due to their inventory management strategy.
“We made significant progress in leveraging data and analytics to better forecast sales demand, receipt timing and flow across the supply chain,” said Macy’s CFO Adrian Mitchell in a Mar. 2 conference call. According to reporting from Supply Chain Dive, Macy’s use of analytics in its inventory management strategy has helped the retailer weather recent difficulties better than its competitors: “While Macy’s margins and profits fell last year with a small sales decline, the impact was not nearly as stark as some of its peers in the sector. Kohl’s, for example, saw margins plummet last year as it grappled with excess inventory and has had to scramble to shrink its inventory position.”
Shippers are searching for resilience in a dynamic time for the global transportation industry. Intelligent Audit, a leading innovator in the parcel delivery sector, provides shippers with an ever-expanding tool kit of parcel delivery solutions.
Get started with Intelligent Audit today, and see what more than 25 years of transportation innovation can do for your business.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
