T|WO Blogs

  • Posted by Tom Moore on 02/13/2018 - 01:00
    You don’t often hear me say “it is time for government to act”.  But it is time to codify what the National Labor Review Board (NLRB) has put back on track in the last months: It has eliminated the precedent breaking joint employment rule that said a company that, for example, hires a 3PL is now a joint employer.  It is back to an employer being the “direct” more
  • Posted by Tom Moore on 02/06/2018 - 01:00
    How many shippers are still not treating carriers well?  I think we are finding out that shippers’ who force long waits on their carriers, or have big spikes in demand are learning that trucks are harder and more expensive to get. There are stories of spot market pricing being double contract rates and Canadian shippers paying round-trip miles.  And it is expected to get worse as more
  • Posted by Tom Moore on 01/30/2018 - 01:00
    Truck shortages are old, and unfortunately, recurring news.  To add insult to the incremental cost that shippers are paying to hire a truck on the spot market, gains in oil prices seem to be accelerating.  On Friday, as I write this, oil is over $66!  To put that in perspective, a year ago a barrel cost $45… so we see a ~50% rise.  Worse, the upward pressure is being more
  • Posted by Tom Moore on 01/23/2018 - 01:00
    Options traded in New York are heavily wagering that diesel prices will rise.  The number of bets on the price rising is up 6% in the last week.  The last time we had this kind of activity was 2006.  What do these traders see?  The price of crude has been on a tear and demand for road transportation has grown stronger – and carriers are ordering more trucks. more
  • Posted by Tom Moore on 01/17/2018 - 01:00
    Yes, oil at $80 per barrel is being discussed.  Key factors impacting the recent run up: Iran’s political uncertainty All the world’s economies are doing well (even France grew 2% – double what it has been doing) OPEC seems to be holding the line   What is not holding the line is US shale production.  My expectation is that it more
  • Posted by Tom Moore on 01/09/2018 - 01:00
    While the Midwest-based shipper quoted in the title uses refrigerated trucks, the sentiments are nearly ubiquitous.  Spot rates are way up – 24% by one account.  Add to this – oil over $61/barrel, insurance prices rising, and labor costs rising while availability is falling.  With the economy picking up more speed, and the new e-log mandates, there may be little relief more
  • Posted by Tom Moore on 01/03/2018 - 01:00
    When you hear that land on which to build a warehouse is going for $1.75 million per acre in Northern New Jersey (up 17 % year over year) and you hear famed real estate mogul Sam Zell say “If someone needs a bell ringing to figure out that the real-estate market is pretty frothy right now, I’m in the business of selling hearing aids”, you learn two things: more
  • Posted by Tom Moore on 12/27/2017 - 01:00
    With the reconstituting on the National Labor Relations Board (NLRB), the stupid Joint Employment rules which had pushed the responsibility for a 3PL’s actions onto the company that hires said 3PL.  You can read the summary https://www.nlrb.gov/news-outreach/news-story/nlrb-overrules-browning-ferris-industries-and-reinstates-prior-joint.  But, as the headline says, “ more
  • Posted by Tom Moore on 12/19/2017 - 01:00
    Firstly, Merry Christmas, Happy Holidays!   While we don’t think about it, self-driving trucks and cars use artificial intelligence (AI) to make decisions.  But AI can be easily fooled.  For example, these vehicles stop when a stop sign is placed at the side of a highway.  Imagine the havoc of this happening on I-95 in rush hour.  Clearly AI more
  • Posted by Tom Moore on 12/12/2017 - 01:00
    The White House is putting finishing touches on a plan to direct federal spending of $200 billion or more – funds it would propose to offset with cuts elsewhere in the federal budget – to leverage hundreds of billions more from local governments and private investors to pay for road, rail, water, and utility upgrades.  Let’s hope it happens!   more
  • Posted by Tom Moore on 12/05/2017 - 01:00
    Who knew there was such a great name as the Dunning-Kruger effect for the state of being ignorant of being ignorant!  Can we develop a list of supply-chain related areas where this applies?  I know one:  the US Postal Service (USPS) has been running at a deficit for years – with, up until now, price increases capped by law at the rate of inflation.  The relaxing of more
  • Posted by Tom Moore on 11/28/2017 - 01:00
    Can technological breakthroughs avoid oil shortages?  Yes – oil shortages are a real possibility in the next five years because companies are not investing in exploration the way they used to…and this is not just me saying this but also the International Energy Agency.  The only hope is that there are continued breakthroughs in energy extraction beyond fracking and improved more
  • Posted by Tom Moore on 11/21/2017 - 01:00
    Here is what I said last month…."The flow of containers from Asia is likely to get more expensive.”   Now comes evidence of a potential countervailing force…lots of Mega-container ships coming on line soon.  COSCO, the fourth largest shipping company,  is adding 17 ships next year with MSC and CMA CGM  (second and third biggest operators respectively) starting to get more
  • Posted by Tom Moore on 11/14/2017 - 01:00
    Last month’s report from the Association of American Railroads shows carloads at 1,065,777, off 0.1%, but intermodal set a new monthly record with a 6.4% annual gain to 1,144,157.    While self-driving trucks are some distance away, more details are emerging about the transition:   Add anti-collision features – the 7,000-plus trucks owned by more
  • Posted by Tom Moore on 11/07/2017 - 01:00
    Trucking companies ordered 36,200 Class 8 trucks in October according to a preliminary report from ACT Research.  That was up 60.4% from September, and a 160% gain from a year ago…this is remarkable because normally orders peak in December.  So truckers are optimistic but still complaining about driver shortages.  This is going to be interesting!   more
  • Posted by Tom Moore on 10/31/2017 - 01:00
    Canadian National Railway (CN) and Norfolk Southern (NS) strike joint-service deal to avoid Chicago’s congestion.  They will do their train interchanges in Elkhart IN – instead of Chicago and route trains around the old EJ & E track that is now owned by the CN. The belief is that this move will cut 1-2 days off transit times.     Brent crude held more
  • Posted by Tom Moore on 10/24/2017 - 02:00
    The flow of containers from Asia is likely to get more expensive.  In a stroke of China’s central government’s pen, they have cut off scrap exports from the USA. Since more containers leave the US loaded with low-value commodities like scrap paper than come from Asia loaded with TV sets, expect pricing to increase as the "in and out" adjust to a new equilibrium.   more
  • Posted by Tom Moore on 10/17/2017 - 02:00
    The American Trucking Association said Q3 volume increased 8.2% year over year. That, coincidentally, is how much JBHunt's revenue increased (excluding fuel surcharges).  Demand is high, drivers are in demand, and prices are going up…so why did Hunt have a decline in profit?  Dedicated trucking, which makes up 24% of JB Hunt’s revenue, is normally a far higher contributor to more
  • Posted by Tom Moore on 10/11/2017 - 02:00
    The Panama Canal is getting a payout from its $5.4 billion widening project.  A wider canal enabled ships, which, for example can have a beam (width) of 49 meters – up from 32 meters and nearly three times the capacity – to transit the waterway.  The number of ships transiting the canal is up 23%!  Historically, bigger container vessels headed from Asia to ports more
  • Posted by Tom Moore on 10/03/2017 - 02:00
    The VW scandal has made diesel go from "darling to devil” but only after a number of refiners in Europe had spent $10 billion adding “cat-crackers” to make more diesel. With European car drivers rapidly moving  away from diesel and back to gasoline, refiners have a surplus – some of which will go into mandated low-sulphur marine fuels, but the rest will flow into the more
  • Posted by Tom Moore on 09/26/2017 - 02:00
    "The average tractor-trailer travels less than seven miles on a gallon of diesel, making it one of the least-efficient vehicles on the road.” Wall Street Journal   What a load of rubbish!  Tractor trailers often weigh 35-39 tons loaded (90% of the time) and 17 tons empty, (10% of the time) and get 7 MPG or more.  On the same ton-mpg basis a 3 ton diesel pickup should get 70 more
  • Posted by Tom Moore on 09/19/2017 - 02:00
    Truckers tell us that Homeland Security is paying at least $4 per mile for loads into Florida.  The problem for carriers is that these loads are “really last minute”.  If you win the auction, there is no certainty that the load will actually go.     With hurricanes and all the things going on, it’s easy to forget that electronic logs will be mandatory in 3 more
  • Posted by Tom Moore on 09/12/2017 - 02:00
    There will be fewer truck drivers and warehouse workers available once storm cleanup gets underway.  There is already a perceived shortage of construction workers in the South and it will only get worse as skilled and unskilled labor pours in to fix the damage. Coincident will be: a large increase in recycling (250,000 cars to be junked in Texas alone) an influx more
  • Posted by Tom Moore on 09/06/2017 - 02:00
    While diesel is seeing the disruption that we discussed last week, (and my daughter in Houston is ok – thanks for those who asked) longer term may be different…"A poll of 14 investment banks, surveyed by The Wall Street Journal at the end of August, predicted that Brent crude, the international benchmark, will average $54 a barrel next year, down $1 from the July survey more
  • Posted by Tom Moore on 08/29/2017 - 02:00
    Ports are seeing larger-than-usual volumes of containers arriving for the Christmas period…and, in some cases are struggling with congestion. Meanwhile, Harvey is disrupting the flow of containers in the Gulf and beyond as ships that traditionally stop in a few ports, wait out the storm before entering Gulf ports.  Both oil exports and imports are on hold.  What is more
  • Posted by Tom Moore on 08/22/2017 - 02:00
    UPS is rolling out Virtual Reality (VR) driver training.  While others have tried VR in the warehouse but backed off to Augmented Reality – showing data in a Google Glass type set up – driver training makes sense because it is not a long-term exposure to the virtual (unreal) world with a hot and sometimes heavy face mask.  From the Wall Street Journal:  "In virtual reality, more
  • Posted by Tom Moore on 08/15/2017 - 02:00
    The latest data I have shows a container from Asia to the US West Coast costing around $1,400 in May – a year ago in May the same container cost about $750.   Oil prices are expected to be somewhat flat as shown by the futures market.  The price for delivery of oil a year from now is only .63¢/barrel more than the price today.  This more
  • Posted by Tom Moore on 08/08/2017 - 02:00
    Managing inbound transportation has often been a mark of a mature supply chain organization. By making inbound transportation a profit center, landed costs go down. But simply managing transportation is not enough. Expert supply chains are now helping their buyers optimize their orders to fill trucks. We are seeing these expert supply chains saving 5-14% on transportation dollars, on more
  • Posted by Tom Moore on 08/01/2017 - 02:00
    Mentioning that the sex lives of truck drivers could impact Wal-Mart suppliers hitting Wal-Mart’s on-time dictate generated an incredible 20 fold increase in blog traffic. Someone who really understands the situation – and who wants to remain anonymous – made good observations:   This "on-time in full” idea push makes very little sense and will not deliver the more
  • Posted by Tom Moore on 07/25/2017 - 02:00
    Don't believe everything you read!   I read an article the other day claiming that the US Postal Service gave Amazon special rates to get their business – delivering Amazon parcels the critical last mile. What the article should have said is that the Post Office was not applying the correct overhead to their parcel rates and , as a result, under prices it’s service more
  • Posted by Tom Moore on 07/18/2017 - 02:00
    Wal-Mart has announced that it will fine companies that don’t ship 95% on time and in full.  On time is defined to the exact day, so delays en route will be costly. One transportation manger put it “Now I have to worry about the sex lives of truck drivers.” But the truth is that he has had to worry about this for a while – Target implemented the “on-time to the day” last more
  • Posted by Tom Moore on 07/11/2017 - 02:00
    Recent events with Celadon, one of the largest US long-haul truckers, show that to make a small fortune...start with a large fortune.  Celadon’s share price has dropped from $26 in 2015 to a little over $3 today and its creditors are in the process of taking a haircut.  Most troubling is an operating loss of $10 million for the quarter ending in March.  Trucking companies more
  • Posted by Tom Moore on 07/05/2017 - 02:00
    I often travel over the bridge in I71 that connects Ohio with Northern Kentucky. Generally, there is a backup on the 50+ year old bridge that carries twice its designed traffic level.  The bad news is they will close half the lanes for maintenance.  (I guess I won’t be going to Cincinnati any time soon).  And this bridge is just one of about 84,000 U.S. bridges that the more
  • Posted by Tom Moore on 06/27/2017 - 02:00
    Farmers claim that the lack of reliability of the U.S waterway system causes a 14% reduction in the prices they get for their grain.  This uncertainty, driven by a lock system that is older than its planned 50-year life span, is very real.  When a lock fails, the river can be closed 60-90 days backing up freight movements.  To compensate while providing reliable service to more
  • Posted by Tom Moore on 06/20/2017 - 02:00
    “Circle January 2020 on your calendar for what could be a major disruption to the energy market and a jolt to the global economy” was the lead sentence in the Wall Street Journal. The cause – the International Maritime Organization (a group I had never heard of – a branch of the U.N.) has mandated that ships reduce the sulphur content in “bunker” fuel by a factor of seven.  Current bunker more
  • Posted by Tom Moore on 06/13/2017 - 02:00
    In exchange for better insurance rates, trucking companies are adding cameras to truck cabs.   Insurance rates for commercial vehicles are on the rise.  Estes says they are up 20% in 2 years.  Driven by “nuclear judgments” – penalties that sometimes run to hundreds of millions of dollars – insurance companies are seeing payouts exceeding income.  To paraphrase more
  • Posted by Tom Moore on 06/06/2017 - 02:00
    Energy Transfer Partners started moving oil through the much disputed, but now completed, Dakota Access Pipeline.  Capable of moving 450,000 barrels a day, it will reduce reliance on rail.  It will also further pressure tanker fleets.  Less than a third of all oil is transported by ocean tanker.  All the oil from the Mideast comes on tankers BUT that more
  • Posted by Tom Moore on 05/31/2017 - 02:00
    Unfortunately, just because everybody is talking about drones and self driving trucks, it doesn’t mean they are going to happen soon.  But big data is happening now!  And every company should be preparing right now.  No need to go out and hire 5 PhD’s as Johnson & Johnson did to start their effort – rather clean up your data.  Simple things like item master data more
  • Posted by Tom Moore on 05/23/2017 - 02:00
    Meet Carol.  Carol, besides sending you this email each week, goes to the grocery store about 3 times a week.  She is typical of shoppers who, for the most part, start in produce, go to the meat section, then onto dairy, and finally to checkout.  Sales in the center of the store of packaged foods and beverages are down 0.4% year over year – but the center store for large more
  • Posted by Tom Moore on 05/16/2017 - 02:00
    Many trucking companies’ earnings are being severely hurt by the lower value of their trucks.  As demand declined, used class 8 trucks, which were worth about $60,000 in early 2015, are now worth only $49,000.  This makes carriers “upside down” – i.e. the book value of the trucks is higher than their market price. Unless freight volume ticks up greatly, no recovery is more
  • Posted by Tom Moore on 05/09/2017 - 02:00
    One of the big challenges in optimizing the supply chain is the sheer mass of data and the time it takes to come up with a better solution.  For example, rerouting trucks around a traffic jam, without causing congestion somewhere else, takes 45 minutes for a relatively small 10,000 vehicles in a city like Beijing. Help may be on its way – quantum computing, that may be readily more
  • Posted by Tom Moore on 05/02/2017 - 02:00
    Anybody who knows me knows that I love riding on trains!  But the time for Amtrak, in any area other than the Northeast where they own their own tracks, is gone.  As a socialist railroad, formed in 1970 when the regulated rail industry was hemorrhaging money, Amtrak has bled red ink for nearly 50 years.  But the more troubling hidden damage is the priority Amtrak more
  • Posted by Tom Moore on 04/25/2017 - 02:00
    Humping, the practice of sorting rail cars by allowing them to go downhill and switching each car to the desired track is used in a lot of places. I hate it!  It generates a lot of damage.  In my earlier life, I saw large steel coils being “smooshed” by massive collisions as the hump operator failed to slow the 200,000+ lb cargo.  It turns out that Hunter Harrison, the new more
  • Posted by Tom Moore on 04/18/2017 - 02:00
    Judge Robert Lasnick accepted the argument that Uber drivers were contractors and having contractors band together was contrary to antitrust laws as well as against the National Labor Relations Act.  Uber and Lyft didn’t have to hand over their contractors’ names and subject them to a card-check election.  This is good news in the whole country as Teamsters, or any union for that more
  • Posted by Tom Moore on 04/11/2017 - 02:00
    While Swift has four times more trucks than Knight, the market has valued them about the same – why? Swift has lots of debt // Knight  has none Swift’s operating ratio is higher than Knight’s They called it a merger but here is the key – Knight’s management will run the new entity… The combined business: 23,000 truck-tractors and 28 more
  • Posted by Tom Moore on 04/04/2017 - 02:00
    Two things have made me re-think labor problems: The increasing problem with Opioids The fracking business taking off again   A quick look at the above map tells you the problem.  How can quality work be performed in light of this problem? Fracking is taking off again – and this time it demands even more transportation more
  • Posted by Tom Moore on 03/28/2017 - 02:00
    In the last year, prices from Asia to California have increased by 50%.  The biggest container lane, Asia to Europe, has seen rates of $969 vs. $695 in 2016 (+40%) and poor container availability out of Europe going east – in the words of one of our clients – has been “problematic.  It's hard to get boxes.”    Why?  Here are some reasons given more
  • Posted by Tom Moore on 03/21/2017 - 01:00
    Major oil producing countries are considering extending their efforts to curtail global petroleum supplies and raise crude prices but Russia is cheating on its commitments to reduce output.  Oil is down again to $48!    Urban Outfitters Inc. Chief Executive Richard Hayne likened the malaise in retail to that of the housing crisis more
  • Posted by Tom Moore on 03/14/2017 - 01:00
      Diesel prices will follow slowly   The market didn’t respect all the pundits and it didn’t follow the projections that it would be selling at $70/barrel.  If it had known, the price would have not slid by more than 8% to end today at a little over $48.  Clearly the market has a mind of its own.  Faced with large inventories more
  • Posted by Tom Moore on 03/07/2017 - 01:00
    Amazon is developing (or acquiring) technology to schedule and track truck shipments.  It seems they want to play in the $150 Billion market for booking transportation.     BP PLC aims to be able to be profitable with oil at $35 a barrel by 2021 and increase output by 5% each year until 2021 without increasing capital spending beyond the staggering more
  • Posted by Tom Moore on 02/28/2017 - 01:00
    Rail efficiency is up and oil expected to be $70   At Warren Buffet’s railroad BNSF, over the past 2 years, revenues are down 14% while profits are only down 7% suggesting better margins and increased productivity.  Warren claims "price comparisons between major railroads are far more difficult to make because of significant differences in both their mix more
  • Posted by Tom Moore on 02/22/2017 - 01:00
    DB Schenker took a $25 Million stake in the online freight booking platform uShip which has been around for more than 10 yrs.  The real question is which platform will become dominant – there are quite a few all fighting for the same shippers and carriers.  Here are some of the deals that have taken place recently: United Parcel Service Inc. bought Coyote more
  • Posted by Tom Moore on 02/14/2017 - 01:00
    Justifying a WMS software upgrade is pretty tough!   Watching who upgrades their WMS, I can say “don’t do it for productivity gains.”  It is one thing to have code that is old and another to have to buy hardware on e-bay or from antique shops, but upgrading because of operational savings should be viewed with distain.  Simply put, new WMS’s don’t seem to more
  • Posted by Tom Moore on 02/07/2017 - 01:00
    Amazon may not impact trucking much, but will hurt UPS and FedEx.   Amazon is starting to impact airfreight but make only small inroads to ground truckload transportation.  It has already bought 4000 trailers – suggesting it is tendering 1-2000 loads per day…not earth shattering.  Airfreight is a different story – Amazon has chosen Cincinnati airport to be its air hub… more
  • Posted by Tom Moore on 01/31/2017 - 01:00
    Some CSX directors met with Hunter Harrison over the weekend to discuss him ascending to CEO.  Recall Hunter has made 3 railroads (ICG, CP, and CN) more efficient over his career.  CSX would make it 4.  This could be good news for both shippers and CSX shareholders.     We have seen a lot of inquiries about dock scheduling lately…. so we made a more
  • Posted by admin on 01/23/2017 - 20:21
    CSX stock jumped more than 20% last week as Hunter Harrison announced that he, with some help from Wall Street funds, was attempting to force change at CSX. Harrison, who walked away from $89 million at Canadian Pacific Railroad, has a history of implementing high train scheduling that drives efficiency and cost cutting.  (We are big supporters of tight scheduling especially in warehouses more
  • Posted by admin on 07/09/2015 - 14:46
    While there will be a lot of fighting about the highway trust fund – a fund that is projected to go bankrupt next year as politicians use it to bankroll mass transit systems and other non-highway projects – unfortunately, there has been little talk about funding urgently-needed work on domestic waterways. In the US, $216 Billion of commodities like agricultural products, coal, oil, more