It’s September, which means Fall is just about here, kids are back to school, and cooler weather is on the way. It also means that football season is here. Last night The Patriots and Steelers kicked off the 2015-16 NFL season. Talk about logistics – on top of all the logistical issues of a standard game (getting players, coaches, and equipment to the stadium, TV and radio broadcasts ready to go, and hundreds of other details), the Patriots also needed to get the Super Bowl banner hung, coordinate the pregame celebration, and get the (four) Lombardi Trophy(s) to the stadium for the festivities. On top of that, there are the logistics of getting 68,000+ fans to the stadium. I was lucky enough to be one of those fans. This meant I had to get myself, my friends, and our tailgating essentials to Foxboro, while battling rush hour traffic. It was all worth it, as the Pats opened the season with an impressive 28-21 win.
And now, on to the news.
- XPO Logistics makes $3bn acquisition of Con-Way
- Google to start testing grocery deliveries this year
- Warehouse worker shortage spells trouble for retailers
- Russia’s war on western food is leading to a national cheese revival
- Spot van, reefer rates rebound
- Diesel price rises for first time in four months
XPO Logistics is set to acquire Con-way Inc. for $3 billion. The deal is expected to close next month, and Con-way will then be merged with another XPO subsidiary. All of the divisions under Con-way, which include Con-way Freight, Menlo Logistics, Con-way Truckload, and Con-way Multimodal, will be rebranded as XPO Logistics. This move will make XPO the second largest less-than-truckload carrier in North America. According to Douglas Stotlar, president and CEO of Con-way, everyone will benefit from the acquisition.
“This landmark transaction provides immediate cash value for our shareholders and reflects the outstanding contributions of our employees over our 86-year history. The combination will mean more services for our customers, more miles for our drivers and more career opportunities for our employees as part of XPO’s global organization. We look forward to working with the XPO team to complete the transaction and ensure a smooth transition.”
Considering how much the grocery delivery space is taking off, it is not surprising to see Google making a move into the space. The company will start testing a delivery service for fresh food and groceries in two U.S. cities later this year – San Francisco, and a city to be named later. This will pit the internet giant in direct competition with Amazon, Instacart, and a host of other players in the space. To start the pilot program, Whole Foods and Costco will be among Google’s partners for the new service.
The holiday season wouldn’t be approaching if retailers weren’t facing some sort of crisis. Last year, the West Coast Port shutdown threatened imports and the holiday success of major retailers. This year, retailers are facing an entirely different problem. The goods are there; the workers might not be. As the unemployment rate has continued to decline, retailers have had a difficult time finding workers for their warehouses. Retailers will need to double or triple their warehouse staff to get merchandise out the door for holiday deliveries. But without adequate warehouse workers, this proves to be a major bottleneck. We’ll keep monitoring this situation, and see if it affects seasonal employment at FedEx, UPS, Amazon, and the Postal Service, which usually see an influx of 300,000+ temporary workers over the holiday season.
Russia has been very active in its response to international sanctions. A year after Russia banned the import of dairy, meat and fish products from European and other western nations in response to sanctions against it over its actions in Ukraine, a wide array of cheeses is back on store shelves. The country has incinerated contraband western foods, which led to the European dairy sector to feel the hit (as it exported around €2.3bn worth of dairy products last year). As a result, local cheese producers have some breathing room now. Before, many Russians would only look to Italy or France as producing “real cheese.” Now, however, with the sanctions, consumers can expect to find the usual variety, but may be surprised to see mozzarella from Tver, feta from Vologda, and camembert from Krasnodar.
Spot truckload van and refrigerated freight rates finally recovered last week after a period of higher demand and declining fuel surcharges, according to DAT Solutions, which operates the DAT network of load boards. The average flatbed rate lost 2 cents per mile, however. National average load-to-truck ratios rose for all three equipment types. Van load availability increased for the second straight week, with the number of posted loads up 6% compared to the previous week. With available truck capacity down 3%, the national average load-to-truck ratio increased to 2.0 loads per truck, meaning there were 2.0 available van loads for every truck posted on the DAT network. The national average van rate rose 3 cents to $1.78 per mile despite a 1-cent decline in fuel surcharges, showing signs of recovery.
And finally, the price of diesel has risen for the first time in four months. The country’s average diesel price increased by 2 cents this week, breaking a streak of 14 consecutive weeks of prices declines across the United States, according to the Department of Energy’s weekly report. The price of a gallon of on-highway diesel now stands at $2.534 nationwide. Prices increased in all regions of the U.S. except New England, where prices dropped 1 cent over the week ending Sept. 7.
That’s all for this week. Enjoy the first weekend of NFL football, and the song of the week, September, by Earth, Wind, & Fire.
Steve Banker says
I always view labor shortages in logistics – driver or warehouse workers – as fictional. In a free market if you raise your salaries, the workers magically appear.