💔🛒🤝 UPS Dumps Coyote, Walmart's Grand Expansion, PACT Force Unite!
Good morning! ☀️
Grab your coffee because we've got a brew-tiful mix of supply chain news brewing today. Walmart's expanding like the waistline of someone who just discovered their bakery section. UPS and Coyote Logistics might be having a tiff – someone forgot to put 'fragile' on the relationship package. And speaking of packages, there's a new PACT initiative in town, where the big heavy-duty truck manufacturers are getting cozy.
So, let's dive into this daily dose of logistics laughter and information – it's a wheel-y good time! 🚚☕😄
“It’s not about ideas. It’s about making ideas happen.”
UPS | Coyote Logistics | Market
UPS Explores Strategic Alternatives for Coyote Logistics Amid Market Challenges
United Parcel Service (UPS) is exploring options, including a potential sale, for its brokerage unit, Coyote Logistics. CEO Carol Tomé expressed concerns about Coyote's vulnerability to fluctuations in the trucking market and its impact on UPS's earnings. During the pandemic's early years, freight brokerage activity thrived due to surging demand for trailer space. However, since 2022, freight brokerages have faced challenges due to a prolonged decline in freight volumes.
Revenue for UPS's supply chain solutions business unit, which includes Coyote, fell by nearly 20% in 2023 compared to the previous year. Although exact financial data for Coyote isn't disclosed, Tomé noted that Coyote was responsible for a significant portion of the unit's decline.
Coyote Logistics was among the top ten largest freight brokers in the U.S. by revenue in 2022. UPS acquired Coyote for $1.8 billion in 2015 to enhance efficiency and earnings. While Coyote's revenue peaked during the pandemic at over $4 billion, it declined when freight volumes dropped last year. Industry experts suggest that freight brokerage, in the long run, remains a promising sector, with potential for growth and success beyond the current challenges.
WHY IS THIS IMPORTANT FOR MY INDUSTRY?
Coyote Logistics is a big player in the world of matching loads with available trucks. If they sell or make changes, it could send ripples across the industry… affecting how competition works and the services you can get. The hiccups Coyote Logistics is facing tell us a lot about what's happening in the wider market. Freight brokerages like them are like canaries in the coal mine, showing us how bumpy or smooth the road is ahead.
Coyote's struggles remind us that supply chains can be pretty unpredictable.
🔥 OUR HOT TAKE?
UPS seems to be playing a high-stakes game of "To sell or not to sell, that is the question" with its brokerage unit. CEO Carol Tomé seems to be singing a rather gloomy tune. Back in the pandemic's heyday, Coyote was the king of the freight brokerage hill, raking in the bucks as demand for trailer space went through the roof. But lately, it's been more like a country song gone sour – revenues down, UPS's earnings down, and Coyote getting the blame.
You may be able to see a silver lining in the clouds, though. The freight brokerage business still has plenty of road ahead. It's like an old reliable pickup truck – it may hit a few potholes, but it keeps on truckin'.
Walmart | Stores | Expansion
Walmart's Ambitious Plans Include Over 150 New and Expanded Stores in the Next Five Years
Walmart, already a retail giant, is aiming to get even bigger. Over the next five years, the company plans to build or convert more than 150 large-format stores, with some expanding from smaller locations into Supercenters offering groceries and merchandise. Although Walmart hasn't disclosed the cost or specific locations, this expansion signals the retailer's commitment to its brick-and-mortar presence. It's a bold move, given the competition from online giants like Amazon and Shein.
Walmart's strength as a major grocer has helped it weather challenges like inflation, attracting a diverse customer base. With a focus on modern store designs, technology, and sustainability, Walmart continues to evolve its retail strategy and reinforce its market dominance.
Read more about this at CNBC >
WHY IS THIS IMPORTANT FOR MY INDUSTRY?
Walmart is going big by building or revamping 150+ large stores. That's a lot of stuff to move around, and it means more demand for trucking and logistics help to get products where they need to be. Walmart's expanding empire means they'll have to rejig their supply chain to make sure everything runs smoothly. New distribution centers, delivery routes, and partners – which can affect other players in the industry. With more stores and items on the shelves, Walmart's supply chain organizers will be busy figuring out how to manage all that inventory.
This shows that brick-and-mortar retail is still kicking it despite online shopping giants. This might nudge other retailers to rethink their strategies and how they handle their own supply chains.
🔥 OUR HOT TAKE?
While Walmart is flexing its muscles, some argue that this move is reminiscent of a retail behemoth trying to tighten its grip on the market. Critics point out that such expansion might stifle competition, making it harder for smaller retailers to survive. The focus on brick-and-mortar stores in an increasingly digital age is another point of contention. In a world where online shopping giants like Amazon dominate… we must question whether Walmart's commitment to physical stores is a wise long-term strategy.
Walmart's strength as a major grocer is a double-edged sword. While it has helped them navigate challenges like inflation, skeptics argue that this dominance could lead to reduced choices for consumers and potentially hinder competition in the grocery industry. Who knows!?
Manufacture | Trucking | PACT
Major Truck Manufacturers Join Forces in PACT to Accelerate Electric Truck Infrastructure
Three major medium- and heavy-duty truck manufacturers - Daimler Truck North America (DTNA), Navistar Inc., and Volvo Group North America - have teamed up to create Powering America’s Commercial Transportation (PACT), an initiative aimed at advancing electric truck infrastructure. PACT's mission is to bridge the gap between the availability of battery-electric vehicles and the insufficient zero-emissions vehicle (ZEV) infrastructure.
These companies, which collectively represent approximately 70% of new medium-heavy duty truck sales in the U.S., believe that decarbonizing the commercial transportation sector is essential for meeting national climate goals. They stress that transitioning to zero-emission vehicles is hindered by the lack of necessary charging infrastructure.
Read more about this at Freight Waves >
WHY IS THIS IMPORTANT FOR MY INDUSTRY?
There aren't enough charging spots for electric big trucks, and that's a big issue. The industry is all about reducing emissions and going green, right? PACT isn't just one company; it's like a superhero team of truckmakers. PACT's efforts will likely speed up the process of getting those chargers everywhere, which is a big win for our industry’s goals - and the planet.
🔥 OUR HOT TAKE?
But - let's not get too carried away with the heroics here. Sure, we all agree that decarbonizing commercial transportation is essential to meet our climate goals. But is the lack of charging infrastructure the real villain here, or is it just a convenient excuse? Some might argue that these companies should put their money where their mouth is and invest in building the charging stations they say are missing. Actions speak louder than words, after all.
Daily Riddle:
I'm a global concern, a puzzle to arrange,
I alter weather patterns, in ways that seem strange.
From melting ice caps to storms that derange,
What am I, this planet's challenging change?
Jan 31 Answer: speeding
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 22, 2024, from iLevel Logistics Inc.