Hearing Is Believing 🦻
Good morning! Today is the first day of the IANA convention in Long Beach, The IANA (Intermodal Association of North America) Intermodal EXPO is a prominent annual event in the transportation and logistics industry, specifically focusing on intermodal transportation. Intermodal transportation involves the movement of goods using multiple modes of transportation, such as shipping containers that can be transported by ships, trains, and trucks.
So, if you are at the conference stop by and get a short interview with the iLevel team! 🚛👍
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Werner Enterprises Found Guilty of Discrimination Against Driver Applicant
Werner Enterprises and its driving school subsidiary, Drivers Management, have been found guilty by a jury of discrimination against a driver applicant who is deaf. The complaint, which dates back to 2018, accused Werner of failing to hire the driver because of his deafness and a refusal to provide reasonable accommodation. The Equal Employment Opportunity Commission (EEOC) pursued the lawsuit, alleging that Victor Robinson, the driver in question, completed the driver school training in 2016 but was not hired by Werner, despite successfully working as a commercial truck driver for other companies. The jury awarded Robinson $75,000 in actual damages and an additional $36 million in punitive damages for Werner's "malice or reckless indifference" to his rights not to be discriminated against based on a disability. However, the final judgment is pending further legal steps.
Werner is also facing another ongoing EEOC lawsuit involving a deaf driver, Andrew Deuschle, who filed a discrimination complaint after Werner allegedly failed to hire him in 2014 and 2015. Although the court ruled in favor of Werner regarding a failure-to-hire discrimination claim in June, the second case remains ongoing. The plaintiffs allege that Werner further violated the Americans with Disabilities Act through job-screening questions and the improper classification of driver applicants with disabilities.
Check out today’s featured article from Trucking Dive to learn more about why one of Werner Enterprises’ driving school subsidiaries has been found guilty of discrimination. Will they change their ways? How many other companies do the same exact thing?
Featured Article
Werner found guilty of discriminating against driver applicant | Trucking Dive
“The carrier expressed disappointment this week with the jury’s decision and is considering an appeal.”
Driver Shortage & Trucking
The Perceived Truck Driver Shortage: Is It Actually Real?
The widely perceived truck driver shortage in the market is not a marketwide issue, but rather specific to certain fleets. While some fleets experience driver shortages leading to unseated trucks, the trucking market has the ability to quickly correct these imbalances. Over the past four years, there has been a significant increase in the number of trucking companies entering the market, resulting in an excess of capacity chasing limited freight. Operating authority for motor carriers of property issued by the Federal Motor Carrier Safety Administration (FMCSA) has grown by 45% from July 2019 to August 2023, while truckload demand has only increased by approximately 11% during the same period.
The myth of a perpetual driver shortage is often propagated by larger trucking companies and industry associations like the American Trucking Association (ATA). These entities, which primarily represent midsize and large fleets, find it challenging to recruit drivers into their operations, leading them to promote the narrative of a driver shortage. However, the reality is that the trucking industry has seen significant growth in independent owner-operators and smaller fleets, which has contributed to the overall capacity of the market. As barriers to entry for new fleets decrease, it is expected that the number of smaller fleets will continue to grow, potentially leading to more pronounced boom and bust cycles in the industry. Currently, a capacity correction is taking place in the trucking industry, addressing the issue of excess capacity relative to available freight.
Navy & Ship Building
Analyzing the US Navy's Troubled Shipbuilding Endeavors
In July 2016, a large naval exercise involving numerous nations took place off the coasts of Hawaii and Southern California. Among the participating vessels was the USS Freedom, a littoral combat ship (LCS) hailed as a technical marvel but plagued with problems. Two LCS ships had previously experienced embarrassing breakdowns, and Freedom itself faced numerous issues, including extensive equipment repairs and unqualified crew members. Despite these challenges, the Freedom was pressed into the exercise as a “no-fail mission." The ship managed to complete its mission but returned with a severely corroded engine, requiring costly repairs. This incident was emblematic of a broader issue within the LCS program, which had been marred by excessive costs and mechanical failures, rendering the ships unable to fulfill their intended missions.
ProPublica's investigation into the LCS program uncovered how Navy leadership repeatedly dismissed warnings about these flaws. Political pressures, lobbying by defense contractors, and congressional support fueled the program's continuation, even as it hemorrhaged taxpayer money. The LCS program serves as a stark example of the military-industrial complex President Dwight D. Eisenhower warned about in his farewell address. While the Defense Department requested a massive budget to address security needs, the conversation in Congress rarely centers on preventing such procurement disasters. Other military projects, like the F-35 fighter jet and the Gerald R. Ford aircraft carrier, have also experienced massive cost overruns and delays.
Let’s Get Global 🌎
Checking out the scoop outside of the United States…
🇷🇺 Maintaining Momentum: How Russia Navigates Sanctions with a Stream of Shady Goods. Over a year since the build-up of Russian tanks on Ukraine's border, global trading dynamics have been significantly impacted by international sanctions imposed in response to the crisis. These sanctions aimed to restrict imports and increase tariffs on various Russian products. However, the enforcement of such sanctions has proven challenging, especially when dealing with a resilient superpower like Russia. Sanctions can be effective when they are targeted, coordinated, and multilateral. Still, over time, their effectiveness diminishes as the targeted entities adapt to evade them. Russia has developed strategies to maintain the inflow of essential consumer goods, from basic necessities to luxury items and advanced technology, despite Western sanctions.
👍 Mid-Sized Businesses Display Greater Optimism Than Small and Large-Sized Enterprises. Dun & Bradstreet has released its inaugural Global Business Optimism Insights report for the third quarter of 2023. The report revealed a decrease in the Global Business Supply Chain Continuity Index by 5.8% from Q2 to Q3, reaching an index value of 50.6, indicating some deterioration in suppliers' delivery efficiency. Interestingly, mid-sized businesses displayed slightly more optimism than both small and large-sized companies. The report also highlighted an expectation of weakened global demand. Economic uncertainty was identified as the primary threat to supply chain continuity by 27% of respondents, followed by regulatory challenges, including new tariffs and non-tariff measures in the ESG space, which concerned 21% of respondents.
iLevel With You 🏡
More topics for the average American household to consider…
🚛 Hyzon's Liquid Hydrogen-Powered Truck Model Extends Travel Range. Hyzon has introduced a liquid hydrogen version for tractor-trailers, significantly extending their travel range. This new model allows for travel up to 800 miles, surpassing the maximum range of 350 miles offered by the company's other North American models. Liquid hydrogen offers higher energy density compared to gaseous hydrogen, enabling an increased fuel capacity without altering the vehicle's weight or payload. Chart Industries collaborated with Hyzon to develop a tank system capable of withstanding extremely cold temperatures, supporting the commercial viability of this technology. Liquid hydrogen trucks are seen as a solution for companies looking to address regulatory pressures for decarbonizing their fleets. McKinsey & Co. has suggested that hydrogen-powered long haul trucks can address the limitations of battery electric vehicles, with increasing demand expected for hydrogen production and refueling infrastructure, particularly after 2025.
💰 Dollar General Implements Automation at South Carolina Distribution Center. Dollar General has implemented automation at its South Carolina distribution center as part of its efforts to optimize its distribution network. Once fully operational, this technology will allow the retailer to process thousands of additional SKUs, improve storage efficiency, and reduce overall costs. This South Carolina facility is the first to receive wide-scale automation, with plans to expand this technology to more centers in the future. Additionally, Dollar General is investing $25 million in improving inventory demand forecasting to support both its stores and distribution centers. The company's focus on supply chain efficiencies and structural improvements has led to benefits such as normalized in-stock levels and on-time deliveries.
⛽️ California Falls Short of Charging Infrastructure Targets. The California Air Resources Board (CARB) has faced criticism for falling behind in providing sufficient charging infrastructure to support its ambitious Advanced Clean Fleets rule. The rule mandates a transition to zero-emission medium- and heavy-duty vehicles, including the installation of 157,000 chargers for such vehicles. However, industry experts and trucking advocates argue that this target is unrealistic and too ambitious. One significant challenge is the time required for building charging stations, with some forecasts extending up to seven years for construction. Utilities are also being asked to expedite their typical connection times, which usually take two to five years for major projects. Filing paperwork for local authorities, particularly related to zoning, is another hurdle, as many zoning codes do not yet exist for chargers as the primary use.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🚗 Tri-gen' System to Power Toyota's Sustainability Efforts at Port of Long Beach. Toyota and FuelCell Energy have completed a "Tri-gen" system at the Port of Long Beach in California, which will produce renewable electricity, renewable hydrogen, and water from directed biogas. The system will power Toyota Logistic Services Long Beach and will be the company's first port vehicle processing facility in the world powered by 100% renewable energy. It will produce 2.3 megawatts of renewable electricity, 1,200 kg/day of hydrogen, and 1,400 gallons of water per day. The hydrogen will fuel incoming light-duty fuel cell electric vehicles and supply a nearby heavy-duty hydrogen refueling station. Tri-gen is expected to reduce over 9,000 tons of CO2 emissions annually from the power grid.
📈 Trucking Industry Braces for Disappointing Peak Season. Trucking experts anticipate a modest peak shipping season, with factors like shifting consumer spending from goods to services, elevated wholesale inventories, and inflation impacting the demand for shipping. While some improvements have been made in retail inventory levels, wholesale inventories remain high relative to sales. Additionally, headwinds like student loan repayments restarting could negatively impact spending in the fall. While the shipping season is not expected to be as strong as in previous years, it is an improvement from the non-existent peak season seen in 2022, according to industry experts.
👩🏻💼 Flexport Founder Criticizes Successor's Hiring Spree, Rescinds Job Offers. Flexport founder Ryan Petersen has announced that the company will rescind 55 job offers and aims to lease out office space across the U.S. as part of efforts to restructure the business. Petersen, who recently returned to run the logistics company, criticized his handpicked successor, Dave Clark, for an excessive hiring strategy, particularly questioning the existence of over 200 open roles. Flexport is viewed as a prominent startup with a valuation of $8 billion and was ranked 10th in CNBC's latest Disruptor 50 list. Petersen defended the company's financial position, citing over $1 billion in net cash but noted that profitability remained elusive.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 25, 2024, from iLevel Logistics Inc.