Welcome to the WHAT THE TRUCK?!? newsletter. In this issue, Lordstown’s implosion, HMM’s cyber attack, truckers lose $4600 parking, Home Depot’s ship and more.
Lordsdown
Hindenburg strikes SPAC — Like Nikola before it, Lordstown Motors Corp. (LMC) is the most recent EV company to limp across the asphalt after a damning Hindenburg short seller report. Now, LMC founder/CEO Steve Burns and CFO Julio Rodriguez are out of the company following an internal investigation that found some truth to short seller Hindenburg Research’s allegations of phony preorders for the company’s planned commercial electric pickup trucks, FreightWaves’ Alan Adler reports.
Low voltage — The situation came to a head last week when the company warned that it wouldn’t survive the year unless it raised more money. LMC was once thought to be a savior for GM’s shuttered Chevy Cruz plant when it was sold the property in November ’19. The move was criticized as being politically motivated during the Trump administration. Back then Trump criticized GM CEO Mary Barra, saying she should find a way to keep the plant open. This ultimately led to GM dealing the plant to LMC. Now, GM finds itself in the middle of another EV controversy as it did with Nikola’s Badger.
“As soon as people saw the F-150 Lightning, any chance of getting any additional investment pretty much dried up. I think it’s highly unlikely that Lordstown is going to find a savior that’s going to keep them going.” — Guidehouse Insights principal analyst Sam Abuelsamid
Lightning strikes — With shares down over 40% since the release of the Hindenburg report, an SEC investigation and the Ford F-150 Lightning stealing LMC’s thunder, things are looking bleak for the Ohio-based upstart. The F-150 Lightning stickers for $12,000 less than LMC’s offering. Meanwhile, if things don’t turn around quickly, LMC’s Endurance pickup truck may not go the distance.
HMM victim of latest cyber attack
A different outlook — FreightWaves’ Nate Tabak reports South Korean shipping line HMM was targeted in a cyberattack over the weekend. HMM claims that it discovered the attack on Saturday and that it had only impacted the company’s Outlook email systems. So far the company claims that it is only a “virus,” but the attack was still affecting systems outside the Americas and Europe.
“The e-mail system is gradually resuming, and our IT planning team, consisting of IT experts, is continuing the investigation to prevent further security accidents” — HMM
Escalation — The HMM cyberattack is just another in a series of recent hits that struck Colonial Pipeline, SolarWinds and Microsoft Exchange. Those cases were a strong reminder that bad actors abound internally, externally and from third-party risk. In fact, the latest risk shares a name with something we’re very familiar with: supply chain. While the umbrella term “supply chain attack” doesn’t have anything to do with the movement and flow of goods, it does deal with vendor risk. CSO describes it as occurring “when someone infiltrates your system through an outside partner or provider with access to your systems and data.” Since 2017, Maersk, COSCO and MSC have all been hit by cyberattacks.
Relief coming for truck parking?
$4,600 lost annually per driver — Parking is the bane of almost every driver’s existence and the lack thereof is near the top of nearly every driver issues survey. A research report released Monday by American Transportation Research Institute is looking toward a resolution as it calls for national truck-parking standards. As FreightWaves’ John Gallagher notes, “because drivers often park earlier to avoid bumping up against federal hours-of-service time limits while looking for a parking spot, the group estimated associated lost wages for drivers at over $4,600 annually per driver.”
Talk is cheap — What may be the biggest hurdle to solving this issue rests right in the report. It would require the agreement, collaboration and the “critical support” of all of the following groups: the American Trucking Associations, Owner-Operator Independent Drivers Association, National Association of Truck Stop Operators, American Association of State Highway & Transportation Officials, the Federal Highway Administration, and the Association of Metropolitan Planning Organizations.
Start of a new era for Home Depot?
Home Depot gives a ship — As employees brace themselves for the Father’s Day rush, it’s the Christmas season that may have Home Depot trying to get ahead of port congestion by securing its own container ship. As Andrew Cox wrote in Point of Sale, “Home Depot’s sales in the first quarter 2021 grew 32.7% yoy from $28.3B to $37.5B.” This growth has seemingly taken HD by surprise. Despite the import boom, retail sales are far outpacing inventory. This isn’t just a problem exclusive to HD. In fact, FreightWaves’ Greg Miller warned last week that now is the time to start preparing for the Christmas capacity crunch.
Hot take — One unintended consequence of the pandemic is that it has shown shippers just how little control they have over their own supply chains when situations turn upside down. Amazon has spent years insulating itself from these issues by creating its own trucking and air fleets, establishing itself as an NVOCC and building out a massive warehousing footprint. Are we slowly seeing mega retailers evolve into mega carriers? It would be a major plot twist if retailers themselves became the biggest threat to the big boys of freight. It remains to be seen if this is just a temporary solution for HD or if it is charting a new course.
Hotter take — One advantage that shippers have by using brokers and carriers is that it presents a firewall between the consumer and the brand. If Evergreen blocks the Suez Canal, it doesn’t make much of a difference to consumers as they generally don’t know how ocean carriers work or who they even are. But say the USS Home Depot blocks the Suez? Not only is Home Depot taking on all of the cargo risk but it is also right in the PR firing line (not to mention in the crosshairs of the Egyptian government.)
Hotter take — One advantage that shippers have by using brokers and carriers is that it presents a firewall between the consumer and the brand. If Evergreen blocks the Suez canal it doesn’t make much of a difference to consumers as they generally don’t know how steamship lines work or who they even are. But, say the USS Home Depot blocks the Suez? Not only is Home Depot taking on all of the cargo risk but they’re also right in the PR firing line (not to mention in the crosshairs of the Egyptian government.)
This week on Insiders
The Hyliion story — This week on FreightWaves Insiders I caught up with Hyliion CEO and founder Thomas Healy. We’re going deep on Healy’s career journey and the story behind Hyliion.
Now playing — Demystifying trucking with owner-operator Wayne Cragg. Watch or listen here.
Subscribe to FreightWaves Insiders wherever you get your podcasts and never miss an episode. New shows drop every Thursday at 3:30 p.m. ET on FreightWavesTV.
WTT Wednesdays
Lance Healy, president of Banyan Technology — With FedEx cutting LTL service to 1,400+ customers, what will that mean for freight and LTL capacity?
Brian Kempisty, founder of Port X Logistics — How Port X Logistics is solving airfreight capacity issues for shippers.
Brian Runnels, director of safety at Reliance Partners — In 1996, he had a serious accident when he was a driver and didn’t realize the scope of the people it affected until recently.
Trent Broberg, CEO of Acertus — Are the best vehicle logistics companies really tech companies?
John Calloway, president of LogEx — Delivering ice cream, minor league baseball and more.
Catch new shows live at noon ET Mondays, Wednesdays and Fridays on FreightWavesTV, FreightWaves LinkedIn and Facebook or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player.
Now on demand
Judging a product by its packaging
The empower hour
Self-defense
Fighting back — Owner-operator LaKeesha Martin teaches The Dude and I a couple moves.
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Dooner