Welcome to the WHAT THE TRUCK?!? newsletter. In this issue, Kyrie Irving invests in Fleeting to aid truckers, Christmas peak season in May, Amazon ups warehouse pay, more.
Kyrie Irving + Fleeting help those on the rebound
Alley-oop — Last week, Black-owned commercial trucking and fleet management services company Fleeting announced a seed round investment of $500,000 from the Brooklyn Nets’ Kyrie Irving’s KAI 11 Consulting and Lockstep Ventures. Irving recently launched KAI 11 Consulting, which is dedicated to creating opportunities and initiatives that can support and promote small business growth in underserved communities.
“I am thrilled to receive this investment from KAI 11 Consulting and Lockstep Ventures to further scale our business and empower those from underserved communities. The trucking industry is one of the fastest-growing in the U.S. and I want to ensure it provides access to everyone who wants to be part of it. I intend to help those in the Fleeting family to become financially independent and even entrepreneurs themselves.” — Pierre Laguerre, founder and CEO of Fleeting
Don’t call it a comeback — KAI 11 Consulting and Lockstep Ventures have teamed up with Fleeting to enhance the company’s social impact arm and to help introduce drivers into an industry that is desperate to get trucks seated. In the near future, Fleeting will offer training services to formerly incarcerated men and women. The goal is to remove the stigma of hiring drivers with a prison record and to give them the opportunity to write their own comeback story.
Show time — Don’t miss Pierre Laguerre on WTT this Friday.
Christmas in … May?
Should you start shopping now? — While Christmas is still 221 days away, FreightWaves’ Greg Miller points to the Census Bureau’s March retail trade report highlighting the enormity of the import challenge in the coming peak season. With the retail inventory-to-sales ratio at an all-time low and trans-Pacific box rates hitting record highs, retailers and consumers are going to be caught in the middle when both ends meet. Deutsche Bank transportation analyst Amit Mehrotra told American Shipper, “Inventories are flying off the shelves faster than companies can replenish them. That is why the inventory restocking cycle is still in the early innings.”
“It’s been an existential nightmare, as confounding as Samuel Beckett’s ‘Waiting for Godot.’” — a concerned West Elm shopper to Vox
Unhappy buyers — In recent weeks in this newsletter we’ve talked about shortages in nearly every category. From microchip shortages rankling automotive, electronics and PlayStations to lumber and even excessive furniture delivery delays. In fact, I just ordered a living room table that isn’t projected to arrive for 12 weeks! That means we won’t get it until August or September. West Elm shoppers recently expressed their outrage to Vox over delays that lasted as long as nine months. Now more than ever, the supply chain has become a marketing tool, but the consequences for missed delivery dates is lost customers. Unfortunately, for many retailers, a lot of this is beyond their control.
Backordered — So, how do retailers keep consumers upset about delays and stockouts happy? By ordering more inventory, a lot of it. Jason Miller, associate professor of supply chain management at Michigan State University’s Eli Broad College of Business calculated that retailers would need to increase inventories by $65.11 billion to reattain the 2019 inventory-to-sales ratio by the end of October.
It’ll cost you — The problem is that the ocean freight capacity needed to meet that demand is already tapped. Trans-Pacific booking costs have had a dogecoin-like ascent to the moon and are now four times what they’d normally be this time of year. Right now, importers are paying $8,000-$10,000 per 40-foot container. That’s not even including premiums or the $3,000/40-foot GRI Hapag-Llyod announced. The question is no longer, when is peak season? Now it’s, when does it end? That answer may not come until ‘22.
Amazon’s employment rush
Pay the piper — The average warehouse worker pay in the U.S. is $12.86 an hour, according to Indeed, but Amazon is rapidly pushing that figure up. It will offer $17 an hour plus sign-on bonuses to 75,000 new warehouse employees. While we often talk about the trucking industry’s issues with attracting new labor, warehouses are finding themselves in a bind with their own worker shortages.
Good labor is hard to find — Last week, the U.S. Bureau of Labor Statistics reported that the number of job openings reached a series high of 8.1 million on the last business day of March. In fact, April data shows that transportation and warehousing employment declined by 74,000 jobs during the month.
A rising tide — Amazon has 409 delivery stations in the U.S. and an additional 229 are being built. What remains to be seen is if Amazon will attract new workers to its warehouses or if its above-average industry pay will simply take workers from other companies. At the moment, unemployment benefits and other pandemic-related reasons (day care closings, at-home schooling) appear to be every warehouse’s biggest competition. For warehouses not owned by Amazon, their labor costs could soar as they try to remain competitive with $17 an hour being the new normal.
The best thing about an all-electric fuel island?
No gas hoarding — After a week of Colonial Pipeline-induced panic-buying that saw motorists put gas in bags, boxes and Tupperware, a trip to an electric fuel island would be a welcome reprieve. While few of those exist at the moment, Bakersfield, California-based startup WattEV is looking to change that. The plan is for the station to supply 25 megawatts to more than 40 charging stalls. The electrification station will be open to the public but WattEV also intends to charge up its own fleets. The company has reserved 50 Tesla Semis and intends to broaden their usage to other electric truck manufacturers’ rigs. Ultimately, it plans on deploying 12,000 heavy-duty battery-electric trucks on California roads within the next decade.
Close call part 1
Fire — Two truckers ended up in the hospital after their rig drove into a median while southbound on Interstate 15, according to Utah Highway Patrol Cpl. Andrew Battenfield. KSL reports the fire was extinguished and both victims were extracted and transported to the hospital, the department added. Neither had life-threatening injuries.
Close call part 2
When the 4th is with you — On May 4th a storm in the Birmingham, Alabama, area caused lightning to strike a tree on the same road where Henri Cheramie was driving his 1990 Honda Civic. Fortunately for Cheramie, someone chose the sunroof option on his Civic 30 years ago because that’s where his head ended up after a tree fell on his vehicle. “If my giant C-section baby head hadn’t gone through that sunroof, I don’t know where I’d be,” he joked with Beauregard Daily News.
WTT @HOME
live.freightwaves.com
May 19-20 — It’s back and bigger than ever. After the volatility of 2020, FreightWaves LIVE @HOME will examine what you can expect for the rest of the year. Listen to pioneering entrepreneurs who can see opportunity on the horizon. Watch transportation and supply chain gurus dive into the lessons learned over successful careers. It’s the place to be for anyone looking to grow their career and their impact in the world of supply chains, logistics and transportation. Plus, we’ll have two episodes of WTT live from the event and there’s a ridiculous number of giveaways just for registering (which is free).
Friday on WTT — We’ll hear from Pierre Laguerre, founder and CEO at Fleeting, about what his new deal with Kyrie Irving means. Bluewire CEO Steve Bryan has a solution to help carriers fend off nuclear verdicts. Miguel Trivino, director of environmental, health and safety at Kenco, talks about how wearables reduce warehouse injuries. Plus, Sam Ovett from Mobile Pocket Office and C.H. Robinson’s Tim Gagnon.
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
How truck wheels are made with Alcoa and DHL’s multibillion-dollar bet on going green
Automating intermodal
What’s supply chain game theory?
We asked a professor — Isenberg School of Management at Umass Amherst professor Anna Nagurneyanswers.
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Dooner