Full electrification of the U.S. commercial truck fleet would require nearly $1 trillion in infrastructure investment alone, according to a new report from Roland Berger released today by the Clean Freight Coalition. The study forecasts a realistic infrastructure buildout for the electrification of medium- and heavy-duty commercial vehicles, exposing what the CFC calls a massive investment gap as state and federal policymakers mandate increased adoption rates of battery-electric commercial vehicles. The CFC, which consists of transportation stakeholders across the trucking and motorcoach industries, says that policymakers must address these cost concerns and infrastructure hurdles to make an electrified supply chain function smoothly for the American economy. The study found that while medium-duty vehicles will face fewer roadblocks, economic and operational constraints make electrification very challenging for the heavy-duty segment. Furthermore, the study outlined the significant improvements in battery range and charging infrastructure capabilities that would be needed to support a path for the electrification of longhaul vehicles.

March and April are critical months for ocean carriers looking to ink annual freight contracts with shippers, including the world’s biggest retailers, but this year contract season is turning into a waiting game. The $2,500 spread between spot market rates and long-term freight contract rates for Asia to U.S. West Coast containers has reached its highest level since September 2021, when the spread between short-term rates and the long-term rates was $2,900. This has caused shippers to hit pause before signing on the dotted line, with ocean carriers looking to sign at the higher spot rates fueled by the Red Sea diversions, and shippers holding out for a steeper decline. Ocean spot freight rates have tumbled for a sixth-consecutive week as the Shanghai Containerized Freight Index dropped by 6 percent. Ocean carriers were unable to push through a mid-March rate increase, and expectations of an April rate hike are fading amid soft demand.

Macy’s three-point transformation plan to combat sliding market share — dubbed the “Bold New Chapter” — will rely heavily on its supply chain. The retailer plans to close distribution centers, increase automation, and implement other tactics that help the corporation improve inventory, productivity, and, ultimately, sales, the corporation’s CFO and COO, Adrian Mitchell, said in a Q4 earnings call. Altogether, supply chain efforts should result in $100 million in cost savings in the current fiscal year, eventually rising to annual run-rate savings of some $235 million by 2026, Mitchell added in the late February call. The initiatives come after Macy’s reported a $71 million net loss in the most recent quarter. In addition to supply chain efforts, its three-point plan also involves closing Macy’s stores and investing in the company’s luxury offerings.

A measure of truck tonnage increased 4.3% in February after decreasing 3.2% in January, although the final number still fell 1.4% short of its level a year ago, according to the American Trucking Associations (ATA). The data comes from ATA’s advanced seasonally adjusted For-Hire Truck Tonnage Index, which rose to 116.0 (2015=100) compared with 111.3 in January. The index is dominated by contract freight as opposed to spot market freight. Compared with February 2023, the index fell 1.4%, which was the twelfth straight year-over-year decline for the monthly measure. In January, the index was down 4.5% from a year earlier.

That’s all for this week. Enjoy the weekend and the song of the week, Paranoid Android by Radiohead.

The post This Week in Logistics News (March 16 – 22) appeared first on Logistics Viewpoints.