Today's Pickup: Amazon Taking More Logistics Work In-House; Steer Clear Of The ATL

Good day,

Benzinga · 02/03/2020 21:05

Good day,

Amazon.com Inc.'s (NASDAQ: AMZN) hiring of 1,600 Pinnacle Logistics employees at Baltimore-Washington International Airport (BWI) signals a continued move by Amazon to take full control of its logistics operations, this time by actually absorbing the workers rather than contracting for their services, writes James Brumley in The Motley Fool. Pinnacle is Amazon's ground-handling partner at BWI, but it wanted out. The workers had been slated for layoffs, but Amazon seamlessly took over the operation and moved the workers on its payroll.

Brumley writes that Amazon has been reducing its use of contract logistics services and increasing its use of in-house solutions. This could mark a major turn for Amazon, which typically manages its logistics through the use of contractors. Various analyses have said Amazon could lower its per-shipment costs if it used fewer contractors and grew its staffing in-house. The challenge is having the ability to manage its astonishing growth and its service commitments on its own.

Did you know?:

The state of Georgia needs to spend between $3.4 billion and $4 billion a year over the next 30 years to move freight efficiently through the state without adding more congestion to metro Atlanta roads, according to a report by a special state commission.

Quotable:

"Urban infrastructure is often not designed to accommodate critical logistics services."

— A GreenBiz report, "The Road To Sustainable Urban Logistics"

In other news:

Baltic Dry Index hits new low

The index, which tracks the cost of shipping dry bulk commodities, fell to a 52-week low in London on Monday. The BDI has fallen for 12 sessions in a row and is 80% off its September high. The latest tailspin is blamed on the effects of the coronavirus, which started in China but has since spread to other countries. (Seeking Alpha)

C&W predicts still-healthy industrial real estate market

Real estate giant Cushman & Wakefield forecasts North American industrial property absorption from 2020 to 2021 to come in at a healthy 459.9 million square feet. Asking rents are expected to increase by 6.8% and hit $6.95 per square foot by year-end 2021. Vacancy will remain at around 5% this year and next. (National Real Estate Investor)

A single window for Indian e-logistics

India's long-awaited but not-yet-released national logistics policy will include a single-window e-logistics market and focus on increasing the country's employment prospects. The single-window system, designed to end the fragmentation of India's logistics market, will cut its logistics costs from 13% to 14% of GDP to 10%, according to government officials. (The Hindu Business Line)

Rail acquisition announced

Short-line railroad Regional Rail LLC, has agreed to acquire Carolina Coastal Railway Inc., which operates 180 miles of track in the Carolinas.The acquisition is subject to the Surface Transportation Board's approval. (Progressive Railroading)

U.S., Canadian operations merge

Illinois-based DSC Logistics said CJ Logistics USA and CJ Logistics Canada have joined under one combined operating company named CJ Logistics America LLC. The company will be doing business as DSC Logistics in the US through 2020, with plans to rebrand as CJ Logistics starting in 2021. (Olean Times Herald)

Final thoughts

This past Saturday, a stretch of Interstate 85 outside Atlanta was closed for hours after a fatal collision involving a motorist and tank truck carrying 8,500 gallons of gasoline and diesel fuel. Sadly, two people were killed, but given the immense fireball that shot into the sky, it's fortunate the death toll wasn't higher. If incidents like this don't give freight folks pause about avoiding metro Atlanta at all costs, perhaps nothing will.

Atlanta is a critical freight market because of its population of nearly 7 million and its location between the booming Port of Savannah and a good chunk of the land east of the Mississippi. But there needs to be an acceleration of efforts to divert shipments off the roads and onto the rails. (See the "Did you know?" segment above.) This is for the efficiency of the freight markets and for the physical and psychological well-being of the region's traffic-traumatized populace. Simply put, if stuff isn't originating from or bound for an Atlanta address, it needs to be off the roads.

Hammer down everyone!

Image Sourced from Pixabay