Leveraging Logistics Blog

Just as with any type of product, food tends to use multiple freight modes to get to the grocery store, though there are definitely more common methods of transport. Domestically, trucks are the primary carrier of food. They carry about 70% of the food consumed in the U.S., with the next most common method being railway - which can include both intermodal and hopper cars - at 17%. As far as the type of truck, that depends on the size of the load and the variety of grocery store food. Trucks that transport food include: Refrigerated (reefer) trucks - handle goods that require consistent temperatures throughout transit, like dairy, meat, eggs and anything else refrigerated Freezer trucks - while these can also be referred to as reefers for shorthand, freezer trucks are more specialized to maintain even colder temperatures that keep loads frozen, ideal for - you guessed it - frozen foods Tanker trucks - typically for liquids like milk, juice and oil, but they can also handle bulk dry goods like flour Traditional semi-trucks - for dry foods that don't need temperature control like crackers, cereal, canned goods and more As a not insignificant portion of food we consume in the U.S. doesn't come from within the country, there are still more freight modes at play as well. Since we're thinking globally, ocean freight accounts for more than half of the "food miles" traveled worldwide, about 60%. Since those boats can't make it onto dry ground, that cargo then shifts to trucks or intermodal options to get to their landlocked destinations. You may be asking, "what about planes?" Well, according to the same study, air freight is a distant last behind sea shipping, road and rail, at just .16%. Another study suggests air freight accounts for between 4 and 5% of food transit in the U.S. though. Regardless of how they're transported, fresh meat and produce - along with perishable processed foods - have a ticking clock to get to the grocery store. Produce will simply over-ripen if it takes too long to get to shelves, regardless of how it's stored. And foods like meat, milk and bread among others - once packaged - will inch closer to their sell-by dates. That means speed and reliability are paramount to get grocery products to stores and consumers before they spoil and must be discarded.

Supply & Demand Chain Executive magazine has selected InTek Freight & Logistics President Shelli Austin among its 3rd Annual Women in Supply Chain award winners. The Women in Supply Chain award honors female supply chain leaders and executives whose accomplishments, mentorship and examples set a foundation for women in all levels of a company’s supply chain network. This year’s list includes individuals from software and service providers, consultancies and academia, trucking and transportation firms, professional development agencies, sourcing and procurement divisions, and more, all who have helped supply chain clients and the supply chain community at large prepare to meet many of today’s—and tomorrow’s—challenges.

While much of the country slept, the two largest unions representing rail workers and Class I railroads reached a tentative agreement for a new contract in the early morning hours the day before a strike could have begun. Negotiators from the Brotherhood of Locomotive Engineers (BLET) and Trainmen and the SMART Transportation Division, along with the Brotherhood of Railroad Signalmen reached the agreement with the National Carriers Conference Committee following about 20 hours straight of in-person talks at the offices of Secretary of Labor Marty Walsh in Washington. During the negotiating session, President Biden reportedly spoke to those at the table urging an agreement to avert a shutdown of the nation's railroads that could've begun Sept. 16 - warning of the damage it would cause the broader economy. That damage, according to the AAR, would've been upwards of $2 billion a day - with about one-third of all domestic freight and thousands of  daily passengers suddenly looking for alternatives to rail. The tentative agreement reportedly follows the recommendations of the Presidential Emergency Board (PEB) No. 250 when it comes to compensation, with a 22% nominal and 24% compounded total salary increase, five $1,000 bonuses for service recognition and one additional paid day off. The hang-up in negotiations continued to involve quality of life issues raised by unions, including overtime, on-call and other scheduling concerns which were not addressed by the PEB. The railroads wanted to stick to the Board recommendations, but sometime overnight the NCCC reportedly budged from that position, paving the way for a deal. A joint union statement indicates the tentative agreement exempts “time off for certain medical events" including routine and preventative medical care, hospitalizations and surgical procedures - something the unions say had never been a part of previous contracts. The unions also indicate the deal includes provisions that will create voluntary assigned days off for members working in thru freight service, and all members will receive one additional paid day off. And the other sticking point - healthcare costs - is addressed with a freeze on members' monthly health care contributions at the end of the agreement while negotiations for the next one take place. While the other unions that had previously reached tentative agreements that basically reflected PEB recommendations without these additional provisions, all will benefit from this deal's terms as well under "me too" clauses. President Biden praised the deal, saying "These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned. The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come."

With Labor Day already a week in the past, the status of supply chains hinges not only on how much demand to associate with peak season, but also on whether a railroad strike stops intermodal freight in its tracks. Let's start first with the story we've been tracking regularly as negotiations between unions representing railroad workers and the Class I railroads have gone through numerous twists and turns - especially in recent months. As of this writing, we are just four days from a Sept. 16th end of the mandatory cooling off period enacted when President Biden appointed a Presidential Emergency Board to assess negotiations between the two sides, and still the two largest unions representing between 70 and 100,000 employees (the engineers and conductors) have no agreement. Indications from leadership suggest a strike is the next step, as they feel working conditions and attendance policies - including specifically an on-call provision- are a non-starter, even with seemingly general agreement on raises and salary structure. The PEB recommendations steered clear of working conditions and work-life balance issues, suggesting those be left for separate local arbitration . If a strike - or any work stoppage for that matter - were to occur, Congress would legally be able to step in to take action if members could agree what that action should look like. Theoretically, they could extend the cooling off period, order all sides to mediation or even order all sides accept a new deal with terms of Congress' choosing. However, the "if members could agree" is the rub in a particularly partisan environment. Democrats who control both chambers - and are routinely seen as pro-union - are being urged by labor leaders to sit this one out. But with a looming mid-term election, they'd also rather not see voters' attention turn to back to supply chain concerns resulting from railroad shutdowns. On the other side, Republicans may be just fine with a change in narrative for voters as other issues currently front-of-mind have been less favorable to their election prospects. The railroads for their part, seem inclined to have Congress enforce an agreement based on the PEB recommendations, which have already led to tentative contracts with multiple unions (though the work-life balance issues would fall under the policies agreed to with the two largest unions in a "Me too" arrangement). In other words, absent a voluntary agreement between these unions and the railroads to either extend the cooling off period themselves or reach a long-term deal, what happens on September 16 and beyond is anyone's guess.

InTek Freight & Logistics, Inc. today announced it has successfully renewed its status with the U.S. Environmental Protection Agency’s (EPA) SmartWay® Transport Partnership. The partnership is an innovative collaboration between the EPA and environmentally responsible companies in the transportation industry. It provides a framework to assess the environmental and energy efficiency of goods movement supply chains. InTek submitted its data in support of SmartWay environmental responsibility criteria and received approval for its current data submission, renewing its partner status for another year.

While it's generally accepted that some forms of freight are lower on volume than normal at this time of year, food freight transport is showing little sign of slowing down. Perhaps it's making up for lost time due to shortages throughout the last couple of years that saw empty grocery store shelves and items crossed off restaurant menus - some of which still persist. Or maybe it's because even during periods of rising prices, food demand can be somewhat inflation-proof while shoppers may skip products that are less essential. After all, you gotta eat. For example, in spite of prices more than 15% higher than the same time last year, sales of chicken products of all kinds are actually up about 10% in 2022. One reason commonly cited - chicken is still cheaper per pound than other proteins. And with many families feeling inflationary pressures, it still offers better bang for the buck - no pun intended. Beyond chicken, researchers note demand for other meats, seafood, fresh, organic and prepared foods and even frozen items like fries and pizza continues to go strong. For freight and logistics pros, that means  temperature-controlled transport and storage are necessities, and that capacity is still not super easy to come by of late. Restaurant spending is a bit of a mixed bag depending on who you talk to, but these facilities also need to stay supplied as in-person dining has fully returned. Food retailers of all kinds are taking a wait-and-see approach when it comes to consumer behavior in the coming months, but thus far, people are still buying, even as costs are up.

Labor Day is a major U.S. holiday that marks the unofficial end of Summer, but while the word "labor" in its name is a bit of a giveaway as to why it exists, its specific origins are a mystery to many. In fact, even historians disagree on some aspects of Labor Day's background, but one major piece of the puzzle traces to a railroad strike in the late 1800s. The Pullman Railway Strike of 1894 saw a quarter million railroad workers take to the picket lines over the course of a few months that year, in a protest related to wage cuts by the Pullman Palace Car Company which left its workers making too little to pay the rent in Pullman, Illinois - the company town. On top of the low wages, workers also expressed concerns about workdays upwards of 16 hours and generally poor conditions - both on the job and at home - as well as the firing of union representation. The strike was a coordinated effort between the Pullman workers and the American Railway Union - which called for a boycott of all Pullman railway cars by its members. The boycott essentially stopped many rail lines west of Chicago in their tracks, stranding passengers and cargo with ripple effects to product shortages, consumer price hikes and factory shutdowns. A couple of months after the strike began, the government under President Grover Cleveland secured a federal injunction and sent in troops to enforce it. And during demonstrations, clashes between troops and strikers led to up to 30 deaths and many more injuries. As a small gesture by the government toward American workers who were upset by this and generally rough conditions related to the Industrial Revolution, Congress passed and Cleveland signed a bill making Labor Day a national holiday. So while the origins of Labor Day technically date more than a decade earlier in New York, with many states adopting it as a holiday in the interim, the railroad strike is credited with the day's recognition at the federal level as a tribute to all American workers.   As the countdown to a potential strike date continues, three of 12 labor unions have reportedly agreed to terms with Class I railroads on a new contract. While the agreement means disruptions will be avoided in areas where those union workers staff railroads, it still leaves three quarters of unions in ongoing negotiations with the date of an allowable work stoppage looming in mid-September. Focusing on the deal that has been reached, the three unions represent about 15,000 railroad workers - members of the International Association of Machinists, the Transportation Communications Union and the Brotherhood of Railway Carmen and making up the International Association of Machinists Rail Division. It's a five year agreement with the NCCC (the Class I railroads) which covers the previous two years and the next three. In essence, the agreement follows the recommendations of the Presidential Emergency Board (PEB) No. 250, with a 22% nominal and 24% compounded total salary increase, five $1,000 bonuses for service recognition and one additional paid day off.

In the midst of hurricane season, the primary connection that comes to mind between these natural disasters and supply chains is the threat of storms delaying, diverting or destroying freight. But for transportation, another impact comes in the aftermath of a hurricane, as many freight providers - involved in trucking particularly - are contracted with FEMA for disaster relief. And even truckers not directly contracted with the government may turn their attention to disaster relief - taking a break from their regularly scheduled routes to carry loads of essential items like food, water, medical supplies and more to affected areas, both to help those in need and potentially see higher rates. Either way, it's generally accepted that some serious freight capacity shifts into disaster relief following hurricanes - and justifiably so - even if some disagree. Disaster relief efforts extend the impact of hurricanes on freight, as even before a storm's arrival, activity tends to ramp up to beat adverse conditions and get loads delivered. And once a storm has passed, while many do work to deliver to disaster areas, others undertaking regular freight operations often look to avoid those affected regions due to anticipated issues getting through smoothly. Because of all these shifts related to hurricane disaster relief, the trucking market particularly typically sees capacity issues, reliability issues and higher costs surrounding storms. And the effects reverberate to regions not directly in the storm's path, as well as other freight modes.  

As the countdown to a potential strike date continues, three of 12 labor unions have reportedly agreed to terms with Class I railroads on a new contract. While the agreement means disruptions will be avoided in areas where those union workers staff railroads, it still leaves three quarters of unions in ongoing negotiations with the date of an allowable work stoppage looming in mid-September. Focusing on the deal that has been reached, the three unions represent about 15,000 railroad workers - members of the International Association of Machinists, the Transportation Communications Union and the Brotherhood of Railway Carmen and making up the International Association of Machinists Rail Division. It's a five year agreement with the NCCC (the Class I railroads) which covers the previous two years and the next three. In essence, the agreement follows the recommendations of the Presidential Emergency Board (PEB) No. 250, with a 22% nominal and 24% compounded total salary increase, five $1,000 bonuses for service recognition and one additional paid day off.

Hurricane season technically runs from June 1 to November 30, and freight keeps moving throughout. But as the peak of hurricane season approaches - coincidentally enough during peak freight season - it's important to remember how these major storms can throw a wrench into supply chains. Whether shipping through areas susceptible to hurricanes or not, logistics professionals always need to keep an eye on storm development during these months, as storms can have both direct and indirect impacts. On the direct side, a hurricane affects freight primarily by delaying or rerouting movement of ships, trucks and trains in areas that are in a storm's path, or directly damaging freight either while in transit or in storage. This can occur through damage to roads, rails, ports, warehouses, etc., power outages, high winds making travel unsafe, flooding and more. Indirectly, hurricanes can damage raw materials or warehouses taking out a link in supply chains, lead to backups in other areas as freight is rerouted, cause shifts in the supply and demand equation, and lead to redirected capacity and transportation resources - partly due to FEMA contracts and partly voluntarily - to hurricane recovery efforts. As you can see, the impacts of hurricane season on freight can be far reaching, causing anything from delivery delays to higher prices to product - and fuel - scarcity.