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Today's Pickup: Uncertain Contract Status Leads DHL To Issue Potential Notice Of layoffs In Michigan

FreightWaves

Good day,

DHL is reportedly negotiating a new contract with FCA US (NYSE: FCAU), and because it is unsure if that contact will be renewed, the company has filed a Worker Adjustment and Retraining Notification Act (WARN) notice with the state of Michigan.

The notice said the company was shutting down a facility in Detroit on March 27, 2020, for maintenance. The shutdown is expected to last approximately 90 days. The contract with FCA expires March 31, 2020, DHL wrote in the notice.

"At this time, we do not have an agreement to provide services beyond that date and we have no guarantee a new or extension agreement will be reached, or that any potential successor service provider to our customer will make offers of employment for current DHL employees performing the work," the notice said.

According to the notice, 134 jobs will be affected, including 63 forklift jobs, 27 material handlers, 8 operations assistants and 28 drivers.

DHL spokesperson Dan McGrath told Crain's Detroit Business the filing is a "precautionary measure," although he declined to identify the customer. Crain's identified the customer through Don Moran, vice president of Teamsters Local 299, which represents the workers.

Did you know?

Rail carloads fell 4.2% annually for the week ending Feb. 8, according to Association of American Railroads data. Intermodal containers and trailers also fell, dropping 8.8%. For the year-to-date, carloads are down 5.6% and intermodal units 6%.

Quotable:

"Insurance is a disaster. It's a bloody disaster. And shippers out there, we need your help. Carriers can't afford [insurance costs of] $25,000 a truck, which is what some carriers are getting quoted. They can't afford $25,000 – some trucks only make $25,000 a year." 

– Joey Hogan, president and COO of Covenant Transport (NYSE: CVTI), on Feb. 13 at the ACT Research Seminar 62 conference in Columbus, Indiana.

In other news:

GM working to minimize coronavirus impacts

GM (NYSE: GM) is working to minimize disruption to its U.S. truck plants because of the coronavirus, as it seeks ensure a continuous flow of parts. (Bloomberg)

Amazon drops delivery partners

Amazon.com, Inc. (NASDAQ: AMZN) has dropped relationships with hundreds of small delivery firms, costing at least 1,300 driver jobs, according to reports. (Bloomberg)

U.S. carload, intermodal volumes drop

Carload and intermodal volumes for U.S. railroads dropped for the week ending Feb. 8, according to data. (Logistics Management)

Who has the best-looking van?

With all the electric vans being adopted by Amazon, FedEx Corporation (NYSE: FDX), UPS Inc. (NYSE: UPS) and others, the question becomes who has the best-looking van? (Core 77)

Rail offers option for Chinese supply chains

As companies reopen factories in China, some are looking to rail as a way to get goods moving in light of an expected capacity crunch. (The Loadstar)

Final thoughts

Last week, Bill Strauss, senior economist and economic advisor for the Federal Reserve in Chicago, and Sam Kahan, chief economist for ACT Research, painted a rosy picture of the economy moving ahead in 2020. Speaking during ACT Research's Seminar 62 in Columbus, Indiana, the pair went through the current state of the economy, and gave brief look ahead that suggested everything will be fine and that it will be pickup up steam as 2020 moves forward.

Other speakers at the event spoke of the expected improvement in freight conditions that should include a tightening of capacity and rate improvement. In all, the event reinforced what many have been saying – the economy is not great right now, but it's not bad either.

Hammer down, everyone!

Image Sourced from Pixabay

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