Air Logistics

Today’s Logistics Report: YRC’s Heavyweight Aid; Fighting for Chips; Vetting


The Logistics Report newsletter won’t be published on Monday, Jan. 17, Martin Luther King Jr.’s Birthday. The next newsletter will be Tuesday, Jan. 18.

Trucking company

YRC Worldwide Inc.

was the biggest beneficiary by far of a program aimed at helping defense contractors weather the impact of the Covid-19 pandemic. The fourth-largest less-than-truckload carrier in the U.S. was one of just 11 businesses that received loans through the $17 billion program for that sector, the WSJ Logistics Report’s Jennifer Smith writes, and the $700 million earmarked for YRC made up 95% of the roughly $736 million in outstanding loans. YRC so far has drawn down $551.3 million, or about 79% of its loan. The backing has brought critical support to a company long troubled by heavy debt loads and thin financing to refresh its aging fleet. But many shippers prize YRC for its extensive national network, and the trucker in defending the loan says its reach is “absolutely crucial” and would be difficult to duplicate through other carriers.

SUPPLY CHAIN STRATEGIES

Semiconductor suppliers can’t add new production fast enough to keep up with red-hot global demand for chips. Semiconductor companies are asking their customers for patience as the industry works through a sharp increase in demand, the WSJ’s Asa Fitch and Elizabeth Koh write, but relief could be slow since some of the deepest supply problems are taking place with older production lines that are less lucrative for manufacturers. The shortfall between supply and demand has already hit the automotive sector, where major manufacturers have suspended production lines because they lack the key components that are the brains behind today’s cars. But the supercharged demand goes beyond car factories, as a resurgence in computer purchases and a broader drive toward digital products drives the need for more chips. With companies across far different sectors now competing for limited manufacturing capacity, lead times for semiconductor deliveries have extended to six months.

Number of the Day

3.077

The Cass Freight Index for U.S. shipping expenditures in December, up 13% from a year ago and the highest level for the spending measure in records dating to 1990.

LOGISTICS TECHNOLOGY

The growing revelations about the

SolarWinds Corp.

hack are pushing companies to look harder at their own supply-chain security. Businesses that have been assessing their exposure to the attack on the software provider are now looking more closely at their suppliers’ security, the WSJ’s David Uberti and Kim S. Nash report, leading some companies to review their vetting processes and even pause updates to applications. Cybersecurity experts say the task could grow more complex as details emerge about a hack that has jolted the supply chains that help the digital economy run. As many as 18,000 SolarWinds customers downloaded the malicious update and the software company shared evidence this week suggesting attackers breached its networks a month earlier than previously known. Cybersecurity experts say the incident underscores the urgency of protecting supply chains that are composed of large numbers of third-party suppliers and vendors.

QUOTABLE


You can’t assume that [supply chains] defend themselves.


— Chris Inglis, former deputy director of the National Security Agency



Read More: Today’s Logistics Report: YRC’s Heavyweight Aid; Fighting for Chips; Vetting

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