Retail Sales Fell in December

The decline in December was 0.7 percent. For many operations, the holiday spending season accounts for over 80 percent of their annual revenue. The retailers have been allowed to function normally to an extent, but the consumer has remained concerned about the pandemic threat and they have avoided the stores anyway. There is also the fact that millions of people are out of work and many more are exercising financial caution.

Consumers flush with stimulus cash moved holiday sales to an unexpected high at 8.3 percent to $789.4 billion over the November-December period.

The increase exceeded the National Retail Federation’s (NRF) holiday forecast despite the economic challenges of the coronavirus pandemic. The numbers include online and other non-stores sales, which were up 23.9 percent at $209 billion. Other sectors:

  • Grocery and beverage store sales were up 9.6 percent.
  • Health and personal care store sales were up 5.4 percent.
  • Building materials and garden supply stores, up 19 percent
  • Sporting goods stores, up 15.2 percent
  • General merchandise stores, down 0.1 percent

NRF’s numbers are based on data from the U.S. Census Bureau, which said that overall December sales (including auto dealers, gas stations and restaurants) were down 0.7 percent seasonally adjusted from November but up 2.9 percent unadjusted year-over-year.

Durable goods slow

New orders for durable goods, products designed to last at least three year, increased 0.2 percent to a seasonally adjusted $245.3 billion in December compared with November, according to the Commerce Department. That was the eighth straight month of gains, although the increase was the smallest since last August.

New orders for nondefense capital goods excluding aircraft, or so-called core capital-goods orders, a closely watched proxy for business investment, increased 0.6 percent in December from the previous month, to $71.8 billion. The gain was also smaller than in recent months.

Despite slower December growth in new orders, economists said the report reflected positive trends for the U.S. manufacturing industry and business investment.

Home sales spike

Home sales in 2020 surged to their highest level in 14 years, with robust sales providing a much-needed boost to the economy.

Existing-home sales rose 0.7 percent in December from November to a seasonally adjusted annual rate of 6.76 million, the National Association of Realtors (NAR) said Friday. The December sales marked a 22 percent increase from a year earlier.

Existing-home sales, which make up the bulk of the housing market, totaled 5.64 million in 2020, up 5.6 percent from 2019 and the highest level since the 2006 pace of 6.48 million, NAR said.

This trend is expected to continue with low mortgage rates in 2021 even though mortgage lending standards are tighter, and the supply of homes on the market is lower relative to demand.

Truck sales rise

Sales of Class 8 tractors in December cleared 21,000 to reach the high mark for the year, but were off 7.4 percent from a year earlier, reported. This could be a sign of additional capacity entering the trucking market.

Sales hit 21,402 compared with 23,119 in the 2019 period.

Freightliner, a brand of Daimler Trucks North America, remained December’s sales leader, at 6,979. That was down 8.6 percent compared with a year earlier.

Only three truck nameplates posted increased year-over-year sales in the month, led by International, a unit of Navistar Inc., which rose 33.5 percent to 2,272. Kenworth Truck Co., a unit of Paccar Inc., rose 1.7 percent to 4,218 units, the second-highest total in the month. Volvo Trucks North America, a unit of Volvo Group, notched a 1.3 percent increase to 2,018.

Western Star, the smallest truck maker, fell the most in December, down 36.3 percent to 494 units compared with a year earlier. Mack Trucks, also a Volvo Group brand, fell 28.8 percent compared with a year earlier to 2,150. Peterbilt Motors, also a Paccar brand, fell 14.8 percent to 3,270.

ATA reports tonnage increase

Trucking closed the crazy year of 2020 on an upswing, with truck tonnage in December rising a seasonally adjusted 2.3 percent year-over-year and jumped 7.4 percent compared with November in the strongest month-over-month gain since summer, American Trucking Associations (ATA) reports.

The index not only registered the largest monthly gain since June, but it also had the first year-over-year increase since March.

For all of 2020, tonnage was down 3.3 percent compared with 2019. Tonnage rose 3.3 percent that year.

Current trucking market

In the week ending January 24th, demand for truckload shipments on the spot market continued to decline in January, coming down from the peaks set in 2020. As a result, freight rates have fallen across the board, with prices lower on most trucking lanes. Here are the spot rate trends according to DAT Solutions:

October           $2.40 per mile

November       $2.44 per mile

December       $2.46 per mile

January           $2.41 per mile

Intermodal drives rail growth

Intermodal gains continued to drive growth in U.S. freight-rail volume during the week ending Jan. 16 compared with the same week last year, according to Association of American Railroads (AAR) data.

For the week, total rail traffic increased 5.8 percent to 528,547 carloads and intermodal units. Although carload traffic declined 2 percent to 232,550 units, intermodal volume climbed 12.8 percent to 295,997 containers and trailers.

Five of the 10 carload commodity groups the AAR tracks on a weekly basis posted an increase. They included grain, up 8,246 carloads to 27,613; metallic ores and metals, up 1,715 to 23,325; and farm products excluding grain and food, up 1,621 to 16,818.

At Wagner Logistics

Well folks, January is in the books and it’s been surprisingly busy as e-commerce continues to drive unexpected volumes. I’m excited about February as we are opening our new operation in the Los Angeles market, our third California facility.

Wagner has taken delivery on our robots and the fulfillment area has been mapped and will go live in a couple of weeks.

Freight volume remains stable and the team is responding to our fair share of opportunities.

I remain impressed with the quality of the teams at Wagner Logistics and their ability to provide innovative solutions to care for our customers. Whether its through an improvement in a process or enhancing visibility through our tailored customer dashboards, the people at Wagner consistently deliver on their promises.

Do you have a transportation RFP or distribution project on your horizon for 2021? We are celebrating our 75th year of history of service to our customers and would love the opportunity to collaborate with you.

As we say every day, Bring it!

Have a great day!

John Wagner Jr. 

About Wagner Logistics

Wagner Logistics was founded in 1946 on the principle that every customer is a big deal and that continues to pervade our mentality, producing a superior customer experience. The company began in trucking and remains dynamic offering top-notch transportation, dedicated warehousing and robust fulfillment services. We strive to produce innovative solutions, in addition to our superior onboarding process which makes transitions seamless, and have been honored 20 years in a row by Inbound Logistics as a Top 100 3PL. Our customers drive our entry into new geographic markets, technological advances and ever-changing distribution challenges. Where do you want to be? Wagner says, Bring It!