Supply Chain Blog
Hi Friends,
As we approach Thanksgiving, I am thankful for my family, friends, customers and co-workers. I am also extremely thankful for the U.S. consumers as their spending is keeping the economy in positive territory.
While manufacturing indexes are showing a recession, the economy is riding on the service industries and retailing. Non-store retailers saw 14.3 percent annual growth in October demonstrating that there continues to be significant upside to on-line sales.
The logistics industry continues to be slow as rail traffic, import/exports, and trucking look at tepid markets. There are varying reasons for this such as the trade war, strong dollar, over capacity, I’m watching what happens over the next several weeks to see if there is a partial deal on trade with China and how hot the retail sales are going into the holidays.
The positive logistics markets remain in the e-commerce fulfillment, last-mile and warehousing arenas. Industrial real estate continues to be hot as absorption is high even with all the new construction and rising lease rates.
Let’s look at the numbers.
Hi Friends,
A sense of optimism has returned and although there are headwinds, the U.S. economy continues to expand. This translates to a modest freight market compared to a year ago but from a trucker perspective, over-capacity continues to depress pricing. It’s possible the trade war may be drawing to a truce adding to the sense of hopefulness.
There is a lot of data to cover so let’s dive into the numbers.
Hi Friends,
The third quarter was soft for many of the publicly held transportation companies, as we expected. Retailer’s cash registers also didn’t ring up as many sales as expected in September after a robust August.
Housing and manufacturing numbers also disappoint. Does this mean we are heading into a recession?
No, the U.S. economy is still in growth mode.
The consumer is in a good place as employment levels are high and wage increases are occurring. The economy is ticking along at a slower rate but in positive territory. It’s not on a tear like it was in 2018 so comparisons to last year are misleading.
Let’s look at the numbers.
Hi Friends,
Since I last wrote, a team from Wagner attended the CSCMP annual conference in Anaheim, CA. The conference is always one of my favorites to gain a sense of what direction the supply chain industry is headed. Once again, an array of technology, robotics and service offerings were on display.
Despite the zoo in Washington, the economy and freight market appear to be slowly improving. On the heels of the Federal Reserve lowering the fed interest rate, we learned that factory output increased 0.5 percent month-over-month in August.
Regardless of the downward trend in the world economy, the U.S. is holding its own. Let’s look at some numbers.
Hi Friends,
While much is made of the slower freight market across all modes, we tend to forget that year-over-year comparisons are bound to disappoint after 2018’s historic market. The market turned fast as the pricing power pendulum swung back to the shipper in 2019.
I believe that in 2020 we will see the market reach an equilibrium as. Many smaller carriers who lived off the sky-high spot rates last year are now injured financially and leaving the playing field either through bankruptcy or by winding down operations. These are the carriers who cut a fat hog off sky-high spot rates in 2018 and added equipment only to see pricing fall in 2019.
As a country, we are in a political climate which breeds uncertainty as we see an economy that keeps moving forward with little enthusiasm. Tariff worries, high deficits, labor shortages and politicians telling us how bad things are.
Yet, the unemployment rate continues to remain low, at 3.7 percent, and average hourly earnings for private employees rose by 11 cents to $28.11, positive news. The consumer is keeping the economy in growth mode as represented in the August retail sales number.
Let’s look at the numbers.