Written by Wagner Logistics' Chief Customer Officer John Wagner Jr.

Dear Friends, 

Spring has sprung and midwestern rivers have overflowed their banks causing havoc for railroads and truckers alike. The heavy snowfall of the winter has met the warm spring air wiping out rail tracks, bridges and roadways. Interstates have closed at places causing lengthy alternative routes in Nebraska, Iowa and Missouri. Heavy rain is forecasted across the Midwest this weekend won’t help matters. 

As this water works its way east to the Mississippi I expect more problems.

Economic numbers are coming in showing the slowdown that started in December has not yet subsided. Freight is moving, however, if history follows we should see increased traffic in April and May after a long, hard winter. 

Let’s look at the numbers.

Dear Friends, 

It’s been a news filled week with 16 Democrats running for president (not counting Biden), Boeing 737 Max problems, college-gate and the public waiting to hear from Mueller. 

Regardless, there were some economic numbers released that affect logistics and transportation. These numbers explain why transportation providers have seen a softening in the market in January and February, we expect this to reverse itself as we enter the second quarter. 

Let’s look at the numbers. 

Dear Friends, 

It continues to be a rough winter as we enter March. It’s hard to believe we are in the final month of the first quarter, there’s is a lot of numbers coming in. 

The Commerce Department said Thursday the gross domestic product (GDP), a broad measure of the goods and services produced across the U.S., rose at a 2.6 percent annual rate in October through December, adjusted for seasonality and inflation.  After strong GDP performance in the second (3.4) and third quarters (4.2) the year ended at a modest pace. 

Due to weaker global growth and the tapering effects of 2017’s tax-cut boost, slower growth is expected this year, Federal Reserve is predicting 2.3 percent growth in 2019. With strong support from high employment and rising incomes, the rough winter is driving down the GDP in the first quarter this year. 

Consumer spending, accounts for more than two-thirds of the economy, rose at an inflation-adjusted, annualized rate of 2.8 percent in the fourth quarter, pulling back from the third quarter when it rose at a 3.5 percent rate. Consumers bought big-ticket items while their spending on services and nondurable goods slowed. 

Let’s look at some more economic and logistics numbers. 

Dear Friends, 

As we hit the halfway mark in the first quarter, winter won’t give up. A pattern of storms crisscrosses the country causing daily disruptions. I remain hopeful the groundhog was right about an early spring as catchers and pitchers are reporting to spring training. 

Meanwhile, the economy keeps chugging along and job growth continues. All eyes are on the trade negotiations with China and the expectation is that there will be a positive result later this week. 

Transportation capacity appears to have reached a balanced point and that is affecting spot pricing as rates continue to stair step down week after week. 

Let’s looks at some economic and transportation news. 

Dear Friends, 

The arctic front that passed through the Midwest found us with temperatures as cold (or colder) than the North Pole. Freight lanes through the region became unbalanced as snow and ice caused significant delays. 

Thief River Falls, Minnesota, saw minus 77 degrees on Jan. 29th, according to the National Weather Service, while the mercury plummeted in Grand Forks, N.D., to 65 degrees below zero. By the next day Chicago, IL was at minus 23, and central Iowa down to minus 35. 

As this weather moves east I anticipate further issues with trucks and trains moving on time. Regardless, the freight market appears to have achieved some balance as truck capacity has become available. 

As you read year-over-year comparisons this year, keep in mind that 2018 was the mother of all freight markets, the 2019 numbers are bound to look weaker. This does not mean we are in a weak market. 

The federal government is back at it, at least for now. Limited economic data is one of the casualties of a closure, but we do have some numbers to look at. 

Dear Friends, 

The world is being a little crazy during this government shutdown, yet the world still turns and commerce continues. Consumer prices inch up, employment is solid, incomes are growing, and the economy is slowing somewhat. Due to the government shutdown, some agencies are unable to issue recent economic numbers. 

Carrier capacity has loosened a little as we head into the first quarter and industrial warehouse space availability has tightened. 

Let’s look at the numbers. 

Dear Friends, 

Happy New Year to you all! 

2019 begins with turmoil from the ongoing trade war with China, stock market volatility, Democrats taking control of the House, and retailers figuring out who the winners and losers were after a great shopping season. The government shut down underway, we won’t be getting numbers from the Labor or Commerce Department nor the Census Bureau. We will get by nonetheless. 

What can we expect in 2019? I’m not one for a lot of predictions so I’ll be brief before getting to some of the current economic numbers. 

  • Political wars – With the Dems now in charge of the house there will be political battles over investigating Trump, the Mueller investigation, immigration and winding down the wars in Syria and Iraq. The only likely thing to get done is infrastructure and a fight to replace Obamacare with a system that includes preexisting conditions.
  • Data mining and artificial intelligence will continue to develop creating predictive systems to assist in planning for about everything: routes, inventory, labor planning, etc. The Internet of Things (IOT) coupled with advances in robotics in the distribution center will create greater visibility and drive labor productivity.
  • Autonomous vehicles are still a ways off, electric tractors will progress more quickly, and the use of platooning trucks will start getting some traction as demonstration projects.
  • Driver recruitment and retention will continue to be challenging at for-hire and private fleets. This rising driver compensation puts continued upward pressure on freight rates. An infrastructure bill will make the driving situation even worse as construction worker needs will pull from the truck driver employment pool.
  • Freight trends are slowing as we enter the New Year, it may be hard to pass on these higher freight rates. 2018 will be seen as the high-water mark for trucking. 

 Now let’s look at some numbers.