Logistics Light Pierces Economic Gloom

The following highlights of the most recent logistics numbers (from the Logistics Market Snapshot, courtesy of the Georgia Center of Innovation) show signs of hope as the economy heads into the autumn months:

• The overall vacancy rate of warehouses and DCs across the U.S. is now at the lowest rate since 2008. The rate declined to 9.3% at the end of Q2 as demand picked up around the country's ocean ports and inland ports over Q1. (Cushman & Wakefield and Journal of Commerce)

• According to the NRF, Imported containerized cargo volume for retail products at major U.S. container ports is expected to increase 6.3% in August over the same period last year.

• Building permits in July 2012 were up 6.8% over June, and up 29.5% from July 2011. Housing starts in July 2012 were also up 21.5% from July 2011.

• Transportation employment increased more than 1.9%year-over-year in July and added about 6,900 employees, including:

• Trucking employment grew by 3,100 jobs in July, up 3.3%year-over-year.

• The water transport sector added 1,100 jobs, up 1.7% overJune and up 9.8%year-over-year.

• The railroads added 611 new jobs in June, up 2.4% over 2011.

• Manufacturing employment spiked by 25,000of which 20,500 jobs were from transportation equipment producers.(More than double most economists’ forecasts)

Transportation Indexes:

• The Dow Jones Transportation index was down 1% during July (based on the stock performance of twenty large, well-known U.S. companies in the transportation industry, average of July 10th thru August 10th);

• NASDAQ Transportation Index decreased 4.2% in July (Averaged share weights of NASDAQ-listed companies classified as transportation companies, average of July 10th thru August 10th);

• The USDOT's freight transportation services index fell 0.1% in June 2012 following a steady index rate in May. The Index’s reading of 109.5 was 1.6% higher year-over-year (Source: US DOT);

• The July shipments index fell 0.7% from the previous month and increased 1.8% year-over-year. The July expenditures index decreased 2% for the month, and increased 0.9% year over year (Source: Cass Information Systems, Cassinfo.com, based upon transportation dollars and shipments of Cass clients comprised of over 400 shipping companies);

Imports and Exports:

• In June, the U.S. imported about $227.9 billion of cargo. June U.S. imports have decreased 1.5% in terms of value from the previous month and grew 2.2% year-over-year. (Source: US Census);

• In June U.S. exported more than $185 billion of cargo, the highest amount on record. June U.S. exports have increased 1.7% in terms of value over the previous month and grew 0.7% year-over-year. (Source: US Census);

• U.S. import prices decreased 0.6% in July, the fourth consecutive month of decline. Import prices fell 3.2 %over the past year. The price index for U.S. exports rose 0.5% in July, following a 1.7% decrease in June. Export prices fell 1.2% year-over-year. (Source: Bureau of Labor Statistics).

Global demand for material handling productsis forecast to climb 4%annually through 2016 to $123.6 billion, according to a new study from The Freedonia Group. India and China will likely see the fastest gains due to the rising manufacturing output that will spur demand for distribution equipment. The U.S. market, which accounted for 22% of global salesin 2011, is expected to remain the leading consumer through 2016.

Rail:

• Railroad bulk carload freight in July 2012 remained steady from June 2012. Freight traffic in July fell 0.7% from July 2011. The decrease in freight rail traffic was mainly due to another decline in coal and grain shipments. Carloads excluding coal increased 1.4% over the previous year. (Source: AAR.org; this report includes rail car-loadings by 19 different major commodity categories as well as intermodal units);

• Intermodal rail traffic in July 2012 was 5.6% higher than July 2011 and 2.5% lower than June 2012 totals. Intermodal loadings have experienced year-over-year gains for 32 straight months (Source: AAR.org);

Trucking:

• The ATA’s seasonally adjusted cargo index rose 1.2% in June after falling 1% in May. The for-hire truck tonnage index rose 3.2% year-over-year. (Source: American Trucking Association | Trucking.org);

• The spot market for truckload freight in July fell 24% compared to the previous month, and was 1.9% higher year-over-year. Truck capacity remained the same for the month and was up 8.1% year-over-year (Source: TransCore Freight Index, www.transcorefreightsolutions.com);

Air:

• Global air freight in June rose 0.8% from one year ago and was up 0.6% from the previous month. North American air freight in June rose 4.5% year-over-year. (Source: IATA.org; global air freight covers international and domestic scheduled air traffic. North American traffic includes only domestic freight traffic.)

• In June, average international air cargo prices dipped 8.3% from the previous month. Average air freight rates were down 17.5% year-over-year. (Source: Bureau of Labor Statistics)

Ocean:

• Import shipment volume, in TEUs, at U.S. ports increased 9% in July from the previous month and rose 10.8% from the previous year. July saw the highest volume of imports in one month since August 2010, raising expectations for this year’s holiday season. (Source: Zepol Corporation | zepol.com)

Warehousing:

• The U.S. average industrial vacancy rate was 9.3% during Q2 2012, down 0.3% from the previous quarter. (Source: Cassidy Turley);

Purchasing Managers Index:

• The National PMI 0.1 point to 49.8 in July 2012. New orders increased 0.2% points to 48.0 and production rose 0.3 points to 51.3. (Source: Institute for Supply Management; The PMI combines data on new orders, inventory, production, supplier deliveries, and employment. A reading above 50 indicates that the manufacturing economy is generally expanding.)

Related Editorial:

Outlook for Shippers Is Getting Grimmer

Chrysler’s World Class Manufacturing Leverages Labor

“Mega Deals” Characterize Transportation and Logistics in Second Quarter

Manufacturing Productivity up a Tick

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