2014 Logistics Gauges Promise Strong Second Half Copyright Denver Post via Getty Images

2014 Logistics Gauges Promise Strong Second Half

Manufacturing sales and employment growth expected.

Manufacturers and shippers are expecting the rest of 2014 to continue its economic growth trend, according to the latest Logistics Market Snapshot, from the Georgia Center of Innovation. U.S. shippers on average expect their volume to rise 3.6% over the coming year, the highest forecast since 2010. Other data points supporting these projections:

  • Railcar and intermodal growth is expected to drive total freight volume, expanding 5% over the next 12 months.
  • Domestic ground and ocean shipping traffic will increase between 3% and 4% during the same period.  

(Source: Wolfe Research)

Manufacturers expect sales to increase by 4.1% and their workforce to grow by 1.7% over the next 12 months. They plan to increase capital investment by 2.3%. Nearly 86% of manufacturers have a positive business outlook, although attracting and retaining a quality work force was the third-biggest business challenge cited by manufacturers, according to the National Association of Manufacturers.

Other highlights from this Snapshot report:

Transportation Indexes:

• Dow Jones Transportation index rose 6.3% during the month of May. (Stock performance of twenty large, well-known U.S. companies in the transportation industry, average of May 10th thru June 10th)

• NASDAQ Transportation Index increased 9.3% in May. (Averaged share weights of NASDAQ-listed companies classified as transportation companies, average of May 10th thru June 10th)

• The May shipments index rose 1% over the previous month and rose 3.6% year-over-year. The May expenditures index rose 1.1% for the month, and increased 11.2% year-over-year. (Source: Cass Information Systems | Cassinfo.com) (Based upon transportation dollars and shipments of Cass clients comprised of over 400 shipping companies)

Rail:

• Railroad bulk carload freight in May 2014 rose 1.3% from April 2014. Freight traffic in May rose 6.1% from May 2013. Carloads excluding coal increased 8.2% over the previous year. (Source: AAR.org) (Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

• Intermodal rail traffic in May 2014 was 8.0% higher than in May 2013, and fell 0.4% from April 2014. Intermodal loadings have experienced year-over-year gains for 54 straight months. (Source: AAR.org) (Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

Trucking:

• The ATA’s seasonally adjusted cargo index rose 1.5% in April. The for-hire truck tonnage index rose 4.8% from April 2013. (Source: American Trucking Association | Trucking.org)

• The spot market for truckload freight in May fell 2.1% compared to the previous month, and was 48% higher year-over-year. Truck capacity rose 6.4% for the month, and was up 1.4% year-over-year. (Source: DAT Trendlines | www.dat.com)

• Orders for heavy-duty Class 8 trucks in North America are expected to total 26,605 units in May 2014. May orders were 6.2% higher than the previous month and 14% higher year-over-year. Class 8 truck orders have now had 16 consecutive months of year-over-year increases. (Source: FTR Associates | ftrassociates.com)

Air:

• Global air freight traffic in April increased 3.2% from one year ago, and fell 1.1% from the previous month. North American air freight in April rose 2.6% year-over-year. (Source: IATA.org) (Global air freight covers international and domestic scheduled air traffic.)

• In April, the index of East-West air cargo rates rose 1.5% from the previous month, and was 5.5% higher year-over-year. The average price of air cargo leaving the United States in April stood at $3.38 per kilogram. (Source: Drewry) (The Drewry East-West Air Freight Price Index is based on the average of rates ($US per kg) for air freight services on 21 major East-West routes.)

Ocean Freight:

• Import volume through major U.S. container ports is expected to surge 7.5% in June over the same month last year as retailers prepare for potential disruptions surrounding the expiring West Coast Port’s labor contract. In April, the latest month for which numbers are available, U.S. container ports handled 1.43 million TEUs, a 9.9% increase from the previous month and a 10.3% increase from the same month last year. Total U.S. containerized imports are expected to increase 6.5% in the first half of 2014. (Source: NRF/Hackett Associates)

Warehousing:

• The U.S. average industrial vacancy rate was 7.9% during Q1 2014, equal to the vacancy rate in the previous quarter. Overall vacancy was 11.7% in Atlanta during the first quarter. (Source: Newmark Grubb Knight Frank)

• In Q1 2014, warehouse and distribution rental rates in the US averaged $5.40 per square foot, equal to the rent rates in the previous quarter. (Source: Newmark Grubb Knight Frank)

Employment

• The unemployment rate in America remained at 6.3% in May 2014 as there were 217,000 net new jobs. (Source: US DOL)

• The trucking industry workforce added 1,500 employees in May. The trucking workforce increased 1.6% over the previous year. (Source: U.S. Bureau of Labor Statistics)

Economic Indicators:

• The Consumer Confidence Index increased to 83.0 in March 2014, up 1.3 points from the previous month. (Source: The Conference Board) (The consumer confidence index is based on a monthly survey of 5,000 U.S. household. It is designed to gauge the financial health, spending power, and confidence of the average U.S. consumer.)

• The Leading Economic Index for the U.S. increased 0.4% in April to 101.4 (2004=100), following at 1% increase in March and a 0.5% increase in February. (Source: Conference Board) (The LEI is a composite of 10 economic indicators that together create an analytic system designed to signal peaks and troughs in the business cycle. The LEI reveals patterns in economic data in a clearer and more convincing manner than any individual component alone.)

•  The consumer price index for all urban consumers increased 0.3% in April from the previous month. Over the last 12 months, the all items index increased 1.8%. The producer price index for finished goods fell 0.2% in May from the previous month. Prices for finished goods rose 2% over the previous year. (Source: US Bureau of Labor Statistics)

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