A Quick Glance Into The Logistics Market - October 2015

Georgia Logistics compiles a monthly set of facts and figures regarding the Logistics Markets. We selected a few facts to share with you :-

U.S. MARKET:

Gross Domestic Product: The U.S. GDP increased an annualized 3.9% in the second quarter of 2015 according to the most recent estimate released by the Bureau of Economic Analysis on September 25. (Source: US BEA)

U.S. Trade Deficit: The U.S. trade deficit increased 15.2% in August to $48.3 billion. Exports decreased 1.80% to $185.1 billion and imports increased 1.30% to $233.4 billion. (Source: US DOC & Census Bureau) 

Consumer Confidence: The Consumer Confidence Index increased to 103.0 in September 2015, up 1.67% from a revised 101.3 in August. (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.) 

Unemployment Rate: The unemployment rate in America remained unchanged at 5.1% in September 2015. A preliminary 142,000 net new jobs were created in September 2015. (Source: US DOL) 

Leading Economic Index: The Leading Economic Index for the U.S. increased 0.1%in August to 123.7 (2004=100), no change in July 2015, and a 0.6% increase in June. (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.) 

Retail Sales: Retail and food service sales increased in September to $447.7 billion,up 0.1% from the previous month, and up 2.4% above September 2014. Non-store retailer sales were down 0.3% from last year. (Source: US Census)

Manufacturing & Trade Sales: Total combined sales and manufacturing shipments totaled nearly $1.320 trillion in August 2015, down 0.6% from July and down 3.1%from the previous year. (Source: US Census)

Manufacturing & Trade Inventory: Total value of inventory on hand is estimated at$1.811 trillion in August, unchanged from July 2015, and up 2.4% from August 2014. (Source: US Census) 

Housing Starts: In August 2015, housing starts decreased 3.0% from the previous month to an annual rate of 1,126,000 units. Starts for single-family homes were an annualized 739,000 in August 2015, a 3.0% decrease from July 2015. The index of pending home sales (sales that haven’t closed yet but contracts have been signed) was 109.4 in August 2015, down 1.4% from the previous month and up 6.1% from August 2014. (Source: U.S. DOC)

Consumer & Producer Price Index: The consumer price index for all urban consumers decreased 0.2% in September on a seasonally adjusted basis from the previous month. Over the last 12 months, the all items index was essentially unchanged before seasonal adjustment. The producer price index for final demanddecreased 0.5% in September from the previous month. Prices for finished goodsdecreased 1.2% from the previous month. (Source: US Bureau of Labor Statistics)

MULTIMODAL:

Dow Jones Transportation Index: Dow Jones Transportation index increased 2.9%during the month of September 2015. (Stock performance of twenty large, well-known U.S. companies in the transportation industry, average of September 10th thru October 10th)

NASDAQ Transportation Index: NASDAQ Transportation Index increased 1.04% in September 2015. (Averaged share weights of NASDAQ-listed companies classified as transportation companies, average of September 10th thru October 10th)

DOT Freight Transportation Index: The USDOT's freight transportation services index rose 0.2% in August 2015. The index’s reading of 123.5 was 30.4% above the April 2009 low during the most recent recession, and the level of freight shipments measured by the Freight TSI was at an all-time high, exceeding the previous high of 123.4 in November 2014. (Source: US DOT) 

Cass Freight Index: The September shipments index increased 1.7% from the previous month and decreased 1.5% year-overyear. The September expenditures index increased 2.4% for the month, and decreased 6.6% year-overyear. (Source: Cass Information Systems | Cassinfo.com) (Based upon transportation dollars and shipments of Cass clients comprised of over 400 shipping companies) 

Import Volumes: In August, the U.S. imported $192.4 billion of cargo, increasing 1.3% from July 2015. (Source: US Census)

Export Volumes: In August, the U.S. exported $124.5 billion of cargo, decreasing 3.2% from July 2015. This was the lowest amount exported since June 2011. (Source: US Census)

Import & Export Price Index: U.S. import prices decreased 0.1% in September, after decreasing 1.6% the previous month. The continued downward trend in nonfuel import prices more than offset an advance in fuel prices. U.S. export pricesdecreased 0.7% in September, after a 1.4% decline the previous month. (Source: Bureau of Labor Statistics) 

E-Commerce: E-Commerce revenue in September 2015 is estimated to be up 11% year-over-year. This September, the share of mobile orders (phone and tablet) out of all e-commerce orders has increased to 28%, up from 23% in 2014. (Source: Custora E-Commerce Pulse) 

Multimodal News Clips:

•  U.S. light vehicle sales were a seasonally adjusted and annualized 18.1 million in September 2015, up from August’s 17.8 million. This is the highest amount since July 2005. (Source: AAR)
• UPS has made a significant expansion to its UPS Worldwide Express service by adding more than 41,000 global postal codes, which it said will result in earlier guaranteed-delivery options for shippers that only previously had end-of-day guarantees. (Source: Supply Chain 24/7)

RAIL:

U.S. Freight Rail Traffic: Total carloads in September 2015 decreased 4.9% from September 2014. Weekly average total carloads in September 2015 were 283,550, the second lowest September on record since 2009. (Source: AAR.org) (Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

U.S. Intermodal Rail Traffic: Intermodal rail traffic in September 2015 was 1.2% higher, year-over-year. The weekly average of 273,196 units in September set a new record for September, breaking the old record set in September 2014. (Source: AAR.org) (Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

Railroad Fuel Price Index: The index of average railroad fuel prices in August 2015 was 319.4, down 10.0% from the previous month and 45.3% lower year-over-year.(Source: AAR.org) (Average monthly price for gallons purchased by freight railroads; Includes federal excise taxes, transportation, and handling expenses)

Class 1 Railroad Employment: Railroad employment in August 2015 decreased 1.19% from the previous month, to 168,997 employees total, the fourth straight month-to-month decline. Total Class 1 rail employment in August increased 0.6%, year-over-year. (Source: U.S. STB)

Railroad News Clips:

• New legislation was introduced that called for an extension of the Positive Train Control (PTC) deadline. The bill would extend the 2015 PTC implementation deadline to the end of 2018. The objective of PTC systems is to prevent train-to-train collisions, over-speed derailments, and incursions into roadway work limits. (Source: Logistics Management)

TRUCKING:

Truckload Freight: The spot market for truckload freight in September decreased 0.8% compared to the previous month, and was 38% lower year-over-year. Truck capacity increased 2.6% for the month, and increased 25% yearover-year. (Source: DAT Trendlines | www.dat.com)

Trucking Employment: The trucking industry workforce decreased by 4,000employees in September. The trucking workforce increased 2.05% over the previous year. (Source: U.S. Bureau of Labor Statistics) 

Trucking News Clips:

• The American Trucking Association reported that the current shortage of truck drivers now stands at almost 48,000 and has the potential to go higher, due in large to industry growth and drivers on the way to retirement. The ATA also reported that if current trends remain intact, the shortage could rise to 175,000 by 2024. (Source: American Trucking Association)
• Third-party logistics provider UTi Worldwide has entered into a definitive agreement to be acquired by Denmark-based global 3PL DSV for $1.35 billion and $7.10 per share. The transaction is expected to be completed between January 1, 2016 and March 31, 2016. (Source: Supply Chain 24/7) 

AIR FREIGHT:

Atlanta Air Cargo Traffic: In August, Hartsfield-Jackson Atlanta International Airport transported 50,921 metric tons of cargo, a 0.10% increase from the previous month and a 2.43% decrease year-over-year. (Source: HJIA)

Jet Fuel Prices: As of September 18, 2015, the global average jet fuel price was $60.1 per barrel; down 0.9% from the previous month, and 46.9% lower year-over-year. (Source: IATA.org, platts.com) (The weekly index and price data shows the global average price paid at the refinery for aviation jet fuel)

Air Freight News Clips:

•  Worldwide sales of semiconductors were $27.7 billion during August 2015, a decrease of 3.0% over the previous year and a 0.5% decrease compared to July 2015. Regionally, year-to-year sales have increased in China, but decreased in the Americas, Europe, Japan, and Asia Pacific/All Other. (Source: Semiconductor Industry Association) 

OCEAN FREIGHT:

Ocean Bulk Freight Rates: The Baltic Dry Index fell 2.52% in September, ending at 888. The BDI has decreased 15.1% year-to-date. (Source:www.bloomberg.com/quote/BDIY:IND) (The Baltic Dry Index is an index that tracks and averages worldwide international shipping prices of various dry bulk cargoes.)

Ocean Freight Business News:

• The Port of Savannah received its first citrus imports from Peru this month. The first container of imported produce to undergo cold-treatment arrived at the Port, carrying tangelos from Peru. The tangelos are part of a pilot program in which citrus, grapes, and blueberries are chilled for at least 17 days prior to entry into the U.S. to protect against fruit flies. (Source: GPA)
•  Continuing the work on the Savannah Harbor Expansion Project, the 200-foot Great Lakes Dredge and Dock vessel the Alaska began work on a $134.5 million contract issued to dredge the 18.5-mile outer harbor to 49 feet at mean low water. (Source: GPA) 

WAREHOUSING & DISTRIBUTION:

Warehouse Rent Rates: In Q2 2015, warehouse and distribution rental rates in the U.S. grew at their fastest pace since the beginning of 2008, hitting $5.42/NNN (triple net lease). This is up 4.8% from the second quarter of 2014, when rents average $5.18/NNN. Rental rates for warehouse space averaged $3.81/NNN in Atlanta, up 8.2% from the previous year. (Source: Cassidy Turley)

Purchasing Managers Index: The National PMI fell to 50.2% in September 2015, a decrease of 0.9% over the previous month. September was the 34th straight month where the PMI was above 50. New orders decreased 1.6 points to 50.1%. Productiondecreased 1.8 points to 51.8%. (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.) 

W&D Business News:

•  Sandler AG, a German textile supplier, will complete construction of a manufacturing plant in Perry, GA. This represents an investment of more than $30 million and will create more than 140 new jobs in Houston County. (Source: Georgia.org)
•  Boeing Commercial Airplanes will invest $81.7 million to retrofit and equip their existing defense-related facility in Macon-Bibb County for the manufacturing of 747-8 fuselage panels, creating up to 200 new jobs over the next three years. Upgrades and improvements to the existing 200,000 sqft facility will include modifications to the building and existing equipment and installation of new equipment. (Source: Georgia.org
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