Panjiva points to improved trade numbers with caution

Following a 3 percent gain in the number of global manufacturers shipping to the United States from February to March, there was another 3 percent gain from March to April, according to data from Panjiva, an online search engine with detailed information on global suppliers and manufacturers.

The matching 3 percent sequential gains follow 3 percent declines from January to February and December to January. And on a year-over-year basis, the most recent 3 percent March to April gain tops last year by 8 percent—due to the economy not being in recovery mode at that time.

Panjiva officials said the total number of global manufacturers shipping to the U.S. in April was 137,303, a 2.6 percent gain from March’s 133,779. Panjiva also said that there was an 11 percent annual increase in the number of waterborne shipments coming into the U.S. in April.

While these numbers are largely positive, Panjiva CEO Josh Green wrote in a blog posting that “year-over-year comparisons are a bit misleading since global trade was a mess last year.

In an interview with LM, Green said it feels like international trade is vulnerable to additional macroeconomic shocks.

“Our modest recovery right now is threatened by the chaos in the financial markets in Europe,” said Green. “The overall signs are promising, but we are not in a recovery that is so robust that we are immune to the threat being created by the instability in Europe.”

Looking at market conditions and how it relates to global manufacturers shipping to the U.S.. there is still some caution when it comes to inventory build up, but Green said that is not “top of mind” for most global manufacturers at the moment. Instead, he said, that there are concerns about production capacity constraints and rising prices that people expect to see as the recovery takes hold.

And with the economy in a modest recovery, Green said these conditions make it feel like a “new normal,” whereas a few weeks back it felt like the worst of the recession was over.  But he again cautioned that the European economic crisis and the decline of the Euro have the potential to derail the recovery.

Advertisements
Posted in Uncategorized | Leave a comment

April retail sales continue upward trend

Keeping in line with retail sales growth from February to March, the United States Department of Commerce and the National Retail Federation recently reported retail sales were up again from March to April.

March retail sales, which include non-general merchandise like automobiles, gasoline, and restaurants, at $366.4 billion were up 0.4 percent from March, which was up 1.6 percent from February, and were up 8.8 year-over-year, according to the Department of Commerce. And total retail sales were up 9.6 percent year-over-year.

The NRF reported that April retail sales (which exclude automobiles, gas stations, and restaurants) increased 0.5 percent seasonally adjusted over March and 4.6 percent unadjusted year-over-year.

“Spring shopping and seasonal weather helped boost sales last month,” said Rosalind Wells, Chief Economist for NRF. “Spending on discretionary items had fallen by the wayside these last few years and we are encouraged to see consumers dipping into that pot once again.”

As LM has previously reported, continued increases in retail are not entirely surprising, considering that various economic indicators and media reports in recent weeks have pointed to some improvements in the job market, and ongoing strength in the manufacturing sector.

And at the same time, consumers have started to emerge from the bunker and begun spending more. This has also been apparent in freight transportation volumes, which are seeing consistent sequential and annual gains, due to increased consumer spending, coupled with retailers slowly building up inventories after deliberately keeping them low for months to better match up with previously sluggish demand following the depths of the recession.

Industry sources have told LM that since November the overall market feels better due to what I will call the retailers putting themselves in a position to have  ample spring inventory in place.

What’s more retail sales are turning in steady performances at a time when unemployment remains high, coupled with the national personal savings rate at about 5.5 percent-compared to zero in the past-which has lowered the new normal consumption rate, and will build up slowly from this point.

While many analysts and economists are calling for continued gains in retail sales, it has led to an outlook of cautious growth which has been sustained, according to Ben Hackett, founder of Hackett Associates.

“These are still relatively good numbers and growth rates,” said Hackett in a recent interview. “We are…seeing consumers wearily come back, and the [inventory] restocking continues to occur. A lot of wholesalers and importers are still working relatively low stocks, with stock-to-sale on a two-month schedule, so there is going to be a continuing re-supply of stocks. People initially thought it was going to be a big one-off in restocking, but we thought it would be slow and steady.”

Posted in Uncategorized | Leave a comment

Railroad shipping: AAR reports steady carload increases during the week ending May 8

Carload freight volumes continued to show steady increases for the week ending May 8, with volumes up for the 11th consecutive week, according to data released by the Association of American Railroads.

Weekly carload volumes-at 288,905-were up 14.7 percent year-over-year and down 13.9 percent compared to 2008. This was in line with the week ending May 1 at 295,718 carloads and the week ending April 24, which hit 298, 218, and is the highest weekly carload level since December 2008, according to the AAR.

Carloads in the West were up 13.7 percent year-over-year and down 9.1 percent compared to 2008. And in the East carloads were up 16.3 percent year-over-year and down 20.1 percent compared to 2008.

In October 2009, the AAR began reporting weekly rail traffic with year-over-year comparisons for the previous two years, due to the fact that the economic downturn was in full effect at this time a year ago, and global trade was bottoming and economic activity was below current levels.

Intermodal container and trailer volumes-at 208,809 trailers and containers-was up 14 percent year-over-year and down 9.2 percent compared to 2008. Intermodal container volume was up 15.9 percent year-over-year and down 2.2 percent compared to 2008. Trailer volume was up 4.3 percent annually and down 34.7 percent compared to 2008.

On a sequential basis, total intermodal loadings were below the weeks ending May 1 and April 24, which hit 213,013 and 212,347, respectively.

As LM has reported, recent railroad volume growth could lead to a bright picture for the remainder of 2010, according to industry analysts.

“Recent Class I commentaries…paint a bright 2010 industry picture,” wrote Jason Seidl, Dahlman Rose research director in a recent report.

Seidl also noted that railroads appear to be well-positioned to maintain a low cost structure as volumes continue to return through things like a better strategic approach to cost-cutting, ongoing investments in infrastructure upgrades, maintenance, and new projects, which will improve their networks to avoid future recovery-related congestion, and access to locomotives and cars in storage, which can be used at lower incremental costs as traffic improves.

On a year-to-date basis, total U.S. carload volumes at 5,058,563 carloads are up 5.8 percent year-over-year and down 13.9 percent compared to 2008. Trailers or containers at 3,674,852 are up 10 percent year-over-year and down 8.2 percent compared to 2008.

The strong sequential growth in recent weekly railroad volumes serves as confirmation of previous so-called “green shoots” that railroad volumes were rebounding, according to industry experts.

Of the 19 products tracked by the AAR, 18 were up year-over-year, with metals up 99.7 percent and metallic ores up 70.2 percent. Grain mill products were down 5.1 percent.

Weekly rail volume was estimated at 32.2 billion ton-miles, which was up 16.2 percent year-over-year. And total volume year-to-date at 553.6 billion ton-miles was up 6.7 percent year-over-year and down 10.4 percent compared to 2008.

Posted in Uncategorized | Leave a comment

IANA reports solid intermodal growth for Q1

Spurred by increased consumer demand and inventory replenishment, intermodal volume for the first quarter trended positive due in large part to growth on the domestic side, according to the most recent Market Trends report from the Intermodal Association of North America (IANA).

IANA reported that first quarter total intermodal loadings at 3,019,310 were up 8.4 percent year-over-year, topping the fourth and third quarters of 2009, which were down 6.4 percent and 16.4 percent, respectively, year-over-year.

And three of the four major intermodal categories tracked by IANA all saw positive year-over-year growth in the first quarter. Domestic containers—at 1,034,036—were up 15.7 percent. All domestic equipment—at 1,417,400—was up 9.0 percent. IANA noted that in the U.S. all U.S. regions recorded increases in domestic container shipments greater than 10 percent annually.

The only negative indicator for the quarter was trailers—at 383,364—representing a 5.9 percent decline. Trailer volume has been down 19 of the last 21 quarters.

IANA Vice President of Member Services told LM that this report is good news on a number of fronts, the most significant one being the 15.7 percent bump in domestic containers compared to the same timeframe a year ago, when they were also up 0.1 percent year-over-year.

“Last year for this quarter, domestic containers [at 893,506] hit their highest point, when everything else was off,” said Malloy. “That is the biggest takeaway of this report.”

While many economic indicators are improving and showing signs of growth, Malloy cautioned that first quarter figures are matched against a dismal first quarter of 2009, when the economy was still very sluggish. What’s more, a closer look reveals that total intermodal loadings for the first quarter are 11.1 percent below the roughly 3.4 billion loadings for the first quarter of 2007, which was the best first quarter performance ever, according to IANA.

On the international side, Malloy explained that while there was nearly 8 percent annual growth, actual quarterly performance was somewhat misleading, with January being moderate, February a little bit better. And a very strong March ended up representing the bulk of quarterly growth.

“March made the whole quarter look good, but trending-wise things are moving the right way,” noted Malloy.

IANA’s first quarter data, coupled with strong intermodal growth signs of late from the Association of American Railroads and FTR Associates, supports the anecdotal consensus that it is becoming more popular among shippers, even though straight trucking movements still account for more than 70 percent of all freight transportation activity.

IMC performance: Intermodal Marketing Companies saw percentage gains on an annual basis in the first quarter, with intermodal loads—at 257,332—up 12.1 percent, and total loads—at 398,960—at 6.7 percent. Highway loads—at 141,628—were down 1.8 percent. Intermodal and highway revenue at $578,254,686 and $179,359,127 were up 16.2 percent and 14.1 percent, respectively.

Even though most key IMC metrics were up annually, they were largely down compared to the fourth quarter of 2009. Malloy attributed this to a bit of volume uptick in the fourth quarter, which due to late year growth.

While IMC growth on a sequential basis, the overall outlook looks positive for 2010, according to IANA.

“With the first quarter off to a quick start, it looks like intermodal is poised for a strong rebound in 2010,” read the Market Trends report. “Economic recovery, continued strong service levels, growing domestic container fleets, rising fuel prices and broadening railroad product offerings all are fueling the industry’s sharp turnaround from the difficulties of 2009.”

Posted in Uncategorized | Leave a comment

Trucking largely exempt from NMB ruling on union organizing

By John D. Schulz, Contributing Editor

WASHINGTON—After decades of playing defense, Big Labor is going on offense following a recent ruling by the National Mediation Board might make it easier to organize workers in the airline and railroad industries.

By a 2-1 vote, the NMB said it would recognize a union if a majority of workers who cast ballots voted for union representation. In the past, the rule required a majority of all workers—in effect, counting all those who did not cast ballots as “no” votes.

Richard Trumka, president of the AFL-CIO, a federation of 56 of the largest unions in the country, called the NMB ruling an “important and essential step” toward ensuring a more democratic process for workers seeking union representation.

“For far too long, the NMB rules have provided an upper hand to corporations encouraging voter suppression, while undermining those participating in the union representation election process,” Trumka said in a statement. “The new rule issued by the NMB allows for a more fair and consistent democratic process in which a majority of workers participating can have a free and clear choice to join together in a union and gain a voice at work.”

Trumka added that the new rules “will help level the playing field for working people” in the transportation.

But transportation attorneys and other labor experts told Logistics Management that the NMB ruling would have little or no impact on the largely non-unionized trucking industry, which is covered by a different set of federal labor laws.

“This ruling will not affect employers who are covered by the National Labor Relations Act, which uses a simple majority of ballots who are actually rule,” said James H. Hanson, a partner with Scopelitis, Garvin, Light & Hanson, Indianapolis, a law firm specializing in transport labor. “It should have no impact on the trucking industry.”

The difference is NLRA-covered industries, such as trucking, can be organized terminal by terminal. Under the NMB ruling, a union must organize under a nationwide classification of workers. “Trucking is under a whole different set of rules,” Hanson explained.

The rule is expected to have the most immediate impact on the rail and airline industries, most specifically at Delta Air Lines where unions are trying to organize 20,000 flight attendants. But unions already represent about two-thirds of the half-million workers in the rail and air industries.

The more important question for shippers is whether this ruling will have much effect on the trucking industry, which is about 95 percent non-union. That compares to trucking being about 90 percent unionized, mostly by the Teamsters union, in the era prior to deregulation in 1980.

The decline in Teamsters’ influence in trucking reflects the overall decline in union representation in all industries in the past half century. Today only about 7 percent of non-government workers are covered by unions; that compares to about 39 percent in the early 1950s.

The Teamsters union is in the midst of a fierce battle to try and organize FedEx package drivers, who are currently classified as owner-operators. Rival UPS, whose drivers are Teamsters, is pushing for legislation that would move FedEx drivers under the National Labor Relations Act (which also covers UPS workers).

That change would allow employees to organize locally. Currently FedEx workers fall under the Railway Labor Act, largely because when FedEx was founded in 1971 it was only an airline.

The Teamsters and AFL-CIO are working furiously behind the scenes in lobbying to get FedEx under the same set of labor laws as UPS. “We will continue to work for crucially needed improvements to our outdated labor laws so that all working men and women enjoy the freedom to pursue the American Dream,” Trumka of the AFL-CIO said.

Posted in Uncategorized | Leave a comment

Trucking: Caution-Sleep apnea may cause restless nights for shippers

By John D. Schulz, Contributing Editor

BALTIMORE—Shippers, logisticians and their motor carrier partners, who often worry about various problems that can occur at any time for shipments in their supply chains, now have another worry that could keep them awake at nights.

Their latest concern could be that the driver of the truck hauling their shipment might be impaired by a little-known condition known as obstructive sleep apnea, which is increasingly being called a public health problem.

Obstructive sleep apnea (OSA) is a condition in which individuals obstruct their own air passages, causing interruptions in breathing during sleep. It is said to affect as many as 20 million Americans. About 80 percent of people with sleep apnea don’t know they have it.

A recent Federal Motor Carrier Safety Administration-commissioned study on the prevalence of sleep apnea in commercial drivers found that 17.6 percent had mild OSA, 5.8 percent had moderate OSA and 4.7 percent had severe OSA. The actual numbers could be higher; a study of Australian truck drivers showed as many as 60 percent could have sleep apnea.

A person suffering OSA can experience a lack of proper sleep and, as a result, their risk of being involved in a life-threatening accident, such as a motor vehicle crash, is increased. The lack of sleep also causes impairment in judgment and reaction time. The condition affects more men than women, is most common in people over 40 and is especially common in people who are overweight—characteristics common to the nation’s 7 million truck drivers.

Don Osterberg, senior vice president of safety for Schneider National, the nation’s second-largest truckload carrier, has estimated that drivers with untreated sleep apnea might have crash rates as much as six to seven times higher than typical drivers.

Schneider National recently tracked 339 of its drivers with sleep apnea, before and after treatment, and found that following treatment, preventable crashes were reduced by 30 percent, median cost of crashes reduced by 48 percent, health care costs were lowered by 50 percent, resulting in health care savings on average of $539 per driver per month.

Recently, the National Transportation Safety Board, after investigating an truck accident in Tennessee involving a 358-pound male truck driver whose truck crossed the median on Interstate 40 and killed a state trooper, found that the driver was being treated for sleep apnea.

The NTSB concluded the probable cause of the accident was the driver’s incapacitation, owing to the failure of the medical certification process to detect and remove a medically unfit driver from service.

The NTSB recently concluded that the relative risk of accident involvement for individuals with sleep apnea is “clearly elevated” and “quite clearly associated” with the untreated disease. Its recommendations included recommending the FMCSA implement a program to identify truck drivers with sleep apnea and increased education of the affliction for drivers,

As such, some 200 companies were represented as the trucking industry and FMCSA held a two-day sleep apnea and trucking conference last month in Baltimore co-sponsored by the American Trucking Associations and the FMCSA. The objective was to achieve a common understanding of sleep apnea to pave the way for progress on what was uniformly called a critical health and safety issue.

Fatigue is estimated to be involved in 15 percent of single-vehicle fatal truck accidents, with sleep apnea an important factor in those crashes.

Treatments can include surgery and a mask that utilizes continuous positive airway pressure (CPAP) that works by gently blowing pressurized air through the airway at a pressure high enough to keep the throat open. But those devices can be difficult to use in the sleeper berth of a truck, where heat and humidity and power supply issues can affect the device’s effectiveness.

The problem seems to build on itself. Experts at the conference said sleep deprivation seems to increase the occurrence of sleep apnea.

Dr. William K. Sieber, a research health scientist with the National Institute for Occupational Health and Safety said his agency is currently conducting a study of long-haul drivers to determine a screening tool for prediction of apnea. That would be based on frequency of loud snoring, breathing cessation, “snorting” and gasping.

Dr. Lawrence Epstein, a sleep expert from the Harvard Medical School, said sleep apnea is common, dangerous, easily recognized and treatable.

“You can find it—if you ask for it,” Epstein said.

Sleep experts agreed the best way for truckers to manage this disease is the “4A” approach—awareness, assessment, adjustment and adherence. The FMCSA is expected to issue new guidance on sleep apnea later this year.

Posted in Uncategorized | Leave a comment

MHIA says industry returns to growth

By Bob Trebilcock, Executive Editor

They say that flat is the new up for business. Based on that measure, better times are ahead for materials handling and automation as the industry returns to growth.

The Material Handling Industry of America is forecasting 6% to 8.5% growth in material handling equipment new orders in 2010, according to the latest Material Handling Equipment Manufacturing Forecast (MHEM). The growth in new orders is accompanied by a 1% to 2% growth in material handling shipments this year.

These were just some of the numbers that were released by Hal Vandiver, vice president of business development for the Material Handling Industry of America (MHIA), at the annual state of the material handling and logistics industry press conference held at NA 2010 during the final week of April.

MHEM defines new orders as orders placed during the year for new materials handling equipment; shipments are based on when that equipment is manufactured and shipped to the customer.

Still, those relatively modest levels of growth follow significant declines in 2009, when material handling equipment orders contracted by 37.4% and shipments contracted by 34.4%. Looking forward, Vandiver is forecasting an acceleration of growth in the second half of 2010, extending into 2011. “The real opportunity is for next year, when we expect both orders and shipments to be growing in the 18% to 19% range,” said Vandiver.

The return to modest growth has been reflected on the show floor at NA 2010. While the number of exhibitors and the amount of show space was down about 20%, attendance was close to even with NA 2008, which was a banner year. Likewise, early sales of space for next year’s ProMat have been strong. “We were able to sell 63% of the show space for next year’s show in just 7 hours,” Vandiver said.

Posted in Uncategorized | Leave a comment