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A quick glance into the Logistics Market - January 2014

Georgia Logistics complies 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 4.1% in the third quarter of 2013 according to the third estimate released by the Bureau of Economic Analysis. 
U.S. Trade Deficit: The U.S. trade deficit decreased by 12.9% in November to $34.3 billion, the lowest trade deficit since October 2009. Exports rose 0.9% to $194.9 billion and imports fell 1.4% to $229.1 billion.  (Source: US DOC & Census Bureau)
Consumer Confidence: The Consumer Confidence Index increased to 78.1 in December 2013, up 6.1 points from the previous month.(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 decreased to 6.7% in December 2013 as there were 74,000 net new jobs, the fewest in three years. About 347,000 people left the labour force during the month. The labour force participation rate fell 0.2 percentage points to 62.8% in December.
Retail Sales: Retail and food service sales rose in November to $432.3 billion, up 0.7% from the previous month, and up 4.1% above November 2012. Non-store retailer sales were up 9.4% from last year. 
Manufacturing & Trade Sales: Total combined sales and manufacturing shipments totaled more than $1.3 Trillion in October 2013, up 0.5% from September and up 3.9% from the previous year.

Manufacturing & Trade Inventory: Total value of inventory on hand is estimated at $1.69 Trillion in October 2013, up 0.7% from September and up 3.6% from October 2012. 

 

Multimodal

DOT Freight Transportation Index: The USDOT's freight transportation services index rose 1.2% in November 2013. The index’s reading of 116.5 was up 5.2% from November 2012.
Import Volumes: In November, the U.S. imported about $229 billion of cargo. November U.S. imports fell 3.4% in terms of value from October, and fell 1.1% year-over-year.
Export Volumes: In November, the U.S. exported more than $194.9 billion of cargo, the highest on record. November U.S. exports have increased 0.9% in terms of value over the previous month and rose 5.2% year-over-year.

Import & Export Price Index: U.S. import prices declined 0.6% in November. Import prices fell 1.5% over the past year. The price index for U.S. exports rose 0.1% in November. Export prices decreased 1.6% year-over-year. 

Multimodal News Clips:

• U.S. auto sales in 2013 rose 7.6% over the previous year to 15.6 million autos. Ford’s U.S. sales totaled about 2.5 million vehicles, accounting for a 10.8% increase, the largest of any other automaker in 2013. Nissan and Chrysler increased sales more than 9% while sales for Toyota and General Motors rose 7.4% and 7.3%, respectively. U.S. auto sales are expected to rise to 16.5 million vehicles in 2014.  
• U.S. crude oil production averaged 7.5 million bpd (barrels per day) in 2013, the highest annual average rate of production since 1989, and a 1 million bpd increase over 2012. Crude oil production in the U.S. is expected to continue rising to 8.5 million bpd in 2014 and 9.3 million bpd in 2015. Growing expectations put the country on pace to become the world’s largest oil producer by 2015, five years faster than the EIA’s earlier predictions.

 

Rail

U.S. Intermodal Rail Traffic: Intermodal rail traffic in December 2013 was 8% higher than in December 2012, and rose 0.6% from November 2013. Intermodal loadings have experienced year-over-year gains for 48 straight months. For all of 2013, U.S. rail intermodal volume totaled a record 12,831,692 containers and trailers, up 4.6% over 2012. (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 November was 589.5, down 9.8% from the previous month and 5.1% lower year-over-year. (Average monthly price for gallons purchased by freight railroads; Includes federal excise taxes, transportation, and handling expenses)

Railroad News Clips:

The commodity with the largest increase in 2013 was petroleum products. Petroleum product shipments increased by 167,868 carloads, representing a 31.1% increase year-over-year. Coal was the commodity with the largest carload decline in 2013, down 256,751 carloads, a 4.3% decrease from 2012. In 2013, coal accounted for 39.5% of U.S. rail carloads, down from 41% in 2012 and coal’s lowest share since 1995. 
• XPO Logistics will acquire intermodal operator Pacer International for approximately $335 million. The acquisition is expected to close in the second quarter of 2014 and is expected to double the size of XPO’s revenue run rate to nearly $2 billion in 2014. Pacer is the third-largest intermodal operator, handling roughly 10% of all U.S. domestic intermodal freight movements.

 

Trucking

Trucking Volume: The ATA’s seasonally adjusted cargo index rose 2.7% in November. The for-hire truck tonnage index rose 5.8% from November 2012. 
Truckload Freight: The spot market for truckload freight in December rose 11% compared to the previous month, and was 49% higher year-over-year. Truck capacity fell 17% for the month, and was down 2.3% year-over-year. 

Truck Orders: Orders for heavy-duty Class 8 trucks in North America are expected to total 31,506 units in December 2013, the highest December total in eight years. December orders were 50% higher than the previous month and 51% higher year-over-year.

Trucking News Clips:

More than 80% of motor carriers surveyed have experiences a loss of productivity since the new Hours-of-Service rules went into effect, with nearly half stating that they require more drivers to haul the same amount of freight. Amiong commercial drivers surveyed, 67% reoirted that the new rules have resulted in decreases in pay. The impacts in driver wages for all over-the-road drivers total $1.6 billion to $3.9 billion in annualized loss.
• UPS Freight, the nation’s fourth-largest LTL carrier, has secured five years of labour pace with ratification of a new five-year labour agreement by its 13,000 Teamsters.

 

Air Freight

Air Cargo Traffic: Global air freight traffic in November increased 6.1% from one year ago, and rose 2.5% over the previous month. North American air freight in November rose 2.5% year-over-year. (Global air freight covers international and domestic scheduled air traffic.)

Air Freight News Clips:

International airfreight volumes will grow 17% over the next five years. By 2017, the five largest international freight markets will be the U.S., China, Germany, Hong Kong, and the UAE. The U.S. and China are likely to add more than 1 million additional tons each over the forecast period; as a result, China is expected to replace Germany as the second largest airfreight market in 2017. 

 

Ocean Freight

Import Volumes: Import shipment volume at U.S. ports totaled 1.64 million TEUs in September. U.S. vessel imports increased 2% from the previous month and rose 7% year-over-year. (Source: Zepol Corporation | zepol.com)

Ocean Bulk Freight Rates: The Baltic Dry Index rose 25% in December, ending at 2,277. The BDI has decreased 25% during the first half of January. (The Baltic Dry Index is an index that tracks and averages worldwide international shipping prices of various dry bulk cargoes.)

Ocean Freight Business News:

• Import volume through major U.S. container ports is expected to increase 1.8% in December. In October, the latest month for which numbers are available, U.S. container ports handled 1.43 million TEUs, a 0.4% decrease over the previous month and a 6.4% increase over the same month last year. Total U.S. containerized imports are expected to increase 2.3% in 2013. 
• More than 1.6 million TEUs of new capacity are scheduled for delivery in the upcoming year, possibly making 2014 a record-breaking year for capacity. New capacity growth in the upcoming year will be led by Evergreen, Maersk Line, China Shipping Container Lines, and Hamburg Süd, which will each receive between 110,000 and 200,000 TEUs. 
• Deliveries of new container ships are expected to continue through 2016, adding to the industry’s overcapacity problem. The fleet of idled surplus container ships hit 718,000 TEUs in mid-December. The idle fleet averaged 595,000 TEUs in 2013, down from 651,000 TEUs in 2012, mainly due to the record number of vessels scrapped this year. In 2014, the supply-demand gap is expected to widen to 3 percentage points, as supply is projected to increase 7.6% while demand will rise 4.6%. This compares to the 2.6 supply-demand gap estimated for 2013.

 

Warehousing & Distribution

Industrial Vacancy: The U.S. average industrial vacancy rate was 8.36% during Q3 2013, down from 8.65% in the previous quarter. Overall vacancy was 12.33% in Atlanta and 11.06% in Savannah during the third quarter. (Source: Colliers International)

Warehouse Rent Rates: In Q3 2013, warehouse and distribution rental rates in the US averaged $4.79 per square foot, down from $4.81/SF in the previous quarter. Rental rates for warehouse space averaged $3.25 per square foot in Atlanta, and $3.95 per square foot in Savannah. 

W&D Business News:

• Kautex of Georgia, a Germany-based automotive supplier, is adding a 95,000 square foot warehouse onto its current operation in Lavonia, Georgia. The construction is planned to be finished by mid-May 2014 and represents a $3.3 million investment.

 

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