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A Quick Glance Into The Logistics Market - March 2014

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 2.4% in the fourth quarter of 2013 according to the second estimate released by the Bureau of Economic Analysis. 
U.S. Trade Deficit: The U.S. trade deficit increased by 0.3% in January to $39.1 billion. Exports rose 1.8% to $192.5 billion and imports rose 0.6% to $231.6 billion. 
Consumer Confidence: The Consumer Confidence Index decreased to 78.1 in February 2014, down 0.8 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 increased to 6.7% in February 2014 as there were 175,000 net new jobs. 
Leading Economic Index: The Leading Economic Index for the U.S. increased 0.3% in January to 99.5 (2004=100), following no change in December and a 0.9% increase in November. (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 rose in February to $427.2 billion, up 0.3% from the previous month, and up 
1.5% above February 2013. Non-store retailer sales were up 6.3% from last year.
Manufacturing & Trade Sales: Total combined sales and manufacturing shipments totaled more than $1.3 Trillion in January 2014, down 0.9% from December and up 2.5% from the previous year. 
Manufacturing & Trade Inventory: Total value of inventory on hand is estimated at $1.72 Trillion in January 2014, up 0.4% from December and up 3.9% from January 2013.
Housing Starts: In January, housing starts fell 16% to an annual rate of 880,000 units. Building permits (an indicator of future housing starts) fell 5.4% to an annual rate of 937,000. Year-over-year, housing starts and building permits in January decreased 2% and 1.3%, respectively. 
Consumer & Producer Price Index: The consumer price index for all urban consumers increased 0.1% in January from the previous month. Over the last 12 months, the all items index increased 1.6%. The producer price index for finished goods fell 0.1% in February from the previous month. Prices for finished goods rose 0.9% over the previous year. 
 
Multimodal:
Import Volumes: In January, the U.S. imported about $231.6 billion of cargo. January U.S. imports rose 0.6% in terms of value from December, and rose 1.2% year-over-year.  
Export Volumes: In December, the U.S. exported nearly $192.5 billion of cargo. January U.S. exports have increased 0.6% in terms of value over the previous month and rose 3% year-over-year. 
Multimodal News Clips: 
  • The state of Georgia has experienced a record increase in both exports and imports for the fourth consecutive year. According to the Census Bureau, the state moved up one position ranking in both exports and imports in 2013. Georgia increased to the 11th largest exporting state from the 12th. The state also increased from the 9th largest importing state to the country’s 8th largest importing state. 
  • The Home Depot’s online sales increased 50% year-over-year in the 3Q and 4Q 2013. Online sales amounted to $585 million in the 3Q, about 3% or the company’s total sales. The Home Depot will spend $300 million this year on e-commerce-related improvements such as additional fulfillment centers, mobile technology, facility enhancements, and a warehouse management system.
 
Rail:
Freight Cars in Storage: The number of freight cars in storage has decreased to 255,634 (16.6% of the fleet) on March 1, down 11,914 cars from a month earlier. (A freight car is "in storage" if it has had a loaded revenue move since 2005, but not in the past 60 days. Decrease here = more demand
Railroad News Clips: 
  • U.S. Class I railroads originated 108,590 carloads of crude oil in 4Q 2013, bringing total Class I crude oil originations for the year to 407,642 carloads. That’s a 74% increase over the 233,819 carloads originated in 2012. In 2013, crude oil accounted for 1.4% of total U.S. Class I originations. 
  • U.S. freight railroads estimate they will spend about $26 billion to build, maintain, and upgrade their rail networks. In recent years, railroads have spent about 17% of annual revenue on capital expenditures, whereas the average U.S. manufacturer spends about 3%. 
 
Trucking: 
Trucking Volume: The ATA’s seasonally adjusted cargo index fell 4.3% in January. The for-hire truck tonnage index rose 1.2% from January 2013.  
Truckload Freight: 
The spot market for truckload freight in February rose 8.8% compared to the previous month, and was 86% higher year-over-year. Truck capacity fell 12% for the month, and was down 22% year-over-year. 
Trucking News Clips:
  • The ATA quarterly driver turnover rate for large truckload carriers dropped to 91% in the 4Q from 97% in the previous quarter. Driver turnover rate has stayed above 90% for the eighth straight quarter.
 
Air Freight: 
Air Cargo Traffic: Global air freight traffic in January increased 4.5% from one year ago, and rose 1.7% over the previous 
month. North American air freight in January fell 0.7% year-over-year. (Global air freight covers international and domestic scheduled air traffic.)
Air Freight News Clips:
  • Delta Air Lines’ $2.7 billion profit for 2013 was the highest net profit in airline history. The previous record was German carrier Lufthansa’s 2007 profit of $2.6 billion. 
  • Global air cargo demand growth is projected to hit 4% this year, a significant increase over the previously forecast 2.1% growth rate for 2014. This projected cargo growth and improved passenger demand is expected to offset increased fuel prices to improve profitability throughout the industry. Airline profits are expected to total $18.7 billion in 2014. Higher jet fuel costs will add $3 billion to the industry’s bill this year.  
  • American Airlines and United Airlines reported year-over-year cargo growth of 11.2% and 7.5%, respectively, in February. American Airlines totaled 173,529 cargo ton miles while United Airlines logged 182,913 cargo ton miles during the month
 
Ocean Freight:
Import Volumes: U.S. vessel imports in January 2014 totaled nearly 1.6 million TEUs, up 5.7% from the previous year. The 
number of shipments in January totaled 802,948 units, a 6.9% increase year-over-year. 
Ocean Bulk Freight Rates: The Baltic Dry Index rose 13.3% in February, ending at 1,258. The BDI has risen 17.4% during the first half of March. (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 12.4% in March from the same month last year. In January, the latest month for which numbers are available, U.S. container ports handled 1.36 million TEUs, a 5.3% increase over the previous month and a 4.1% increase over the same month last year. Total U.S. containerized imports are expected to increase 4.1% in 2014. 
  • Maersk Line, the world’s largest container line, posted a profit of $1.51 billion in 2013, a 228% increase over the $461 million it earned in 2012. The increase in profit was due to higher volumes and steep cost cuts, which offset lower freight rates. 
  • The container ship capacity on ultra large container vessels, or ships with a capacity of more than 10,000 TEUs, will increase by 31.4% this year, followed by a further 30% in 2015.  
 
Warehousing & Distribution: 
Industrial Vacancy: The U.S. average industrial vacancy rate was 7.9% during Q4 2013, down from 8.1% in the previous quarter. The U.S. vacancy rate is now at its lowest level since Q1 2006. Overall vacancy was 11.7% in Atlanta during the fourth quarter.
Warehouse Rent Rates: In Q4 2013, warehouse and distribution rental rates in the US averaged $5.40 per square foot, up from $5.27/SF in the previous quarter. Rental rates for warehouse space averaged $3.77 per square foot in Atlanta. 
  • Purchasing Managers Index: The National PMI rose 1.9 points to 53.2 in February 2014. New orders rose 3.3 points to 54.5 and production decreased 6.6 points to 48.2. (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.)

Purchasing Managers Index in Georgia: Georgia’s PMI rose 6.7 points to 56.7 in February, the highest reading since March 2013. New orders in Georgia rose 13.1 points to 58.3 and production rose 13.7 points to 54.2. Georgia’s PMI is now 3.5 points above the national PMI. (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:
  • Niagara Bottling, the nation’s largest private label bottled water supplier, will establish a new facility in Coweta County, Georgia. The company’s new 450,000 square foot facility will represent a $52 million investment and will create more than 40 jobs in the area.
  • Gerresheimer Peachtree City, a manufacturer of complex drug delivery systems, will expand in Fayette County, Georgia, creating 120 jobs and investing double-digit millions into the expansion. The German-based company will build and additional 60,000 square foot manufacturing facility on its 35-acre campus.
  • Inalfa Roof Systems, a leading global provider of vehicle roof systems, will expand its recently completed 165,000 square foot regional headquarters in Cherokee County, Georgia by an additional 45,000 square feet. The company will invest an additional $6 million and create 100 new jobs in addition to the 300 already announced in June 2013.
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