A Quick Glance Into The Logistics Market - November 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 3.5% in the third quarter of 2014 according to the first estimate released by the Bureau of Economic Analysis.

U.S. Trade Deficit: The U.S. trade deficit increased by 7.6% in September to $43.0 billion. Exports fell 1.5% to $195.6 billion and imports remained the same at $238.6 billion. 

Consumer Confidence: The Consumer Confidence Index increased to 94.5 in October 2014, up 5.5 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 fell to 5.8% in October 2014 as there were 214,000 net new jobs.

Leading Economic Index: The Leading Economic Index for the U.S. increased 0.8% in September to 104.4 (2004=100), following no change in August, and a 1.1% increase in July. (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 October to $444.5 billion, up 0.3% from the previous month, and increased 4.1% above October 2013. Non-store retailer sales were up 9.1% from last year. 

Manufacturing & Trade Sales: Total combined sales and manufacturing shipments totaled more than $1.35 Trillion in September 2014, remaining the same from August and up 4.1% from the previous year. 

Manufacturing & Trade Inventory: Total value of inventory on hand is estimated at $1.76 Trillion in September 2014, up 0.3% from August and up 5.3% from September 2013. 

Housing Starts: In September, housing starts rose 6.3% to an annual rate of 1,017,000 units. Building permits (an indicator of future housing starts) rose 1.5% to an annual rate of 1,003,000. Year-over-year, housing starts and building permits in September increased 17.8% and 2.5%, respectively. 

Consumer & Producer Price Index: The consumer price index for all urban consumers increased 0.1% in September from the previous month. Over the last 12 months, the all items index increased 1.7%. The producer price index for finished goods fell 0.1% in September from the previous month. Prices for finished goods rose 1.6% over the previous year.

 

MULTIMODAL

Import Volumes: In September, the U.S. imported about $238.6 billion of cargo. August U.S. imports remained the same in terms of value from August, and rose 2.6% year-over-year.

Export Volumes: In September, the U.S. exported nearly $195.6 billion of cargo. September U.S. exports have decreased 1.5% in terms of value over the previous month and rose 2.8% year-over-year. 

E-Commerce: E-Commerce revenue in October 2014 is up 12% year-over-year, with e-commerce orders also up 12% over the same period. Mobile orders (phone & tablet) accounted for 20% of all e-commerce orders in October, up from 15% during the same month last year. 

Multimodal News Clips:

  • For the second consecutive year, Georgia has been ranked the No. 1 state in the nation for business by Site Selection Magazine. In earning the top spot, the publication cited the state’s many logistical advantages and cutting edge work-force training programs. The overall ranking is based on a survey of corporate site selectors and a set of criteria that includes the number of qualified new projects. 
  • The average holiday shopper will spend $804.42 this year, up nearly 5% over last year. Approximately 56% of shoppers plan to shop online, up from 51.5% in 2013, and the most in the survey’s 13-year history. On average, shoppers will do 44% of their holiday shopping online.

 

RAIL

U.S. Intermodal Rates: For the week ending November 3, average intermodal rates totaled $2,259 per 53-foot container, 13% higher year-over-year. (The Intermodal Rate Index is a weekly reported average spot rate for 36 major U.S. intermodal lanes.)

Railroad News Clips:

  • Total intermodal volumes grew 5.1% in the 3Q versus the same period in 2013. Domestic and international volumes were up 5.5% and 4.7%, respectively. Domestic container growth led the way with a 7% increase to 1.56 million units. 
  • CSX has announced record results for Q3 2014 in revenue, operating income, net earnings and earnings per share. Revenue during Q3 increased 8% year-over-year to $3.2 billion. The company produced operating income of $976 million, a 16% increase year-over-year. 

 

TRUCKING

Diesel Prices: U.S. average diesel prices rose to $3.68 per gallon last week. The U.S. average diesel price was 15.5¢ lower than the same week last year. The average price of diesel in the lower Atlantic states was $3.50 per gallon.(Reflects the costs and profits of the entire production and distribution chain.)

Trucking Employment: The trucking industry workforce increased by 3,900 employees in October. The trucking workforce increased 2.6% over the previous year. 

Trucking News Clips:

  • The 21 public motor carriers tracked by JOC.com increased their combined revenue 10.7% year-over-year in the 3Q to a combined $10.74 billion. Truckload companies increased their revenue by an average 11.9% year-over-year to $4.4 billion. LTL company revenues rose 9.9% year-over-year to $6.3 billion. 

 

AIR FREIGHT

Atlanta Air Cargo Traffic: In September, Hartsfield-Jackson Atlanta International Airport transported 49,977 metric tons of cargo, a 4.2% decrease from the previous month and a 1.8% decrease year-over-year.

Jet Fuel Prices: As of November 7, 2014, the global average jet fuel price was $102.7 per barrel; down 3.5% from the previous month, and 13.9% lower year-over-year. (The weekly index and price data shows the global average price paid at the refinery for aviation jet fuel)

Air Freight News Clips:

  • Air cargo traffic is projected to grow at an annual rate of 4.1% through 2018. The Middle East will be the fastest-growing region over the next four years, with an average growth rate of 4.7%. By 2018, the U.S. is expected to remain the largest air freight market with 10.1 million tons, followed by China with 5.6 million tons. 

 

OCEAN FREIGHT:

Import Volumes: Import volume through major U.S. container ports is expected to total 1.4 million containers in November. In September, the latest month for which numbers are available, U.S. container ports handled 1.59 million TEUs, a 5.2% increase from the previous month and a 10.9% increase from the same month last year. Total U.S. containerized imports are expected to increase 6.4% in 2014. 

Ocean Freight Business News:

  • At least a half dozen carriers are planning to implement a port surcharge today amounting to $1,000 per FEU on customers because of worker slowdowns and the accompanying congestions at West Coast ports. Hanjin, CMA CGM, Hyundai Merchant Marine, Yang Ming, Evergreen, and NYK all sent notices about the surcharge to shippers. More carriers are likely to follow suit in the upcoming weeks.
  • Ocean fuel surcharges are falling in response to the drop in fuel prices. In the trans-Atlantic eastbound market, the average bunker fuel surcharge per FEU has dropped nearly 4% from August. High-sulfer bunker fuel has dropped from $602 per metric ton in June to $470 in October, a 22% decrease. The drop in fuel prices is expected to help carriers boost 3Q earnings. 

 

WAREHOUSING & DISTRIBUTION:

Industrial Vacancy: The U.S. average industrial vacancy rate was 8.0% during Q3 2014, down from 8.2% in the previous quarter. Overall vacancy was 11.2% in Atlanta and 9.3% in the South during the third quarter. 

Warehouse Rent Rates: In Q3 2014, warehouse and distribution rental rates in the US averaged $5.20 per square foot, up from $5.16 per square foot in the previous quarter. Rental rates for warehouse space averaged $3.68 per square foot in Atlanta and $4.78 per square foot in the South. 

Industrial Absorption: Net absorption in the US during Q3 2014 totaled more than +41.6 million square feet. Overall absorption totaled +1.7 million square feet in Atlanta. Absorption in the South led all other regions, totaling more than +15.4 million square feet. (Absorption is the net change in occupied space between two points in time. Positive absorption means that previously unoccupied space is being occupied.)

W&D Business News:

  • Walmart will locate to a new distribution facility in Union City, Georgia, creating more than 400 jobs and investing $108 million into the project over the next three years. The 1.2 million square-foot state-of-theart warehouse facility will support Walmart’s e-commerce operations.
  • Badcock will construct a new regional distribution center in LaGrange, Georgia, investing $22 million and employing more than 100 new workers. The 535,000 square-foot facility will include enhanced energy efficiency technologies and is designed for expansion to 700,000 square feet.
  • Kubota Manufacturing America, a leading manufacturer of small tractors, RTVs and lawn mowers, will expand its headquarters in Gainesville, Georgia, creating an additional 650 jobs and investing $100 million into the project over the next several years.
  • Mannington Mills, the world’s leading manufacturer of luxury vinyl tile, will expand in Morgan County, Georgia. The project will create 200 new jobs as the company invests $50 million over the next four years. The new 550,000 square-foot manufacturing and distribution facility is the company’s second announced expansion in the course of a year.
  • AWEBA Group, one of the largest and most advanced die-making enterprises in Europe, will establish its first North American headquarters in Dublin, Georgia. The company will invest $6 million and create 52 new jobs to produce tools and dies for the NAFTA region.

 

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