A Quick Glance Into The Logistics Market - October 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 4.6% in the second quarter of 2014 according to the third estimate released by the Bureau of Economic Analysis. 

U.S. Trade Deficit The U.S. trade deficit decreased by 0.5% in August to $40.1 billion. Exports rose 0.2% to $198.5 billion and imports rose 0.1% to $238.6 billion.  

Consumer Confidence: The Consumer Confidence Index decreased to 86.0 in September 2014, down 7.9 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 5.9% in September 2014 as there were 248,000 net new jobs. 

Leading Economic Index: The Leading Economic Index for the U.S. increased 0.2% in August to 103.8 (2004=100), following a 1.1% increase in July and a 0.7% increase in June. (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 September to $442.2 billion, down 0.3% from the previous month, and increased 4.3% above September 2013. Non-store retailer sales were up 6.8% from last year. 

Manufacturing & Trade Sales: Total combined sales and manufacturing shipments totaled more than $1.36 Trillion in July 2014, up 0.8% from June and up 5.3% from the previous year. 

Manufacturing & Trade Inventory: Total value of inventory on hand is estimated at $1.75 Trillion in August 2014, up 0.2% from July and up 5.7% from August 2013. 

Housing Starts: In August, housing starts fell 14.4% to an annual rate of 956,000 units. Building permits (an indicator of future housing starts) fell 5.6% to an annual rate of 998,000. Year-over-year, housing starts and building permits in August increased 8.0% and 5.3%, respectively. 

Consumer & Producer Price Index: The consumer price index for all urban consumers decreased 0.2% in August from the previous month. Over the last 12 months, the all items index increased 1.7%. The producer price index for finished goods remained flat in August from the previous month. Prices for finished goods rose 1.8% over the previous year.

 

MULTIMODAL:

Import Volumes: In August, the U.S. imported about $238.6 billion of cargo. August U.S. imports rose 0.1% in terms of value from July, and rose 3.7% year-over-year. 

Export Volumes: In August, the U.S. exported nearly $198.5 billion of cargo, the highest on record. August U.S. exports have increased 0.2% in terms of value over the previous month and rose 4.1% year-over-year. 

Multimodal News Clips: 

  • • This year’s holiday sales are expected to increase 4.1% to $616.9 billion. Holiday sales on average have grown 2.9% over the past 10 years, including 2014 estimates, and are expected to represent 19.2% of the retail industry’s annual sales of $3.2 trillion. 

  • • Total shipments handled by 3PL’s rose 7.2% year-over-year in 2Q 2014, and jumped 8% from the previous quarter. According to a survey, the combined revenue of 3PLs rose 17.3% year-over-year to almost $3 billion. 

  • • Global demand for material handling equipment is projected to increase 5% annually through 2018 to $140 billion. Gains will be strongest for sales of automated conveyors and automated guided vehicles. Sales of automated warehouse equipment are expected to grow 6% in the U.S. during the same period. 

 

RAIL:

U.S. Freight Rail Traffic: Railroad bulk carload freight in September 2014 fell 0.5% from August 2014. Freight traffic in September rose 2.7% from September 2013. Carloads excluding coal increased 5.6% over the previous year. (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 2014 was 4.5% higher than in September 2013, and rose 0.2% from August 2014. Intermodal loadings have experienced year-over-year gains for 58 straight months. (Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

U.S. Intermodal Rates: For the week of September 22, average intermodal rates totaled $2,271 per 53-foot container, 9.1% higheryear-over-year. 

Railroad News Clips: 

  • •The Georgia Ports Authority expects within the year to announce the second of six inland intermodal terminals it plans to develop to expand the port’s reach across the Southeast. The inland terminal projects include collaboration between industries and economic development agencies to provide direct intermodal routes to the Ports of Savannah and Brunswick. 

  • • Genesee & Wyoming saw a 10.5% increase in traffic volumes for August 2014 year-over-year, totaling 179,184 carloads. Commodity categories were led by agricultural products with a 24.9% increase over the same month last year. 

 

TRUCKING:

Trucking Volume: The ATA’s seasonally adjusted cargo index rose 1.6% in August. The August index is the highest on record. The for-hire truck tonnage index rose 4.5% from August 2013. 

Truckload Freight: The spot market for truckload freight in September fell 6.0% compared to the previous month, and was 39% higher year-over-year. Truck capacity rose 7.8% for the month, and increased 17% year-over year.

Trucking Employment: The trucking industry workforce increased by 3,800 employees in September. The trucking workforce increased 2.3% over the previous year.

Trucking News Clips: The number of 3PLs with LTL shipments has risen 18.2% year-over-year as more companies add LTL services. In 2009, fewer than 30% of 3PLs offered LTL services. In 2Q 2014, 70% of 3PLs offered LTL  shipments. The truckload sector accounts for 71% of all 3PL activity, and LTL accounts for 10% of activity. Truckload and intermodal shipments by 3PLs have risen 6.6% and 4.3%, respectively. 

 

AIR FREIGHT:

Air Cargo Traffic: Global air freight traffic in August increased 5.1% from one year ago, and rose 0.2% from the previous month. North American air freight in August rose 5.5% year-over-year. (Global air freight covers international and domestic scheduled air traffic.)

Atlanta Air Cargo Traffic: In August, Hartsfield-Jackson Atlanta International Airport transported 52,187 metric tons of cargo, a 1.2% increase from the previous month and a 0.2% decrease year-over-year. (Source: HJIA)

Air Freight News Clips: Air cargo traffic is projected to grow at an annual rate of 4.7% over the next two decades, with global air freight traffic expected to more than double by 2033. The world freighter fleet is expected to grow with deliveries of 840 new factory-built airplanes and 1,330 passenger-to-freighter conversion airplanes. More than 52% of those deliveries are expected to replace retiring airplanes and the remainder used for growth.

 

OCEAN FREIGHT:

Import Volumes: Import volume through major U.S. container ports is expected to total 1.53 million containers in October, breaking the previous record set in August. In August, the latest month for which numbers are available, U.S. container ports handled 1.52 million TEUs, a 1.5% increase from the previous month and a 2.1% increase from the same month last year. Total U.S. containerized imports are expected to increase 5.3% in 2014. 

Ocean Bulk Freight Rates: The Baltic Dry Index fell 7.3% in September, ending at 1,063. The BDI has fallen 10.3% during the first half of October. (The Baltic Dry Index is an index that tracks and averages worldwide international shipping prices of various dry bulk cargoes.)

Ocean Freight Business News:

  • • A Project Partnership Agreement has been signed, allowing construction on the Savannah Harbor Expansion Project to begin. The project will cost approximately $706 million. The State of Georgia has already set aside the required 40% of the total ($266 million) in order to begin the project while it awaits congressional appropriations for the remaining 60% in federal funding.

  • • Maersk Line plans to invest $3 billion a year for up to five years to order ships with a combined capacity of 425,000 TEUs for delivery between 2017 and 2019. The 425,000 TEU capacity will represent about 30  ships of 14,000 TEUs. The company’s revenue from operations in 2013 totaled $3.7 billion.

  • • The Port of Savannah could overtake New York-New Jersey as the top port on the East Coast within the next 10 years. The port is seeking to more than double its container traffic from 3 million TEUs to 6.5 million TEUs within a decade. More than $1.3 billion in capital improvement plans include increasing the number of ship-to-shore cranes from 22 to 30 and rubber-tired gantry cranes from 116 to 169. Infrastructure improvements are already underway to directly connect the port to nearby interstates and inland intermodal terminals.

 

WAREHOUSING & DISTRIBUTION:

Warehouse Rent Rates:In Q2 2014, warehouse and distribution rental rates in the US averaged $4.97 per square foot, up from $4.91per square foot in the previous quarter. Rental rates for warehouse space averaged $3.29 per square foot in Atlanta and $3.95 per square foot in Savannah. 

Purchasing Managers Index:The National PMI fell 2.4 points to 56.6 in September 2014. New orders fell 6.7 points to 60.0 and production increased 0.1 of a point to 64.6. (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:

  • • Polytech Fibers, a Georgia-based polyester fiber manufacturer, will create 114 jobs and invest more than $12 million into its new 80,000 square-foot manufacturing facility in Chatsworth, Georgia over the next three years. 
  • • Haso USA Inc., a Tokyo-based manufacturer of personal use cleaning products, will create 170 jobs and invest $7 million in a new location in Gwinnett County, Georgia. The 100,000 square-foot facility will manufacture personal wet wipes, mopping wipes, and dusting products. 
  • • Neaton Rome Inc., a leading automotive product manufacturer, will expand in Floyd County, Georgia, creating 50 jobs and investing $8 million into the project. 
  • • Asama Coldwater Manufacturing (ACM), a leading automotive brake manufacturer, will expand in Warrenton, Georgia, creating 40 jobs at a new 80,000 square-foot machining and painting facility. 

 

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