Proving Our Mettle, Earning Our Stripes

John Wagner Jr, President of Wagner Industries gives his thoughts on some of the issues and news that affected the Supply Chain in July 2012.
 
The up and down roller coaster of economic information has continued over the last couple of weeks. Here’s a closer look inside the numbers from my view inside Wagner Logistics.
 
Consumer confidence fell to the lowest level this year in July according to the consumer sentiment index published by Thomson Reuters/University of Michigan.  The index, which asks consumers if they are better off than they were a year ago and if it’s a good time to buy big-ticket items, dropped a point to 72.3 from 73.2 in one month.
 
The Commerce Department said the US economy continues to pull back as a result of slowing consumer spending. This suggests spenders continue to worry about the future and the economic challenges here and abroad.
 
The value of all goods and services produced, which makes up the country’s gross domestic product, grew at an annual rate of 1.5% between April and June, This reading fell from the upwardly revised two percent growth rate during the prior three months and a 4.1 percent rate in the fourth quarter of 2011, creating a clear trend line in the wrong direction.
 
While the economy has grown for 12 consecutive quarters, it still hasn’t been enough to significantly push down the unemployment rate.
 
Consumer spending went up only 1.5 percent during the second quarter which was lower than the 2.4 percent increase in the first quarter.  Durable goods (home appliances, furniture, autos) fell 1.0 percent in the second quarter.
 
On the positive side of the economy, exports grew for the third straight quarter, up 5.3 percent from April through June.  This suggests that the debt problems in Europe are not having the negative effect to the degree expected.
 
Unfortunately the counterpoint to this is that imports, which subtract from overall GDP, grew faster than imports. The US imported at a 6.0 percent rate during the quarter.
 
The much-maligned housing market continues to show improvement with residential and new home building showing the fifth straight quarter of improved investment, up 9.7 percent for the period.
 
Inflation seems to be under control with the Fed reporting the price index for personal consumer expenditures grew only 0.7 percent in the quarter after rising 2.5 percent in the first quarter.
 
LTL carriers continue to present price increases, the latest comes from Old Dominion. ODFL announced an increase in base rates by 4.9 percent effective August 6th. That number is lower than previously announced competitor increases. YRC, Con-Way, FedEx Freight, and ABF all implemented a 6.9 percent increase and UPS Freight announced a 5.9 percent hike earlier in July.
 
UPS management said they are forecasting a one percent GDP estimate for the remainder of 2012 in the United States.  The company also moved capacity out of Asia in response to the slowdown in that economy. UPS is also saying a slowdown is occurring in B2B parcel shipments. That slowdown is countered by an increase in B2C shipments, but they expect to see that segment soften as well.
 
The American Trucking Associations June Truck Tonnage Index was worse than the normal seasonal performance with only a 1.2 percent increase.  ATA believes that this is in line with the financial results coming from the carriers, using the word "lackluster" to describe it.
 
At Wagner Logistics we continue to have a positive attitude despite these disappointing numbers.  Several business opportunities are present and we remain encouraged that our company’s investment in its people and systems continues to drive value in client relationships.  The Wagner Mercury Gate transportation management system is a case in point.
 
By providing superior visibility in client logoed portals and putting solid tools for pricing and optimization in the hands of our experienced professionals, we are moving loads and monitoring performance better than ever before.
 
On the fulfillment and distribution side of our business, the industrial engineering team continues to work on processes and targeted client operations to make them more efficient, holding down cost for our clients.  At a time when clients are hypersensitive about cost, we prefer to find those efficiencies to offset rising costs in insurance, energy and other areas.

Quelle: eyefortransport

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