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Market Update: Transportation Industry News

Market-Updates_Domestic

In the transportation industry, there are many moving parts that can impact your day-to-day operations. From monitoring driver shortages to tracking diesel pricing, staying current on the events in transportation means you will be better equipped to make knowledgeable business decisions and drive growth and efficiency into your supply chain. This month’s Market Update highlights key factors that impact the transportation industry in North America and will keep you up to speed on the latest news and topics that matter to your supply chain and business.

Large Scale Market Indicators

According to the Bureau of Economic Analysis, consumer purchases, manufacturing, housing, and exports contributed to a 4% increase in GDP in the second quarter, following a 2.1% decline in quarter one. The personal consumption category increased 2.5%. While that number is a bit disappointing, there was a whopping 14% increase in purchases of durable goods, and non-durable goods increased 1.9%. Imports also increased in the second quarter. They detract from GDP but add to domestic freight tonnage, so this is positive for the transportation sector. Read more.

On August 26, 2014, the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) reached a tentative agreement on terms for health benefits, subject to agreement on the other issues in the negotiations. There is cautious optimism that peak season volumes will not be adversely impacted—at this time, cargo is generally flowing as expected throughout the entire U.S. West Coast. Learn more.

Driver Shortage

All available drivers are being utilized. This makes the market vulnerable to seasonal freight surges and, especially, any upside underlying freight growth. The large contract-oriented dry van fleets are announcing major driver compensation increases. Read more.

Government Regulations

On July 29, 2014, the U.S. Senate convened a hearing regarding “Opportunities and Challenges for Improving Truck Safety on Our Highways.” While many in the trucking community have strongly advocated for a roll back and/or suspension of the July 2013 Hours of Service (HOS) changes in favor of a closer look at the costs and unintended consequences of the current rules, the July 29 hearing was a clear signal from our lawmakers that there will be no change in the foreseeable future. Read more.

The role of owner-operators in today’s world is challenging enough without the added regulations of the CARB. To stay compliant, these regulations add a large financial burden on owner-operators. It often requires updating current equipment or purchasing entirely new equipment. Read more.

C.H. Robinson Vice President, North American Truckload Services, Bob Biesterfeld recently addressed some of the impacts of HOS and CARB regulations. Watch the conversation below.

Diesel Pricing

According to the Department of Energy Information Administration (EIA), the average price for diesel per gallon is $3.81—an amount that stands as the lowest price since November 2013. Diesel prices have been down for 21 of the last 25 weeks. Read more.

Which transportation indicators or topics are most relevant to your interests? Leave your suggestions in the comment section.