In the transportation industry, there are many moving parts that can impact your day-to-day operations. From monitoring carrier capacity and driver shortages to tracking diesel pricing and government regulations, staying current on relevant news 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, including the latest Shippers Conditions Index (SCI) reading, which, while at the highest it’s been since 2010, has been predicted to be short-lived.
Large Scale Market Indicators
Though backlogged containers at ports are starting to clear, it will likely be months until they are all offloaded from ships, drayed to warehouses, and unloaded for transfer to trucks. When you add in time for customs, you may be looking at a 25- to 41-day lag, which overlaps with the start of increasing spring shipping volumes. It might be time to reconsider what constitutes “normal” conditions at the ports. Read more.
The Shippers Conditions Index (SCI) rose to 2.6 in January, reflecting a continuation of short-term positive indicators, including a one month reaction to fuel price reductions and adjustments for reversal of the 2013 hours of service (HOS) changes.
ACT Research Co. forecasted that the Class 8 market will reach a peak in 2015 as a favorable freight market and improved trucker profitability lift the industry.
The U.S. unemployment rate is dropping below 5.2%, which is considered “full employment” by some economists. At the same time, trucking companies are short at least 30,000 drivers while running at near full utilization. That’s a sign that demand for trucking capacity outweighs supply as the U.S. economy continues to accelerate. Read more.
Driver turnover is impacting carriers. According to the American Trucking Associations (ATA) Chief Economist Bob Costello, “We are seeing the turnover gap between small and large carriers narrow to levels we haven’t experienced in some time. This is likely the result of larger fleets raising pay, offering bonuses, and attracting more and more drivers from smaller fleets to fill seats. These figures show us that the driver shortage is getting more pervasive in the truckload sector.” Read more.
The Senate held a hearing on the oversight and reform of Federal Motor Carrier Safety Administration (FMCSA). It was the first in a series that will examine the reauthorization of highway safety programs and will focus specifically on truck safety programs and FMCSA regulations. Read more.
Transportation Secretary Anthony Foxx resubmitted his and the White House’s highway funding plan to Congress. A six-year, $478 billion transportation reauthorization package, it ups both the length and the price tag from last year’s more modest Grow America Act.
At $2.824 per gallon, national average retail diesel prices have fallen to a five-year low. This is the third straight week of declining diesel prices.
Which transportation indicators or topics are most relevant to your interests? Leave your suggestions in the comment section.