Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Subscribe to this list via RSS Blog posts tagged in 2014 freight forecast

As the year 2013 winds down, it is time to reflect on the major transportation trends of the past year.  While I saw and read about a wide range of developments, these are the ones that resonated most with me.

1.Technology Comes to Freight Transportation

Last year I predicted that we would see a flurry of new technologies come to freight transportation.  They did and I wrote about some of these new companies on several occasions during the year.  Technology was successfully applied to the freight brokerage business, freight portals, LTL density calculations and to other segments of the industry.  Buytruckload.com, PostBidShip, Freightopolis, QuoteMyTruckload,  and Freightsnap were featured in various blogs during the year.  They are changing the way business is done in freight transportation.  Watch for more of these companies to surface in 2014.

2013 has been called the Year of the Network by numerous supply chain and transportation industry thought leaders.  Companies that built a successful supply chain trading partner network focused on three elements:

Connectivity— unite disparate systems and trading partners

...
Hits: 11410
0
Continue reading 0 Comments

At the end of each year, I like to take stock of the major freight transportation stories of the past twelve months and look ahead to the trends that will drive the industry in the coming year.  The two blogs that I write are prepared from my perspective as a consultant to shippers and carriers.

This year I would like to hear from you.  Those of you who follow this blog observe trends in your segment of the industry.  Please take a minute to share them with me.  Please post them on this blog or send a private e mail to dan@dantranscon.com

Please feel free to select any major trend or trends that are having or will have a major impact on our industry, whether regulatory, economic, technological, demographic, consumer behavior, environmental, modal shifts or business strategy.

To broaden the range of inputs and perspectives, I will also post this request on Facebook, LinkedIn and Twitter.  In the coming weeks I will be preparing my two lists.  The lists will include a blend of my observations and yours.  Look for these two blogs in mid-December.  Thank you to those of you who take the time to share your observations with me.

 

...
Hits: 22248
0
Continue reading 0 Comments

Last week the Stifel Transportation & Logistics Research Group hosted a webinar event that featured two speakers from the Transportation Intermediaries Association, Mark Christos, TIA Board Member, Chair - 3PL Market Report and Robert Voltmann, President and CEO.  The two gentlemen presented some of the findings from their latest benchmarking report.  This data, supplied by a sample of TIA members, provides one indicator of how the transportation industry is performing.

The report looks at trends in truckload, intermodal and LTL shipping.  It also captures information on fuel related costs.  The current (first quarter 2013) report contained some interesting findings.

The percentage of transportation intermediaries offering LTL services has now increased to over 60 percent.  While LTL shipments represented 6 percent of TIA member revenues in 2010, this has gone up to 8 percent in 2012.  First quarter LTL revenues, among the TIA members reporting results, were up 6.5% year/year and compared to 4 percent increase for intermodal and 2.4 percent for truckload.  LTL profit margins were up 140 basis points year/year (1.4%) as compared to a 90 basis points drop for intermodal and a 70 basis points decline for over the road truckload.

LTL profit margins increased to 18.6 percent as compared to 10.0 percent for intermodal and 13.8 percent for truckload.  It was also interesting to note that small LTL players (e.g. less than $16 million in annual sales) experienced a 240 basis points increase in year/year profits while the very large LTL carriers (e.g. over $100 million in annual revenue) experienced a 200 basis points improvement.  The mid-size LTL carriers (e.g. $16 million to $100 million) suffered a 110 basis points decline in profit margins.  In one of their charts, one could see that the upward trend on LTL profit margins has been maintained since the fourth quarter of 2011. 

One of the TIA representatives noted that there are two developments that are creating a bit of an industry shakeout.  The new requirement for a freight broker to post a $75,000 surety bond is posing a challenge for some of the smaller players.  Anecdotal evidence seems to indicate that brokers moving less than 5 loads a day are finding the new environment most difficult to manage. 

...
Hits: 13647
0
Continue reading 0 Comments

Last week the Council of Supply Chain Management Professionals released its 24th annual State of Logistics Report. Last year, business logistics costs were once again 8.5 percent of U.S. Gross Domestic Product (GDP), the same level they hit in 2011, the new report says. That means freight logistics was growing at about the same rate as the GDP. Inventory carrying costs and transportation costs rose "quite modestly" in 2012, said the report's author Rosalyn Wilson. Year-over-year, inventory carrying costs (interest, taxes/obsolescence/depreciation/insurance, and warehousing) increased 4% y/y as inventory levels climbed to a new peak. Meanwhile, transportation costs were up 3% y/y predominantly from an increase of 2.9% in overall truck transportation costs.

This "new normal" is characterized by slow growth (GDP growth of 2.5% to 4.0%), higher unemployment, slower job creation (which will primarily be filled by part-time workers due to higher healthcare costs), increased productivity of the current workforce from investment in machinery/technology (and not human capital), and a less reliable or predictable freight service (as volumes rise but capacity does not increase fast enough to meet demand). Wilson noted that slow growth and lackluster job creation has caused the global economy to wallow in mixed levels of recovery. "This month will mark the fourth year of recovery after the Great Recession, and you're probably thinking that here has not been much to celebrate," said Wilson. "Is it time to ask, 'Is this the new normal?'"

For logisticians, the "new normal" means less predictable and less reliable freight services as volumes rise but capacity does not. In areas such as ocean transport, Wilson said, this can mean slower transit times. "I do believe the economy and logistics sector will slowly regain sustainable momentum, but that we'll still experience unevenness in growth rates," Wilson predicted.

For cutting-edge logistics managers, however, the current environment also means great opportunities to secure increasingly tight capacity in an era of shrewd rate bargaining. This is partly because the trucking industry, in particular, is facing a lid on capacity because of higher qualifications for drivers while top carriers are becoming increasingly selective in their choice of customers and in the allocation of their assets.

"Truck capacity is still walking a fine line—few shortages, but industry-high utilization rates," Wilson explained. Truckload capacity continues to remain stagnant (with the majority of new equipment orders for replacement or dedicated fleets and the copious amount of truckload capacity sapping regulations coming down the pipeline) and the assumption that freight demand will continue to modestly increase (as the economy continues to muddle along at low single digit GDP growth in combination with population growth), a less predictable and less reliable freight market is developing (as described in the "new normal").

...
Hits: 13783
0
Continue reading 0 Comments

Every year at this time, RBC Dominion Securities Inc. assembles a group of investors and invites Jim Allworth, Co-Chair and Portfolio Strategist to address the group.  This year’s session was particularly noteworthy in that Mr. Allworth painted a rather optimistic picture of the medium term prospects for the US and Canadian economies. The Saturday Globe & Mail newspaper also carried a feature article with the headline “A Recovery in Red” as did an April Time magazine feature (How ‘Made in the USA’ is Making a Comeback).  These forecasts have significant implications for freight volumes during this three year period.  Here is some of what they had to say.

The Great Recession has produced four years of below normal economic growth.  The United States, the world’s largest importer and largest economy has been growing at 2 percent per annum as compared to its normal 4 percent.  This has pulled everybody down.

Mr. Allworth cited a recent economic report of the US Congressional Office, a non-partisan group of economists, with a reliable track record, that is now predicting economic growth of 3 – 4 percent during the period 2014 to 2016.  This growth is being driven by several factors. 

The countries with low wage levels (e.g. China) boosted wages last year.  This is making the US more attractive from a cost perspective and shifting some manufacturing back to the United States. 

The process of extracting shale oil and gas through fracking is having a very positive impact on the supply of energy in the United States.  As a result of technological improvements, the US is using 2 million less barrels per day than it did a few years ago.  Through fracking, the country is producing 2.5 million barrels per day of new energy.  In total, this is a swing of 4.5 million barrels per day.  The US is expected to be energy independent within 6 to 10 years.

...
Hits: 14663
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

BNSF routing guide Canadian truckers freight payment freight audit Muhammad Ali Driving for Profit broker security 2014 freight volumes 2014 economic forecast 3PL Hudsons Bay Company UP shipper-carrier contracts buying trucking companies shipper-carrier roundtable Carriers Adrian Gonzalez freight bid Transport Capital Partners (TCP) Associates Accessorial Charges US Economy e-commerce freight RFP freight broker Warehousing freight rate increases freight transportation Freight Rates Leadership Social Media in Transportation truck drivers shipper-carrier collaboration Climate Change freight audit Freight Capacity Fire Phone Career Advice Surety bond dimensional pricing Reshoring freight forwarders freight transportation in 2011 FCPC Cleveland Cavaliers Trucking LCV's Dan Goodwill BlueGrace Logistics Retail transportation Stephen Harper Trade Vision fuel surcharge Crude Oil by Rail professional drivers FMCSA Canadian economy Derek Singleton Doug Nix Schneider Logistics freight transportation conference MPG RFP Entrepreneur President Obama truck driver $75000 bond US Housing Market Finance and Transportation Freight contracts home delibery Keystone Pipeline TransForce carrier conference Blogging Rate per Mile Success intermodal Sales Management Colilers International driver Global experience capacity shortages 2015 Economic Forecast Freight energy efficiency Truckload Canada U.S. trade Regina Conway Ferromex Twitter future of freight industry David Tuttle dynamic pricing Map-21 2014 freight forecast Load broker Driver Shortage Omni Channel CN Rail EBOR TMP Worldwide Management CSA scores rail safety Training New Hires KCS Software Advice freight payment LinkedIn Loblaw CSX Swift economy Microsoft Failure freight cost savings US Manufacturing bulk shipping freight costs CITA Shipper Pulse Survey CRM economic forecasts for 2012 FMS derailments Business skills FuelQuest Horizontal Supply Chain Collaboration Rotman School of Business CSA Rail New York Times IANA MBA Celadon 2012 Transportation Business Strategies. Jugaad 3PLTL shipping Infrastructure shipping wine JB Hunt Business Strategy Business Transformation Strategy Yield Improvement Crisis management Sales Training ShipMax Scott Monty Canada Distribution ProMiles Consulting Harper Davos speech Dedicated Trucking mentoring Werner Emergent Strategy Tracy Matura selling trucking companies Life Lessons Transportation Buying Trends Survey NS cheap oil Social Media network optimization Freight Recession CP Rail Canadian freight market solutions provider pipelines Canadian Transportation & Logistics Transplace US Election TMS Search engine optimization trucking company acquisitions Success failure entrepreneur Facebook Retail freight agreements NCC Shipper NMFC LTL Transcom Fleet Leasing US Auto Sales Packaging customer engagement coaching Masters in Logistics Freight Management Toronto Job satisfaction Transportation University of Tennessee Wal-Mart transportation newspaper Bobby Harris 2013 Economic Forecast capacity shortage financial management Deferred Packaging CN Doug Davis Global Transportation Hub Railway Association of Canada Amazon Canada-U.S. trade agreement YRC 360ideaspace Right Shoring FCA tanker cars driver shortages Transloading Training Freight Carriers Association of Canada broker bonds USA Truck hiring process NAFTA Transportation service Spanx Canada's global strategy APL Education peak season Dedicated Contract Carriage Broker transportation news

Blog Archives