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

b2ap3_thumbnail_dreamstime_xl_60041796.jpg

As we approach 2016, there are a number of forces that are shaping the economics of Freight Transportation. Here are a few to consider.

The US Economy and the US Dollar

The US economy is providing a number of mixed signals in December of 2015. Unemployment is at only five percent. Economic growth, while sluggish, has been able to generate a consistent 200,000 new jobs a month. But some other indices don’t look so good.

The Institute for Supply Management (ISM) PMI Index of economic activity in the manufacturing sector contracted in November for the first time in 36 months, since November 2012, while the overall economy grew for the 78th consecutive month. The November PMI® registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent and below the 50 percent mark that signals growth. The New Orders Index registered 48.9 percent, a decrease of 4 percentage points from the reading of 52.9 percent in October. The Production Index registered 49.2 percent, 3.7 percentage points below the October reading of 52.9 percent. Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.

...
Hits: 1156
0
Continue reading 0 Comments

A few weeks ago, I gave a presentation to a group of transportation professionals at a Best Practices in Cross-Border Freight Transportation conference in Buffalo, NY, sponsored by SMC3. I made the point that changes in just one variable, Currency Exchange, could make or break a company. As I look back over my lifetime (I am an old guy), Canada – U.S. exchange rates have varied from a Canadian dollar being worth $0.61 US to $1.10 US. As evidenced by the past few days, these currency fluctuations can occur quickly and without warning.

Furthermore, these types of variances can have huge impacts on shippers and carriers. If you look at some of Canada’s core industries (e.g. newsprint, minerals), the effects can be devastating in terms of market competitiveness, north-south freight flows, freight rates, empty miles, - - - even business survival.  Currency exchange fluctuations are just one of a number of variables that can change quickly and without much warning. There are a host of others.

Think about the winter we came through in the first quarter of this year. Is this the result of climate change? Will this be, as some suspect, the new normal? Have you made plans in the event that the next winter is as bad as the last one? We are still dealing with rail congestion as a result of the harsh winter and we are about to enter the fourth quarter. In addition to winter storms, we are seeing an upswing in other types of weather issues (e.g. tornados) in America and other countries.

Think about the Middle East that is a powder keg today. What if war breaks out in a variety of locales? What if ISIS tries to attack America? What if some sources of energy supplies are cut off and diesel fuel prices spike? What happens if the economy spikes? Think about the driver shortages today, the challenges in attracting drivers into the industry and the potential impacts on the supply of truck and rail equipment if the demand for transportation services is not met with an increase in supply. What would significant increases in freight rates do to your business?

Think about the possibility of an economic slowdown in Asia, Europe, Russia and/or South America, countries that are still dealing with the aftermath of the last recession. What would happen to our economy if some of these economies falter? We are living in a turbulent and fragile world.

...
Hits: 1447
0
Continue reading 0 Comments

Thankfully, the first quarter of 2014 is behind us. The challenging winter across Canada and the northeastern USA and capacity shortages, brought on, in part by the weather, created a difficult environment for both carriers and shippers. Are we in the clear now? With the winter behind us and with the economy improving, can we expect freight supply and demand to come into balance? Here are some thoughts to ponder.

1. Climate Change will continue to produce Bad Weather

Because of its near-total dependence on petroleum fuels, the U.S. transportation sector is responsible for about a third of America’s climate-changing emissions. Globally, about 15 percent of manmade carbon dioxide comes from cars, trucks, airplanes, ships and other vehicles. A National Research Council report states that America’s transportation infrastructure is at risk due to the effects of global warming. Severe weather and rising water levels will impact roadways, railroads, and airports. Climate change will affect transportation primarily through increases in several types of weather and climate extremes. Climate warming over the next 50 to 100 years will be manifested by increases in very hot days and heat waves, increases in Arctic temperatures, rising sea levels coupled with storm surges and land subsidence, more frequent intense precipitation events, and increases in the intensity of strong hurricanes. The impacts will vary by mode of transportation and region of the country, but they will be widespread and costly in both human and economic terms and will require significant changes in the planning, design, construction, operation, and maintenance of transportation systems.

In other words, get used to it. The next winter may be worse than the last one.

2. Capacity Shortages May Increase and Get Worse

...
Hits: 2032
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

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

Blog Archives