John’s Blog

1-4-10

Dear Friends,

The year has started out with some strong numbers that should help lift everyone’s spirits. The Institute for Supply Management's index of manufacturing activity rose to 55.9 from 53.6 in November, more than analysts had expected. This is the highest reading since 2006.

Any number over 50 in the ISM index means an expansion in orders and manufacturing so we need to watch and see if this trend will continue. Job growth should be aided by this trend. For those of us in the Logistics industry, we should begin to see a slow rise in inventories and a little more freight than what was available a year ago at this time.

The American Trucking Association’s For Hire Truck index rose 2.7% in November which would indicate that this trend is incrementally creeping up in the right direction.

It looks like YRC Worldwide got their bond holders in line at the last minute relieving them of a lot of debt. My guess is that they now have to deal with the Teamsters Pension Fund to work out an arrangement AND get the shipping public convinced that their business is sustainable so shippers have confidence in routing freight through their network.

As one would expect, oil prices are up again to over $80 per barrel driven by the very cold winter (heating oil) and the expectation that the economy is improving and will require more of it. Diesel fuel jumped up 6.5 cents to $2.797 per gallon.

At Wagner we are optimistic about 2010 and are already seeing increased opportunities as companies continue to evaluate their distribution networks and consider outsourcing. As they stare at the empty space in their own DCs they are considering the more flexible space a 3PL provides.

We are also getting opportunities to evaluate companies’ freight bills to develop comprehensive transportation plans for them. In 2010 a dollar saved is more important than ever.

Please let me know if we may assist you and your company in any way.

Have a great week!

John