John’s Blog

1-12-09

Dear Friends,

As fear grips the nation the debate is on as to whether or not the government should spend a trillion dollars to jump start the economy.  For better or for worse, as elected officials they are compelled to show the electorate that they are doing something.

From a transportation logistics perspective here is the landscape:

• Freight volumes dropped to historic lows in the 4^th quarter.
• Exports have dropped due to Asian and European economic woes
• Container traffic at the ports have fallen off in dramatic fashion
• Ocean carriers are taking ships out of service
• 3,065 trucking companies failed in 09 representing 10,650 trucks leaving the market
• Railroads are experiencing drops in volume and laying off people

This is driven by:

• Housing markets that are in the tank and car sales are at historic lows
• The consumer has stopped spending fearing job losses
• Unemployment is now over 7% and forecasted to hit double digits

One bright spots is that the retailers are all carrying less inventory so transportation firms should have some replenishment shipments.

Much of the population will experience a mental boost when Obama takes office looking for the change they were promised. Will tax cuts be enough to improve the consumer’s confidence to spend?  It remains to be seen.

At Wagner we are weathering the storm as we see many of our clients carrying less inventory and shipping volumes that are down.  We are also working diligently to absorb the acquisition of LTS Logistics in Little Rock and Pine Bluff Arkansas. 

We are carrying some capacity in terms of space and being very aggressive in filling this space.  For companies looking at their supply chains now is a good time to go to market.

Have a great week!