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John’s Blog
2-2-09
Dear Friends,
As the Democrats and Republicans try to negotiate an agreement on the Stimulus Package, the economy continues to slide. The goal is to take care of the people who are out of work while creating jobs. At the end of the day the recovery hinges on getting the banking sector to loan money again. The initial dose of $350 Billion has had little effect and most say this is due to the toxic assets they control.
Next may be the creation of a “Bad Bank” to hold these toxic assets until they can be liquidated. TARP money has been used to shore up the banks but until they can dispose of these bad assets and get them off of their balance sheets they are likely to only be able to lend money to individuals and companies that don’t need the money. The credit crisis continues.
In the mean time there appears to winners and losers shaking out in this economy. Wal-Mart is holding up while Target is hurting. Macy’s has announced large cut backs while the Dollar Stores seem to be hanging on.
In transportation it would appear that YRC is losing market share to companies like Old Dominion and others. Heartland has announced they intend to reduce the size of their fleet further if the economy does not improve soon. JB Hunt also suffers in the truckload segment and is planning further capacity reductions. In short, 5% of the trucking capacity has already been cut and when the economy turns at the end of 09 or beginning of 2010 plan on spending a lot for trucking.
Likewise there have already been large reductions in ocean and air cargo capacity.
At Wagner we are going about serving our clients. Our focus has been on the integration of the LTS Logistics acquisition and it has been going well as we look for areas to consolidate and leverage technology.
We continue to look for areas where we can add value for clients through providing flexibility and efficiency in operations. Please let me know if there are any weak or soft spots in your supply chain that we may help you with.
Have a great week,
John
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