John’s Blog

9-27-10

Dear Friends,

The Conference Board released their index of leading economic indicators showing an increase of 0.3% in August for a small increase following a 0.1% increase in July and a decline of 0.2% in June. The Conference Board reports that the indicators are pointing to a weak recovery with little momentum until next year.

The Commerce Department reported Friday that durable goods orders fell 1.3% in August after a 0.7% increase in July. The culprits were slower auto and aircraft sales but when these are removed orders actually increased 2%.

Carriers were helped by the increase in capital equipment orders which increased 4.1%

In the housing market, builders were helped by a surprise 10.5% increase in housing starts. Most of this is multifamily construction with single family housing increasing 4.3% in August.

The unemployment picture remains clouded as initial unemployment claims increased by 12,000 in the week ending September 18 according to the Labor Department. On a more positive note, the four week moving average shows claims dropping by 3,250 to 463,250.

The Federal Reserve continues to be in a quandary as it looks at low inflation, high unemployment, modest income growth, lower housing wealth and tight credit.

In transportation the railroads continue to see increased intermodal traffic with a year over year increase of 16.9% the week ending September 18^th. Containers jumped 18.8% to 205,532 and trailers up 6.5% to 34,481. The American Association of Railroads also reported that carloadings were up to 304,679 for an 8.1% increase year over year.

After seeing pricing fall 7 to 10% in the recession, truckload carriers are reporting renewed pricing strength. Increases are reportedly in the 5 to 10% range reflecting a tightening of truckload capacity. Carriers are targeting their low margin customers to get pricing in line with where they believe the new market rates should be.

YRC Worldwide continues to struggle with their pension liability and negotiations with the Teamsters are ongoing. It is reported that the Teamsters and YRC have reached an agreement but the details are not yet known.

The National Bureau of Economic Research (NBER) who tracks economic cycles reported that the recession technically began in December 2007 and ended in June of 2009. The emphasis is on the word “technically” as most of the country is still feeling the affects of a very slow economy.

At Wagner we are working on our 2011 planning as we look to grow our dedicated distribution center operations, cross channel fulfillment and transportation services. We are seeing an increased interest in companies mitigating financial risk by finding more scalable solutions to their distribution needs.

Please let me know if we may compete for your business with Wagner’s team of seasoned logistics professionals and world class technology. I am as close as your local airport.

Have a great week!

John Wagner Jr

John’s Blog

09-20-10

Dear Friends,

I hope you had a good weekend as we transition into the fall season. Here is the news from last week.

US retail sales increased in August for the second month in a row. The Commerce Department reported that sales rose 0.4% beating analyst’s expectations. This follows a revised increase of 0.3% in July so it looks like consumers were active in back-to-school shopping. All sales categories except autos were up.

The Commerce Department also saw business inventories increase by 1.0% from July. The inventory to sales ratio in July was 1.26, the same as June. This ratio is used to indicate the number of months it will take a company to sell off inventory.

The Labor Department reports first time claims for unemployment benefits is at a two month low. Employment gains are painfully slow and analysts believe that it will continue on this path. This slow growth is not going to make any big dents in unemployment numbers in the short term.

The Producers Price Index increased 0.4% in August, showing that the price that is paid on goods before they are sold to consumers is up. Energy costs are the main reason for the increase.

Consumer prices increased by 0.3% in August according to the Labor Department following a 0.3% increase in July. The inflation rate is flat.

The Federal Reserve said that US manufacturing showed slowing growth with a small 0.2% led by reductions in automotive production.

In transportation, truckload carriers are increasing prices with a range from 5 to 15%. The Longbow Truckload Barometer (measuring demand & capacity) increased 10.5% for the 4^th straight weekly increase. Smaller carriers are having a harder time then the larger carriers getting increases.

The TransCore North American Freight Index declined a bit but is still very high. Truckload spot market loads dipped 13.8% from July to August. Spot market freight is still 75% higher than in 2009.

Railroads saw both railcar and intermodal traffic increase with the week of September 4^th showing an 18% increase in intermodal alone. 10,759 rail cars were taken out of storage and returned to service in August leaving 22.7% of the railcar fleet in storage.

At Wagner we continue to work the holiday bubble of work in distribution and fulfillment. Wagner’s new operation in Aurora OH (Cleveland) continues to grow and across the company we are seeing more opportunities.

As you plan for 2011 please let us know if there is anything we may be doing for you in distribution warehousing, transportation, e-commerce fulfillment or co-packing. We would be pleased to compete for your business in the coming year.

Have a great week!

John Wagner Jr