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John’s Blog
October 19th, 2009
Dear Friends,
As the freight recession that began in
mid 2006 drags on (as publicly traded carriers note in their earnings
reports) carrier earnings are down which is no surprise. Excess
capacity and a depressed pricing environment are the result of less
freight to haul but another issue looms large, fuel costs.
The recent lower cost of diesel has
allowed many carriers to hang on but with oil prices beginning to
rise – hold onto your hat. With $78-80 per barrel oil watch out
for continued increases in fuel as winter approaches. Oil closed
Friday at $78.53 a barrel.
On the other hand, demand is a result
of an improving economy and an indicator of things to come. With a
mild improvement in domestic freight demand coupled with an expansion
of the Chinese economy, we could see $100 per barrel oil in early
2010.
The refineries have a lot to do with
this as well as they reduce their reserves. The weaker dollar is
another contributor.
At Wagner we are seeing a shorter
holiday surge. In the past the holiday uptick would last all the way
to Black Friday (the day after Thanksgiving) but 09 is shaping up to
be a replay of 08 with the intense activity ending in early November.
Nevertheless, the good people at Wagner
are doing what they always do – meet deadlines and ship on time and
on budget.
The biggest difference between 08 and
09 is the increase in proposal activity as at this time last year the
country was in a near panic as our financial institutions and housing
industry began to collapse.
Going into 2010 there seems to be a
sense of cautious optimism that the worse is finally behind us.
There is now willingness on the part of shippers to move on plans and
to get serious about using their supply chain as a competitive
advantage.
If I may help you and your company with
any distribution center or transportation projects in 2010 don’t
hesitate to let me know. The economy is on a long slow rebound and
Wagner will be there to help.
Have a great week!
John
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John's Blog 
