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John’s Blog
8-2-10
Dear Friends,
Last week was an active for news with
the Commerce Department reporting that the GDP increased at a 2.4%
annual rate in the second quarter. First quarter was 3.7% so a
slowdown has occurred. Consumer spending rose 1.6% in the second
quarter after a 1.9% increase in the first quarter.
This mild decrease in consumer spending
is mirrored by the new lower consumer confidence numbers released
last week. The Conference Board Consumer Confidence Index is down to
50.4 in July from 54.3 in June. Consumers are not feeling good due
to continued unemployment, economic fears and stagnant wages.
When the back to school sales starts we
will see how real this really is.
In transportation, driver pay is on the
rise as the CSA regulations are rolled out. These new aggressive
regulations are flushing out drivers with a dubious past shrinking
the pool of people available to drive. As the year progresses watch
as carriers get very aggressive at attracting and keeping drivers
with increased pay and generous sign on bonuses. As carrier
profitability is demonstrated as sustainable, higher pay will follow.
Taking a break in the rise of freight,
for-hire tonnage dropped 1.4% in June according to the ATA. The
American Trucking Association reported that year over year freight
tonnage was up 7.6% from June 2009.
With the reduction in fleet size
capacity remains tight even as shipments show a slight slow down.
The AAR reports that rail shipments
increased 19.2% year over year in the week ending July 24th.
Containers were up 21.1% and trailers were up 9.3%. Other rail
traffic excluding intermodal increased 4.7%.
Something to watch is the Federal Motor
Carrier Safety Administration Hours of Service proposal which was
sent to the White House. A series of hearings will be held and if
hours are reduced the result will be further los of carrier driving
capacity.
At Wagner we are continuing to work on
driving efficiencies in our distribution warehousing and fulfillment
operations. We are also busy in transportation and working with
companies having problems in finding carrier capacity.
Please let us know if we may be of
service in working on any supply chain issues for you.
Have a great week!
John Wagner Jr
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John's Blog 
