John’s Blog

10-4-10

Dear Friends,

Last week saw August factory orders dropping for the third straight decline in four months. The Commerce Department reported that manufactured goods orders declined by 0.5% to $408.94 billion. The good news is that capital spending increased by 5.1% when aircraft is removed from the numbers.

The Institute of Supply Management reports that their gauge of manufacturing was 54.4 in September. This is down from an August reading of 56.3 confirming the loss of momentum in manufacturing. Readings greater than 50 signal growth

The ISM said inventories were up 4.2% in August

The National Association of Realtors index for sales of existing homes increased 4.3% in August. This is a metric on pending sales where a contract has been signed but not yet closed.

In employment, the Labor Department said claims for first time unemployment fell 16,000 to 453,000 in the week ending September 25^th. Employers are slowing the rate of job reduction.

The Mid-America Business Conditions Index increased slightly for the first time since May. The September reading was 56.3 from 55.8 in August. Any score above 50 suggests economic growth in the next three to six months, while a score below 50 suggests a contracting economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

The US Energy Department said crude oil futures were drawn more than expected with stockpiles falling by 500,000 barrels in the week ending September 24^th. Analysts were surprised expecting stockpiles to increase.

Shippers are reported to be bullish on an increased need for transportation capacity citing accelerating volume and higher year over year costs. The ATA said their seasonally adjusted truck tonnage index increased 2.9% in August when compared to 2009 levels. The index went down 2.7% from July for the largest month to month decrease since March of 2009. Truck volume is expected to be stable for the remainder of the year.

The FTR Trucking Condition Index increased slightly to 2.3 in August for the sixth straight month of positive readings.

ABF is following YRC Worldwide with a 5.9% increase in LTL general tariff rates. FedEx who earlier announced a consolidation of their ground freight network followed last Wednesday with a rate increase of 6.9% on certain trucking services. The Express division will increase pricing by 3.9% for domestic and export services effective January third. Other ground trucking rate increases are yet to be announced.

The American Association of Railroads said that the highest weekly intermodal volume for 2010 was experienced in the week ending September 25^th. A 17.3% increase in containers totaling 241,167 containers and trailers. Broken out separately this was an increase of 19.2% for containers and 7% for trailers in a year over year comparison. Growth is expected to continue. Boxcar traffic increase 10.7% in the same period.

At Wagner we finished the third quarter in strong territory and are hopeful the momentum will continue for the rest of the year.

As you plan for 2011 feel free to give me a call to explore potential projects. Wagner has strong capabilities in freight management, distribution warehousing, and e-fulfillment with a great team of associates coupled with strong technology in seven US markets.

Have a great week!

John Wagner Jr