|
John’s Blog
12-13-10
Dear Friends,
Our representatives in Washington are
arguing over extending the tax breaks for everyone but one item of
interest in this supply chain blog is the transportation related
measures being debated. 100% expensing of 2011 business investments
mean that companies may write off all plant & equipment expenses
next year. The payroll tax reduction should also be good for
consumers (not so good for the social security fund). There are
number of “extenders” that may be passed for tax breaks that were
set to expire for biodiesel and short line railroad infrastructure
improvements.
The Commerce Department told us last
Thursday that wholesale inventories increased 1.9% in October
following a 2.1% jump in September. Durable goods (appliances,
furniture, and electronics) inventories were up 0.9%.
Initial jobless claims went down by
17,000 applicants in the week ending December 4th with the
four week moving average moving down to 427,500. Continuing claims
were reported to be 4.09 million people according to the Department
of Labor. Hiring remains very weak and unemployment stands at 9.8% ,
a new US record stretch where unemployment has remained above 9% for
19 straight months. There were a total of 15.1 million people
unemployed in November.
In international shipping the Drewry
benchmark container “spot” rate on November 29th
remained stable at $1,961 per FEU (40’ equivalent unit). This rate
is based on a 40’ container shipping from Hong Kong to Los Angeles
without terminal handling expense.
The DOT freight transportation services
index increased 3.2% in October year over year. This is the 10th
straight month of year over year improvement. The index saw a gain
of 0.2% over September.
Dry van trailer sales surged in
November according to ACT Research with a 35% increase in 3rd
quarter sales year over year. Buyers registered 24,064 trailers with
16,478 being dry vans. 76,125 trailers were registered by buyers in
the first 9 months of 2010, a 42.2% improvement over 2009.
FedEx announced that they are raising
rates by an average of 4.9% on its FedEx Ground and FedEx Home
Delivery units effective January 3rd. The actual increase
is 5.9% but is offset by a 1% adjustment decrease in their fuel
surcharge for an effective net increase of 4.9%. Look for further
LTL carrier rate hikes in 2011.
The American Association of Railroads
said that intermodal traffic was up 13.8% in the week ending December
4th with 235,835 trailers and trailers. Containers were
up by 15.3% with 197,526 units handled. In this post Thanksgiving
week the AAR said there were 303,570 carloads originated for a year
over year gain of 6.8%.
At Wagner we are involved in year end
adjustments with leases to take advantage of market conditions. Now
is a great time to rationalize your distribution network as the
industrial real estate market is weak resulting in lower lease rates.
If you have a need for a new location don’t hesitate to give
Wagner a call as we will source a facility and staff it tailoring the
services to your needs.
Should you have a need for
transportation services, fulfillment, distribution center operations
or packaging I hope you know who to call in 2011.
Have a great week!
John Wagner Jr
|
