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John’s Blog 5-19-11
Dear Friends,
Keeping our finger on the pulse of the economy helps us
serve you better. That’s why we like to share how it works through this blog.
For example, continued positive consumer attitude is keeping
the economy in a slow positive direction. The Thomson Reuters/Michigan consumer
confidence yardstick increased in May to 72.4 from April’s 69.8. Since consumer
spending makes up 70 percent of the economy, this is an important metric.
We have a way to go to reach the 89 average reading that
occurred in the five years leading up to the current recession, but we are
getting there.
This improving confidence, in turn, is showing up in retail
sales, which were up 0.5 percent in April. That’s a small increase, but it also
marks the 10th straight month of retail sales improvement. Good
news.
Trends such as these affect all of us in sometimes
not-so-subtle ways. According to TransCore, freight rate trends are moderating
seasonally on the truckload spot market, increasing monthly since January.
Average rates were 13 percent higher year over year in the first quarter of
2011.
You can expect that the industry will hit a seasonal peak in
June, depending on the lane and market. Reducing fuel costs will help, but they
will still be on the historical high side at $4 per gallon.
On the intermodal transportation side, business continues to
be very good for the railroads. In the week ending Saturday, May 14, traffic
was up by 11.2 percent over the same week a year ago with 232,187 units
handled. For April, the Association of American Railroads reports that
that volume was up 9 percent over 2010 to almost 915,000 units.
The take-away from this for you is that between the carrier
capacity crunch, intermodal chassis challenges, and rising consumer confidence,
there are severe transportation headaches in the future. Look within and be as carrier-friendly as
possible to keep your capacity coming.
At Wagner, we have expanded our team to accommodate the
growth. I would like to welcome Joe Johnson
to the team. He will lead our information technology group. We have taken great
strides in our IT systems, and I am happy to have Joe on board to take us to
even higher levels of service for you.
With a full team of experts like Joe at the ready, don’t
hesitate to reach out to us about your transportation or distribution center
needs. We love a challenge!
John Wagner Jr.
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