Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog

b2ap3_thumbnail_dreamstime_xl_60041796.jpg

As we approach 2016, there are a number of forces that are shaping the economics of Freight Transportation. Here are a few to consider.

The US Economy and the US Dollar

The US economy is providing a number of mixed signals in December of 2015. Unemployment is at only five percent. Economic growth, while sluggish, has been able to generate a consistent 200,000 new jobs a month. But some other indices don’t look so good.

The Institute for Supply Management (ISM) PMI Index of economic activity in the manufacturing sector contracted in November for the first time in 36 months, since November 2012, while the overall economy grew for the 78th consecutive month. The November PMI® registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent and below the 50 percent mark that signals growth. The New Orders Index registered 48.9 percent, a decrease of 4 percentage points from the reading of 52.9 percent in October. The Production Index registered 49.2 percent, 3.7 percentage points below the October reading of 52.9 percent. Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.

...
Hits: 3079
0
Continue reading 0 Comments

b2ap3_thumbnail_dreamstime_l_59142906V2.jpg

The past year started with some solid tailwinds as the economies of the United States and Canada appeared to be in a growth mode. Then a number of unexpected events took place that changed the trajectory of the year. Here is our synopsis of the major freight transportation stories of 2015.

The Collapse in Energy Prices

The rout in oil prices began in late 2014 as Saudi Arabia stood firm in its insistence not to cut production quotas. The downturn in China’s economy produced less demand as oil supply remained at pre-downturn levels, a recipe for low oil prices and other challenges throughout the year. This had a huge impact on Canada’s oil sands companies, producing significant layoffs. There were also spillover effects in other energy sectors such as coal mining. The latter experienced very large price drops and decreased shipping volumes.

The steep decline in fuel and oil prices has, in turn, been a boon to freight transportation and logistics services providers primarily in the form of lower operating costs, while at the same time tremendously aiding carriers and providers serving retail-based customers, as lower fuel prices have dramatically impacted the amount of discretionary income consumers have.

...
Hits: 3127
0
Continue reading 0 Comments

This past year was a tumultuous and transformative year in Freight Transportation. What is in store for us in 2015? Here are some trends to watch.

1. Dimensional LTL Pricing

The National Motor Freight Classification (NMFC) system, developed during the Great Depression by the National Motor Freight Traffic Association, classifies goods based on four elements—density, stowability, handling, and liability—that reflect a shipment's "transportability." However, the ratings from the system are not derived from the dimensions of the actual shipment but from average shipment characteristics. The classification methodology was not designed to accommodate the changes in modern-day production methods, where goods tend to be lighter and generally cube out in a trailer before they weigh out. For nearly eight decades, less-than-truckload (LTL) carriers have been using this system to allocate their trailer space.

Change will come to the LTL freight industry in 2015, driven by so-called dimensionializing, or dimensioning, machines that precisely calculate the amount of space a shipment will occupy in a trailer. The machines measure a shipment's dimensions—arrived at by multiplying length, width, and height—and provide proof of their calculations. A high-end "static" machine designed to measure stationary objects sells in the low to mid-$80,000s. The payoff can be rapid—30 to 60 days, depending on how a carrier uses the machine and how it calculates return on investment (ROI). Carriers like UPS Freight and FedEx Freight, LTL units of highly visible companies that have used dimensioners in their parcel operations for decades, are going that way. Old Dominion Freight Line Inc., that has used dimensioning equipment since 2009, YRC Worldwide Inc., and many of the other leading players in the LTL sector will likely follow the leaders.

2. Low Energy Prices will continue for much of 2015

...
Hits: 13766
0
Continue reading 0 Comments

As the year draws to a close, it is time to reflect on the major news stories in the world of freight transportation. These are the ones that struck me as being the most impactful.

1. The Economy – Two Steps Forward/One Step Back

US GDP grew by over 3 percent in 2014, its best showing in several years. A rise in employment levels, coupled with an increase in consumer spending, helped lift the American freight market. The long, slow post Great Recession recovery finally kicked into a higher gear, driving an upswing in freight activity.

However, November data highlighted a slowdown in the pace of recovery across the U.S. manufacturing sector. At 54.7, down from 55.9 in October, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) indicated the weakest overall improvement in business conditions since the snow-related setback in January. Although the latest reading remained well above the neutral 50.0 threshold, the index has now dropped for three months in a row. Weaker rates of output and new business growth were the main negative influences on the headline PMI figure in November.

2. America - the Super Energy Power

...
Hits: 3960
0
Continue reading 0 Comments

In my previous blog, I tried to capture some of the Major Freight Transportation Stories of 2013 (http://www.dantranscon.com/index.php/blog/entry/the-top-freight-transportation-stories-of-2013).  In this blog I will look ahead to 2014 and beyond.  Here are some of the emerging trends that transportation professionals should monitor closely in the coming years.

1. The 10 Miles Per Gallon Truck

Heavy-duty trucks consume 1/5th of the fuel consumed in the United States.  The world’s freight transportation requirements are expected to consume 70 percent more energy in 2040 than they did in 2010.  As demands for freight transportation rise in developing countries, this is also increasing the level of fuel consumption.

A recent HOS study suggests that the changes made in 2013 in the USA are having an impact on driver productivity.  New measures may further erode productivity.  An electronic on-board recorder (EOBR) mandate is also slated to be rolled out in the next year or two. It will likely eliminate log book falsification across the board and could easily clip another 2% to 5% of industry productivity. Mandatory speed limiters would be next and would eliminate some additional productivity.  New drug testing procedures are also being considered and would eliminate those drivers who are able to pass the current urine-based test despite habitual drug use. Taken together, this influx of regulations will reduce the number of drivers in the overall pool and will reduce the productivity of those remaining in the pool.

At a time when most truckers are striving to operate their fleets at 6 miles per gallon, talk of 10 MPG may seem like science fiction.  The good news is that fifteen industry manufacturers have joined together in the 21st Century Truck Partnership.  Led by Daimler, Navistar and Peterbilt and a joint venture with Cummins and Peterbilt, they plan to have working prototypes within two years.  The four projects that fall within this initiative are experimenting with engines and heavy duty hybrids, vehicle power demands, idle reducing technology and new lightweight materials such as carbon fibre and high strength steel.  With driver recruitment being such a major challenge, improved vehicle productivity would be of major benefit to the trucking industry.

...
Tagged in: Transportation
Hits: 11369
0
Continue reading 0 Comments

Most Recent Posts

Search


Tag Cloud

Social Media in Transportation Montreal Canadiens Comey shipper-carrier contracts 360ideaspace Horizontal Supply Chain Collaboration computer protection FCA autos Consulting Surety bond Canadian freight market Wal-Mart Sales Strategy Whole Foods Canada-U.S. trade agreement YRC Value Proposition Freight Management Yield Improvement marketing US Economy Stephen Harper Trade Vision Twitter US Manufacturing transportation newspaper Crisis management consumer centric freight transportation Dedicated Trucking network optimization pipelines dynamic pricing Spanx driverless capacity shortage ShipMax ELD CITA Shipper Pulse Survey USMCA CSA Leafs BNSF economy rail safety Canadian truckers laptop TMP Worldwide Amazon Search engine optimization Scott Monty CP Rail driver shortages 2012 Transportation Business Strategies. Jugaad automation Driving for Profit freight rate increases Canadian Protests Facebook transportation news cyber security Werner peak season Masters in Logistics Entrepreneur Global Transportation Hub NMFC Habs EBOR Online grocery shopping shipping wine Rotman School of Business freight costs recession Adrian Gonzalez Harper Davos speech Coronavirus FMCSA Conway asset management Ferromex cars Deferred Packaging Emergent Strategy Tariffs Transportation Buying Trends Survey Transloading Cleveland Cavaliers Training New Hires Government Canada's global strategy China Politics Right Shoring trucking company acquisitions Transportation customer engagement Career Advice transportation audit Climate Change TMS Broker US Election David Tuttle intermodal bulk shipping Social Media freight payment Geopolitics Freight Carriers Association of Canada Anti-Vax Job satisfaction Hudsons Bay Company Dan Goodwill IANA carrier conference NCC routing guide Swift freight RFP home delivery Freight Shuttle System Rail Trucker Protest Toronto Sales professional drivers driver pay business security Digital Freight Networks Canada Education Sales Training Covid-19 Keystone Pipeline Associates Celadon dark stores Truckload University of Tennessee Digitization Trucking Business Transformation Strategy freight forwarders drones Inbound Transportation Business Strategy online shopping economic forecasts for 2012 Global experience mentoring Training BlueGrace Logistics Canada U.S. trade Retail small parcel Otto Transcom Fleet Leasing supply chain management 2014 freight volumes freight transportation in 2011 freight marketplace Tracy Matura computer security Grocery Blockchain digital freight matching Packaging Accessorial Charges NAFTA KCS Hockey 2015 Economic Forecast driver CRM Omni Channel Dedicated Contract Carriage LCV's Success failure entrepreneur freight broker the future of transportation TransForce Leadership Reshoring Derek Singleton Canadian Transportation & Logistics Transport Capital Partners (TCP) Load broker RFP truck drivers MBA Freight Matching financial management Transplace 2013 Economic Forecast Impeachment broker bonds Schneider Logistics General Motors Shipper Muhammad Ali MPG economic outlook Sales Management capacity shortages Rate per Mile CN Freight contracts UP derailments Electric Vehicles Software Advice LinkedIn 2014 economic forecast CSA scores Finance and Transportation truck driver APL Doug Nix US Auto Sales shipper-carrier roundtable dimensional pricing USA Truck Fire Phone Retail transportation Doug Davis Freight shipping freight cost savings Map-21 President Obama US Housing Market NS Business Development Freight Capacity 3PL Microsoft natural disasters Blogging Loblaw Uber Freight selling trucking companies freight bid 3PLTL Canadian economy hiring process e-commerce 2014 freight forecast solutions provider freight audit freight payment freight audit autonomous vehicles fuel surcharge Life Lessons last mile delivery FuelQuest LTL business start-up freight transportation conference Toronto Maple Leafs Carriers New York Times FCPC technology Failure CSX employee termination freight agreements Driver Shortage cheap oil Infrastructure YRCW $75000 bond JB Hunt CN Rail Transportation service shipper-carrier collaboration Freight Recession Load Boards Freight Rates future of freight industry risk management buying trucking companies home delibery computer Warehousing trade Justice Outsourcing Sales FMS tanker cars ProMiles Regina small business Crude Oil by Rail robotics Railway Association of Canada Management coaching Success truck capacity Business skills Distribution broker security Donald Trump Trump Colilers International Bobby Harris energy efficiency

Blog Archives

March
February
December
October
September
August
June
May
April
March
January