Heavy Duty Trucking

JUL 2014

The Fleet Business Authority

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JULY 2014 Trucking's Most Respected Business Report Logistics report predicts 'banner year' – Jason Mathers, senior manager, Green Freight, Environmental Defense Fund Trucking's Most Respected Business Report hotline T his is going to be a banner year for the logistics industry, said Rosalyn Wilson in the 25th An- nual State of Logistics Report. The economy last year was not stellar, and business inventories plum- meted in the first period this year as a consequence of bad weather, but freight is gaining now, Wilson said in a presentation last month at the National Press Club. Wilson prepared the report for the Council of Supply Chain Management Professionals. It is presented by Penske Logistics. The tough first period this year is not a harbinger of what's to come, she said. The Consumer Confidence Index is rising, as are retail sales and home con- struction. More jobs are being created and unemployment claims are falling. "The health of the freight market is a solid indicator of the direction the economy is moving," she said in her report. "All indications are that freight will grow moderately for the rest of the year and the economy should follow suit." The driver shortage remains trucking's number one issue, she said, utilization rates are close to 100%, and capacity is falling. While rates were flat last year, tonnage was up 6.1%, Class 8 regis- trations dropped 4.5%, and bank- ruptcies rose. Overall logistics costs as a percentage of Gross Domestic Product increased slightly in 2013 but still grew more slowly than GDP. Last year was a complicated one, Wilson said. It started slowly, grew strongly in the middle and ended in a deep dive. But before the fourth period of last year, growth was strong, due to rising household net worth driven by gains among the most affluent and modest gains in manufacturing. Wilson forecasted that freight will continue to gain this year and acceler- ate in the second period. Keep up with the latest news each day at www.truckinginfo.com Read the full interview at www.truckinginfo.com/EDFinterview The Conference Board's Leading Economic Index, a gauge of economic conditions over the next three to six months, was up 0.5% in May to 101 and was described as "broad-based" and "robust." Industrial production rose 0.6% in May after dropping 0.3% in April and was 4.3% above a year earlier. The amount of freight carried by the U.S. for-hire transportation industry rose 0.4% in April from March, up for the third consecutive month. The Freight Transportation Services Index was at 117.6, the second highest all-time level. Truckload linehaul costs in May averaged 5.8% higher than a year ago, following two months of similar increases. Housing starts remained above the 1 million mark annually for the second straight month, but fell 6.5% from the month before. Building permits also were down. Truckload rates (Cass Truckload Linehaul Index) Freight Transportation Services Index (U.S. Department of Transportation) Industrial Production (U.S. Federal Reserve) Q: Tell me about the Envi- ronmental Defense Fund and what you do. A: One of the core ways we work to advance environmental solutions is working collaboratively with companies to identify and promote and demonstrate best practices that can save companies money and reduce environmental impact. Q: Many in the trucking industry view environmental groups with distrust. How are you different? A: We understand that trucking is a significant source of greenhouse gas emissions. It's about 6% of U.S. GHG emis- sions. Over the next 20 years, that's going to be going up to potentially about 8%, or 130 million metric tons — at a time when our best science tells us we need to be cut- ting climate pollution on the order of 80% or more. To me the challenge is, how do we continue to benefit from the great services of trucking and also meet our obligations to our children and grandchildren to cut carbon pollution? The next round of the [GHG/fuel economy] standards is one of several things we need to do. Leading Economic Index (Conference Board) Economic Indicators hotline – Jason Mathers, A Q & Green: Positive Yellow: Concern Re d: Negative Housing Starts (U.S. Commerce Dept.) 16 HDT • JULY 2014 www.truckinginfo.com Truckload rates Freight Transportation Industrial Production Leading Economic Index Economic Indicators Housing Starts (U.S. Commerce Truckload Freight Industrial Leading Housing Starts ttttt ttttt –6.5 % ttttt +0.5 % ttttt +0.5 % ttttt +0.4 % ttttt +5.8 %

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