Subscribe to our free, weekly email newsletter!


2010 Mid-year rate outlook: Paying a Premium

While the extent of the recovery remains uncertain, shippers will continue to be hit with rate increases across all modes.
image
By John Paul Quinn, Contributing Editor
July 15, 2010

In the earlier stages of the downward economic trend of the past two years, analysts were initially reluctant to use the dreaded “R-word.” But now it seems as if they’re equally wary about using another “R-word,” but this time it’s “recovery.”

“We seem to be enjoying a burst of growth, but the fundamentals aren’t there,” says David Jacoby, president of supply chain consulting firm Boston Strategies International.

“The job growth is largely in temp work and there has even been a slowing of this as we approached the middle of the year.”

Jacoby adds that corporate investment is also lagging as companies are conservatively hedging their bets since many don’t see this as a sustainable growth situation—at least not yet. “This is not necessarily a dangerous scenario, but it’s a disappointing one,” he says.

Forecasts of GDP growth are hesitant and cautionary as well, according to Paul Bingham, managing director of trade and transportation at IHS Global Insight.

According to Bingham, real growth is forecast to be up 3.4 percent this year in contrast to the negative 2.4 percent of 2009, but the pace is expected to slow back to 2.8 percent in 2011.

About the Author

John Paul Quinn
Contributing Editor

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

According to a comparison study conducted by Teamsters Local 1224, DHL contracted pilots are paid considerably less and work much longer hours than pilots who fly for U.S. logistics companies UPS and FedEx. Pilots at Atlas, Polar and Southern report being forced to fly long hours with minimal rest time in between flights, leading to dangerous fatigue.

Atlas Air Worldwide Holdings said it will provide air cargo services to support Amazon’s package deliveries to its customers.

The dark side of the “Amazon effect” and larger impact made by the explosive growth in e-commerce may soon be seen when organized labor prepares for a massive air cargo strike.

During this webcast our panelist offer logistics and supply chain professionals a “reality check” when it comes to our current state of understanding, adoption, and utilization of the technological tools that are available to improve our operations.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 55.7 in April (a level of 50 or higher indicates growth), which was up 1.2 percent compared to March, with economic activity in the non-manufacturing sector growing for the 75th consecutive month.

Article Topics

· All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA