Subscribe to our free, weekly email newsletter!



Bright outlook for a Beige Book

By Jeff Berman, Group News Editor
March 04, 2011

Earlier this week, the Federal Reserve released the most recent edition of its “Beige Book,” which tracks economic activity. This edition covers the period from January 3-February 18.

A look at the results seems to be in line with many other economic indices, many of which have the same theme.

That theme being something like this: “things are moving at a slow and steady pace, with cautious signs of improvement.”

Some the notable findings from the Beige Book include how the economy is growing at a moderate pace, with transportation firms showing gains in shipments, while fuel costs continue a steady run-up.

In certain cities reporting into the Fed for this report, there was an indication that more truck drivers needed to be hired, but there are concerns about a limited labor pool.

There were also solid growth signs on the manufacturing and retail front, too, which carry over positive implications for those involved with supply chain management and logistics operations—another good sign.

An analysis of the Beige Book by IHS Global Insight U.S. Senior Economist Gregory Daco was optimistic yet cautious.

This overall upbeat report underlines that the economy has picked up momentum in early 2011,” wrote Daco. “However, as Federal Reserve Chairman Bernanke reported in his semi-annual testimony to Congress, the pace of the recovery has not been sufficient to translate into major labor market improvements, and housing activity remains a key risk.”

This got me thinking about three stories I filed this week—two coming from the Institute for Supply Management and one from FTR Associates.

While these reports each had different focuses, they each at the same time were encouraging and (brace yourself, here it comes….again) cautiously optimistic. After what we have been through, what with cost-cutting measures, limited staffs/doing more with less, limited long-term visibility (OK—that is still there), and tight credit availability, which is loosening now, we need to embrace these signs.

FTR President Eric Starks summed it up pretty well during an interview on trucking market conditions.

Starks explained how the current trucking environment is beginning to resemble how the market was in 2004.
In 2004 and back to the middle of 2003, Starks explained that market conditions began to accelerate and gained momentum during the first quarter of 2004.

“Things happened quickly in a six-month timeframe, making it difficult for the industry to respond in an orderly fashion,” said Starks. “So what you saw was a bit of a perfect storm, with everything tightening on the capacity side for all modes being able to meet the needs of the shipping environment at that point. It was one of those things, which was difficult for all of the right reasons. Shippers themselves had a lot of demand with some artificial things baked in there. This time we are seeing a decent amount of freight, but there are also some issues with the regulatory environment that are going to constrain capacity.”

Regulatory and Middle East issues aside, this is an optimistic forecast for the most part. Let’s hope we have a similarly colorful outlook when the next Beige Book is released.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


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

Intermodal units, at 278,767 containers and trailers were up 6.7 percent compared to the same week last year and marks the third best week for intermodal ever recorded based on AAR’s data.

LM Group News Editor Jeff Berman recently conducted a wide-ranging interview with Bobby Harris, President and CEO of non asset-based 3PL BlueGrace Logistics about various aspects of the freight transportation market.

It’s small, but senior brass at YRC Worldwide will take it. After nearly seven years of continuing losses in excess of $2.6 billion, the parent of the nation’s second-largest LTL carrier posted a narrow net profit in the third quarter ended Sept. 30.

As was the case for the second quarter, third quarter earnings results for publicly-traded less-than-truckload (LTL) carriers are again strong. Signs of solid earnings results from carriers that have posted earnings to date include tonnage increases, gains in weight per shipment and average daily shipments, higher yield, and revenue per hundredweight.

While the holiday season is known to bring good tidings and cheer to all, it may also come with another thing that is not so pleasant: higher rate freights. That was the thesis of a commentary written by Mark Montague, industry pricing analyst and chief market-watcher for DAT, a Portland, Ore.-based subsidiary of TransCore.

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA