Subscribe to our free, weekly email newsletter!



Economic uncertainty continues to rule the day

By Jeff Berman, Group News Editor
October 24, 2011

In a recent interview with Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast, I was told that “that the only true options for the economy at this point are stumbling forward or falling down.” While Leamer may have said that in jest, his words ring true—unfortunately.

He made several points supporting his case, including: sluggish GDP growth, cautious consumer buying behavior, and a moderate slowdown on the manufacturing and industrial production side to name a few.

The news regarding a tepid economic recovery is clearly far from new, we have been reading about it and experiencing it in one way or another for a while now. We have been told that things will be better “soon” on more than one occasion, yet things continue to stagnate.

This less than uplifting theme (it is Monday; I apologize) was driven in part by an article I read in this morning’s Wall Street Journal, entitled “Lean Companies Ready to Cut.” Not the most inspiring headline in this era of economic uncertainty by a long shot, I know.

Without re-writing the entire article in this space, here is a quick summary of what it discussed:
-many manufacturers are setting aside money to fund moves aimed at cutting costs and streamlining operations;
-these cuts could be comprised of things like job cuts and factory closures, with slow revenue growth expected in 2012; and
-hiring growth remains anemic

OK-not exactly a ringing endorsement for the economy. What’s more, Jeff Sprague, managing partner at independent research firm Vertical Research Partners, said this:

“The consumer is dead, construction is dead, so if the industrial sector pulls back, then we don’t have too much else to lean on. At the margin it certainly is worrisome. It could feed on itself.”

Sprague did add that corporate plans regarding cost-cutting need to be viewed with a caveat, that being not being caught flat-footed should things take a more serious turn for the worse.

As per the usual, the mixed signals regarding the economy are plentiful. We have seen them go up and down more times than can be remembered over the last four years or so. And now that we are in third-quarter earnings season, there have been some signs that freight transportation carriers and logistics services provider are off to a good start on that front. Look no further than J.B. Hunt, CSX, KCS, and Union Pacific, to name a few on the intermodal and rail side.

But as more companies report in the coming weeks it will help to provide a clearer picture of what is happening—and what can possibly be expected—in the future. Given the up and down nature of the economy, though, don’t take it as gospel, though, because we all know just how quickly things can change.

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

Getting items ordered online to your home on a same-day basis is as important or relevant as it needs to be, and it depends on things like the type of products being ordered and its relative urgency as well. This was put into better perspective for me during a recent conversation I had with Dr. Victor Allis, CEO of Quintiq, a supply chain vendor specializing in a single optimization and planning platform.

Diesel prices dropped for the third straight week, with the average price per gallon seeing a 2.5 percent decline to $3.869 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

Seasonally-adjusted (SA) for-hire truck tonnage in June dropped 0.8 percent on the heels of a revised 0.9 percent (from 1.0 percent) increase in May and was up 2.3 percent annually.

Even as Congress was putting the finishing touches on a 10-month short-term funding extension to the federal aid highway bill that temporarily averts a funding crisis, Transportation Secretary Anthony Foxx was ripping the measure as a short-term “gimmick” that once again fails to adequately fund U.S. infrastructure needs in the long run.

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

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