Subscribe to our free, weekly email newsletter!

Fiscal cliff and economic uncertainty are top of mind in transport circles

By Jeff Berman, Group News Editor
November 19, 2012

Had enough of reading and hearing about companies scaling back investment, research, and hiring plans, due to the pending Fiscal Cliff and other things like economic uncertainty? Well, hold on for a while, because this stuff is not fading away anytime soon.

Once the election ended, talk of the economy accelerated at a fervent clip, surpassing the level it hit near the end of the election—or at least it felt that way.

In case you are doubting the pace of the drumroll of economic uncertainty, an article in today’s Wall Street Journal outlines what our economy is up against (not exactly breaking news but still):

“U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery. Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next. Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.”

Feelings of anxiety and uncertainty (there’s that word again) were prevalent when learning what may be in store for the economy at last week’s National Industrial Transportation League-Intermodal Association of North America TransComp event in Anaheim, California.

NITL President and CEO Bruce Carlton said that it is his hope that “adults sit at the table” to negotiate and come up with a solution that works for the betterment of the country.
“We need a rational way to go forward and get back to the business of tackling the national debt and getting this economy back on its feet,” said Carlton. “We are capable of doing it.”

I hope Carlton is right, especially from a supply chain perspective.

At a NITL-hosted press conference at last week’s event, Matt Ehlinger, NITL 1st vice chairman and director of corporate transportation for NCH Corporation in Irving Texas, said that nothing good can come out of it for supply chains.

“We are not looking forward to the domino effect which would happen if this kicks in,” he said. “It is going to be disruptive. How do you plan for it? These types of cuts have the potential to negatively impact a lot of things.”

NITL leadership stressed that this directly relates to supply chain and transportation stakeholders getting the services they need in order to continue doing what they do or U.S. commerce is going to be affected and the costs for operating businesses and supply chains will be hindered as will U.S. consumers subsequently.

“I don’t imagine there is enough time between [now] and the end of December to make every single decision about spending priorities,” explained Carlton. “There is time to draft a framework for it, but the President and the Speaker need to ultimately decide what the federal government is going to spend money on. You cannot do it all, so what are the priorities? Will they recalibrate existing programs or dip their toe into big entitlement programs, Social Security and Medicare? It is almost unavoidable. The election is over; Congress needs to get to work on this.”

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

Seasonally-adjusted (SA) for-hire truck tonnage in October at 135.7 (2000=100) was up 1.9 percent compared to September’s 133.1, and the ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment was 139.8 in October, which was 0.9 percent ahead of September.

The average price per gallon of diesel gasoline fell 3.7 cents to $2.445 per gallon, according to data issued today by the Department of Energy’s Energy Information Administration (EIA). This marks the lowest weekly price for diesel since June 1, 2009, when it was at $2.352 per gallon.

In its report, entitled “Grey is the new Black,” JLL takes a close look at supply chain-related trends that can influence retailers’ approaches to Black Friday.

This year, it's all about the digital supply network. In this virtual conference, we will define the challenges currently facing supply chain organizations and offer solutions designed to transform linear operations into dynamic, automated networks that offer seamless communication, visibility, and the ability to respond and optimize processes at any given time.

In his opening comments assessing the economy at last week’s RailTrends conference hosted by Progressive Railroading magazine and independent railroad analyst Tony Hatch, FTR Senior analyst Larry Gross said the economy continues to slog ahead at a relatively tepid pace, coupled with some volatility in terms of overall GDP growth. And amid that slogging, Gross said there is currently an economic hand-off occurring between the industrial sector and the consumer sector.

Article Topics

Blogs · All topics


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

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA