A gentle surge in U.S. manufacturing and more emphasis on “near shoring” indicates that trade with Canada will continue to grow this year, major forwarders say. This is a trend confirmed by economists at the Toronto-based CIBC World Markets who report that Canada will remain the biggest trading partner for the U.S. for years to come.
Demand for U.S. goods is surging, says CIBC, with wholesale trade inventories climbing 1.7 percent to $52.4 billion this past May—the largest percentage increase since January 2007. “The volume of cross-border growth is impressive,” says CIBC analyst Rob Shotte. “The inventory-tosales ratio is a measure of the time, in months, required to exhaust inventories if sales were to remain at their current level. Overall, 16 of the 25 wholesale trade industries reported higher inventory levels.”
The impact of the current environment for U.S. shippers has been significant, Shotte adds. U.S. wholesalers in construction, forestry, mining, industrial machinery, equipment, and supplies posted the biggest inventory gains in dollar terms, followed by agricultural wholesalers when shipping into Canada, CIBC notes in a recent report.
One of the world’s premier trade services companies concurs with this observation. “A combination of forces are at work when examining this uptick,” says Amy Magnus, district manager for A.N. Deringer. “Business has been good, and seems to be getting better. But U.S. exporters trying to go it alone may still find some unexpected barriers and choke points.”
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Seasonally-adjusted (SA) for-hire truck tonnage in July headed up 1.3 percent on the heels of a 0.8 percent increase in June. The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 133.3 in July, which outpaced June’s 132.3 by 0.8 percent, and was up 2.8 percent annually.
Volumes for the month of July at the Port of Long Beach (POLB) and the Port of Los Angeles (POLA) were mixed, according to data recently issued by the ports. Unlike May and June, which saw higher than usual seasonal volumes, due to the West Coast port labor situation, July was down as retailers had completed filling inventories for back-to-school shopping.
With a 0.8 cent decrease, this week’s average price per gallon is $3.835 and stands as the lowest price since hitting $3.844 the week of November 25, 2013.
LTL carriers are rapidly investing in expensive, on-dock, three-dimensional size measurement capturing machinery, and they are hoping one day of being able to more accurately charge shippers rates based on the actual dimensions of their shipments, rather than the traditional weight-and-distance-based formula that has been in effect since the 1930s or even earlier.
The Department of Transportation’s Bureau of Transportation Statistics (BTS) recently reported that its Freight Transportation Services Index (TSI) dipped 0.9 percent from May to June.