Subscribe to our free, weekly email newsletter!



One more thing about the winter

By Jeff Berman, Group News Editor
May 23, 2014

OK, so this past winter was brutal. That may go down as the understatement of the year. We have written about it a bunch on this site and in print––and for good reason.

The impact the winter had on freight transportation and logistics operations is well-documented, too, what with making it harder for shippers to secure capacity, especially over the road, as well as railroad-related service issues, among other issues.

But when it comes to how the harsh winter weather impacted manufacturing and non-manufacturing operations, it was not nearly as dire as it was for freight transportation and logistics, according to the Institute for Supply Management’s (ISM) Spring 2014 Semiannual Economic Forecast that was issued earlier this month.

In each ISM Semiannual Economic Forecast, a “special question” is included for both its manufacturing and non-manufacturing member respondents. The Spring 2014 question was along the lines of whether or not there was an impact on their businesses (specifically new orders, production, and employment for manufacturing and new orders business activity, and employment for non-manufacturing) and, if so, whether those impacts were short-term (to be made up in the balance of 2014) or long-term (impact having a lasting effect on the whole year).

Looking at the feedback for this question in the report, I initially expected a much different response than what the data indicated.

For manufacturing, on the new orders side, 51.3 percent of the panel said there was no impact, with 34.2 percent citing a short-term impact, 6 percent long-term, and 8.5 percent unsure. The report added that for manufacturing production, 52.8 percent of respondents indicated no impact, 34.2 percent indicated that the impact was short-term, 7.5 percent indicated that the impact was long-term, and 5.5 percent were unsure of the extent of the impact. And for employment, 78.5 percent of respondents indicated no impact, 12.5 percent indicated that the impact was short-term, 3 percent indicated that the impact was long-term, and 6 percent were unsure of the extent of the impact.

As for non-manufacturing, for new orders, 58 percent of respondents indicated no impact, 26.4 percent indicated that the impact was short-term, 6.3 percent indicated that the impact was long-term, and 9.2 percent were unsure of the extent of the impact. For Business Activity, 57.1 percent of respondents indicated no impact, 32.6 percent indicated that the impact was short-term, 5.7 percent indicated that the impact was long-term, and 4.6 percent were unsure of the extent of the impact. Finally, for Employment, 81.7 percent of respondents indicated no impact, 9.7 percent indicated that the impact was short-term, 2.3 percent indicated that the impact was long-term, and 6.3 percent were unsure of the extent of the impact.

So, looking at that feedback, the general consensus could be something like: “take that, winter!” Grin. As I previously mentioned, I mistakenly assumed that the impact would be far more severe. In my own defense, living through this past winter in Maine was not a cause for celebration (summer is a different story fortunately!).

Brad Holcomb, chair of the ISM Manufacturing Survey Business Committee, told me that he anecdotally heard about 40 percent of publicly traded companies pointed to weather as a drag on their first quarter earnings reports, which saw pundits labeling bad weather as an “excuse” for poor performance.

“We saw with the data that the winter’s impact was not that severe,” he said. “It was difficult, of course, but it is over now and companies are back on track.”

Tony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, agreed with Holcomb, explaining that while the weather had some impact in the first two months of the year, once there was a break in the weather things got back to business as usual.

“It was definitely a speed bump but not a crash,” he said.

The fact that Old Man winter did not beat down overall throughput for ISM members is a good thing. Even with some of the challenges it presented for nearly everyone, they were able to work through it and persevere, which is a good thing. Will things be as smooth the next time winter rears its ugly head? Only time will tell.

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 November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Total November POLB volumes were up 2.1 percent year-over-year at 581,514 TEU, and POLA volumes in November decreased 3 percent compared to November 2013 at 663,346 TEU.

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

Article Topics

Blogs · ISM · All topics

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