Subscribe to our free, weekly email newsletter!


Trucking news: Ceridian-UCLA Pulse of Commerce Index down 0.5 percent in September

By Jeff Berman, Group News Editor
October 14, 2010

As various economic indices, freight metrics, and trucking companies are reporting declining and stagnant volumes during the second half of the year, the most recent Ceridian-UCLA Pulse of Commerce Index (PCI) appears to be following suit, as the PCI declined 0.5 percent in September, following a 1.0 dip in August.

The preceding months to a large degree also reflected an uneven economy and very slow recovery, with May down 3.1 percent, June down 1.9 percent, and July up 1.7 percent. Back-to-back declines in August and September mark the first time that has occurred in the PCI since January and February 2009.

The PCI, according to Ceridian and UCLA, is based on an analysis of real-time diesel fuel consumption data from over-the-road trucking and is tracked by Ceridian, a provider of electronic and stored value card payment services. The PCI data is accumulated by analyzing Ceridian’s electronic card payment data that captures the location and volume of diesel fuel being purchased by trucking companies. It is based on real-time diesel fuel purchases using a Ceridian card by over the road truckers at more than 7,000 locations across the United States.

The PCI closely tracks the Federal Reserve’s Industrial Production data as well as GDP growth.

“The PCI tells us that inventory is stalled on the nation’s thoroughfares. The good months of growth are now seemingly in our rear view mirror,” said Ed Leamer, chief PCI economist and director of the UCLA Anderson Forecast, in a statement. “Our economy’s loss in traction is alarming and for the ‘Cassandras of the double-dip,’ may foretell a coming decline in GDP and spike in unemployment. However, with residential investment, consumer durables, business spending, and other component indicators already at or near record lows relative to GDP, it remains unlikely that we will experience an outright decline into recession.”

What’s more, the PCI noted that September’s decline represents four straight months of limited or no increases in over-the-road movement of produce, raw materials, goods-in-process and finished goods since the PCI peaked in May 2010.  And according to the PCI, GDP growth in the third quarter of 2010 is forecasted to be in the range of 0.7 percent to 1.7 percent, which the previous PCI forecast of 1.5 to 2.5 percent estimate reported last month.

With economic growth linked directly to unemployment, the current outlook—with unemployment just below 10 percent nationwide—remains grim. On an annual basis, the September PCI is up 5.8 percent, but annual growth needs to be in the 10-to-15 percent range to indicate a healthy job market, according to the report’s authors.

Ceridian Senior Vice President of Finance Todd Dooley told LM that this month’s data is reflective of a slow, steady, unspectacular recovery.

“The low single digit growth is not enough to put people back to work,” he said. “The thing that is disturbing is the continued downward trend in year-over-year growth. It peaked in May at 9 percent and has kept ticking down since then, which gives you pause for concern.

While inventory rebuilding drove strong volume growth in the first half of the year, it has clearly subsided since then. Dooley said he equates inventory building to shipment data the PCI captures, with those shipments growth rates declining on an annual basis for four months. Although growth is still occurring, Dooley observed it is happening at a decelerating rate.

Looking ahead, Dooley said the really interesting question is: what happens with shipments in October, which is typically the busiest month of the year for the domestic trucking sector?

“October is an early predictor…to what consumer spending may be like during the holiday season,” said Dooley.  “Until people go back to work and feel good about their prospects, the money is not going to flow, goods are not going to be consumed, houses won’t be bought, and cars won’t be purchased or leased. It is all about getting people back to work.”

These sentiments were echoed at the recent Council of Supply Chain Management Professionals Annual Conference in San Diego, with many trucking executives telling LM they remain somewhat guarded about future growth prospects until more economic growth occurs in a sustained and meaningful way. And Dooley said that according to feedback Ceridian has received from the trucking industry is that volume growth is steady and continual, with volumes growing but not at a great rate.


For more news on “Truckingclick here

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

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

Article Topics

News · Trucking · Ceridian · UCLA · Pulse of Commerce · 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