More questions than answers when it comes to logistics landscape
August 31, 2010 - LM Editorial
Every so often, it is good to take stock of what is going on in your world—and the world around you for that matter. With that in mind, now is a good time to assess what is happening in the world of freight transportation, supply chain, and logistics.
One thing which has received a fair amount of attention is the matter of Peak Season? This brings up questions like: will there be one or did it already happen? Given that fact that the past 4 Peak Seasons have essentially been a bust to a large degree, those are good—and fair—questions in my opinion. But we need to let things happen to see what happened at the end of the day.
A shipper told me in a recent Peak Season story I wrote for logisticsmgmt.com that this year’s Peak Season will be a “doozy,” because of shrunken capacity, which can create challenges when it comes to re-positioning intermodal equipment. This situation, said the shipper, subsequently leads to carriers having a hard time getting boxes back to the West Coast. In short, that shipper said overall Peak Season activity will be driven by a lack of capacity, as opposed to growth in the economy.
This point leads me back to one of Newsroom Notes’ favorite topics—the economy. I am not an economist, nor do I play one on TV (excuse my poor attempt at humor here; I should be much funnier by Friday). But I don’t need to be an economist to determine that the confluence of mixed economic signals is still in fifth gear.
Last week’s 1.6 percent GDP forecast is certain to not get anyone excited, nor are the high levels of unemployment we continue to see either, or a steep trade deficit. But we need to keep in mind there are some encouraging things at play, too.
What are those things? For one, diesel and oil prices remain digestible for shippers and carriers for the most part continue to report demand is steady if not as strong as it was just a few weeks back.
Other good news signs are record-breaking weekly intermodal volumes over the past two weeks being reported by the Association of American Railroads and a resurgent air cargo market.
But at the end of the day, consumer demand and inventory restocking activity—which is clearly slowing down—look to be the Wild Cards, when it comes to assessing future freight volumes. What will happen? Who knows? But it figures to be a wild ride.
What do you think? Newsroom Notes wants to know.
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