Viewpoint: Crank up the economic sunshine

By Michael Levans, Group Editorial Director
January 01, 2014 - LM Editorial

To kick off 2014, I’m going to reinforce a rather bold suggestion that Group News Editor Jeff Berman made in his first blog post of the new year: Let’s cut out the use of the adjective “cautious” before we use the noun “optimism” when referring to the state of the U.S. economy.

One merely needs to tune into the daily drone of consumer news media to feel the warmth. Unemployment is finally heading in the right direction, housing is robust in most regions of the U.S., and the consumer confidence index ticked up more than six points in December, recouping the drop caused by the government shutdown in October.

And in our reporting online and in these pages this month, we continue to reveal beams of bright light concerning trade, manufacturing, and even the evolution of “reshoring”—a trend that should help trim transportation budgets and reduce risk in the long run.

In quick review, Port Tracker, a monthly report issued by the National Retail Federation and maritime consultancy Hackett Associates, is calling for a positive end to 2013 in terms of annual import growth at U.S. retail container ports. According to the report issued last month, total import volume for 2013 should ring in at 16.2 million TEU, marking a 2.3 percent increase over 2012.

To round out this data, the United States Department of Commerce reported last month that U.S. exports hit $194.86 billion on a seasonally-adjusted level in November. This number stands as the new high water mark for exports, and when partnered with the import data results is the lowest trade gap since 2009.

“We are well on our way to a sustained recovery,” Hackett Associates Founder Ben Hackett tells Berman this month. “And with unemployment now down to 7 percent, it appears that the recovery will continue at a healthy pace.”

The positive news on the state of U.S. manufacturing rolls along as well. According to the economic forecast issued by the Institute for Supply Management (ISM) last month, U.S. manufacturing revenue is set to increase 4.4 percent in 2014, with capital expenditures slated to rise 8 percent and capacity utilization to ring in at 80.3 percent.

According to Brad Holcomb, chair of ISM’s survey committee, this 2014 forecast is based on the positive momentum that started in the middle of 2013, with each month increasing over the previous month through the end of the year. “Our panel of purchasing and supply management executives are forecasting a continuation of that growth trend in 2014,” said Holcomb, “with a good first half and an even better second half.”

One of the more intriguing bits of upbeat news comes out of survey results issued by business advisory firm Grant Thornton. The report titled Realities of Reshoring found that more than one third of responding U.S.-based companies are planning to bring production, customer service, or IT infrastructure back to the U.S. in the next 12 months.

“The idea of going overseas was to drive costs down,” Grant Thornton’s Wally Gruenes, the study’s lead, tells us. “Now, many companies have identified cost savings in the analysis of data they receive from partners in the supply chain. They’re looking for closer collaboration or face-to-face meetings to improve these savings, and proximity can be important.” 

If the results of this study come to fruition, we could see a substantial impact on U.S. trade balances and even more pressure on our straining infrastructure and domestic trucking capacity. However, all of this upbeat data indicates that even U.S. business has confidence in the U.S. again—and for me that’s enough to crank up the sunshine.



About the Author

image
Michael Levans
Group Editorial Director

Michael Levans is Group Editorial Director of Peerless Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at .(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

Even though China’s costs have risen and the U.S. has now surpassed Mexico as the preferred locale for relocating offshored manufacturing, advantages can be fleeting and the challenges great

Memphis-based FedEx reported solid fiscal second quarter earnings results today. Quarterly net income of $616 million was up 23 percent annually, and revenue, at $11.9 billion, was up 5 percent. Operating income at $1.01 billion was up 22 percent.

UPS said this week that it has added significant space to some of its North America-based distribution facilities, which the company increases the total size of its supply chain solutions network size by roughly 1.2 million square-feet. The company’s total global supply chain solutions network is comprised of 596 facilities and about 32.8 million square-feet. UPS offers various services at these facilities, including: warehousing and fulfillment inventory, transportation and returns management; custom kitting and packaging; and store-ready displays.

A week ago, the average price per gallon of diesel gasoline saw its steepest decline in more than two years, when it fell 7 cents to $3.535. This week took that decline a step further, with the Department of Energy’s Energy Information Administration (EIA) reporting that the average price this week fell 11.6 cents to $3.419 per gallon.

With an eye on further expansion of its e-commerce business and related reverse logistics processes, transportation and logistics bellwether FedEx last night announced it has inked an agreement to acquire Pittsburgh-based GENCO, a third-party logistics (3PL) services provider specializing in product lifecycle and reverse logistics.

Article Topics

Columns · Viewpoint · Trucking · January 2014 · Economy · Import · Export · 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