“There’s a Stat for That”
The new year often serves as a point of reflection, when individuals review the past year in an effort to improve upon the future. It is also the time at which economic reports assessing the prior year are published by government agencies and trade groups. This week, Cass Information Systems kicked off the process with its December Freight Index. A number of federal agencies also posted monthly economic index reports. These reports constitute the majority of this week’s logistics news.
- DOT Freight Transportation Index Rises to Record Level
- Cass Freight Index Declines in December
- Freight Rail Traffic for 2013 Saw Record Intermodal Growth, Slight Dip in Carloads
- XPO to Buy Pacer for $335 Million
- UK SME e-retailers planning to combine clicks with bricks
The US Department of Transportation reported that the November Freight Transportation Index rose to a record high. This represents a 23 percent increase over the low reported in 2009 during the recession, and a 5 percent increase over November 2012. The report attributed truck tonnage increases to heavy load industries including oil and gas fracking and heavy construction. The increase in oil and gas transportation and trade is a common theme across the reports include in this week’s logistics news. In 2014, ARC will be conducting research on the upstream supply chains of unconventional oil fields, such as those supporting the current shale oil boom in the United States. The DOT report also stated that growing auto production benefited both trucking and rail. The developments outlined in this index are of interest to logistics industry practitions and to those looking to gauge the overall economy, as it shows a strong leading relationship to macroeconomic growth cycles.
The Cass Freight Index for December showed that shipment levels were 3.2 percent lower than in December 2012 and 1.8 percent lower than 2011.
The report did note that this decrease does contrast with the ATA’s truck tonnage index, used in the DOT Freight Trasport Index noted above, that shows loads have been getting heavier. The Cass report outlines 2013 as a whole, essentially concluding that the freight climate was mediocre during the year.
The American Association of Railroads (AAR) reported record intermodal growth in 2013, although there was a slight dip in overall carloads. The commodity categories that showed the greatest increase over 2012 included petroleum products, up 31 percent; stone and gravel, up 8 percent; and motor vehicles and parts, up 5 percent. The categories down the most included metallic ores and grain.
Swithing now to the 3PL world, XPO Logistics announced its intention to acquire the intermodal freight carrier, Pacer International. This acquisition is expected to double XPO’s annual revenue to $2 billion. There appears to be operational synergies and limited overlap between the organizations, as XPO is strong in freight brokerage, last-mile logistics and expedited transportation services, while the Pacer acquisition offers well-established intermodal freight services with a strength in cross-border Mexico movements.
Finally, from across the pond, Royal Mail conducted a survey on small and medium e-tailers in the UK. The omni-channel retail paradigm shift continues in Europe, as the survey indicated that 16 percent of pure-play e-tailers intend to “either open a physical store or seek space in one to increase sales.” At the same time, over half of the retailers indicated that competition for online shoppers was more intense than it was in 2012.