I have spent the majority of this week developing a 5 year forecast for the global WMS market. The primary takeaway from my week’s efforts is that the broad-based increase in the value of the dollar is going to wreak havoc on the translation of foreign sales into dollar values. Another impact is the increased cost of US labor (implementation and consulting services) to overseas customers. Companies with operating revenues in foreign currencies (euros, Swedish krona, Brazilian real, Mexican peso) but costs in US dollars will experience substantial reductions in dollar denominated revenues and operating margins. Also, US product export volume is likely to suffer due to the production cost disadvantage. The impacts from currency exchange rate fluctuations will be in full effect this year.
Now on to this week’s news:
- Global Logistic to Buy U.S. Warehouses for $4.55 Billion
- New Report Predicts Continued Growth in Freight, Trucking
- Is the Calais crisis costing the UK £250m a day in lost trade?
- U.S. Capital Equipment Orders Rise for Second Time This Year
- Grey Orange builds warehouse robots to make sure you get your online purchase on time
Global Logistic Properties (GLP) has entered into an agreement to purchase more than 200 warehouses from Industrial Income Trust for $4.55 billion. This will make GLP the second largest owner of US industrial real-estate (after Prologis). Once this deal is completed, GLP will oversee more than 500 million square feet of industrial real estate. Concurrently, GLP, also reported that it will reduce its development projects in mainland China from an annual target of $2.2 in new starts down to $1.7 billion. This decision is partially driven by recent customer caution after the June Chinese stock market drop and a short-term decrease in demand in cities including Tianjin and Dalian.
The American Trucking Associations (ATA) released a report this week that forecasts freight volumes to increase by almost 29 percent over the next 11 years. The authors also expect freight revenues to increase by almost 75 percent over that same time period. Other key predictions include a slight reduction in trucking’s share of overall freight tonnage, a large increase in pipeline volumes and share of overall movements, and an absolute and relative increase in intermodal transportatation.
The UK and France are experiencing substantial trade disturbances at the French port of Calais. French ferry workers are striking, some burning piles of tires, causing gridlock on routes to the port. Also, the migrant crisis at the Eurotunnel continues as thousands of migrants congregate in Calais and attempt to cross into the UK through the tunnel. As a note, the estimate of 250 million pounds per day in lost trade was issued by the Freight Transportation Association, and assumes that the trade does not go through alternative channels, which is an inacurate assumption as much traffic is rerouted.
The US Department of Commerce released its report on June’s Durable Goods activity. Orders for durable goods increased increased 3.4 percent, driven by the aircraft category. Boeing stated that it received 161 aircraft orders in June, in comparison to only 11 in May. Motor vehicles orders and shipments also increased in June. Although much of the global economy is currently soft, US production of capital goods remains stable.
Grey Orange, a India-based robotics manufacturing company, was featured in a TechinAsia article. I am glad that I came across this article because I was previously unaware of this firm’s warehouse robotics offering. The company currently offers three warehouse automation products – a high speed sortation system that can reportedly sort at speeds of up to 7,200 packages per hour; a high speed parcel and box dimension and weighting system; and of course, Butler, the company’s goods-to-person storage and retrieval robot that carries shelves in a similar manner to Kiva robots.
Have a great weekend!