WASHINGTON — 2014 will be a “banner year” for truckers and other freight haulers, according to the 25th Annual State of Logistics Report from the Council of Supply Chain Management Professionals.
“The performance of the economy overall has not been stellar in 2014, but freight continues to gain momentum and accelerate in the second quarter,” said Rosalyn Wilson, author of the report, at a June 17 presentation at the National Press Club in Washington.
2013 was a complicated year for the economy, starting slowly, gaining momentum mid-year but taking a nosedive at the end, Ms. Wilson said. Gross Domestic Product growth was only 1.9 percent for the year, compared with 2.8 percent in 2012, she said.
The cost of the logistics system rose 2.3 percent in 2012, significantly less than the 3.4-percent hike in prices in 2012, she said.
“In 2012, logistics costs as a percent of the national GDP declined to 8.2 percent,” Ms. Wilson said. “This means that the freight logistics sector was growing at a slightly lower rate than GDP.”
Coming off a strong fourth quarter, 2014 held a great deal of promise for the freight sector, according to Ms. Wilson. However, shipment volume and total freight payments plummeted in January 2014, thanks to a sharp economic downturn that began in December and continued into January, she said.
“GDP figures for the second half of 2013 indicated that the economy is gaining momentum,” she said. “But ultimately this did not pan out in the fourth quarter of 2013, with the first quarter of 2013 posting dismal results.”
By March, however, Ms. Wilson determined that things were picking up for the freight industry.
“Both shipment volumes and payments were on the rise, despite a winter that was still hampering deliveries until the beginning of April,” she said. “Rail carloadings, intermodal and truck tonnage were gaining.”
New orders rose 1.1 percent in March, after plunging in January, according to Ms. Wilson. Also, the backlog of orders, another prime indicator of growth in freight traffic, jumped to 10.6 percent in March, she said.
Major indicators have remained strong in 2014, Ms. Wilson said. The Consumer Confidence Index rose to 83 in May from 81.7 the previous month, and both retail sales and home construction picked up in May, she said.
“The health of the freight market is a solid indicator of the direction the economy is moving,” she said. “All indications are that freight will grow moderately for the rest of the year and the economy should follow suit.”
To order a copy of the report, go to the Council's website. It's free for members, $295 for non-members.