Professional Documents
Culture Documents
• Why am I here?
by
John Franklin
• Driver Shortages
Project Objective
Initial Meeting
• Proposal and goal of the association.
Database.
Funding
• Meetings.
Facility.
Publications.
Food and Beverages.
Guest Speakers.
• Traffic Database.
Web based.
Volvo Logistics
North American Purchasing
Crystal Ball – January 2011
• Macro economic view – slow with an upside but optimistic for the next 2 years.
• Consumption for the past 8 quarters is 2% or less.
• Consumer credit falling as people are buying less, more goods than services, which is
driving the manufacturing sector.
• Home ownership growth 1995 = 63%, 2004 = 69%, 2011 = 67%. Housing is 15% of the
overall economy. Distressed properties, including foreclosures, made up about one-third
of existing home sales in November, roughly in line with the previous month and the
previous year.
• Banks are starting to loosen credit but there are still 900 banks on the FDIC’s watch
list. More than 150 banks failed in 2010. Look for more mergers in 2011.
• Businesses have record profits and are flush with cash. They will begin using this cash
to enhance their support structure and market position.
Economic Indicators
• On an annual basis, real GDP is forecast to increase to 2.7% in 2011 and rise to 3.1%
in 2012. For real growth to take place the GDP has to be over 2%.
• Manufacturing remains a large source of freight movements. Industrial forecast to
increase 4.9% in 2011 and 5.2% in 2012.
• Manufacturing growth in the US accelerated in December with the Supply
Management’s monthly PMI measure reaching its highest level in 7 months and showing
signs of greater expansion in the coming months.
• The ISM manufacturing index rose to 57% from 56.6% from the month before, the 17th
straight month of expansion at US factories.
Truckload Forecast
• The recent strong economic releases confirm our expectation over overall truck
growth’s return to the 4% level.
• These freight growth levels are more than enough to create the capacity shortages we
forecast a year ago. Only a double-dip recession, characterized by a sharp
manufacturing slowdown, would significantly change this forecast.
Truckload Rates
• Rates are up over 5% (including existing contracts). There are reports of contract
renewals above 10%
• Resumption of stronger freight growth, price increases for equipment and maintenance
items such as tires, increased regulation, and improvement in margins will continue to
pressure rates upward
• Strong manufacturing growth has generated truck freight above GDP growth.
• Despite the current pause in growth, loadings have averaged 6.1% annualized Q/Q
growth since Q2 2009.
• We still expect freight growth to remain in the 5% range for the next year.
Domestic Fuel
• Diesel prices also hit a two year high in December with prices in week 1 2011 now at
$3.33 per gallon
• Stocks have fallen from record levels as refiners ease production now that the heating oil
customers have made their initial winter purchases.
• The forecast is for diesel fuel prices to remain in the $3.30 range for 2011, however, it
should be noted that the price of diesel is highly volatile.
Trucking Bankruptcies
• The rate of bankruptcies is declining, but that’s not providing much relieve in available
capacity. Avondale estimates bankruptcies pulled 55,405 trucks from the road in the first 3
quarters of 2010.
• Bankruptcies reduced capacity by 13% but surviving truckers are not adding capacity so the
net effect is 16%.
• The review period is 24 months but the most recent violations are more heavily weighted.
As time moves on and fewer violations are incurred, the scores will improve.
Conclusion
• Improving industries currently located in our area.
• Attractive incentive for industries looking to locate in our
area.
• Improving our community.
Safety
Quality
Delivery
Cost
Environmental Care
Moral
• Salt and Light.
Questions
Thank You!