LOGISTICS MARKET SNAPSHOT

VOLUME #2

Fueling Logistics Competiveness

Prepared: January 15, 2011

MULTIMODAL:
Dow Jones Transportation Index NASDAQ Transportation Index DOT Freight Transportation Index Cass Freight Index Multimodal Business News: Dow Jones Transportation index was up 2.11% during December.
(Stock performance of twenty large, well-known U.S. companies within the transportation industry, average of Dec 10th thru Jan 10th) (averaged share weights of NASDAQ-listed companies classified as transportation companies, average of Dec 10th thru Jan 10th)

NASDAQ Transportation Index up 0.4% in December.

The USDOT's freight transportation services index rose 0.1% (flat) in November 2010 from a year earlier. The December shipments index down 3.6% from November and up 12.4% year over year. The December expenditures index down 3.9% for the month and up 20% year over year.
(Based upon transportation dollars and shipments of Cass clients comprised of over 400 shipping companies)

• Online sales increased 36% in 2010 year-over-year. (Source: Mercent Corp.) • China allowed the Yuan to appreciate slightly against the dollar by resetting the reference rate.

TRUCKING:
Over-the-Road Trucked Shipments Trucking Employment Truck Orders Freight Rate Index Over-the-Road Trucked Shipments grew 2.4% in December. This month’s increase pushed the index above its previous peak for the year established last May. Overall trucked shipments are up 4.1% year-over-year.
(From the Ceridian-UCLA Pulse of Commerce Index which is based on real-time fuel consumption data for over the road trucking)

The trucking industry added 2,600 jobs in December, the third consecutive month that the trucking workforce grew. (Source: U.S. DOL) Orders for heavy-duty Class 8 trucks in North America increased 115% in December from a year ago and totaled more than 25,000 units. Total orders for 2010 increased 27% over 2009. (Source: ACT Research Co.) Freight rate index cost-per-mile increased to $2.30 in January 2011, up from $2.27 in December 2010.
(This Cost Per Mile (CPM) indicator is comprised of 8 main and 65 total cost and cost influencing components, it considers completely, every cost related to freight transport by land)

Diesel Prices

U.S. average diesel prices rose for the sixth straight week, increasing 0.2¢ last week to $3.333 per gallon, the highest price since October 2008. Average diesel price in lower Atlantic states is $3.308 per gallon.
(Source: U.S. DOE) (Reflects the costs and profits of the entire production and distribution chain.)

NAFTA Trade Trucking Business News:

Surface transport-related trade between the U.S. and its NAFTA partners, Canada and Mexico, was up 14.9% in October compared to the same month in 2009, reaching $70.6 billion. (Source: US DOT) Every public trucking company is expected to post improved year-over-year earnings for the fourth quarter in a row. On average, improvement from quarter to quarter will top 40%.

RAIL:
U.S. Freight Rail Traffic Intermodal Rail Traffic Railroad bulk carload freight in December 2010 increased 9.4% over December 2009. (Source: AAR)
(Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

Intermodal rail traffic in December 2010 is 14.7% higher than same month last year. (Source: AAR)
(Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)

Railroad Fuel Price Index

The index of average railroad fuel prices in November was 479.1, up 2.3% over the previous month, and up 17% over the previous year. (Source: AAR)
(Average monthly price for gallons purchased by freight railroads; Includes federal excise taxes, transportation, and handling expenses)

Freight Cars in Storage Class 1 Railroad Employment Railroad Business News:

The number of freight cars in storage has decreased to 316,271 (20.8% of the fleet) on January 1, down 1,539 cars from a month earlier. (Source: AAR)
(A freight car is "in storage" if it has had a loaded revenue move since 2005, but not in the past 60 days. Decrease here = more demand)

Railroad employment was up 757 employees to 155,042 employees in November 2010. (Source: U.S. STB)
• On December 27, Norfolk Southern Railway loaded the largest coal shipment in more than 12 years, and

the second-largest in its history. 155,522 net tons of coal were loaded using 1,487 rail cars.
• CSX Transportation reported that customers committed to 130 new or expanded facilities along its rail

lines in 2010 which upon completion could create up to 5,200 jobs.

LOGISTICS MARKET SNAPSHOT
VOLUME #2

Fueling Logistics Competiveness

Prepared: January 15, 2011

AIR FREIGHT:
Air Cargo Traffic Global air freight in November up 5.4% from one year ago after expanding 14.5% year-over-year in October.
(Statistics cover international scheduled air traffic; domestic traffic is not included.

In November, international air cargo prices fell 0.4% since October, down 18.2% since November 2009. Air Freight Price Index Jet Fuel Prices
(Source: JOC) (The Drewry Air Freight Price Index is based on the average of rates ($US per kg) for cargoes of 100+kg to 1,000+kg cargoes from Shanghai to London, Moscow, Prague, New York, and Los Angeles.)

As of January 7, 2011, global average jet fuel price was $106.90 per barrel, up 3% from December, and 16.5% year-over-year. (Source: IATA) (The weekly index and price data shows the global average price paid at the refinery for
aviation jet fuel)

Cargo Yields Air Freight Business News:

IATA forecasts 2011 yields for cargo to grow 7.9%, after cargo traffic volumes increased 19.8% for 2010. (Source: IATA)
• Last week’s winter storm is expected to reduce Delta Airlines’ net profit for the fourth quarter by about

$45 million. Delta was forced to cancel more than 2,000 flights due to hazardous weather.
• Air China has estimated that its 2010 net profit more than doubled the company’s 2009 profit of 5.03

billion Yuan (or $759.8 million).

OCEAN FREIGHT:
Import Volumes In November, U.S. ports imported more than 60 million metric tons of cargo, valued at $84.7 billion. November U.S. imports have increased 6.6% in terms of volume and increased 21.6% in terms of value over the previous year. (Source: US Census) In November, U.S. ports exported approximately 48.9 million metric tons of cargo, valued at $42.5 billion. November U.S. exports have increased 13.6% in terms of volume and increased 22.8% in terms of value over the previous year. (Source: US Census) Import container volume at the nation’s major retail ports is expected to be up 8% in January over the same month last year. (Source: NRF & Hackett Associates) The January 10, 2011 average spot market rate was $2,119 per FEU, remaining the same from the week before and $703 higher than the rate for the same week last year. (Source: JOC & Drewry Inc.)
(Based on Drewry Shipping Consultants' research and derived from shipping rates from Hong Kong to Los Angeles. The rate is based on a full 40-foot container load or FEU, excluding terminal-handling charges in Hong Kong.)

Export Volumes

Retail Container Traffic

Container Rates

Shanghai Containerized Freight Index Ocean Bulk Freight Rates

The January 7th SCFI rate was $1,126.94 per FEU, up 0.4% from the week before. The spot rate for shipments to the U.S. East Coast was $3,240 per FEU, up 2.2% from the previous week. (Source: JOC)
(The Shanghai Containerized Freight Index is a weekly reported average export spot rate from Shanghai for 15 different trade lanes.)

The Baltic Dry Index dropped 16.5% in December, ending with a cost of $1,773. The BDI has continued to decrease 14% for the first half of January. (Source: The Baltic Exchange)
(The Baltic Dry Index is an index that tracks and averages worldwide international shipping prices of various dry bulk cargoes.)

Bunker Fuel Prices Port of Savannah Port of Brunswick

Average bunker fuel prices were up 4.4% or $26.92/MT to $644.42/MT in December 2010. By mid-January, bunker fuel prices were up 3% to $663.74/MT. (Source: Bunker Index)
(The Bunker Index is the average global bunker fuel price from individual ports; measure in $US per MT or megaton)

In November 2010, container traffic was up 14% or 227,168 TEU’s from November 2009. This follows an increase of 16.7% in October 2010 over 2009. (Source: GPA) In November 2010, Auto units were up 10,081 or 34.6%, following growth in October of 61.6% over the same months in 2009. Total vessel calls in Brunswick were up by 14 or 36.8% in November. (Source: GPA) • Shanghai overtook Singapore as the world’s busiest container port in 2010. Shanghai’s port handled 29.05 million TEUs in 2010, an increase of 16.2% over the previous year. • In December, Chilean carrier CSAV added the Port of Savannah to the port rotation of its all-water service from Asia to the U.S. East Coast. This service includes 10 vessels and offers a 25 day transit to Busan. • The International Maritime Bureau, reported that pirates captured 1,181 seafarers and killed eight, with a total of 53 ships hijacked in 2010. This is the highest year ever, up 10% over 2009. Hijackings off the coast of Somalia accounted for 92% of attacks and a total of 28 vessels and 638 hostages were still held for ransom by Somali pirates as of Dec. 31, 2010. (Source: IMB)

Ocean Freight Business News:

LOGISTICS MARKET SNAPSHOT
VOLUME #2

Fueling Logistics Competiveness

Prepared: January 15, 2011

WAREHOUSING & DISTRIBUTION:
Warehouse Vacancy The U.S. average industrial vacancy rate ended the year at 10.5%. The vacancy rate is expected to decline gradually to 10.1% by the end of 2011 and 9.3% by the end of 2012. (Source: Grubb & Ellis) At the end of 2010, average asking rental rates for warehouse space were $4.26 per square foot annually. Average rental rates are expected to reach $4.30 per square foot by the end of 2011 and $4.35 by the end of 2012. (Source: Grubb & Ellis) Georgia’s PMI was down 2.6 points to 53.7 in December over the month prior, but new orders in Georgia were up 1.4 points to 59.3. The National PMI increased 0.4 points to 57 in December 2010, and new orders increased 4.3 points to 60.9. (Source: Kennesaw State University/ISM)
(The PMI combines data on new orders, inventory, production, supplier deliveries, and employment. A reading above 50 indicates that the manufacturing economy is generally expanding.)

Warehouse Rent Rates

Purchasing Managers Index

W&D Business News:

• FedEx announces plans to build a nearly 215,000 square-foot distribution center in Atlanta.

U.S. MARKET:
Gross Domestic Product U.S. Trade Deficit The U.S. GDP increased 2.6% in the third quarter 2010 according to the third estimate released by the BEA on December 22. (Source: US BEA) The U.S. trade deficit shrank 0.3% in November to $38.3 billion, the lowest trade deficit in 10 months, as exports climbed to the highest level in more than two years. (Source: US DOC & Census Bureau) Decreased to 52.5% in December 2010 from 54.1% in November 2010. (Source: The Conference Board)
(The consumer confidence index is based on a monthly survey of 5,000 U.S. households. It is designed to gauge the financial health, spending power, and confidence of the average U.S. consumer.)

Consumer Confidence Unemployment Rate

The unemployment rate in America fell to 9.4% in December, the lowest since May 2009. But the number of new jobs created remained small; employers added 103,000 workers to the payrolls. (Source: US DOL) The Leading Economic Index for the U.S. increased 1.1% in November to 112.4 (2004=100), following a 0.4% increase in October and a 0.6% September. (Source: Conference Board)
(The LEI is a composite of 10 economic indicators that together create an analytic system designed to signal peaks and troughs in the business cycle. The LEI reveals patterns in economic data in a clearer and more convincing manner than any individual component alone.)

Leading Economic Index

Retail Sales

Total of all retail and food service sales for December 2010 are estimated at $380.9 Billion, up 7.9% over last year. Non-store retailer sales were up 15% and automobile sales were up 14.7% over December 2009.
(Source: US Census)

Manufacturing & Trade Sales

Total combined sales and manufacturing shipments totaled $1.13 Trillion in November 2010, up 1.2% from last month and 8.5% from a year ago. (Source: US Census) Total value of inventory on hand is estimated at $1.42 Trillion in November 2010, up 0.2% from last month and 6.8% from a year ago. (Source: US Census)

Manufacturing & Trade Inventory

Archives of these monthly snapshots are posted to: SNAPSHOT.GEORGIALOGISTICS.ORG For more information about the Logistics Market Snapshot or the many other resources and activities of the Georgia Center of Innovation for Logistics please contact: Page Siplon, Executive Director – psiplon@georgia.org – 912.966.7867 … or visit www.georgialogistics.org

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