Executive Vice President of Innovation Robert Sutton reviews how economic and transportation factors for the month relates to current supply chain needs.
MARKET INDICATORS CONTINUE OVERALL POSITIVE MONTH-OVER-MONTH GROWTH
Consumer sentiment for February is 76.2, down over last month. Purchasing Manager’s Index (PMI) is 58.7 for the month. Industrial production, which measures the manufacturing sector output and accounts for approximately 80% of total production, is up 107.2%.
Retail sales up 5.3%, significantly higher than projected. U.S. unemployment continues to decline month-over-month since last summer to 6.3%.
Durable goods orders – excluding transportation – is +0.2% continuing an eight-month trend, and orders of non-defense capital goods –excluding aircraft – is -2%.
OVER THE ROAD CAPACITY DECREASES; PORTS REMAIN CONGESTED
Logistics Management Index (LMI) for February is 67.2%. Growth in inventory levels and cost, warehousing utilization and prices, and transportation utilization and prices have increased, while transportation capacity has decreased compared to last month.
Cass Freight Index is 1.11 for the month, up 8.5% year-over-year. Tender rejections for contracted loads are at approximately 27% across the U.S.
DAT load-to-truck ratio is up overall, with van +4.27%, and flatbed +48% month-over-month. DAT spot rates month-over-month shows van at $2.36, and flatbed and $2.49%.
February indicates significant volume increase at west coast ports for imports coming from Southeast Asia. As inventory levels continue to rise, vessels in San Pedro Bay are waiting to berth at the ports of LA and Long Beach.
POTENTIAL ELEMENTS TO AFFECT ECONOMIC ACTIVITY
COVID-19 vaccination rates for February on the rise compared to last month along with the approval of the Johnson and Johnson vaccine are expected to impact infection rates in the U.S. Continued congestion in the ports is causing shipping delays and is expected to be a shock to supply chain for several months.
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