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Expect Freight Rates to Rise in Holiday Season

Posted on 14 Oct, 2014 By Mark Montague of DAT Solutions

Nearly $1 trillion in retail sales will result if analysts at Deloitte are correct in their forecast of 4.5% growth during the upcoming holiday season. Consumers have 2.6% more disposable income this year, according to Deloitte, due in part to declining fuel prices. Employment statistics are improving, as well, and the picture for Q4 will be even rosier with the addition of as many as 800,000 seasonal jobs in retail and related service sectors.

The National Retail Federation (NRF) projects a 4.1% increase in holiday sales, compared to 2013. If the industry organization’s forecast is correct, seasonal sales growth will exceed 4% for the first time since 2011.

A more Grinch-like forecast emerged from the Standard & Poor’s 500 Retailing Index, which declined 0.9% for the first eight months of 2014. That period included a weak back-to-school season. Consumer confidence fell in September, as well, according to the Conference Board.

The transportation sector is flourishing, at least in part because of rate increases. The Dow Jones Transportation Index has been outperforming both the retail sector and the S&P 500 since March of this year, as seen in the graph below of 2014 to-date:

The Dow Jones Transportation Index (DJTA) has steadily outperformed both the Dow Jones Retail Index (DJUSRT) and the S&P 500 (SPX Daily) since March of this year. (Custom graph created on MarketWatch.com.)

Shippers expect to pay higher rates for truckload and rail intermodal transportation in the busy holiday season and well into 2015. A survey by Wolfe Research, according to Journal of Commerce, revealed that “52% of shippers plan to pay peak surcharges to move their truckload freight” in the fourth quarter. Another result of tight capacity: the shippers surveyed expect to rely increasingly on freight brokers to help find trucks.

Fourth-quarter freight volume was not expected to increase dramatically, according to previous estimates. because many shippers brought imports into the West Coast early. Concerns persisted about a potential labor strike at ports from Southern California up to British Columbia, but there has been no work stoppage even though contract negotiations are still not complete.

Freight is still arriving, and the highest-volume U.S. ports, in Los Angeles and Long Beach are busier than ever. A significant number of van loads are finding their way onto the spot market. This week’s activity on DAT Load Boards included more than 2,000 available van loads and 500 to 600 outbound trucks posted per day from the Los Angeles market, home to both ports. Spot market rates rose last week on the lanes from L.A. to the regional freight hubs of Stockton, Phoenix, Denver, Dallas and Atlanta, as recorded in DAT RateView.

Rates are atypically high outbound from L.A., including the lane to Phoenix. Rates on that lane are approaching the all-time peak average of $2.57 (not including the fuel surcharge, which was a few cents higher in June.) The current load-to-truck ratio is up to 4.3, indicating capacity pressure in October that resembles the June peak for vans outbound from L.A. This lane has seen high demand and atypically high rates since late May, when spot market rates surpassed the contract rates. That means that small and mid-sized carriers got more money per mile for one-time loads from freight brokers than the big, contract carriers received directly from shippers. During a slack season, the contract rate typically exceeds the spot market rate (paid to the truck) by 10% to 20%, and a portion of the margin goes to the broker.

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IMTA InfoFlash: Operation Safe Driver to be Focus October 19

During the week of October 19-25, 2014, law enforcement agencies across North America will engage in heightened traffic safety enforcement and education aimed at unsafe driving behaviors by both commercial motor vehicle and passenger-vehicle drivers during Operation Safe Driver Week.

During Operation Safe Driver Week, activities will be held across the United States, Canada and Mexico with the goal of increasing commercial vehicle and non-commercial vehicle traffic enforcement, safety belt enforcement, driver roadside inspections and driver regulatory compliance. In addition to enforcement, education is an important component of Operation Safe Driver Week. Law enforcement and transportation safety officials will offer educational and awareness safety programs to the motor carrier population and the motoring public.

 

For more information about Operation Safe Driver go to www.cvsa.org.

Source: Commercial Vehicle Safety Administration

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National Truck Driver Appreciation Week

The DMTB team would like to recognize our professional truck drivers for everything they do to keep America moving!  Did you know that everyone in this country depends on the professional truck driver for most things in their lives without realizing it? Nearly 96% of the gross national product  moves by Truck. These Men and Women spend days on end crisscrossing our highways under tight time schedules to deliver our freight.  Often times they are lucky to get a simple thank you.

This is our opportunity to give them all a special thanks, If you cross paths with one of these hardworking folks take some time and shake their hand for a job well done. If you are a driver and your path crosses by our office please stop in and get this and see us to receive a free gift.

For more information on National Truck Driver Appreciation Week visit the American Trucking Association’s Website

 

Be sure to ask our staff about upcoming Trucktoberfest as well!

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Georgia’s New Cargo Theft Bill

This past April, Gov. Nathan Deal of Georgia signed The Georgia Cargo Theft Act, which went into effect on July 1st of this year. This Act represents the first legislation of its kind in the nation. Prior to this Act, cargo theft cases were treated as mere car thefts and the perpetrators rarely faced serious penalties for their crime. This is true even though cargo thefts can run into the hundreds of thousands of dollars. As a result of the lack of serious ramifications, cargo theft has continued to be a major issue for everyone along the supply chain, especially in the top 5 cargo theft states of CA, FL, TX, GA, and IL. It has impacted consumers, unwittingly, in the form of higher prices, as well.

 

Georgia’s new legislation designates mandatory prison time based on the value of the property stolen once the thief is arrested and convicted. There are a few value ranges, but one example of this would be a theft that is valued between $10,000 and $1M. The punishment, prior to this legislation was negligible, but as of July 1, 2014, it carries a term of not less than 5 and not more than 20 years in prison.

 

Law enforcement entities and many business organizations in the private sector have been pleading and prodding the legislatures at both the State and Federal levels for several years now. Their efforts have been focused on finding ways to curb the national epidemic that cargo theft has become. The Georgia Cargo Theft Act is a big step forward at the local level and, hopefully with continued pressure and persistence, it will start a trend on the national level, as well.

 

DMTB is a proud member of Cargo Net. CargoNet provides a layered approach to cargo security with proactive deterrence methods, extensive recovery assistance, and coordinated theft communications. CargoNet’s 24/7/365 support center and subject matter experts become an extension of your company’s security program. Additionally, members receive local and national cargo crime alerts, safety tips, theft trend information, quarterly and annual cargo theft reports, safety education webinars and guides, and much more.

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Brake Safety Week is Next Week

Brake safety week is coming September 7-13. This is an annual event that is part of Operation Airbrake sponsored by CVSA in partnership with FMCSA. In 2013 more than 20,000 vehicles were inspected with a goal of over 30,000 inspections this year. This would be a good time to have that brake job done. Good luck.

 

Brake Safety Tips
Generally inspect all of the vehicle’s brake equipment including drums/discs, brake hoses and chambers, slack adjusters and actuators, relay valves, tanks, pipes and fittings, etc.
* Check that components are secured and are not deteriorated, worn or damaged.
* Check for over-travel of slack adjusters during brake application.
* Check the condition of compressor hoses/fittings, drive belt & pulley (if fitted).
* Check for the presence of the compressor air filter.
* Check for the presence of visible brake failure indicators and ensure they are operational.

 

Source: Without a Doubt Truck and Trailer Repair

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