The summer temperature is rising, so is consumer confidence

As we wrap up the month of July consumers are being more positive. I should say, very positive.

The Conference Board recently said that their measure of consumer confidence hit a reading of 121.3, the highest reading in sixteen years. 
Plentiful jobs, low gas prices, slowly rising wages, rapid 401K growth and a sense of security all feed into this optimism. We will see if this translates into higher consumer spending as so far it has not. 
Retail sales stall 
Sales at retailers unexpectedly fell in June for a second straight month, which could affect the expected economic growth in the second quarter. 
The Commerce Department said retail sales fell 0.2 percent last month, with lower receipts at service stations, clothing stores and supermarkets. Bars, restaurants and hobby stores also saw sales stall. 
Retail sales rose 2.8 percent year-over-year in June. 
Housing starts boom
The Census Bureau tells us that housing starts surged 8.3 percent in June, to a 1.215 million unit annual rate. Single family and multi-family starts gained 6.3 percent and 13.3 percent during the month.
Existing-home sales slowed in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors (NAR). Only the Midwest saw an increase in sales last month.
The median existing-home price for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600).
First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago.
Amazon’s hiring spree Inc.’s rapid fulfillment growth demands lots and lots of people. The huge e-commerce company is holding a national jobs fair next week to fill 50,000 new positions at distribution centers and sorting sites in the U.S.
In preparation for the holiday push Amazon will grow its employment to about 300,000 by next year. This is amazing growth from their 30,000 people in 2011.
U.S. warehouse employment is close to one million people, work force recruitment and retention is a growing challenge. 
ELD delay
The House Transportation Committee has attached a directive to this year’s Transportation, Housing and Urban Development (THUD) appropriations bill that could end up delaying or repealing the electronic logging device mandate set to go into effect on Dec. 18. In addition to the bill was a directive calling for a review of the technology platforms of ELD suppliers.
While the Federal Motor Carrier Safety Administration’s (FMCSA) Electronic Logging Device mandate remains on track to take effect this coming December, the House Appropriation’s Subcommittee on Transportation, Housing & Urban Development and Related Agencies issued a report that directs the FMCSA to consider delaying the implementation of ELD.
The delay is intended to look at the cost and effect for small carriers. I don’t expect the delay to take place due to the congressional effort needed to stall the rule. 
Freight and truckload pricing remains strong
I had wondered what the freight demand would look like post-Independence Day and I’m pleased to see that despite a slight fall-off, the historically slower freight month has remained relatively strong. 
DAT Solutions reports the number of available loads on the spot truckload market slipped just 3 percent during the week ending July 22. Nationally, the overall number of truck posts was up 2 percent compared to the previous week as demand for capacity stayed solid and prices remained high. Load-to-truck ratios for all three major freight segments fell 5 percent with dry van load/truck ratio at 4.8; flatbeds 36.1; and reefers 8.5. Spot van load posts declined 1 percent and the number of posted trucks increased 2 percent.
The national average van rate fell 2 cents to $1.81 per mile as most major markets saw lower pricing.
The American Trucking Associations (ATA) reported recently that truck tonnage volumes headed down in June on the heels of decent growth in May. For the first six months of 2016 ATA said Seasonally-adjusted (SA) tonnage is up 1 percent.
Trucking demand in the week ending July 15th, as measured by’s Market Demand Index (MDI), increased by 11.9 percent sequentially from the prior week to 31.48 (up 129.3 percent year-over-year from the same week in 2016).
Truckload linehaul rates appear to be stabilizing according to the Cass Linehaul Index. This measure increased 1.5 percent in June year-over-year for the third straight month of growth.
The Cass Truckload Linehaul Index measures market fluctuations in per-mile truckload pricing that isolates the linehaul component of full truckload costs from others, such as fuel and accessorials, providing a reflection of trends in baseline truckload prices.
The Cass Intermodal Price Index measures market fluctuations in per-mile U.S. domestic intermodal costs. It includes all costs associated with the move, such as linehaul, fuel and accessorials. Intermodal rates continue moving higher but at a slower pace rising 1.8 percent in June from the same time a year ago to 123.3.
This marked the ninth straight month of increases but pricing momentum has slowed with the measure falling for month-over-month for the third straight time.
I expect the intermodal sector to likewise track higher with truckload rates headed a little higher. Driver shortages along with any implementation of ELDs will help rail growth. 
Rail growth
In the week ending July 15th overall total unit volume (commodity carload and intermodal units) were up 13.1 percent over the previous week. Rail volume was up across the board. The Canadian rails (CP and CN) were at the bottom of the range, up only 4.3 percent and 4.9 percent, respectively. The highest performer was NSC (up 17.4 percent). On a year-over-year basis, total unit volume was up a total of 3.9 percent for all rails for the week.
Intermodal carloads increased 17.2 percent sequentially across the board. These were driven by a 19.6 percent increase in intermodal trailers and a 17.1 percent increase in intermodal containers.
Commodity carloads were up 9.6 percent for the week sequentially across the board. On a year-over-year basis, the week was up 1.6 percent. Commodities with the biggest growth were in crushed stone, sand, and gravel (up 28.8 percent) and metallic ores (up 21.0 percent). The largest decreases were farm products (down 21.1 percent) and primary forest products (down 15.5 percent). 
At Wagner Logistics
Summertime is underway, Wagner remains busy preparing for the holiday e-commerce season tweaking systems and reviewing hiring plans. We are working with a number of companies on planning for the remainder of the year calibrating resources to handle projected business levels.
Wagner’s transportation group remains active finding carrier capacity as well as securing additional equipment to meet customer commitments. We are enjoying this active freight market.  
As you execute plans for the future, please let me know if you are planning to add warehouses or seek help in moving freight. Wagner has been in business for 70+ years and we want to hear about your challenges. As we say everyday, Bring It!
Have a great day,
John Wagner Jr. 
About Wagner Logistics
Wagner Logistics has been honored 15 years in a row by Inbound Logistics as a Top 100 3PL provider, we offer dedicated warehousing, transportation management, packaging and assembly operations across the United States with over 4,500,000 sq. ft. Current offices include Jacksonville FL, Cleveland OH, Pine Bluff AR, Dallas, TX, Omaha, NE, Clinton, IA, Kalamazoo, MI, Charlotte, NC, Memphis, TN, Edgerton, KS, and Kansas City MO and KS. We provide genuine customer service to our customers and our superior onboarding process will make your customer’s transition seamless. We work tirelessly to find innovative solutions to reduce supply chain costs while increasing your speed-to-market with our award winning technology.
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