Industry Indicators: May 16-22
Industry Indicators: May 16-22
iLevel Logistics presents intriguing data that offers a snapshot of notable industry changes and events during the week of May 16th through May 22nd.
Inventories to sales ratio down
Source: St. Louis Federal Reserve
The sales to inventory ratio is at historically low levels. Retailers are pushing to replenish their inventories. Thus, expect trucking capacity to remain tight.
Note: This measure is viewed as an indicator of the number of months of inventory on hand in relation to sales for a month. Right now, the ratio stands at approximately 1.1, suggesting retail stores have enough merchandise to cover about 1 month of sales.
Workers Shortage
iLevel entered the search term of “worker shortage” in Google Trends. Clearly, many are concerned about the lack of workers to fill open positions.
The influence of the pandemic on U.S. airlines monthly passengers
Source: Bureau of Transportation Statistics & BTS
And the dramatic decline in monthly passengers led a record low number of FTEs -full time equivalents employees.
On a positive note, more and more people are now flying. In mid-May, daily airport traffic was the busiest since the pandemic began. We will see whether the increases lead to a pre-pandemic level of FTEs.
1-40 bridge by crack
Source: Bureau of Transportation Statistics
Last week, the crack discovered in the De Soto bridge on 1-40 over the Mississippi River caused two main problems. First, vehicles are now detoured to the 1-55 bridge three miles away, which creates new traffic headaches. The time delays are significant.
Second, while the waterway opened earlier this week, the three-day closure produced a log jam – backing up 62 tugs carrying 1,058 barges. The relevant segment of the Mississippi River passing under the 1-40 bridge deals with 470,323 short tons each day. The chart below illustrates the range of commodities that the temporary waterway closure likely slowed – soybeans measure at nearly 60 billion tons shipped through this waterway. $$
While most bridges were rated as either Fair or Good condition, about 5% were rated poor. The I-40 bridge was recently rated as Fair.
U.S. – Mexico Incoming Truck Crossing
Source: Bureau of Transportation Statistics
The number of trucks entering the United States from Mexico reached a record high in March at 628K.
Tax Rates by Income Levels
Source: Cato Institute
A lot of discussion among policymakers about taxes – especially rates on higher earners. Below, you can see the average tax rates for the top 1% of earners is about the same as during the 1980s – though clearly with some ups and downs through the years. Most notable, is the rates applied to the lowest earners – which since 2008 have dropped to near zero.
Infrastructure proposal and American’s preferences
Source: The Hill
According to a May 14-15th opinion survey, nearly 70% of registered voters agreed that it’s more important for Biden’s infrastructure plan to be passed with bi-partisan support than passed as quickly as possible. Significant majorities of Republicans (85%), Independents (61%) and Democrats (58%) want to bi-partisan support for infrastructure.
Pork is back
Source: Forbes & TransportDive
Earmarks were banned for a decade but now over 3,309 earmarks were proposed for the infrastructure plan and assorted appropriation bills. Notice, 6 of the top 10 members of Congress proposing earmarks are Republicans. This is one way to generate bi-partisan support for infrastructure.
Without question, earmarks are powerful bargaining chips that incentivize negotiation and increase the chances of a bill’s passage. However, earmarks also add considerably to government debt. As the chart below shows, earmarks for transportation projects are a favorite of House members.
Small Business Optimism Up in April
Source: NFIB
Small business index rose to nearly 100 points in April, an increase of 1.6 points from March. Since January, the index increased 4.8 points.
Most small business owners however are pessimistic about general business conditions and do not think it’s a good time to expand their businesses.
One prominent factor in owners’ expectations is prices – which many perceive as increasing. Notice actual prices and planned (expected) prices are about the same (see below). Both increased the last several months. We must return to the early eighties to see actual prices surpass small business owners planned or expected prices.
Finally, 44% of small business owners are unable to fill current job openings. Looking at the data, this significant percentage is a genuine outlier and explains why many owners realize now is a bad time to expand their businesses.
More on Small Business Owners
Source: Alignable
A recent Alignable poll of over 7,000 small business owners shows that more than 2/3 are concerned that inflation will hurt their ability to recover from the pandemic. Almost 40% said they were “highly concerned” about inflation. Manufacturing owners were most concerned, followed by Electricians and Construction.
In addition, about half of small business owners said they’re having difficulty filing all of their job vacancies. A substantial proportion blamed the labor shortage on government employment benefits.
Climate change and greenhouse gas emissions
Source: EPA
As climate change moves higher on the policy agenda, politicians are taking aim at the transportation sector. Indeed, the much touted Biden infrastructure plan includes a host of green initiatives bent on reducing carbon emissions. The graph below shows the transportation sector, including logistics, generates nearly 30% of greenhouse gas emissions – the largest share by any source. The emissions come largely from burning fossil fuels in vehicles.
Can you make sense of data?
Source: Talking Logistics
In a survey of supply chain and logistic executives, analytical skills was selected as the most important attribute needed for young supply chain professional to succeed (94%). People skills (61%) and communications skills (50%) ranked second and third.
Diesel Prices Up Again and Up in Every Region
The cyber-attack on the Colonial pipeline helped push U.S. average fuel prices higher.
Most Americans think COVID-19 risk is greater than a bad reaction to vaccination – but not all
Source: YouGov
The share of Americans that think government should do more to solve problems – about the same as before pandemic
Source: Pew Center Research
The only real change from 2019 about views of government responsibilities – access to high-speed internet.
Economic outlook looks good and that’s good for trucking
Source: FleetOwner
In Q1 2021, overall GDP grew 6.4% and the goods transport sector grew a healthy 8.1%. Q2 appears to be heading even higher, especially for GDP goods transport. Predictions for Q3 and Q4 show a leveling off but still valuable growth in GDP and GDP goods transport.
Forecasts for truck freight in Q2 2021 jumped considerably (16.2%), followed by an impressive 8.5% in Q3 and 7.6% in Q4.
The number of miles between repairs for each truck system
Source: HDT Truckinginfo
Keeping trucks up and running is of course important. Here’s a chart that shows the average miles between repairs for 5 key truck systems.
Medium Duty Sales
Source: Transport Topics
VMT Tax Realities
Poor container ship delivery performance
Source: Supply Chain Digest
No surprises here, average monthly reliability of ocean container ships continue to slide.
Last Mile Delivery Pain Points – drivers, drivers, and drivers
Source: HDT Truckinginfo
Top Truck Bottlenecks
Source: ATRI
Pallet costs soar
Source: SupplyChainDive
High demand and unprecedented lumber costs are pushing pallet costs to record levels.
Eating out vs. eating in – measures finally reach pre-pandemic levels
Source: Convoy
For the first time March 2020, Americans’ spending in April 2021 at restaurants and bars caught up with their at-home food spending. A strong signal that consumers are returning to conventional spending patterns.
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