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Released: January 7, 2010
U.S. Manufacturing Expands Again in December
There’s good news from the manufacturing world. U.S. manufacturers carried their expansion into a fifth consecutive month in December, according to the Institute for Supply Management. More than 20 percent of NASSTRAC’s regular membership is comprised of manufacturers, and this sector is a significant driver of over-the-road trucking activity. As the overall economy grew for the eighth consecutive month, supply chain executives across the country responded to ISM with reports of increased activity in nine of 18 manufacturing industries surveyed. The closely watched PMI index hit 55.9 percent, up more than 2 percent from the previous month as it reached the highest level since April 2006. "This month's report is quite strong as both the new orders and production indexes are above 60 percent,” said Norbert Ore, Chair of the ISM Management Business Survey Committee. Manufacturing may be benefiting from an excessive destocking cycle as indicated by the recent performance of the customers' inventories index, he said. “Customers' inventories have been 'too low' for nine consecutive months, and this month's index is the lowest reading since the inception of the index in January 1997. Overall, the recovery in manufacturing is continuing, but there are still some industries mired in the downturn as evidenced by the seven industries still in decline."
Diesel Rises 6.5 Cents to $2.79
Diesel fuel jumped by the largest increment in more than two months, increasing 6.5 cents to $2.797 a gallon, the U.S. Department of Energy reported to NASSTRAC Monday. Diesel’s gain was the second in two consecutive weeks, following declines in seven subsequent weeks. With last week’s 0.6-cent uptick, the 7.1 cents in increases nearly erased the positive movement of the downturns, which had totaled 8.2 cents. Trucking’s main fuel is now 50.6 cents over the same week last year, according to DOE figures. Monday’s rise was the biggest since a 9.6-cent spike on Oct. 26.
> View NASSTRAC’s Regional Diesel Fuel Fill Prices
Environmental Groups Sue Long Beach Over Port Agreement
Two environmental groups have filed suit against the Port of Long Beach over its decision to settle a federal lawsuit challenging its authority to regulate trucking at the port, according to the Associated Press. The Natural Resources Defense Council and the Sierra Club filed a lawsuit in state court last week, claiming port and city officials violated state law requiring public involvement and an environmental review before agreeing to a deal with the American Trucking Associations. The agreement involves settling certain aspects of the port’s clean trucks program, aimed at reducing diesel emissions. Long Beach City Attorney Robert Shannon told AP that a federal judge approved the October settlement with ATA and that the new lawsuit does not belong in state court. Last month, ATA said it would ask a federal judge to forgo a trial in its clean trucks lawsuit against the neighboring Port of Los Angeles and, instead, to issue a summary judgment in the group’s favor.
Truck Tonnage Shows 2.7% Monthly Gain in November
U.S. truck tonnage fell 3.5% in November from a year ago, but showed a 2.7% month-to-month gain from October, American Trucking Associations reported recently. The increase from October boosted ATA’s seasonally adjusted tonnage index to a reading of 106.4, its highest level in a year, with the year 2000 as a base year with a 100 reading. The November year-to-year decline of 3.5% was the best year-over-year showing in twelve months, ATA said. The October index had declined 5.2% year-over-year. NASSTRAC members rely heavily on trucking to manage their supply chains and watch the index closely.
“Slowly, but surely, truck freight has started the recovery process and November’s solid increase is a very positive sign,” said Bob Costello, chief economist at ATA in a recent Transport Topics article, noting that tonnage in November was pushed higher by improved economic activity and by an inventory correction that is near completion. “Truck freight had been hurt by both slow economic output and bloated inventories; however, we now have evidence that the inventories are in much better shape, which will not be such a drag on truck freight volumes.” He also urged caution when reviewing these numbers: “While the economy and trucking is improving, the industry should not get overly excited about the sizeable increase in November. I continue to believe that both the economy and truck tonnage will exhibit starts and stops in the months ahead, but the general trend should be for moderate growth.”
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