Good day, everyone.
The Philadelphia Federal Reserve’s manufacturing index, one of the broad indices that businesses and investors toss into their analytical stew, rose in January to a seasonally adjusted reading of 17 from 9.1 in December. Any reading above zero indicates improving conditions. Most economists expected a 10 reading. The “New Orders” index, always of interest to transport and logistics folks, rose 8 points to 21.3, the highest reading in six months. The shipments index fell 1 point to 11.4. The “unfilled orders” and “delivery times” indexes were positive this month, suggesting higher unfilled orders and slower delivery times, the Philly Fed said. The current inventory index fell 10 points to -7.6, its first negative reading in 14 months and indicating a decline in inventory levels. The firms reported growth in underlying demand for their products, and are generally optimistic about future growth and employment. Broad economic readings have been a mixed bag. The Empire State factory index, released Monday, dropped to 3.9 in January, the lowest reading since May 2017. The big kahuna of indices, the monthly Institute of Supply Management Report on Manufacturing, had one of its weakest overall readings in years in November, with most respondents attributing the softness to uncertainty over the direction of U.S.-China trade talks. The uncertainty manifested itself in Q4 as many businesses advanced their ordering ahead of the original Jan. 1 deadline for higher US tariffs on Chinese imports. Bulging inventories could present a near-term challenge for carrieres; a report out (this) week from Morgan Stanley showed a record drop in shippers’ macro outlook on volumes, pricing and capacity. With net inventory levels reaching another all-time high and ordering levels falling, the “risk of a destocking event in 2019 is high,” the investment firm said.
Did you know?
There could be as many as a dozen inland ports opened across the U.S. by the end of this year, heralding a major shift in how goods get moved throughout the country.
Quotable:
“If we are at 100 percent staff with 18,000 volunteers, I think we’ll do an outstanding job, but we cannot control the sick callouts of TSA and Customs and Border Protection.”
– John Selden, general manager of Atlanta’s Hartsfield-Jackson International Airport, on the airport’s chances of efficiently processing hundreds of thousands of travelers leaving Atlanta the day after the Super Bowl should the partial government shutdown be ongoing.
In other news:
TSA workers getting helping hands
Transportation Security Administration employees, many who are working without pay, are the recipients of an outpouring of generosity from travellers, fellow airline workers, and many others. (Associated Press)
Reviving New York Harbor from the bottom up
The New York Harbor for years has been polluted and depleted of marine life. But one nonprofit is working to clean the murky water and revive its long-lost ecosystem — one oyster at a time. (CNN)
BNSF’s Rose hits PSR concept
Matt Rose, who is retiring as executive chairman of BNSF Railway, said Precision Scheduled Railroading is unworkable in various scenarios and could be illegal because it may allow rails to skirt their federal common carrier obligations. (Trains Magazine)
Newborn found dead at Amazon Arizona DC
The baby was found dead in a ladies room, according to police. (NBC News)
Tesla to end customer referral program, Musk says
Program costs too much, company founder says. (The Verge)
Final Thoughts
The daily chaos of the US freight markets obscures the broad picture of remarkable progress, according to JLL Inc.’s Craig Meyer, who heads industrial in the Americas for the real estate services and logistics giant. America is closer than ever to what Meyer called the “perfection of the supply chain.” Namely, that you can sit on your couch with a phone or tablet, order a product with one click and have it delivered to your door–or anywhere-in as little as 2 hours, all with a money-back guarantee. Never before in human history has a shipping network so vast been fine-tuned to work this way. The expansion of inland “ports” (or distribution centers)–30 years since the first one went live in Front Royal, Va.–will push the supply chain even closer to this goal by seamlessly linking ships, trains, and trucks. The biggest game-changer of inland ports is it directly attacks the supply chain biggest bogeyman: Road congestion. Arterial sclerosis causes delays, pollution, and inventory bloat as businesses worried about untimely deliveries and stockouts overload on product just in case.
Hammer down everyone!