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For-hire trucking industry loses 9,300 jobs the past two months

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Data from the Bureau of Labor Statistics showed that for-hire trucking, which includes local, regional and over-the-road companies, lost 5,100 jobs in August and another 4,200 in September. (The Trucker file photo)

WASHINGTON — The for-hire trucking industry has lost 9,300 jobs the past two months, according to the Department of Labor’s monthly job report released Friday, which showed that overall, U.S. employers added a modest 136,000 jobs in September, but enough to help lower the unemployment rate to a new five-decade low of 3.5%.

Data from the Bureau of Labor Statistics showed that for-hire trucking, which includes local, regional and over-the-road companies, lost 5,100 jobs in August and another 4,200 in September.

The BLS said for-hire trucking has lost 4,700 jobs in the first nine months of 2019.

“One reason for the decline is that private fleets have been adding capacity and that’s taking freight out of the fore-hire market,” said Kenny Vieth, president and senior analyst at ACT Research. “So, they are pulling freight out of an already slowing for-hire freight market.”

ACT Research reported September 27 in the latest release of the ACT For-Hire Trucking Index, based on August data, trucking retrenched to contraction in all categories after the large and partly anomalous improvement in July.

The Volume Index pulled back to 48.0 in August, from 56.7 in July (seasonally adjusted). The August Pricing Index, at 47.1 (seasonally adjusted), also returned to negative territory after stabilizing to 50.3 in July.

“While the strong consumer plus pre-tariff inventory building could still help volumes into the holidays, it appears inconsistent in the for-hire market, due in part to the weak manufacturing sector,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “We think the addition of private fleet capacity is also partly responsible. Our for-hire respondents have stopped adding capacity, yet retail tractor sales data tell us capacity is growing. This will likely keep peak season muted in the for-hire market, with seasonal strength still likely closer to the holidays.”

Avery Vise, vice president of truck at FTR, said that as a result of the positive numbers in 2018, carriers began hiring, and that hiring reached a peak right as the demand for those drivers began to soften.

“Since January, the industry has been in a holding pattern,” Vise said.

He also pointed to trucking company failures as another reason the industry is losing jobs.

“Through the first nine months of 2019, there have already been twice as many failures as all of 2018,” he said, pointing to rising insurance rates and companies that “didn’t handle the good times as well as they should have by not controlling costs” as two reasons for the higher number of failures.

“Carriers threw a lot of pay at drivers when things were good, and when things get tight, you can’t take those pay raises back,” he said.

Data on the long-distance segment of the for-hire trucking industry mirrors the rate for all for-hire trucking.

In August, the latest month for which data is available, the long-distance segment, which is primarily over-the-road trucking, lost 4,700 jobs.

As for the job market overall, hiring has slowed this year as the U.S.-China trade war has intensified, global growth has slowed and businesses have cut back on their investment spending. Even so, hiring has averaged 157,000 during the past three months, enough to absorb new job seekers and lower unemployment over time.

Despite the ultra-low unemployment rate, which dropped from 3.7% in August, average hourly wages slipped by a penny, the Labor Department said Friday in its monthly jobs report. Hourly pay has risen just 2.9% from a year earlier, below the 3.4% year-over-year gain at the beginning of the year.

The unemployment rate for Latinos fell to 3.9%, the lowest on records dating back to 1973.

With the U.S. economic expansion in its 11th year and unemployment low, many businesses have struggled to find the workers they need. That is likely one reason why hiring has slowed since last year.

But it’s likely not the only reason. The jobs figures carry more weight than usual because worries about the health of the U.S. economy are mounting. Manufacturers have essentially fallen into recession as U.S. businesses have cut spending on industrial machinery, computers and other factory goods. And overseas demand for U.S. exports has fallen sharply as President Donald Trump’s trade conflicts with China and Europe have triggered retaliatory tariffs.

A measure of factory activity fell in September to its lowest level in more than a decade. And new orders for manufactured items slipped last month, the government reported.

Persistent uncertainties about the economy in the face of Trump’s trade conflicts and a global economic slump are also affecting hotels, restaurants and other service industries. A trade group’s measure of growth in the economy’s vast services sector slowed sharply in September to its lowest point in three years, suggesting that the trade conflicts and rising uncertainty are weakening the bulk of the economy.

The job market is the economy’s main bulwark. As long as hiring is solid enough to keep the unemployment rate from rising, most Americans will likely remain confident enough to spend, offsetting other drags and propelling the economy forward.

But a slump in hiring or a rise in the unemployment rate in coming months could discourage consumers from spending as freely as they otherwise might during the holiday shopping season.

Consumers are still mostly optimistic, and their spending has kept the economy afloat this year. But they may be growing more cautious. Consumer confidence dropped sharply in September, according to the Conference Board, a business research group, although it remains at a high level.

Americans also reined in their spending in August after several months of healthy gains. The 0.1% increase in consumer spending that month was the weakest in six months.

Other parts of the U.S. economy are still holding up well. Home sales, for example, have rebounded as mortgage rates have fallen, helped in part by the Federal Reserve’s two interest rate cuts this year. Sales of existing homes reached their highest level in nearly 18 months in August. And new home sales soared.

Americans are also buying cars at a still-healthy pace. Consumers would typically be reluctant to make such major purchases if they were fearful of a downturn.

The Associated Press contributed to this report.

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At 0.3% dip, September retail sales drop by largest amount in seven months

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The overall economy grew at a 2% annual rate in the April-June quarter with much of that strength coming from a 4.6% surge in consumer spending, which accounts for about 70% of economic activity. (© 2019 FOTOSEARCH)

WASHINGTON — Retail sales dropped in September by the largest amount in seven months, possibly signaling that rising trade tensions and turbulent markets are having an impact on consumer spending.

Retail sales fell 0.3% last month following a 0.6% gain in August, the Commerce Department reported Wednesday. It was the first decline since a 0.5% drop in February.

Retail sales are important to the trucking industry because trucks carry an estimated 75-80% of the merchandise sold at retail outlets.

Consumer spending was strong in the spring and economists had been counting on continued strength to protect the U.S. economy as it is buffeted by the fallout from President Donald Trump’s trade war with China.

The spending decline in October, which was unexpected, was influenced by special factors including a big 0.7% decline in sales at gasoline stations, a decline that likely reflected falling gas prices during the month.

The overall economy grew at a 2% annual rate in the April-June quarter with much of that strength coming from a 4.6% surge in consumer spending, which accounts for about 70% of economic activity.

That spending pace had been expected to slow in the July-September quarter but still remain strong enough to support economic growth near the 2% rate seen in the spring.

But some economists are worried that a slowing global economy and the adverse impact of the U.S.-China trade war could slow overall growth so much that the country could see an increasing risk of a recession ending the current record-long U.S. expansion, which began in June 2009.

“It looks like the trade war has claimed yet another victim, in addition to diminished business confidence and reduced investment spending, … consumers are starting to chicken out,” said Chris Rupkey,  chief financial economist at MUFG in New York.

Many economists said the disappointing retail sales performance would make it more likely that the Federal Reserve will cut interest rates in October for a third time this year to buy more insurance against a recession when they meet later this month.

Michael Pearce, senior U.S. economist at Capital Economics, said while there were special factors affecting the weak September sales performance, the report contained clear signs that consumption growth is slowing.

He said the report was consistent with his view that the overall economy will continue to slow to a rate of just 1% by the final three months of this year. He said that will prompt the Fed to cut rates again but not until the December meeting.

In addition to the drop in gasoline sales, sales of autos fell 0.9% in September after a solid 1.9% increase in August.

Sales at department stores were down 1.4% while sales at general merchandise stores, which include chain retailers such as Walmart and Target, fell 0.3%.

Sales also dropped at hardware stores, grocery stores and sporting goods stores. Clothing stores, restaurants and health care stores all saw increases.

Sales in a retail control group which focuses on key components that go into computations of GDP were unchanged in September after a 0.3% gain in August.

 

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TA Logistics, sister companies collaborate to offer expanded footprint

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CFI, a sister company of TA Logistics, is one of the nation’s leading truckload carriers with a fleet of over 2,300 trucks and 7,000 trailers providing on-demand as well as dedicated truckload service packages.  (Courtesy: TA LOGISTICS)   

EAGAN, Minn. — Third-party logistics provider TA Logistics Tuesday said it is expanding its service capabilities and solution resources by adding to its portfolio asset availability from Transport America, as well as sister companies CFI, one of the nation’s leading truckload carriers, and CFI Logistics, a provider of integrated supply chain solutions.

The businesses all are operating companies of TFI International Inc.

TA Logistics, founded in 2000, has long provided third-party logistics services for manufacturing, industrial and retail-based business.

By formally incorporating CFI and CFI Logistics into its solution set, the company gains broader capabilities to address customer needs for dedicated truckload capacity, freight brokerage, transportation management and network optimization, warehousing and distribution and supply chain engineering, according to Bill Carter, vice president of logistics for TA Logistics.  Additionally, the company maintains a relationship with and access to TForce, a provider of expedited same-day final mile delivery.

“Customers increasingly want a logistics partner that can operate and deliver value across the broadest footprint of their supply chain,” Carter said. “Establishing more formal relationships and joint sales efforts with our sister companies – and the complementary capabilities they offer – allows us to leverage proven assets and services and significantly bolster our ability to meet more of our customers’ needs.”

Carter said that bringing to market a portfolio of logistics management, same-day final-mile delivery, reliable middle-mile trucking, and over-arching supply chain optimization capabilities is critical for today’s evolving, high-velocity, eCommerce-driven supply chains.

“Customers want to be able to choose a single element of service, a broadly integrated solution, or anything in between,” he said. “Yet the common denominator is to have those multiple capabilities within one organization that can flex and adapt. That’s a valuable differentiator that TFI companies enjoy.”

TForce operates a network of 60 distribution and product staging centers in the U.S., with nearly 4,400 dedicated last-mile delivery trucks, covering 92 percent of communities in the U.S. TForce’s capabilities include expedited last mile service for parcel, package, freight and large-format goods delivered into homes or businesses.

CFI is one of the nation’s leading truckload carriers with a fleet of over 2,300 trucks and 7,000 trailers providing on-demand as well as dedicated truckload service packages. CFI Logistics provides complimentary supply chain planning, optimization and transportation management services to ensure optimal network operations, asset deployment and utilization, and supply chain productivity.

Importantly, Carter said, with CFI’s 35 years of experience and operations in Mexico, inbound cross-border goods from Mexico can now be seamlessly managed and expedited for delivery into TA Logistics distribution centers, where they can then be staged for order fulfillment and final-mile delivery via an owned intra-Mexico LTL network.

Lastly, he said customers benefit from the convenience and efficiency of working with one service provider for multiple needs, and receiving a single, consolidated invoice.

“Time is money for our customers, so ease and efficiency of doing business and not having to manage multiple carriers and invoices becomes a key advantage,” Carter said.

 

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Transportation, safety, funding to be emphasis area for new AASHTO president

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Patrick McKenna, left is the new president of the American Association of State Highway and Transportation Officials. The association’s new vice president is Victoria Sheehan. (McKenna photo courtesy Missouri Department of Transportation: CATHY MORRISON; Sheehan photo courtesy: NEW HAMPSHIRE DOT)

WASHINGTON — The newly-elected president of the American Association of State Highway and Transportation Officials (AASHTO) says he plans to emphasize the need for surface transportation funding reauthorization and highlight transportation safety as the major focus areas of his one-year term.

“We need to make clear the public benefit of federal surface transportation investment and its impact on the safety, mobility, health, and economic well-being of all Americans,” Patrick McKenna, director of the Missouri Department of Transportation since 2015, said in a statement reported by the Journal, AASHTO’s official publication.

The expiration of the 2015 Fixing America’s Surface Transportation or FAST Act in September 2020 means reauthorizing surface transportation funding will occur in a presidential election year: “a tall task, but one that AASHTO and its members must fully embrace [as] state DOTs depend on the funding stability provided by multi-year transportation program,” McKenna said.

Launching a national campaign focused on how “transportation is personal” that explains the many benefits transportation investment provides to all Americans is one tactic McKenna plans to spearhead during his term as AASHTO’s 2019-2020 president as part of the organization’s effort to get surface transportation funding legislation reauthorized.

He also plans to place renewed focus on reducing transportation fatalities, which McKenna described as a “national public health crisis” in his remarks.

“Despite tremendous advances in technology and millions invested in [driver] education, the annual loss of life on our nation’s roads is staggering,” he said, noting that the National Highway Traffic Safety Administration’s most recent estimates indicated that 36,700 people died on America’s roads in 2018.

To help reduce those losses, McKenna said AASHTO will continue its role in the Towards Zero Deaths and Vision Zero national coalitions while “facilitating a conversation” with state DOTs and local communities to consider ways to deploy “innovative infrastructure designs and technologies” to more safely accommodate pedestrians, bicyclists, and scooter users.

McKenna, who recently completed a one-year term as AASHTO’s 2018-2019 vice president, also served as president of the Mid America Association of Transportation Officials for 2017-2018 and is a member of the executive committee for the National Academy of Science’s Transportation Research Board.

Victoria Sheehan will be AASHTO’s vice president in 2019-2020.

Sheehan commissioner of the New Hampshire DOT in 2015 after a 10-year career in the Massachusetts Department of Transportation’s highway division, where she served in a number of roles including accelerated bridge program manager, bridge program consultant contracts administrator, and finally as manager of strategic planning and highway performance.

Sheehan is originally from Northern Ireland.

She is only the second woman to serve as vice president in the association’s 105-year history.

 

 

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