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U.S. employers add modest 130K jobs in August; for-hire trucking loses 4,500

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The Labor Department reported that despite the modest gain in the number of new jobs, the unemployment rate remained 3.7%, near the lowest level in five decades. (The Trucker file photo)

WASHINGTON  — U.S. employers added a modest 130,000 jobs in August, a sign that hiring in the United States has slowed but remains durable in the face of global economic weakness and President Donald Trump’s trade war with China.

The job gain was boosted by the temporary hiring of 25,000 government workers for the 2020 Census. Excluding all government hiring, the economy added just 96,000 jobs in August, the fewest since May.

Still, the Labor Department reported Friday in its monthly jobs report that the unemployment rate remained 3.7%, near the lowest level in five decades. And more Americans entered the workforce in August — a positive development that increased the proportion of adults who are either working or seeking work to its highest level since February.

In addition, average hourly pay rose 3.2% from a year earlier, outpacing inflation and increasing Americans’ spending power.

For-hire trucking lost 4,500 jobs, according to Labor Department statistics.

Even with the slower pace of hiring, more jobs and rising pay are expected to help sustain America’s economic recovery, which has entered its 11th year, the longest on record. An improving job market can help fuel consumer spending, the primary driver of growth.

And for now, Americans are still spending. Consumer spending rose in the April-June quarter by the most in five years. It had also increased at a healthy clip in July.

That is especially significant now because many businesses have cut their spending and delayed expansion and investment given their uncertainty about the duration and impact of the trade war. In addition, retaliatory tariffs from China have cut into U.S. exports.

In its employment report Friday, the government revised down its estimate of job growth for June and July by a combined 20,000. That revision reduced average job growth for the past six months to 150,000, down from 223,000 for all of last year. Still, hiring at the current monthly average would be enough to keep up with population growth and lower the unemployment rate over time.

For August, the unemployment rate for African-Americans fell to 5.5%, a record low. Trump has repeatedly highlighted that decline, which has been steady since the Great Recession ended in 2009. In August, however, the rate fell because more African-Americans stopped looking for work and were no longer counted as unemployed.

Consumers generally feel positive about the economy despite some cautionary signs. Their confidence, as measured by the Conference Board, is still strong. But an index of sentiment compiled by the University of Michigan fell in August by the most in nearly seven years. In that survey, Americans expressed rising concern about the consequences of tariffs.

U.S. and Chinese officials plan to meet in early October in negotiations that are intended to resolve their dispute. The announcement Thursday of next month’s resumption of talks helped ignite a rally on Wall Street.

The impact of the trade war is evident in industry-specific hiring figures. Manufacturers added just 3,000 jobs, the latest sign their hiring has fallen off sharply from last year. Employment in shipping and warehousing companies was essentially unchanged, with fewer factory and farm goods to transport. Retailers cut 11,000 jobs, the seventh straight month of decline, which is partly a reflection of the impact of online shopping.

As the tariffs increasingly take effect, trucking companies could absorb a hit if they have fewer factory and farm goods to ship. And retailers might cut workers as tariffs start to affect such consumer goods as clothes, toys, and electronics. If setbacks in those industries become severe enough, they could eventually raise the unemployment rate.

 

 

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Schneider now offers rail dray intermodal service

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Expanding its strength of intermodal expertise to include Rail Dray ensures that the carrier is continuing to meet the demands of a changing industry, a Schneider official said. (Courtesy: SCHNEIDER)

GREEN BAY, Wis. — Schneider, a provider of trucking, intermodal and logistics services, has added a new service to its lineup of intermodal solutions. Schneider Rail Dray focuses on the initial and end moves of intermodal transportation, getting freight from shipper to ramp and ramp to receiver — safely and seamlessly.

“Expanding our strength of intermodal expertise to include Rail Dray ensures that we’re continuing to meet the demands of a changing industry,” said Jim Filter, Schneider’s senior vice president and general manager of intermodal. “The new service provides capacity and control to reliably move dray freight without the inconveniences typically associated with rail moves.”

Schneider Rail Dray is optimal for:

  • Railroad providers needing to move shipper freight.
  • Third-party logistics providers lacking driver capacity.
  • Direct shippers using their own intermodal containers.

Filter said with one call, Schneider provides premium support and visibility needed for rail dray freight:

  • Scale: Conducting over 1 million drays a year, Schneider has the scale to expertly dray freight across an entire network.
  • Visibility: Satellite-tracking technology enables real-time visibility of dray freight and early notification of delays.
  • Risk Mitigation: Schneider’s professionally trained, uniformed drivers operate newer company equipment that is maintained to the highest standard to safeguard against delays and minimize safety and regulatory exposure.
  • Optimization: Schneider has the resources and know-how to efficiently optimize an entire dray network.

To learn more about how Schneider Rail Dray avoids costly hang-ups and keeps rail freight moving, visit Schneider.com.

Schneider’s services include regional and long-haul truckload, expedited, dedicated, bulk, intermodal, brokerage, warehousing, supply chain management and port logistics.

 

 

 

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ACT Research says freight markets still weak, data still trending negative

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This chart shows the net orders on a 12-month average versus the build rate. Only recently has the build rate been better than the order average. (Courtesy: ACT RESEARCH)

COLUMBUS, Ind. — According to ACT Research’s (ACT) latest State of the Industry: Classes 5-8 Report, economic reports over the past month have more often risen above consensus than fallen below it, but it is premature to declare an end to freight market weakness.

“Data points indicating increased economic activity represent the essential first steps in the process of increasing demand to rebalance the heavy freight markets. However, as in any commodity market, it is not just demand, but supply, and until the supply-side of the market is addressed, the disequilibrium story will continue to weigh on freight rates and by extension the heavy vehicle industry,” said Kenny Vieth, ACT Research president and senior analyst. “While the data are starting to suggest ‘less bad,’ reports suggesting recovery are premature, as key freight metrics continues to trend negative in the latest round of data releases.”

Speaking about the Class 8 market, Vieth said that in concert with weak/deteriorating freight volumes and rates, forward-looking demand indicators continue to erode, even as mid and downstream data points remain robust.

“Ultimately, the current situation of weak orders and strong build is unsustainable,” he said.

Regarding the medium duty markets, Vieth said medium-duty demand metrics remain in better balance, but there are signs of modest fraying on weak net orders, relative build strength and excessive inventories.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Navistar to build new Class 6-8 manufacturing plant in San Antonio area

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Navistar’s new manufacturing plant will have the flexibility to build Class 6-8 vehicles, complementing the company’s existing assembly manufacturing footprint, which includes truck assembly plants in Springfield, Ohio, and Escobedo, Mexico. The plant will have the flexibility to build Class 6-8 trucks. Pictured is the International LT Series farm model. (Courtesy: NAVISTAR)

LISLE, Ill. — Navistar, a maker of commercial trucks and buses, said Thursday it will be making a capital investment of more than $250 million to build a new manufacturing facility in Texas.

The investment, which is contingent on finalization of various incentive packages, will bring approximately 600 jobs to the San Antonio area.

“Over the last five years, Navistar has made significant investments to improve our position in the market,” said Troy Clarke, Navistar chairman, president and chief executive officer. “This investment will create a benchmark assembly facility to improve quality, lower costs and provide capacity to support anticipated industry growth, as well as market share gains.”

The new manufacturing plant will have the flexibility to build Class 6-8 vehicles, complementing Navistar’s existing assembly manufacturing footprint, which includes truck assembly plants in Springfield, Ohio, and Escobedo, Mexico.

Navistar’s trucks are manufactured under the brand name International.

The announcement of the new Texas plant was part of Navistar’s Investor Day, where company executives presented their 2020-24 strategy “Navistar 4.0” that includes a plan to increase its EBITA margins to 12%.

Clarke said “Navistar 4.0” includes the following elements:

  • Improve EBITDA margins to 10% by 2022 and 12% by 2024.
  • Grow market share and become the number one choice of the customer through new product offerings and customer segmentation.
  • Implement a single platform strategy to optimize use of R&D resources and commonization of parts and tooling.
  • Increase modular design resulting in customer benefits, speed to market and lower product costs.
  • Build a new truck assembly facility in San Antonio, Texas, reducing logistics and manufacturing costs.
  • Use the TRATON alliance to provide significant procurement savings, more efficient research and development spend and new integrated power train offerings for customers.
  • Grow aftersales revenues with an expanding distribution network, growing private label sales and e-commerce initiatives.
  • Improve financial results allowing the company to invest in growth initiatives, de-lever the balance sheet and fully fund its defined benefit pension plans by 2025.

Building on the major advances achieved in the last five years, including gains from an alliance with TRATON Group, Navistar 4.0 lays out a clear path for the company’s ongoing transformation, Clarke said.

“Navistar is committed to building on the gains of the past five years to improve financial returns to shareholders,” he said. “Navistar 4.0 establishes a clear road map to grow EBITDA margins to 12%, while also winning in the marketplace.”

The new Texas investment builds on Navistar’s recently announced plans to invest $125 million in the Huntsville, Alabama, engine plant to produce next-generation, big-bore powertrains developed as part of the alliance with TRATON, a subsidiary of Volkswagen AG and a global commercial vehicle manufacturer worldwide.

The Texas site is located on a critical corridor along Interstate 35, which links Navistar’s southern United States and Mexico supply bases, allowing for significant logistic improvements, resulting in lower cost and enhanced profitability.

“This investment by Navistar is paramount to Texas’ success in growing our diverse and highly skilled manufacturing workforce,” said Texas Gov. Greg Abbott. “The Lone Star State is the new frontier in innovation, and I am confident that this partnership will usher in even greater economic prosperity for our state.”

“We are so proud to have a company like Navistar, a leader in vehicle innovation, in San Antonio,” said San Antonio Mayor Ron Nirenberg. “It shows that our strategy to grow our advanced manufacturing sector is working.”

“The county has, for many years, been touting the strength of our Texas-Mexico region as a platform for vehicle production,” said Judge Nelson Wolff. “Navistar’s decision to locate their newest facility here is just the latest affirmation that our community is uniquely situated to host world-class companies in advanced manufacturing industries. We are thrilled to have them in Bexar County.”

Navistar plans to break ground on the property later this year and anticipates production to begin approximately 24 months later.

In its presentation Thursday, Navistar also provided industry and company financial guidance for 2020, including:

  • Industry retail deliveries of Class 6-8 trucks and buses in the United States and Canada are forecast to be between 335,000 and 365,000 units.
  • Revenues are expected to be between $10.0 billion and $10.5 billion.
  • Adjusted EBITDA is expected to be $775 million to $825 million.
  • Manufacturing free cash flow is expected to be break-even excluding changes in working capital.

For more information, visit www.navistar.com.

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