Some military historian said something once about amateurs studying tactics and professionals studying logistics. Let's take that to a whole new level and see what logistics data tells us about the U.S. economy right now.
China's TEU traffic is at an all-time high. This covers both exports and imports, with exports to Europe climbing almost 50% yoy. Somebody's buying all that stuff.
Meanwhile, back here in the U.S., industrial production is slowing. Looks like raw material demand is slipping. Why bother making stuff here when we can import it all from China, right?
If we're not making stuff here, there's less of a need to truck things hither and yon through our hinterland. That's why spot bids for truckload freight are falling. Truckload carriers aren't the only ones feeling a pinch. My favorite LTL basket case, YRCW, is looking for even more cash to burn. Its execs can read the same data that I read. Maybe the deteriorating industry picture will give them more leverage to push for union givebacks.
There you have it. The logistics roundup for today is a pretty picture for Chinese import/export handlers and not so pretty for their shipping counterparts in the U.S. I expect to see further deterioration in both countries' economies in the months ahead, with more pronounced declines in logistics traffic in the U.S. leading the way to a double-dip recession.
Full disclosure: No position in YRCW.
China's TEU traffic is at an all-time high. This covers both exports and imports, with exports to Europe climbing almost 50% yoy. Somebody's buying all that stuff.
Meanwhile, back here in the U.S., industrial production is slowing. Looks like raw material demand is slipping. Why bother making stuff here when we can import it all from China, right?
If we're not making stuff here, there's less of a need to truck things hither and yon through our hinterland. That's why spot bids for truckload freight are falling. Truckload carriers aren't the only ones feeling a pinch. My favorite LTL basket case, YRCW, is looking for even more cash to burn. Its execs can read the same data that I read. Maybe the deteriorating industry picture will give them more leverage to push for union givebacks.
There you have it. The logistics roundup for today is a pretty picture for Chinese import/export handlers and not so pretty for their shipping counterparts in the U.S. I expect to see further deterioration in both countries' economies in the months ahead, with more pronounced declines in logistics traffic in the U.S. leading the way to a double-dip recession.
Full disclosure: No position in YRCW.
