transport executives to boost
capital spending
Executives of 11 truck, rail, and
intermodal companies said
they plan to boost their 2011
capital expenditures by
between 20 and 30 percent as they either replenish their truck fleets or
maintain and grow their rail and intermodal networks.
The executives’ comments came at Milwaukee-based investment
firm Robert W. Baird & Co.’s 40th annual Industrial Conference held
last month in Chicago. The conference drew attendees from 108 public companies across multiple sectors of the U.S. economy, including
executives from three truckload carriers, three railroads, three less-than-truckload (LTL) carriers, and two intermodal companies. Jon A.
Langenfeld, Baird’s chief transport analyst, would not identify the
companies other than to say both J.B. Hunt Transport Services Inc.
and Ryder System Inc. were represented.
Langenfeld said capital expenditures in the truckload and LTL sector are returning to historically normal replenishment levels following
capital underinvestment during the past two years. Railroads and
intermodal companies will invest to maintain existing systems or
expand their networks to accommodate continued robust demand for
their services, Langenfeld said.
The companies said they are negotiating higher rates on new and
renewed contracts due to stronger demand and the impact of capacity reductions. The trend is likely to continue into 2011, according to
the executives.
Companies with broader exposure to industrial end-markets, such
as railroads, LTL carriers, and integrators like FedEx Corp. and UPS
Inc., are seeing stronger growth and, according to Langenfeld, are
“providing more constructive 2011 outlooks” tied to improving
industrial production activity.
By contrast, demand for truckload service, which is driven by the
consumer and retail end-markets, is expected to weaken in the fourth
quarter due to modest consumer spending and a diminished need to
replenish inventories, he said. ;
they said it:
It’s a new morning.
—Bruce Carlton, president of the National Industrial Transportation
League, commenting on the stunning defeat of Rep. James L. Oberstar
(D-Minn.) in the mid-term elections. Oberstar, who was chair of the
House Transportation and Infrastructure Committee, has been a longtime supporter of shipper interests.
“”
tech execs say U.S. unlikely
to achieve export goals
The chances are slim the United States will
meet President Obama’s stated goal of
doubling its exports in the next five years,
according to a survey of top supply chain
and manufacturing executives at small to
mid-sized U.S. high-tech companies.
The survey, conducted by research firm
IDC Manufacturing Insights and commissioned by UPS Inc., found that 60 percent
of the 125 respondents believed it “very
unlikely” or “not likely at all” that President
Obama would achieve his objective. The
main impediment, according to 60 percent
of the respondents, is the high cost of manufacturing in the United States, which
makes U.S.-made products less competitive in world markets.
Only 3 percent of the respondents said it
was “very likely” the export goals would be
met. The respondents were senior executives in the electronics, computer peripherals, and computer software and services
industries.
Scott Davis, UPS’s chairman and CEO,
took issue with the findings. “Despite the
pessimism in some quarters, I believe this
goal can be attained,” said Davis, who sits
on President Obama’s Export Council. Davis
said a U.S. company that limits its business
to domestic commerce is “turning its back
on 96 percent of its potential customers.”
According to Commerce Department
estimates, less than 1 percent of the
nation’s 30 million businesses do export-
ing; of those that do, 58 percent export to
just one market, Commerce said. The com-
panies that made up the survey’s respon-
dents are the types of small to medium-
sized U.S. businesses the Obama adminis-
tration is targeting in its export promotion
initiatives.
The findings of the IDC study, titled
“Change in the (Supply) Chain,” were
released as President Obama journeyed
through Asia with visits to India, Indonesia,
South Korea, and Japan. The main purpose
of the president’s trip was to promote
trade as a way of spurring job creation at
home. ;
