DC Velocity - August 2019

newsworthy

THE LOGISTICS SECTOR CONTINUED ITS SLOWING GROWTH trend in June, as the Logistics Manager’s Index (LMI) declined slightly compared with May and reached a historic low for the fourth straight month, according to the latest monthly LMI report.

The LMI registered 56 in June, down from a reading of 56. 7 in May and down considerably from its reading of 72.6 a year ago, researchers said. The index has shown a downward trend since 2018 but has remained above the 50-point mark, which indicates growth in the sector. Researchers said the most recent decline was driven primarily by decreasing rates of growth in warehouse prices, transportation capacity, and transportation utilization, along with slightly increased but still low growth rates in transportation prices.

Researchers pointed to dynamic changes in transportation metrics as evidence of a downward shift in the market. Transportation prices went from growing at the fastest rates possible a year ago, registering as high as 94, to showing anemic growth in recent months, hitting 51 in June. The lack of growth along with a steep drop (- 5.0) in transportation utilization in June “corroborate recent reports of slowing freight markets,” the researchers said.

“The warehousing metrics seem to suggest that capacity is becoming
available for the first time, increasing utilization and slowing the growth in
price,” researchers said, adding that “the logistics industry is still growing,
but at a slower rate than it had for most of 2018. It would appear that the
market has shifted considerably over the last year.”
The LMI is released each month by researchers from Arizona State
University, Colorado State University, the Rochester Institute of Technology,
Rutgers University, and the University of Nevada, Reno, in conjunction
with the Council of Supply Chain Management Professionals (CSCMP).

Trucking companies remain under pressure to recruit and retain drivers, as high turnover rates persist nationwide. First-quarter data from the American Trucking Associations (ATA) show that turnover at large truckload carriers rose five points to 83 percent, while turnover at smaller fleets dipped four points to 73 percent.

Although the results present a mud-
dled picture of the labor market for
drivers, ATA said it remains tight over-
all. “While the market for drivers in
certain segments continues to be tight,
we’re seeing the impacts of a soft-
er freight environment,” ATA Chief
Economist Bob Costello said in a state-
ment announcing the quarterly results.
“Despite weaker freight growth, it is
clear that there is still strong demand
for quality drivers industrywide, which
will continue to put carriers under pres-
sure to recruit and keep good ones.”
At 83 percent, turnover at fleets with
more than $30 million in revenue was
below the 2018 average rate of 89 per-
cent and 11 points below the year-ago
figure, ATA said. At 73 percent, the
turnover rate for smaller fleets is the
same as it was in the first quarter of
2018, according to ATA.

The tight labor market is causing some firms to get creative in their recruiting efforts. Fort Worth, Texas-based heavy-haul carrier Lone Star Transportation is marketing directly to women with a campaign designed to showcase its growing staff of women drivers. A recruiting page on the company’s website features interviews with some of its most successful female drivers, one of whom is Sage Mulholland, star of the company’s video blog “Flatbed Diva,” which aims to show women what it’s like to pilot a big rig out on the road.