The State of the Industry: A Mid-year Look at Transportation and the Economy
At Transplace’s recent Shipper Symposium, a diverse group of shippers, logistics experts and analysts came together to discuss the latest industry trends and obstacles faced by supply chain and transportation professionals, and identify strategies for addressing these issues and improving operations. During the event, we had the opportunity to examine how the transportation world is shifting and what it all means to attendees’ business strategy. Below are some highlights on the state of the economy and transportation industry from the insightful discussion.
What is the current state of the economy?
A popular question in today’s market is, “Why is the economy not growing and it feels like the recovery has ground to a halt?” Currently, the US economy feels as if it’s fairly stable, but over the last 18 to 24 months, we have hit a global commodity bubble. Over this timespan, we have seen a decline in a number of key commodities. Not only has oil and gas burst as a commodity, but corn, wheat, copper and lead “commodity bubbles” have burst as well.
Additionally, from mid-August to the end of August, there was a worldwide material decrease and drop in demand, which could be seen in the GDP. It is also interesting to frame up this discussion in terms of capacity in recent years – something that is never quite certain. Capacity tightened up in 2014, but then loosened again in 2015. Now, in 2016, the industry is seeing recessionary levels of excess truckload capacity similar to those of 2009.