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Press Release – Trand4Cast Powered by Internet Truckstop Market Demand Index (MDI) Increases 2%

New Plymouth, Idaho, September 11, 2012–Internet Truckstop, the largest web-based freight matching service in the transportation industry reports that the Market Demand Index (MDI) increased 2% to 13.2 from 12.96 the previous week as reported in the weekly Trans4Cast.

The overall average equipment rate decreased 1% to $2.16 from $2.17 the previous week. Flatbed rates decreased 2% to $1.98 from $2.01 the previous week. Reefer rates increased 4% to $2.30 from $2.21 the previous week. Specialized truck rates decreased 2% to $2.49 from $2.54 the previous week. Van rates decreased 3% to $1.86 from $1.92 the previous week.

One of the more disappointing economic reports last week was that the Institute for Supply Management’s proprietary PMI for manufacturing remained below 50 in August for the third consecutive month. The PMI is a composite measure of several dimensions of the supply chain, and any value below 50 reflects a contraction in U.S. manufacturing activity.

About Trans4Cast powered by Internet Truckstop
Trans4Cast is the compilation of highly relevant data, easily accessible to all trucking professionals. The Market Demand Index (MDI), a measure of relative truck demand, is culled from Internet Truckstop data.  Internet Truckstop compiles this weekly report that will assist in making critical business decisions. The report is now a web series with a news anchor and appears as the Industry Economic Update  on BigTruckTV.com, Internet Truckstop, and Truckload Carriers Association. The show is produced bi-weekly and can be accessed online 24/7. Jeremy West is the economic consultant preparing this report. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. For more information on Trans4Cast, please contact Roxanne Bullard at 1-800-203-2540 ext. 6230.

About Internet Truckstop
Founded in 1995, Internet Truckstop is the first and largest freight matching service on the web. Internet Truckstop offers more tools than any other freight matching service available. These easy-to-use tools, the largest freight database, and a commitment to the transportation industry make Internet Truckstop the leader in Internet freight matching.

Source:
Stephanie Sternes
800-203-2540 ext. 6186
stephanies@truckstop.com

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Is manufacturing activity weakening? Comparing the Industrial Production Index to the PMI

One of the more disappointing economic reports last week was that the Institute for Supply Management’s proprietary PMI for manufacturing remained below 50 in August for the third consecutive month. The PMI is a composite measure of several dimensions of the supply chain, and any value below 50 reflects a contraction in U.S. manufacturing activity.

In contrast, the Manufacturing component of the Federal Reserve’s Industrial Production (IP) Index increased moderately during both June and July (the August values will be released this week on September 14th). The divergence of these two indices presents a conundrum: how can manufacturing be simultaneously increasing and decreasing?

The discrepancy primarily results from differences in the method by which each of these indices is constructed. The Federal Reserve determines monthly IP Manufacturing strictly by examining (actual and imputed) industrial output, sourced from various trade associations and censuses.

By comparison, the PMI is formed from surveys of ISM member businesses and reflects five components: new orders, production, employment, supplier deliveries, and inventories. Because it includes several components besides production, the PMI may contract even if current manufacturing volumes are increasing.

So, which of these two indices is superior? Or, more specifically, which index better contextualizes the environment for trucking? Although some analysts argue the PMI has inferior predictive power (e.g. Bachman, 2010), this relates more to its usefulness for forecasting economic recessions than its quality in measuring the current business climate.

Overall, both measures are valuable for carriers to use in evaluating their future outlook. The Industrial Production Index is informative about future volumes, especially over a longer term—goods that are produced are eventually going to be shipped, generating demand for trucks. The PMI speaks to the current manufacturing climate, and declines in the non-output portions of the PMI could foreshadow production declines to come.

 

Jeremy West, Internet Truckstop Economist

 

 

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Press Release – Increased numbers for the Market Demand Index (MDI), the trucking sector looks to maintain a “holding pattern”

Increased numbers for the Market Demand Index (MDI), the trucking sector looks to maintain a “holding pattern”

There was an increase in the ITS Market Demand Index (MDI) last week. Numbers are moving up for load availability and truck searching. Truck availability remained flat from last week.

The overall average equipment rate remained flat but specialized truck rates and van rates increased from the previous week.

We are seeing an increase in the fuel prices from last week. The lowest average cost of fuel is $3.82 and the highest is $4.15.

“With the notable exception of diesel prices, the trucking sector continues to maintain a “holding pattern.” Broader economic data were more positive this week (especially July retail Sales). However, the U.S. economy will most likely maintain slow growth throughout the second half of 2012, generating steady by unimpressive trucking volumes.” Jeremy West, Internet Truckstop Economist

About Internet Truckstop
Founded in 1995, Internet Truckstop was the first online freight matching service. Listening to the transportation industry is the driving force behind all of the innovative business tools that we develop. These easy-to-use tools, the largest freight database and a commitment to our customers makes Internet Truckstop the leader in Internet freight matching.

Our success is defined by our customers’ success.

For more information on the Trans4Cast newsletter please visit www.trans4cast.com or call 1-800-203-2540 x 6180

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Trans4Cast: MDI Decreases

The ITS Market Demand Index (MDI) decreased 4% to 15.86 from 16.6 the previous week. Load availability decreased 5% compared to the previous wee and truck availability increased 1%. Truck
searching decrease and the overall average equipment rate decreased slightly as well.

We did see a decrease in fuel prices though.

This week, the Federal Reserve’s Open Market Committee (FOMC) revised downward their projection for GDP growth in 2012 to 1.9-2.4%, with this revised range dropping half of a percentage point from the April projection. Coupled with weakening manufacturing indices and slowing retail sales, this presents a gloomy outlook for trucking. One brighter outlook, however, is that fuel prices should continue to fall. To see a full report of the Trans4Cast please visit: www.trans4cast.com