As the leaves fall, summer sets sail and the holiday rush fast approaches, King is carving out some time to bring you all the latest news and numbers from across the logistics industry. We are now well into the last half of the year, and there is a lot of good news for retailers and shippers. The numbers are looking good, and the economy looks primed to bring forth a bountiful holiday season.
Let’s fall back a bit. Read our Q1 and Q2 reports from this year.
Without further ado, let’s get in gear and see what happened in the logistics industry in Q3!
Jobs, the economy and consumer spending habits
The economy in Q3 was a mixed bag when it came to the supply chain. From an overall perspective, GDP growth was a bit underwhelming, coming in at around 2.0% for the July-September period (a full percentage point below Q2’s numbers). Despite the low GDP growth, consumer confidence turned over a new leaf, with reports showing a 4.6% confidence index (the highest quarterly mark since Q4 2017).
Other good news came out of the latest September jobs report, which reported that unemployment fell to 3.5% by the end of the quarter. While wages have stagnated, and the number of jobs added have decreased when compared to previous months, the overall outlook of the U.S. is rather bright.
DAT trendlines make a major break from prior years
The national DAT Van Load-to-Truckload ratio remained relatively steady all through Q3, rising slightly each month from 2.09 in July to 2.26 in August and 2.39 in September. This is a stark break from the norms of the last two years, which saw far more fluctuations in the number of loads posted per truck. This stability made rates a bit easier to predict, but there is no telling if this stability will hold out through Q4.
The national freight rates ended September at:
- Van: $1.84
- Flatbed: $2.20
- Reefer: $2.16
Cass Indices show little signs of movement
The Cass Freight Indices, both shipments and expenditures, had little movement throughout Q3, maintaining their negative status when compared to the numbers last year. For the tenth month in a row, the Cass Freight Index has been below its numbers from 2018, signaling a possible contraction in the U.S. economy, according to their report. However, the Freight Index was on the rise in Q3, increasing from 1.17 in July to 1.20 in September.
Expenditures also continue to lag their numbers from last year, but remained relatively stable through Q3, with barely any notable changes (2.861 in July to 2.854 in September). Read the full Cass Freight Index® Report here.
The tonnage index fluctuates, but remains predictable
The American Trucking Associations’ (ATA) seasonally-adjusted tonnage index went on a roller coaster in Q3. After falling by 1.1% in June, with the year-over-year increase being the smallest it has been in two years, the index jumped in by 6.6% in July (a 7.3% increase over 2018). This number once again reversed in August as it fell again by 3.2%. Although the month to month numbers seem chaotic, truck tonnage is on a consistent upward trend over the numbers presented in 2018, and August concluded 4.1% higher than last year.
Great news for diesel fuel prices
Diesel fuel prices normalized when compared to their Q3 2018 levels, decreasing across the board from July to September. While prices have fluctuated slightly over the year, they have largely remained lower than last year since June. Based on these trends, we can expect that prices will continue to be lower than their 2018 counterparts moving into the final quarter of the year.
Diesel fuel prices for Q3 were as follows:
- July: $3.042
- August: $3.032
- September: $2.976
What’s new at King? Get to know your friendly neighborhood 3PL.
What’s new with our team here at King? You could say that the summer season brought many warm things to our team members, our partners and our clients. King received a few notable honors over the past few months, a very nice way to celebrate our company’s 30th year in service:
- SmartWay High Performer: King received this distinct honor, which is given to less than 5% of all logistics companies that have joined the EPA’s SmartWay program, for the second year in a row, demonstrating our commitment to shipping freight in smart and sustainable ways.
- Top Workplaces in Minnesota: for the fifth consecutive year, King was named one of the Top Workplaces in Minnesota by the Star Tribune. This is based on the feedback provided by our very own employees!
- Governor’s Safety Award: King received a Meritorious Achievement Award for exemplary workplace safety efforts in 2018, the second consecutive year our company received this honor!
- Top Logistics Company, MSPBJ: we could not be more grateful to be named as a Top Logistics Company by Minneapolis-St Paul Business Journal for the 6th year in a row.
While these awards are an incredible honor for King, they reflect a high-performing community consisting of our valuable employees, wonderful clients and dedicated carrier partners, working together to bring efficiencies to the marketplace. As the year comes to an end, we look forward to serving our clients and partners, creating even more meaningful supply chain solutions.
In addition to celebrating these honors, did you know King Solutions celebrates the small business community in Minnesota? King serves as a proud sponsor of KARE 11’s Behind the Business segment. Check out all four of our TV commercials here.
Get ahead of the year-end rush
Before you know it, the holidays will be here. And we’re already optimizing supply chains for the inevitable surge. Ready to talk distribution solutions for your business? So are we. Contact King today!