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2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward

The global economy continued to build momentum this year, spurred by further out performance in G7 economies. As a result, we have edged up our global growth forecast to an average of 3.7% between 2018 and 2019. Given diminishing economic slack and rising wage pressures, central banks are simultaneously starting to back away from previous stimulus measures. However, their cautious approach is akin to applying less pressure on the gas pedal rather than hitting the brake. The U.S. economy in particular has considerable oomph heading into 2018.
Forecast has been upgraded to 2.6% in 2018 and 2.3% in 2019 due to momentum and an anticipated boost from tax cuts. After a sub-par start to 2017, global economic growth accelerated to an above-trend 4% pace in both the second and third quarters of the year. Moreover, a similar brisk pace is estimated for the October-December period.

On the surface, this synchronized expansion in economic activity seems to be the real deal, with the seeds planted by highly accommodative monetary policy, and recently, supportive fiscal policies bearing fruit. Moreover, global surveys show that business and consumers are the most confident they’ve been during this cycle, reinforcing the notion that the economy no longer requires life support. Nevertheless, concerns about the sustainability of the current expansion linger among policymakers, particularly in a world of aging labor forces, low productivity growth, high income inequality, elevated policy uncertainty, and a slow uptake of structural reforms.

As with advanced economies, risks to the U.S outlook are somewhat better balanced than in the past, with downside risks largely unchanged from past quarters. Better foreign demand is checked by domestic and global political risks. These risks include threats to disrupt existing trade relationships, elevated levels of indebtedness, and the challenge of sustaining development objectives amidst structural changes.

As widely expected, the policymaking committee lifted its benchmark short-term rate by a quarter percentage point to a range of 1.25% to 1.5%. It marked the central bank’s third such rate increases this year and a vote of confidence in an economy that has perked up in recent months. The move is expected to ripple across the economy, nudging up rates, most noticeably for credit cards, adjustable-rate mortgages and home-equity lines of credit. The effect on fixed-rate mortgages is likely to be less pronounced.

The US economy will see a further pickup in growth, with or without a tax cut. However, growth in the Eurozone is predicted to have peaked in 2017. Similarly, the recent growth spurt looks set to fade. The Chinese economy’s gradual deceleration is expected to continue. Fortunately, the emerging world’s recovery will likely be sustained and pick up a little steam.

GasBuddy Analysts Expect Fuel Prices to Rise Again in 2018

Gasoline prices are predicted to move stealthily higher for the second successive year, making U.S. motorists billions of dollars extra in higher fuel expenses. Commuters can look forward to pay about $2.57 per gallon in 2018, the uppermost price since 2014, according to the 2018 Fuel Price Outlook report released by GasBuddy. Whether it is a journey to work, the store or holiday, drivers are likely to be paying more at the gas pump in 2018 when evaluated to the preceding year.

A standard home is projected to spend $1,898 on gas all through 2018, a rise of about $130 over the previous year. The nation’s annual gasoline invoice will increase to $364.6 billion, some $25 billion higher than what motorists used up in the previous year. According to the statement, gas prices will hit the highest point in April and May with the national average estimated to be higher than $2.70. The speculation does not suppose any record-breaking prices to be set this year, but majority of the country will see prices climax under $3 per gallon, but unforeseen interruption could push the national average close to $3, the report added. However, OPEC allow much of the liability for cutting oil production, allowing oil inventories to start 2018 which is virtually 50 million barrels lesser than a year ago,” said Patrick DeHaan, head of petroleum analysis at GasBuddy.

Metro regions including Chicago, Los Angeles, New York City, Sacramento, San Francisco, Seattle and Washington, D.C., will possible see prices elapse $3 per gallon while cities such as Cleveland, Detroit, Miami, Minneapolis, Orlando, St. Louis and Tampa may possibly get inside arm’s reach of such prices.

In reality, the supply increases will possible be making up for by a convergence of added factors. For instance, key oil producers both within and outside the Organization of Petroleum Exporting Countries (OPEC) have decided to expand oil production cuts all through 2018, specifically as a way to neutralize the impact on prices of increased U.S. supplies.
A blooming global economy also impel higher claim for fuel. The world demand for oil is projected to develop past 100 million barrels a day for the first time ever, which also help uphold the prices. While several people may think there’s no means to believe that you prevail at the pump, there are definitely things motorists can do to reduce the rage of paying for gas. This can be achieved if you can simply outfox the pump by shopping around for the lesser price,” according to Patrick DeHaan, head of petroleum analysis at GasBuddy.

U.S Expects Domestic Crude Output to Hit Records in 2018, 2019

U.S. crude oil production is projected to rise to more than 10 million barrels for each day in the early hours of 2018, getting that landmark for the first time since 1970, and to keep on increasing into 2019 to a higher record said by the U.S. Energy Information Administration.

U.S. productivity will increase to 10 million barrels a day as soon as next month and reach 11 million in November 2019, according to government forecasts Tuesday. This evaluate with almost 11 million barrels of Russian production in 2017 and just lower to the 10 million from Saudi Arabia in December. Both countries have guaranteed to limit production this year to control supply and boost up prices, although the kingdom has signified it could pump another 2 million.

Production was projected to strike 10.04 million bpd all through the first part of this year, the agency said in a monthly report. The 10 million-bpd landmark earlier had not been expected to be reached until the fourth quarter. The monthly average for February is likely to exceed 10 million bpd, said Tim Hess, the lead analyst for the report. U.S. productivity will be at an all-time high in 2019, exceeding 11 million bpd by the end of that year, a latest high point for national output, the EIA said in the report. The standard production in 2019 will increase 580,000 bpd to 10.85 million bpd, the agency said in its first viewpoint for next year.

Much of the production development will be concerted in the Permian Basin, the biggest U.S. oilfield extending across Texas and New Mexico, said the EIA director of the office of petroleum, natural gas and bio-fuels analysis. The Organization of the Petroleum Exporting Countries and associates together with Russia are keeping supply limits in place in 2018, a second year of control, to reduce a price-denting surplus of oil held in stock.

Any possible changes in strategy from players like OPEC or supply interruption in key U.S. basins would risk disturbing the U.S. estimates, EIA officials recognized on a conference call on Tuesday. EIA’s point of view included boost in its forecasts for oil prices, overall production and demand. The rise in prices is estimated to drive gains in U.S. production during 2018, equalizing curbs by others. Some forecasters have said the rise in U.S. shale oil production could put off OPEC and Russia to continue their deal to control supply until the end of the year for doubts of losing market share.

United States Freight Railways

U.S. railroads start off 998,168 carloads in December 2017, up 2.5 percent from December 2016. U.S. railroads and also initiate 1,065,965 containers and trailers in December 2017, up 5.3 percent from the same month last year. Joint U.S. carload and intermodal originations in December 2017 were 2,064,133, up to 4 percent from December 2016. In December 2017, 14 of the 20 carload goods class tracked by the AAR saw carload increase compared with December 2016. These incorporated: compressed stone, sand & gravel, up to 15,632 carloads or 23.1 percent; metallic ores, up to 6,875 carloads or 35.2 percent; and chemicals, up to 4,277 carloads or 3.5 percent. Freight that saw decrease in December 2017 from December 2016 consists of: grain, down to 5,542 carloads or 6.1 percent; motor vehicles & parts, down to 2,625 carloads or 4.1 percent; and nonmetallic minerals, down to 1,424 carloads or 8.9 percent.

Railroads initiated 1,065,777 carloads in October, down to 0.1% from October, 2016. But a documentation of 1,144,157 containers and trailers was up 6.4% on-year. Joint carload and intermodal originations were 2,209,934, up 3.1% year-on-year. The overall U.S. carload traffic for the first 10 months of 2017 was 11,172,437 carloads, up 3.4%, and 11,576,709 intermodal units, up 3.7%. Total joint traffic for the first 43 weeks of 2017 was 22,749,146 carloads and intermodal units, a boost of 3.6%.
US railroads’ carload traffic increased 3.4% to ~268,000 railcars in Week 49 of 2017; when match up to ~259,000 units in the same week last year. Intermodal traffic’s rising force sustained with volumes increasing 4.6% to ~293,000 units from ~280,000 units in Week 49 of last year.

Intermodal traffic has been picking up steam this year and is now increasing at a rate of 5-6 percent, which is back to the twofold of the GDP or above the standard development rate which it was good to see after several slow years and drop in oil prices,” observed Bill R, a management consultancy. “The present development proposes that truck capacity is lessening a bit and truck rates are increasing.

While carload demand remains strong, numerous indicators show that we may have approved the growth climax. The inventory-to-sales proportion in the US is tracking sideways, signifying the time when companies look to refill inventories quickly which often gives the rail carload a boost. The upward trend in seasonally-adjusted freight capacity has been moderated. Freight volumes are still projected to grow in 2018, even though at a slower rate than in 2017.

Cutting Air Freight Expenses in Half through Drone Technology

Kemlog Drone Technology

Transportation and shipping by air is quick, but costly. Boat is a lot cheaper, but extremely slow. So why not send all those boxes and parcels on an un-piloted, amphibious Boeing 777-sized drone that can take to the air end to end and finally drop off as much as 200,000 pounds of cargo at a seaside port? It would transmit the cargo at about partly the cost of standard air freight. Making a transportation drone that merge high speeds, low costs, and large payloads may sound like untainted desire, but in a period of increasingly growing international transportation volumes, Nautilus’ vision is more than just simply fascinating.

That’s the idea behind Natilus vision, a Richmond, California-based startup who plans on flying FAA-approved tests of a 30-foot trial product that’s about the volume and mass of a military Predator drone. The flight will mark the foremost major step toward overturning the global freight forwarding industry. Ultimately, CEO Aleksey Matyushev says, the company anticipates flying the prototype on 30-hour test runs, shipping up to 700 pounds of cargo, between Los Angeles and Hawaii. One motive for buoyancy is the certainty that most cargo planes today were formerly passenger planes that have just been modified for cargo. With a plan in mind for a propeller-driven cargo drone that is suitable for volume as disparate to the present weight-centric models, Natilus’ aircrafts will be totally unlike the present industry standard.

The objective is to end production of the full-size, over 200-foot drone before 2020, then have it go through testing and guarantee before commencement of actual commercial flights. Natilus expect to build hundreds of the drones, some of which will be sold straightforwardly to customers—preferably to companies like UPS and FedEx as well as “standard freight forwarders” like Whole Foods and Costco.

The startup is prepping vast, 200ft-long drones that would ship up to 200,000 pounds of cargo over the ocean. They’d tentatively reduced the cost of air freight in half by removing the crew and improving fuel effectiveness. And despite the fact that the drone is likely wouldn’t be allowed to fly over populated areas, that wouldn’t raise an issue— it’s intended to land on water and unload its goods at a seaport. The belief is that after landing, they would taxi into a typical port, where cargo would be unloaded by means of cranes. According to the startup, the aircraft would cover up the course from Los Angeles to Shanghai in about 30 hours.

Though Natilus is still quite a few years away from delivering the drones—it presently function with just three major staffers and less than a million dollars in funding—Chris Connell, president of the global perishable goods transporter. By 2020, Natilus’s gigantic unmanned planes could transport 200,000 pounds of goods across the world. But foremost, the 30-foot prototype must pass test runs. For now, Natilus is paying attention on getting its 30-foot prototype, which is about 70% complete, set for summer test-run in San Pablo Bay, just northeast of San Francisco. If those go fine, then it’s complete steam further on the 777-sized model, provided that supplementary funding and the manufacturing talent needed to build it become visible.

ATA Tonnage and Cass Freight Index Reports is Both Strong in November

American Trucking Associations’ highly developed seasonally adjusted (SA) For-Hire Truck Tonnage Index rise again in November, adding up 2.3% in addition to the 3.9% jump during October. In November, the index equaled 151.8 (2000=100), starting from 148.4 in October.

Comparing the report with November 2016, the SA index increased 7.6%, which was down from October’s 10.5% year-over-year increase, but yet, extremely strong. In September, the index improved 6.3% on a year-over-year basis. Year-to-date, in comparison with the equivalent eleven months in 2016, the index is up 3.5%.

The report tries to authenticate ATA truck records across the data sources. It shows this month that jobs expansion says the trucking industry employment stage were slightly altered month-over-month. The American Trucking Associations (ATA) forecast September would see slower development as the hurricane season flow lessened, but according to the report, trucking is enduring to rush ahead, with strong data points signifying a complete resurgence from the industry recession that began in 2015. That merge with innovating from the hurricane damage encouraged ATA Chief Economist Bob Costello to say, “Going forward, upgrading from those hurricanes and other natural disasters like the wildfires will add to freight order.

Shipment did increase but compared to Augusts’ 4.7% rise, that’s barely a distress for the trucking industry. In actual fact, the Cass Index distinguished in their latest report that they are paying more attention on the number of loads moved by truck and less attention on the number of tons moved by truck because of the increase in e-commerce and the move away from brick-and-mortar retail.

The Cass Freight Shipment Index fall 1.2% in succession but increase 3.5% on a year-over-year basis. The index fell 1.1% successively and was down 3.0% year-over-year. The index, which uses information from bill payments through a bank is mainly supported on trucking which includes rail, air and barge freight.

The Cass Truckload Index, which tracks monthly changes in line haul rates, beg off 0.9% in December in opposition to the same period in 2015, the tenth successive month of such turn down. However, the present strong point being reported in mark rates is leading them to consider that the current -3% to 1% truckload pricing prediction may need to be improved and moved to a slightly more positive position if the force in spot rates continues long enough to move deal rates back into affirmative terrain.

Not just did the Shipments Indexes expand their run of positive year-to-year contrast, but those evaluations have turn out to be gradually more positive. Shipments initial turned positive fourteen months ago. The 14.3% YoY increase in the November Cass Shipments Index is so far an additional data point which verifies that the first positive hint last October was a alteration in trend.

Four Change Management Keys to Digital

Just how digital supply chain management and the broad concept that Cloud-based systems, analytics and checking of goods, vehicles and other assets through the Internet of Things (IoT) will increase the way supply chains run is the uppermost of mind for many people in logistics today. Evidently, digitalization will change supply chains, however our understanding of how it will play out is an effort in development.

Despite the fact that the transition to digital processes is unruly to the sector, it has taken companies some time to put in place the policies to react. In actual fact, a full 90% of respondents who had plans acknowledged that they have started executing the change. Digital technologies can assist in managing that difficulty in a number of ways. These may comprises combining data from different bases, recording manufactured goods and shipment hand-offs, classifying habitual subjects, providing the right facts to the right people, and starting the most proper actions. These change can deliver companies with understandings that would be impossible, or almost impossible, for human beings to swiftly realize on their own. For instance, artificial intellect and machine learning could benefit an outfit retailer that is having difficulties with product imperfections and hastily recognize the cause of the defects, converse the problem to the responsible party, place an order with a more trustworthy source, and follow up with improved quality-assurance principles.

Different study found that a meager 32 percent of the organizations are trying to use a digital strategy and about only percent have gotten the necessary skills and resources. This is in sharp divergence to the study’s findings that nearly 85 percent of all organizations believe that change of management to digital will basically change the way they deliver services over the next three to five years.

Technologies like extrapolative analytics, better perceptibility over the movement of goods, and robotics that assist warehouses and distributions hubs preserve pace will all play a part in digital supply chain management. So will the understanding that the new skills will layer over existing management as a means of change to digitalization.

The exact approach to digitizing supply chains incorporates appropriate cutting-edge technologies with refurbished operations. Several managers will be conversant with the elementary transformation approach: inaugurating a visualization for the future supply chain, evaluating the supply chain’s current state, and developing a makeover road map. In a digital transformation, this method has some new structures. The visualization will call for an arrangement of no-regrets enhancements as well as more hypothetical changes that can be followed over time. The valuation requires to deliberate whether operations and technology are appropriately incorporated, and whether the company has the capacity plan and structural arrangement that will favor innovation and continual development. Additionally, the transformation road map will have compacted timeframes, given the ease with which the newest digital solutions can be topped up.†digital

Supply Chain Trends To Watch in 2018

Technology as the backbone of cloud computing is facilitating advance innovation in global Logistics & Supply Chain industry.  Alternatively, distorting boundaries between countries have unlocked the market for cross-border e-commerce therefore generating a necessity for digitized logistics. Data remains the ultimate constituent of the Logistics operations and the request for evaluating the data-patterns and revolving raw functioning data into actionable perceptions will be the future of Logistics. In the ever-changing business, staying forward in delivering the service is the most crucial and companies need to adopt big-data algorithms, data-visualization skills and keener analytics to increase process effectiveness and reduce the delivery times. Here are some of the supply chain trend you need to watch in 2018:

Perfect Order Deliveries

The complications of last mile deliveries make the chances against achieving a flawless order irresistible, and perfect orders are the vital measure of customer fulfillment. Perfect orders are the proportion of orders distributed to the precise place, with the precise product, at the precise time, in the exact condition, in the correct package, in the accurate quantity, with the precise documentation, to the correct customer, with the precise invoice. Accomplishing the perfect order spot assist in decreasing cost as a wrong shipping which can lead to gaining of physical cost to fix the error, penalties and revenue loss.

Rise of Elastic Logistics

Elastic Logistics basically means elasticity to magnify and shrink abilities to support with the demands inside the supply chain model at a given time. Supple automation solutions upsurge the quickness and resistance of the logistics infrastructure to cost efficiently meet the market variabilities. With optimum operation, companies can convey delight while keeping the expenses in one piece, and the search to beat the claim will be just increasing.

Artificial Intelligence & Block chain

Block chain & Artificial Intelligence has hit the logistics industry early this year and through the safety and limpidity apprehensions, block chain remains the appropriate and confident choice for the Logistics companies for its impermeable mode to hoard and share the transactional data and increases reliability with a guaranteed transaction

Increased Adoption of Drones and Smart-Glasses

The placement of smart-glasses and drones that upturn exponentially and industries can assure faster and effective deliveries. Incorporation with smart glasses will help in making deliveries at ease by hands-free route quests, face recognition for error-free deliveries and personalized deliveries. With the increase in unmanned airborne vehicles and smart glasses implementation, the functioning efficiencies of primary and preceding mile logistics can be improved, augmented elasticity and speed of delivery in accomplished and overcrowded cities.

Automated handling (AGV)

Driverless transport schemes have until now principally been used for extremely monotonous tasks, such as transport of small parts. We forestall that slight aisle trucks (VNA), spread trucks and low level order pickers (LLOPs) will gradually be used in automated transport and in the setting away and withdrawal of palletized goods.

Connected machines

For clever producers, the use of IOT (Internet of Things) strategies increases the effectiveness and efficiency of industrialized actions, assisting in reducing new vehicle delivery times. By joining their lift trucks, businesses can have their fingers on the beat of the whole fleet in actual time and guarantee all moves easily.

Generally, the trend is moving near binding the new-age skills for driving efficiency, increasing delivery capability score and making new revenues while heaping on the huge prospect that lies at the dawn of cross-border e-commerce while constructing a supple and a sustainable Supply Chain.

Automation Could Kill 73 Million U.S Jobs by 2030

A new study discovers that automation could kill up to 800 million jobs worldwide by 2030 which entails that 38% of U.S. jobs have a high risk of being wiped by automation in 2030. Uncertainties that automation will kill more jobs continue to grow which shows that workers are at risk. An estimated 73 million U.S.  jobs would be dissolve and most of them will be to increased productivity due to automation. It was revealed that robotics and artificial intelligence would eradicate not just blue-collar factory jobs but also many white-collar careers such as paralegals, journalists, airline pilots, even surgeons could be affected.

Automation is gradually booming in every part of our lives, whether it’s robots building the cars we drive or artificial intelligence systems driving the vehicles for us. With the increase in autonomous systems, many people concern is how their job will be affected.

Seventy-three million jobs in the world’s foremost economies could fade over the next fifteen years because of improvements in technology. Improvements in artificial intelligence, robotics, and biotechnology, would interrupt the business world in a comparable way to preceding industrial revolutions. It was found out that as many as 73 million jobs in the U.S could be lost through automation. Those losses would be partly balance by the establishment of 2.1 million new opportunities in sectors such as tech, professional services and media. Countries will have to invest in changing their workforce if they want to keep up with the variations and avoid a worst case situation.

The effect of automation on jobs could really be determined by the occupation. A report by the International Institute for Sustainable Development proposes that automation could substitute more jobs in the next decade. Artificial Intelligence, Automation, and the Economy,” issued by the Executive Office of the U.S. President, states that automated vehicle technology could impend or change 73 million of the jobs in the United States. That means 80 percent to 100 percent of these positions will be eradicated. Those working physical labor jobs are not the only ones who would be affected. Software capable of analyzing large volumes of legal documents is expected to drastically reduce the number of paralegals and as such software programs advance, people with other occupations, like accountants, could become easily replaced.

On the other side, people with tech expertise will be required in every industry to set up and control the automation systems. Nevertheless, they’ll be hired at a smaller number than the people the machines will eventually replace.

Are You Ready for The ELD Mandate?

The ELD Mandate involves the use of ELDs by commercial drivers who take record of their hours-of-service (HOS) registers. Formerly, it was recorded in paper logbooks, but now, ELDs electronically record driver information spontaneously, including location information, engine hours, vehicle miles, HOS, and identification.

By now, all drivers must have heard about the Federal Motor Carrier Safety Administration (FMCSA) Electronic Logging Device (ELD) Rule. The regulation is proposed to increase work safety for drivers and systematize the course of tracking, managing, and sharing driver duty status registers. For every of the FMCSA, the ELD Rule relates to most motor carriers (as well as the commercial buses and trucks) drivers who are expected to keep records of their duty status. An ELD mechanically records driving times and other Hours-of- Service (HOS) data. The Federal Motor Carrier Safety Administration’s (FMCSA) execution time is fast approaching. Commencing December 18th the FMCSA’s Electronic Logging Device (ELD) mandate will entail most regional carriers to use ELDs as a substitute to paper log books.

The FMCSA evaluates that over 3 million trucks and over 3 million drivers will be pretentious by the new ELD rules. Generally, the rules relate to most of the trucks in regional side weighing more than 10,001 pounds, vehicles designed to transport more than 8 passengers for payment to the driver, vehicles designed to transport more than 15 passengers and finally vehicles used to haul menace materials in quantities that require placarding by the DOT.

After numerous years of discussions and reviews, the Final ELD Rule was issued in December 2016 and the required ELD Compliance date is December 18, 2017. The FMCSA contemplates that the year between the publishing of the final rule and the compliance date is an awareness and evolution stage, with many haulers willingly installing ELDs. By December 18, 2017, ELD use will be obligatory, with the requirement that companies with vehicles using legacy Automatic On-Board Recording Devices (AOBRDs) will have a 2-year period before they are mandatory to transition the compliant ELDs in December 2019.

Reflecting on how many of the carrier associates presently using ELDs vs individuals that don’t. Installing an operational ELD system through a convoy is no small task because it requires more interval and significant investment up front. Furthermore, this will likely cause a dip in efficiency as these carriers learn how to efficiently control with severe devotion to the hours of service rules that using ELDs will require.

The future is now for the trucking industry, and transporters can’t wait much longer to bring their trucks and drivers into acquiescence with the ELD mandate. The significances for overseeing the deadline for acquiescence may be niggling at best and overwhelming at worst for carriers. It’s in a trucking company’s best awareness to make sure that everything is taken care of prior to the deadline.