Inland Distribution

Special Report

“ They ’ re driven by the economy , just like everyone else ,” Lockard said .

Although the US economy continues to expand , demand for physical goods remains soft . The LCI suggests signs of rising freight volumes this summer haven ’ t changed shippers ’ moods .

The American Trucking Associations ’ ( ATA ’ s ) advanced seasonally adjusted For-Hire Truck Tonnage Index increased 0.3 % in July after declining 1.8 % in June . The measure of largely contract carrier tonnage was still down 0.9 % year over year in June .

The unadjusted index , which reflects actual tonnage hauled by carriers , rose 3.4 % in July from June , the ATA said .

Shippers are “ driven by the economy , just like everyone else .”

“ While July wasn ’ t a strong month , we see continued evidence that the truck freight market is likely turning a corner , albeit slowly ,” said Bob Costello , ATA ’ s chief economist .

The dampening of positive responses in the LCI suggests businesses are facing new challenges or uncertainties , BlueGrace said . But the increasingly neutral inventory outlook suggests some shippers are satisfied that inventory levels match market signals .

“ I believe we ’ re going to see normal retail seasonal volume in the fourth quarter ,” Lockard said during the webinar on the state of the less-than-truckload ( LTL ) sector . “ I believe that will bolster LTL more than truckload , however , as there will be more LTL volumes in those orders than full truckloads .”

email : bill . cassidy @ spglobal . com

US shippers more cautious on Q4 inventory levels

US shipper inventory sentiment index

Index level

60 % 6.0 % 50 %

40 %

10 30 %

20 %

10 %

0 %

Source : BlueGrace Logistics

2022-3Q 2023-1Q L 2023-2Q 2023-3Q Positive inventory Neutral inventory Negative inventory Median inventory

5.0 %

4.0 %

0.0 3.0 %

2.0 %

1.0 %

0.0 %

Index level median

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Technology , imports drawing logistics investment to Phoenix

By William B . Cassidy

Rising cross-border trade with Mexico and the growth of high-tech manufacturing in Arizona , including semiconductor plants , is injecting more logistics investment into the Phoenix area , already a key inland hub for US imports headed east from California .

BNSF Railway in June announced plans to build a 4,321-acre intermodal rail and logistics center , with a warehousing and distribution campus , in northwest Maricopa County . This came after Union Pacific Railroad opened a new intermodal terminal in Phoenix earlier this year .

Global logistics provider DSV last year established air charter operations at Phoenix-Mesa International Airport to link Arizona with Europe and Asia . Smaller companies , such as RK Logistics , are expanding in the Phoenix market as well , following their customers .

“ Everything is moving outward .”

Demand for industrial space is high enough that development is being pushed farther from downtown Phoenix , Chris Camacho , president and CEO of the Greater Phoenix Economic Council , told Journal of Commerce .

“ We added 50 million square feet to the industrial market here last year , and a lot of that was new build ,” Camacho said . Much of that new construction is in what Camacho called “ frontier corridors ,” such as the Loop 303 corridor north and west of Phoenix .

“ In the last five years , we ’ ve had 45 companies move to the 303 corridor , adding 15,000 jobs ,” he said .

Unlike Southern California , there is no shortage of space in which to build or lease in central Arizona . “ Everything is moving outward ” from Phoenix , said Camacho .

Following shippers

Shippers moving into the area , especially technology companies , are drawing logistics and transportation providers . RK Logistics acquired a temperature-controlled warehouse in Phoenix in August to support semiconductor production in Arizona .

Taiwan Semiconductor Manufacturing Co . ( TSMC ) is investing more than $ 65 billion to build three chip plants in Arizona . The first of those factories is north of Phoenix , near Loop 303 and Interstate 17 , and is expected to begin production in 2025 .

36 Journal of Commerce | September 23 , 2024 www . joc . com