Posts Tagged ‘ppi’

Does the BLS Trucking PPI Indicate That a Bottom has been Reached?

Tuesday, May 26th, 2009

Ghost Ship full After performing a steep dive since Q3 2008, the current Bureau of Labor Statistics Trucking PPI  looks like it”s beginning to run out of negative steam. Anybody who has been watching this in the marketplace knows that the timing is pretty good to dust off those carrier contracts and secure the requisite capacity at today”s rates … rates that are destined to go north once manufacturers begin to feel the pinch of inventory depletion. Reinforcing the change in momentum is the Census Bureau’s latest report on the ratio of manufacturer”s inventories to sales, always a good leading indicator. A American Hauntingn download

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So what can shippers do today to ensure they remain competitive during these volatile & evolving conditions? The first question they have to answer is how their freight costs measure up in the marketplace. There are a couple of ways to benchmark rates:

    • A quick metric is to compare actual freight rate change trends to the BLS PPI indices for TL, LTL, & rail freight classes; other rate index sources are available from the ATA, AAR, and STB.
    • Or a more detailed benchmark analysis can be performed on the shipper”s freight database by an outside provider that has a comprehensive, best-in-class, and current freight rate database in the modes used by the shipper.

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Catch a Fire hd Once it”s been established that the opportunity exists for rate improvements, a procurement initiative needs to be launched to close the gap. Here too there are a couple of options:

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  • Using either manual, electronic, and/or web based processes shippers can execute their own in-house RFQ methodologies to secure requisite capacity at the most competitive rates available in today”s market.
  • Or an outside provider can be engaged to perform the RFQ process often times in conjunction with other shippers” volumes to leverage maximum lane densities using highly efficient, state-of-the-art RFQ technology.

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So whatever option a shipper elects to use, my advice is Carpe Diem – seize the day.

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