Food Shippers of America - Fall/Winter 2016 - 81


I N D U S T R Y
F O R E C A S T

Presidential Election
Brings Uncertainty
by Brian D. Paolillo

ith the approach of the U.S. presidential election, there is a fair amount
of economic uncertainty, which is typical during an election year when a
new president assumes office. The economic impact of the outcome of the
election, nonetheless, will be determined once the winning party and new
administration are established at the end of the year.
SO FAR, RECENT MARKET indicators
point to a strengthening labor market
and economic activity expansion at a
moderate rate. The Federal Reserve
reports that job gains were strong in
June and there has been an increase
in labor utilization in recent months.
Household spending has been growing,
although business fixed investment
has been soft. While oil prices, interest
rates and inflation continue to be low,
retail inventory levels are running
high, which is contributing to declining
freight volumes.

Elevated Inventory, Excess Capacity
Elevated inventory levels are
contributing to the excess of capacity
on the highway as demand and prices
continue to fall. The latest report from
the American Trucking Association (ATA)
found that the seasonally adjusted
Truck Tonnage Index was down
2.1 percent in July, following a 1.6
percent decline in June. In fact, on a
monthly basis, tonnage has decreased
in four of the last five months. In
contrast, the demand for refrigerated
freight is predicted to grow at an annual
rate of 12 percent through 2019.
Shippers and carriers face regulatory
changes that may significantly impact
their transportation operations,
including the electronic logging

mandate (ELM), which will require drivers
to electronically comply with the hours of
service (HOS) rules. This is expected to
tighten capacity by eliminating smaller
fleets that are unable to comply, as
well as further contribute to the driver
shortage. The Food Safety Modernization
Act (FSMA) rule for preventive controls
for human food is now finalized, with the
shipper primarily responsible for safety
risks during transportation. The earliest
compliance for most entities will be
April 6, 2017.
Intermodal Challenges
Intermodal trailer shipping continues
to face tough competition from
trucking, primarily driven by low fuel
prices. Despite a promising Q1, North
American intermodal volumes declined
in Q2 after 25 years of consecutive
growth, according to the Intermodal
Association of North America (IANA).
While intermodal volumes were up 2
percent in the first quarter from the
prior year, there was a 6.1 percent drop
in the second quarter due to fewer
international and trailer shipments.
Intermodal trailer volumes dropped
26.6 percent, continuing a multi-year
downward trend, IANA noted, while
international shipments fell 9.3 percent.
Domestic container volume performed
the best of all segments, gaining 3.4

percent, helping to temper the overall
loss. Another bright spot - Intermodal
Marketing Company (IMC) volume
improved significantly, up 17 percent from
the previous year, due to excess trucking
capacity.
Although the Q2 intermodal volume
reflected current market conditions, IANA
stated that year-end projections are still
tracking for growth in both domestic
container and international volumes.
Despite this trend, we are still seeing
truck-to-rail conversion, especially
in the East, where railroads have
recently invested in opening up service
in traditional highway-only lanes. In
addition, there are some lanes where
trucking has won back share from
intermodal on price driven by excess
capacity and lower fuel costs.
Another emerging trend is that shippers
are looking for multi-year intermodal
agreements, with price adjustments tied
to specific market indices. It is a clear
sign that shippers rely on intermodal
capacity and are looking for long-term
commitments from providers. ■
Brian D. Paolillo is senior vice president
and general manager, Transportation
Division, Yusen Logistics (Americas) Inc.,
Jacksonville, Florida.

FOOD SHIPPERS OF AMERICA | www.foodshippersofamerica.org |

81


http://www.foodshippersofamerica.org

Table of Contents for the Digital Edition of Food Shippers of America - Fall/Winter 2016

President’s Letter
Meet Your Board
Mentors Make a Difference
Are You Partnered with a 3PL Yet?
Caution: Merging Traffic
Retailers Sharpen Supply Chain Visibility With Improved Technology
Parking Woes Continue
Electronic Logging Devices: Myths and Facts
Tax and Accounting Changes Will Impact Transportation Industry
Retail Trends
Positive Attitudes and Strong Relationships: Key Tools for Success
From Farm to Fork
Narrow Focus to Separate from the Pack and Increase Sales Momentum
Industry Forecast
The Internet of Things
Member Profile: C&S Wholesale Grocers
Preparing for the New Overtime Pay Rules
10 Ways to Become an Effective Manager
Culture at Work is Everything, and Everything is Culture
FSA Members
In the News…
Index of Advertisers
Food Shippers of America - Fall/Winter 2016 - cover1
Food Shippers of America - Fall/Winter 2016 - cover2
Food Shippers of America - Fall/Winter 2016 - 3
Food Shippers of America - Fall/Winter 2016 - 4
Food Shippers of America - Fall/Winter 2016 - 5
Food Shippers of America - Fall/Winter 2016 - 6
Food Shippers of America - Fall/Winter 2016 - 7
Food Shippers of America - Fall/Winter 2016 - 8
Food Shippers of America - Fall/Winter 2016 - 9
Food Shippers of America - Fall/Winter 2016 - 10
Food Shippers of America - Fall/Winter 2016 - President’s Letter
Food Shippers of America - Fall/Winter 2016 - Meet Your Board
Food Shippers of America - Fall/Winter 2016 - 13
Food Shippers of America - Fall/Winter 2016 - 14
Food Shippers of America - Fall/Winter 2016 - 15
Food Shippers of America - Fall/Winter 2016 - Mentors Make a Difference
Food Shippers of America - Fall/Winter 2016 - 17
Food Shippers of America - Fall/Winter 2016 - 18
Food Shippers of America - Fall/Winter 2016 - 19
Food Shippers of America - Fall/Winter 2016 - 20
Food Shippers of America - Fall/Winter 2016 - 21
Food Shippers of America - Fall/Winter 2016 - 22
Food Shippers of America - Fall/Winter 2016 - 23
Food Shippers of America - Fall/Winter 2016 - 24
Food Shippers of America - Fall/Winter 2016 - 25
Food Shippers of America - Fall/Winter 2016 - 26
Food Shippers of America - Fall/Winter 2016 - 27
Food Shippers of America - Fall/Winter 2016 - 28
Food Shippers of America - Fall/Winter 2016 - Are You Partnered with a 3PL Yet?
Food Shippers of America - Fall/Winter 2016 - 30
Food Shippers of America - Fall/Winter 2016 - 31
Food Shippers of America - Fall/Winter 2016 - Caution: Merging Traffic
Food Shippers of America - Fall/Winter 2016 - 33
Food Shippers of America - Fall/Winter 2016 - 34
Food Shippers of America - Fall/Winter 2016 - 35
Food Shippers of America - Fall/Winter 2016 - 36
Food Shippers of America - Fall/Winter 2016 - 37
Food Shippers of America - Fall/Winter 2016 - Retailers Sharpen Supply Chain Visibility With Improved Technology
Food Shippers of America - Fall/Winter 2016 - 39
Food Shippers of America - Fall/Winter 2016 - 40
Food Shippers of America - Fall/Winter 2016 - 41
Food Shippers of America - Fall/Winter 2016 - 42
Food Shippers of America - Fall/Winter 2016 - 43
Food Shippers of America - Fall/Winter 2016 - 44
Food Shippers of America - Fall/Winter 2016 - Parking Woes Continue
Food Shippers of America - Fall/Winter 2016 - 46
Food Shippers of America - Fall/Winter 2016 - 47
Food Shippers of America - Fall/Winter 2016 - 48
Food Shippers of America - Fall/Winter 2016 - Electronic Logging Devices: Myths and Facts
Food Shippers of America - Fall/Winter 2016 - Tax and Accounting Changes Will Impact Transportation Industry
Food Shippers of America - Fall/Winter 2016 - 51
Food Shippers of America - Fall/Winter 2016 - 52
Food Shippers of America - Fall/Winter 2016 - 53
Food Shippers of America - Fall/Winter 2016 - Retail Trends
Food Shippers of America - Fall/Winter 2016 - 55
Food Shippers of America - Fall/Winter 2016 - 56
Food Shippers of America - Fall/Winter 2016 - 57
Food Shippers of America - Fall/Winter 2016 - Positive Attitudes and Strong Relationships: Key Tools for Success
Food Shippers of America - Fall/Winter 2016 - 59
Food Shippers of America - Fall/Winter 2016 - 60
Food Shippers of America - Fall/Winter 2016 - 61
Food Shippers of America - Fall/Winter 2016 - 62
Food Shippers of America - Fall/Winter 2016 - 63
Food Shippers of America - Fall/Winter 2016 - 64
Food Shippers of America - Fall/Winter 2016 - 65
Food Shippers of America - Fall/Winter 2016 - 66
Food Shippers of America - Fall/Winter 2016 - 67
Food Shippers of America - Fall/Winter 2016 - From Farm to Fork
Food Shippers of America - Fall/Winter 2016 - 69
Food Shippers of America - Fall/Winter 2016 - 70
Food Shippers of America - Fall/Winter 2016 - 71
Food Shippers of America - Fall/Winter 2016 - 72
Food Shippers of America - Fall/Winter 2016 - 73
Food Shippers of America - Fall/Winter 2016 - Narrow Focus to Separate from the Pack and Increase Sales Momentum
Food Shippers of America - Fall/Winter 2016 - 75
Food Shippers of America - Fall/Winter 2016 - 76
Food Shippers of America - Fall/Winter 2016 - 77
Food Shippers of America - Fall/Winter 2016 - 78
Food Shippers of America - Fall/Winter 2016 - 79
Food Shippers of America - Fall/Winter 2016 - 80
Food Shippers of America - Fall/Winter 2016 - Industry Forecast
Food Shippers of America - Fall/Winter 2016 - The Internet of Things
Food Shippers of America - Fall/Winter 2016 - 83
Food Shippers of America - Fall/Winter 2016 - 84
Food Shippers of America - Fall/Winter 2016 - 85
Food Shippers of America - Fall/Winter 2016 - 86
Food Shippers of America - Fall/Winter 2016 - Member Profile: C&S Wholesale Grocers
Food Shippers of America - Fall/Winter 2016 - 88
Food Shippers of America - Fall/Winter 2016 - Preparing for the New Overtime Pay Rules
Food Shippers of America - Fall/Winter 2016 - 90
Food Shippers of America - Fall/Winter 2016 - 91
Food Shippers of America - Fall/Winter 2016 - 92
Food Shippers of America - Fall/Winter 2016 - 93
Food Shippers of America - Fall/Winter 2016 - 94
Food Shippers of America - Fall/Winter 2016 - 10 Ways to Become an Effective Manager
Food Shippers of America - Fall/Winter 2016 - 96
Food Shippers of America - Fall/Winter 2016 - 97
Food Shippers of America - Fall/Winter 2016 - Culture at Work is Everything, and Everything is Culture
Food Shippers of America - Fall/Winter 2016 - 99
Food Shippers of America - Fall/Winter 2016 - 100
Food Shippers of America - Fall/Winter 2016 - 101
Food Shippers of America - Fall/Winter 2016 - FSA Members
Food Shippers of America - Fall/Winter 2016 - In the News…
Food Shippers of America - Fall/Winter 2016 - 104
Food Shippers of America - Fall/Winter 2016 - 105
Food Shippers of America - Fall/Winter 2016 - 106
Food Shippers of America - Fall/Winter 2016 - Index of Advertisers
Food Shippers of America - Fall/Winter 2016 - 108
Food Shippers of America - Fall/Winter 2016 - 109
Food Shippers of America - Fall/Winter 2016 - 110
Food Shippers of America - Fall/Winter 2016 - cover3
Food Shippers of America - Fall/Winter 2016 - cover4
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