In The News

Well, the Numbers Are In...

Well, the numbers are in.  As we all expected, it's not exactly pretty.  Ugly as it is, there's reason to be encouraged, at least in reference to the economy's overall recovery.  This isn't to say that everything's going to be rosy right away, but following the economy's collapse in 2008, things have improved a bit faster than maybe anyone expected.

These figures, by the way, come from GPSNet Technology's occasional looks at the state of the expedite industry and subsequent communications to its members and clients.

2009, while starting out on the decline and continuing as such until June, saw a steady upturn in terms of volume on a month-to-month basis.  In terms of raw volume, December 2009 compared quite favorably to December 2008--in fact, Dec. 2009 saw a 47% difference against December 2008.  While a higher volume is indeed important and indicative of the turnaround that the industry so desperately needs, it's important to note that the downturn in rate per mile hasn't turned the corner as quickly as has overall volume.  What this translates to, as you're probably aware, is that, industry-wide, there's money being left on the table when you compare 2009 to previous years.

Overall, December 2009 against December 2008 shook out to look like this:

Orders were up 33% Billable miles were up 51%  (Huge increase in billable miles.  Longer length of haul.) Billable revenue was up 47% Linehaul revenue was up 45%.   Fuel revenue was down 27% Linehaul revenue per mile continues to stabilize after taking significant drops earlier this year.
GPSNet also follows the Dow Jones Industrial Average (DJIA) and compares it to the "GPSNet Expedite Index," which is the summary of data from GPSNet's member companies.  This comparison shows that, over the last three years, the GPSNet Index seems to closely follow the DJIA, though there isn't necessarily a direct correlation between the two.  This point is highlighted by the fact that over the last 12 months, the DJIA has recovered to a degree of 80%, while the GPSNet Index has recovered to a degree of 100%, which represents a significant difference between the two indices, especially over an extended 12-month period.  To this end, GPSNet says, "Either the Dow is undervalued or the Expedite Index is in need of a correction."

These figures and assertions raise a question in my mind--and it's one I don't have an answer for.  So, rate per mile isn't recovering as quickly.  Does this mean that it's just not going to--or that the market is just different now?  Or, can we expect the per mile rates to end up at a comparable level at some point down the line?

On the flipside, there's been much made in the news lately about how the economy's projected to exit "recession mode" later this year, and GPSNet Technology says, "Smart companies are preparing to maximize their growth opportunities."  This, too, raises a question--since so many companies were forced to reduce in size over the last year, does this growth represent growth above and beyond the sizes of forces previous to the recession?  To be sure, one would hope so.  The point, though, is that companies are positioning themselves to be able to grow beyond those points--one can never be too optimistic, right?