Manufacturing monitor ISM issued a good news, bad news report today, but the good outweighs the bad.
   The sector expanded in November for the fourth consecutive month, says the Institute for Supply Management. The downside is that the rate of growth is less than a month ago, and less than analysts expected.
   “The signs are still encouraging for continuing growth as both new orders and production are still at very positive levels,” says Norbert Ore, head of ISM’s Manufacturing Business Survey Committee. 
   So what freight is hot? Here are November’s dynamic dozen leading sectors, in order:
· Apparel, Leather & Allied Products
· Printing & Related Support Activities
· Petroleum & Coal Products
· Miscellaneous Manufacturing
· Electrical Equipment, Appliances & Components
· Transportation Equipment
· Chemical Products
· Computer & Electronic Products
· Food, Beverage & Tobacco Products
· Paper Products
· Fabricated Metal Products
· Machinery.
   And the five showing a November decline:
· Wood Products
· Furniture & Related Products
· Nonmetallic Mineral Products
· Primary Metals
· Plastics & Rubber Products.
— Max Heine

There was a mixed bag of trucking-related economic reports Friday, though the good seems to outweigh the bad.

The American Truck Dealers, citing trade press reports, notes that third-quarter earnings reports from fleets show freight volumes appear to be rising, though revenues aren’t keeping pace. Also, U.S. truck tonnage fell 7.3 percent in September from the same month last year. That’s not good news unless you consider that it was the best year-to-year monthly showing since November 2008, observes the American Trucking Associations. ATA’s seasonally adjusted for-hire truck tonnage index dipped 0.3 percent in September from August after rising 2.1 percent in August from July.

In his own weekly roundup, ATA Chief Economist Bob Costello cites the U.S. Bureau of Economic Analysis report that real gross domestic product jumped 3.5 percent (annualized rate) during the third quarter. This marks the first time the U.S. economy has grown since the second quarter of 2008 and the largest gain since the third quarter of 2007. The quarter’s good performance was due in part to the feds’ Cash for Clunkers program, a rebounding housing market and a rise in personal consumption.

These trends are good signs for freight, even if you subtract the federal influence of the car-buying program and the stimulus for first-time homebuyers that ends in November. Still, like other economists, Costello continues to take a cautious view about the speed of recovery: “The third quarter GDP reading was encouraging; however, I expect the economy to grow modestly in subsequent quarters as the U.S. consumer continues to face several headwinds, including employment losses, tight credit, and high debt levels.”

 — Max Heine

If you’re thinking of getting your own authority for truckload hauling, think again. Or have some excellent contracts locked up before you jump.

A June 8 conference call, hosted by Dahlman Rose & Co. with executives from five carriers (Cowan Systems, Fenway Partners, First Express and Roehl Transport), had little good news.

“There was universal agreement that we are experiencing one of the worst pricing marketing in truckload history,” says Dahlman’s summary of the conference. The pressure is expected to stay indefinitely. Shippers are pressing for “more favorable fuel surcharge applications, lower assessorial charges, and more favorable payment terms.” One large shipper tried to get Roehl to accept payment terms of 120 days instead of 30 days, said Roehl’s Andy Vanzant.

He also estimated 10,000 to 20,000 carriers on the verge of bankruptcy, and that $3 diesel could seal their fate.

There were reports of carriers moving their trade cycles from 36 months to 42 or 48 months. Also, shippers are increasingly using third-party brokers or carriers for their cheap capacity, according to the summary

DIESEL PRICES have been rising like the afternoon high temps here in the Heart of Dixie, where I’m based, and so are the diesel price forecasts from the U.S. Energy Information Administration’s monthly Outlook.

From today’s EIA report:Diesel fuel retail prices, which averaged $3.80 per gallon in 2008, are projected to average $2.40 per gallon in 2009, up 14 cents from the previous Outlook.  Diesel fuel retail prices are projected to average $2.67 per gallon in 2010, up 19 cents per gallon from the previous Outlook.”

Most recently, average prices jumped almost 15 cents, to $2.50. The past four weeks logged an advanced of 23.5 cents.

— Max Heine