Orders for durable goods drop unexpectedly in Aug.
WASHINGTON — Orders for goods expected to last at least three years fell unexpectedly in August due mainly to a drop in demand for commercial aircraft. The worst reading since January for durable goods is evidence that any recovery in manufacturing will be slow and gradual.
Economists were disappointed with the report, which followed similarly weaker-than-expected data on existing home sales Thursday, but most said it reflected the uneven nature of the economy as it transitions out of the worst recession since the 1930s.
The results are consistent with “the early stages of a business cycle recovery, and thus do not contradict perceptions that this is where the economy is now,” Pierre Ellis, an economist at Decision Economics, wrote in a note to clients.
The Commerce Department said Friday that orders for durable goods dropped 2.4 percent in August, after increasing a revised 4.8 percent in July. Wall Street economists expected a 0.5 percent increase, according to a survey by Thomson Reuters. It was the second drop in three months.
Orders for commercial aircraft and parts, a volatile category, plummeted 42.2 percent after nearly doubling in July.
Excluding aircraft and other transportation goods, orders were flat in August, also below analysts’ expectations of a 0.5 percent rise. Transportation goods orders dropped 9.3 percent.
The Boeing Co. said earlier this month that its August orders fell 11 percent, as weaker demand for air travel forces airlines to scale back plans to buy new planes.
The Chicago-based airplane maker also said commercial jet deliveries tumbled 22 percent last month compared with August 2008. Still, Boeing says it remains on track to deliver 480-485 planes this year, up from 375 in 2008.
Autos and auto parts orders posted a 0.4 percent gain in August, after rising 1.6 percent in July, according to the government data. The sector received a major boost last month from the Cash for Clunkers program, which provided consumers rebates of up to $4,500 for trading in older cars for newer, more fuel-efficient models. The program, which ended last month, boosted auto sales 30 percent in August.
Several other categories posted weak results. Orders for computers and electronic products dropped 0.7 percent, after rising for two straight months. Electrical equipment and appliance orders fell 0.5 percent, after jumping 4.2 percent in July.
A category known as “non-defense capital goods, excluding aircraft,” a key measure of business investment in machinery and other items, fell 0.4 percent, its second straight drop. It dropped 1.3 percent in July.
Still, other recent measures of manufacturing output have been positive. The Federal Reserve said last week that industrial production rose for the second straight month in August. And the Institute for Supply Management, a trade group, said earlier this month that its gauge of manufacturing activity signaled growth in August for the first time in 19 months.
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September 25th, 2009 at 11:28 am
FYI
1.Today’s Cargo (Freight) & logistics technology: Problems & Disadvantages?
a.In the past few decades, the correspondence between Freight Brokers and Carriers has been almost exclusively verbal and over the phone. In order to cover their clients’ available loads, the freight brokers have had to hire an army of people to make hundreds if not thousands of calls in order to find the best Carriers with the most competitive rates. In addition to the phone calls, the Carriers had to fax their Letters of Authority (CVOR, MC Registration, HAZMAT licence, Cargo Insurance Policy etc.) to the Brokers, in order for their quote to be seriously considered.
About 10 years or so ago, some online load-boards (like the Load-Link, Truckstop.com etc.) started becoming available where the Freight Brokers could post their available loads and reach out to a larger audience of Carriers, but yet again, having to receive hundreds if not thousands of calls per load, per day in order to find the best Carriers with the most competitive rates.
At the same time, the Carriers have been using the same manual process to book loads quoting and making arrangements with Brokers over the phone.
Lately, both parties have been trying to utilize the method of email correspondence, in order to avoid excessive phone communication. Also to cut down the overhead of hiring people to do the manual work of placing and receiving high numbers of calls while asking and answering the same repetitive questions. Nevertheless, these methods are rarely used by most Carriers, especially by the owner operators, due to their inability to follow and write emails while on the road.
Another obstacle is the factor of trust. The majority of the verbal arrangements are not properly documented; therefore both sides have legitimate reasons not to trust each other:
Broker’s concern: Will the Carrier do the load on time, smoothly, and as agreed without extra charges?
Carrier’s concern: Will the Broker pay as agreed?
The same concerns are present even when using any of the currently available online load-boards. Even though the Brokers and the Carriers have some sort of credit standing reports attached to their profile, the question remains: are they current and accurate?
There is no real-time comment section available for each party to leave real feedback about their dealings with the other party during their past arrangements for other users to see the complete and accurate picture of the profiled user. (Give examples)
Cargo Success has resolved these concerns and now the Brokers and the Carriers are able to leave feedback and comments in their own words about dealing with each other. Those ratings are attached to their user profile for all other members to view before they engage in business dealings with a given user.
Now we provide an accurate and real-time profile.
2.How you thought your way through developing the software
a.I have been in the Freight Industry all my life. In my early career, I was a Freight Broker and later a Carrier, serving Brokers and large manufacturers. Throughout my experience, I have been faced with all sorts of challenges that all Brokers and Carriers face in their daily operation. I have analyzed and taken under consideration all manual methods of dealings and correspondence between Brokers and Carriers as well as the practical factors and challenges they face on a daily basis.
That’s why my team and I decided to create an online application specialized for the freight industry which streamlines the Truck and Freight booking process, with an extremely user friendly interface, while automatically processing, organizing and documenting all correspondence made between the Broker and the Carrier about each listing. This has taken us approximately 4 years from start-up to implementation.
Basically, CargoSuccess.com’s turnkey application allows the Broker who utilizes our load-board, to post a large number of loads and include all necessary details about each stop without disclosing any sensitive information. The loads are described in detail so the Carriers are not compelled to call the Broker and make any further enquiries about them. In a matter of minutes the Broker will receive large numbers of online quotes, along with attached Authorities from preferred or other public Carriers and book trucks in less than half the time with half the resources. The Carriers on the other side are able to submit more online quotes and book more freight in one hour, than over the phone in a whole day.
Our load-board works for time-sensitive and other freight. The Brokers can also create up to 500 listing templates and speed up the posting process considerably.
3.Are there any online transactions or confirmations, waybill printing etc.
a.Our application comes with an Integrated Order Management Solution, where the Broker can, at a glance, refer to its complete activity report of all Covered and Outstanding loads. The Carriers can also take advantage of the Integrated Invoicing Solutions at no extra charge and invoice the Brokers with a click of the mouse. Simple and easy, ha?
4.Do members download any logistics software?
a.Cargo Success is a secure online application and does not require installation of any sort. Our members can access, monitor and carry on with their activities from any computer, any place and at any time (via internet of course).
5.What about e-customs expediting (I’m thinking it’s beyond the scope)
a.Satellite Tracking, E-customs expediting, Mobile Access and other updates are only some of the upgrades that are being considered and worked on at this time. You will see some of them being implemented very shortly and the best part is that they will be included in our system at no additional cost to our members.
6.Is it strictly a membership relationship with clients?
a.Even though the subscription to our Community is based on membership plans, we consider our members to be our family. We want to hear what they have to say. When they speak – we listen. We review and consider each and every comment and suggestion we receive from them. That’s the only way to develop a long term relationship with our members and make Cargo Success a household name in the Freight Brokerage Industry.
We specifically chose this area of Canada to start our business since it is the most condensed market with freight brokers and trucking companies in the country. With all the major transportation routes, the Mississauga, Brampton, Etobicoke and Kitchener-Waterloo areas serve Eastern Canada and north-east US, and make up the majority of freight operations in Canada today. Cargo Success is here to service the freight industry and provide the best and most advanced “Freight and Truck Booking Process” that, until now, has never been available to the freight brokerage sector.
With our extensive experience in this business and by being aware of all the challenges facing the freight industry today, we want to help this sector advance and progress. As a result we are currently offering free memberships to all brokers and Carriers to take advantage of our on-line freight solutions, and quickly reap the benefits of utilizing the Cargo Success’ advanced load-board.
7.Any transportation software projects for the future?
Cargo Success’ current technology is just the start of our innovation for the freight industry. We constantly upgrade our system with new features and options always looking for new ways to automate any manual work that the freight brokers and carriers struggle with in their daily operations.
Our simplification and streamlining of the “Truck and Freight Booking Process” is just the start of what is yet to come for the members of our freight community. Our near future plans are to expand our services and offer them to the air and sea freight transportation industry. I am happy to say that in the next few months we will be launching Cargo Success in Europe and other continents respectively.
Our plan is to become the leader in on-line freight management solutions and we see this becoming a reality very quickly.