In today's interconnected and wired world, what happens in one major market inevitably reverberates in others around the globe. So it's not surprising that economies worldwide are feeling the effects of the U.S. economic slowdown.
Global Insight Inc. (formerly DRI and WEFA) is a leading consulting company providing comprehen- sive economic information and forecasts on countries, regions and industries, with particular expertise in global trade and transportation. Global Insight serves more than 3,800 clients in industry, finance, and government through offices in 13 countries covering North and South America, Europe, Africa, the Middle East, and Asia.
In today's interconnected and wired world, what happens in one major market inevitably reverberates in others around the globe. So it's not surprising that economies worldwide are feeling the effects of the U.S. economic slowdown.
In the United States the news remains bleak, with credit availability continuing to tighten as financial distress spreads well beyond the mortgage market. Financial institutions that are taking heavy losses in that market are reducing their risk exposures across the board. Moreover, the availability and costs of financing for businesses, consumers, and state and local governments have deteriorated to such a point that lower interest rates for the banks are not translating into lower rates to borrowers. In fact, it's quite the reverse, with banks raising their rates and showing an unwillingness to lend.
The United States is experiencing a true "credit crunch," the likes of which has not been seen in decades. A credit crunch is a sudden reduction in the availability of loans or a sudden increase in the cost of obtaining a loan. It often is caused by a sustained period of lax and inappropriate lending, which results in losses for lending institutions and investors when the loans turn sour and the full extent of bad debts becomes known.
That's one reason the future looks threatening and uncertain. President Franklin D. Roosevelt's Depression-era assertion, "The only thing we have to fear is fear itself," has become the mantra recently, a reminder that an economic crash hinges on psychology — in other words, on a crisis of confidence among lenders and spenders.
Although the U.S. economy hasn't plunged into that abyss quite yet, it is teetering on the edge, and it is doing so while the U.S. dollar continues to weaken. The crisis probably is not as bad as all the negative news headlines would seem to indicate, and it should not cause a severe recession. Nevertheless, it will have an undeniable impact, not just on the United States but on its trading partners as well.
Dollar's decline hits hard
Since an estimated 70 percent of the U.S. gross domestic product (GDP) is linked to consumption, a drop in consumer spending will have an impact on trade and cause repercussions for trading partners. One can only hope that Europe will maintain its confidence and avoid a similar decline in trade while providing some of the relative optimism the markets could use right now.
The declining dollar has investors shifting to the commodity markets, pushing up the price of oil to an unsustainable level that is creating further inflationary pressures. Other commodity prices, particularly for grains and other foodstuffs, have also increased dramatically, in some cases reaching record highs. The countries that are least able to deal with rising prices are the ones that are being hit the hardest.
Much of the rise in prices stems from policies of the U.S. Federal Reserve, which is using lower interest rates as its primary tool for staving off a recession. The dollar has depreciated 33 percent against the euro since November 2005, but it appears as if the Fed does not care about a weak dollar for now. In fact, the Fed's policies have prompted the European Central Bank to complain about excessive movement in the exchange rate.
Based on the financial turmoil in the United States, Global Insight is projecting that world GDP growth will decline from nearly 4 percent last year to closer to 3 percent this year, a drop of one-quarter. The impact of that decline on global industrial production will increasingly be felt in the second half of the year. For example, the weakness of U.S. imports in 2007 and 2008 is having a significant effect on global containerized trade in general and on the three east-west "headhaul" (major container export) routes in particular. These three routes represent more than 26 percent of the global deep-sea container trade by volume. As highlighted in Figures 1 and 2, the headhaul routes are expected to recover in 2009.
In the longer term, we forecast world container volumes will grow on average above 7 percent per year.
The upside of exports
The dollar's downward slide may be bad news for U.S. consumers —it means that prices for imported goods are rising —but it is dramatically improving the competitiveness of U.S. producers. U.S. exports rose 8.1 percent in 2007, and they should rise a similar 8.3 percent this year. Export growth, in fact, is helping to prevent a more severe economic downturn.
Other regions are managing to hold their own. Growth in Asia also looks solid, but there are signs that Europe is losing steam, partly because U.S. goods are gaining at Europe's expense as the dollar falls, and partly because some housing markets there (the United Kingdom, for one) are declining.
The outlook for international trade's contribution to U.S. GDP growth is illustrated in Figure 3.
Despite the United States' credit woes, the strength of U.S. exports will continue to have a positive effect on the country's GDP through 2009. And a stronger U.S. economy will help to prop up economies worldwide.
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”