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January-February-2019

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20 PalletCentral • January-February 2019 palletcentral.com ruck capacity should be less tight in 2019 than last year, but U.S. shippers shouldn't expect another 2016. The U.S. economy is expanding more slowly than in 2018, but it is still expanding, and that means shippers at times will still be tasked to find trucks and drivers, and will pay more for transportation, unless they can work collaboratively with their carriers to reduce costs. Overall, that's good news for pallet manufacturers, on whose products the movement of freight truck depends. There will be more trucks on the road this year even than last year, if truck manufacturers actually can build all the Class 8 tractors and trucks ordered in 2018. And there will be more palletized shipments, both industrial freight and consumer product goods. Retail sales in the U.S. rose 4.6 percent year over year in 2018 and are expected to climb between 3.8 and 4.4 percent in 2019, the National Retail Federation said on Feb 5. That would result in total 2019 retail sales of between $3.82 trillion and $3.84 trillion. That's a lot of retail goods, shipped on a lot of pallets. Industrial production is expected to expand as well. Industrial production in the U.S. rose 4 percent year over year in December, capping a strong performance in 2018. Expectations for 2019 include growth of 2.6 to 3 percent – slightly stronger than predictions for real gross domestic product expansion. Again, this is the source of much of the palletized freight moving through U.S. less-than-truckload carriers' networks. Despite a decline in spot pricing, U.S. truck rates are expected to climb higher in 2019, though not as far and as fast as last year. Truckload and less-than-truckload carriers are seeking contract rate hikes in the mid-single-digit percentage range, and reportedly winning them. That's a sign that shippers want a bit of "insurance" and more assurance when it comes to capacity. The U.S. economy is still growing faster than the supply of tractors, trucks, and containers. Even more important, the economy is growing faster than the supply of truck drivers, which, despite T is Key to Truck Capacity TRANSPORTATION iStockphoto.com/WendellandCarolyn Collaboration Collaboration By William B. Cassidy

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