beyondthemba

Oil's biggest day yet drags down stocks

The impact of oil prices will be stunning and swift. I believe companies will finally (many already have) that either they have to get price in the marketplace or they will scale back operations.

As we see the issues develop in the airline industry where they are effectively shutting down capacity saying it is cheaper to park the planes than fly them, so will you see this with trucking. Soon, I predict, moving your products at any price will be next to impossible. Trucking companies will raise prices, take out capacity and refuse to drive "unpaid" out of route miles.

All this means an incredible strain on the economy overall. 

Oil's biggest day yet drags down stocks

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Tags: oil, inflation, economy, transportation

China Logistics Infrastructure

One of the items that really allowed the growth of United States Logistics was the Government and private industry investment in infrastructure. The railroads first and then the interstate highway system really connected key "nodes" in the supply chain. This allowed for fast movement of goods and reduced logistics costs dramatically.

However, the United States now is experiencing a crisis of infrastructure as the collapse of the I-35 bridge in Minnesota so tragically reminded us. Drive on I80/90 through Chicago and you will see the difficulty of truck and goods movement.

While the United States appears to not be investing a lot in the infrastructure, China, on the other hand, has decided to invest a lot. As the this article in China Logistics states:

"China’s fixed-asset investments in logistics-related sectors hit US$126 billion in the first three quarters of the year, up 18.8%. All of the figures are up and all of them are somewhat mind-boggling. Indeed, some are so large it is difficult to get a handle on them.

This is another competitive advantage for China. As they build out their infrastructure commerce will rise dramatically and more and more resources will be used for China domestic logistics.

I believe while the genesis for logistics and supply chain operations was to get the product out of the Country, it very quickly is turning into a very large domestic Chinese industry

U.S. Trucking Company Gets License to Buy China Trucking Company

Schneider National is well on it's way to buying a Chinese trucking company. As a shipper, my question is why would this be of value? A "branded" product has world wide appeal and in some cases, for some products, a US brand name is a big deal in a foreign country. For example, Harley Davidson is such a huge brand that it resonates everywhere.

Does a brand name for a trucking company mean anything overseas? Even for US shippers who operate in China, I am not sure the brand is of value. Don't most shippers have independent Chinese logistics firms for which a "Schneider" or a "Swift" will mean nothing?

I am confused on the value of this purchase.