A new report by Ariba North America, a spend management solution company, speculates that because of the day-to-day survival mode of many carriers, the market remains “shipper friendly.” As a result, shippers should, and will, “continue to look to the carriers that can maintain high levels of customer service and grow their relationship, while carriers must continue to examine their cost model to ensure their sustainability,” the report, written by Rachel Rutkoski, said.
Rutkoski is a senior category manager, transportation and logistics, Ariba North America. In her report, she noted that “activities that typically reflect the health of the transportation industry continue to show that we are moving in the right direction.”
Among the many positive signs is the rail industry. Intermodal container volume was up 3.6% year-over-year, the report noted.
“The railroads are an excellent barometer for the health of the U.S., economy,” the report said, “and are in position to rebound faster than other modes since rail transports goods for a wide variety of industries. Shippers should keep an eye on activity in this industry, particularly since it serves as an effective leading indicator for the health of the U.S. economy and overall transportation industry.”
The report also noted that Warren Buffett’s investment in Burlington Northern Santa Fe signals market confidence “that the rail industry’s financial health is stronger than other modes of transportation.”
Another sign of positive turnaround is a report by Cortera. The community-driven business credit bureau released its January 2010 Supply Chain Index (SCI) report, a monthly index of accounts receivable activities covering manufacturers, distributors and wholesalers, retailers, services and transportation companies.
The January report indicates a 9.05 days beyond term (DBT) rate, a 9.95% increase over the December report. What that means is that businesses’ rate of payment is improving, leading to increased confidence that businesses are on the path to recovery.
“If history is a guide, we’re about to see a steady, multi-month improvement in payments, cash flow and debt reduction throughout the supply chain,” said Jim Swift, president & CEO. “For stakeholders, quick, reliable payments remain the best way to fuel continued growth through the entire supply chain.”
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