Lee & Associates - Big Box Industrial Report
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10
US
Market
Import
Volumes
In May 2017, the U.S. imported $194.7 billion of cargo, decreasing 0.31% from April. The May imports of capital goods
($52.8 billion) were the highest on record. (Source: US Census)
Expert
Volumes
In May 2017, the U.S. exported $127.2 billion of cargo, increasing 0.24% from April. The May exports to South Korea
($4.5 billion) were the highest on record. (Source: US Census)
Rail
Railroad
News Clips
The Building Rail Access for Customers and the Economy (BRACE) Act, introduced in March of this year, has achieved
majority support in Congress. The BRACE Act includes language to make the Railroad Track Maintenance Tax Credit,
also known as the 45G Tax Credit, permanent (the tax credit expired December 31, 2016). Under the terms of the credit
a short line railroad must invest one dollar for every 50 cents in credit up to a credit cap equivalent to $3,500 per mile of
track. Since it was implemented in 2005, the tax credit has enabled short line and regional railroads to invest $4 billion
in infrastructure, assisting the nation’s 603 short line railroads in upgrading track and bridges. (Source: Railway Age)
Trucking
Trucking
Volume
The ATA’s seasonally adjusted For-Hire Truck Tonnage Index was 138.5 in June 2017, a decrease of 4.3% from the
previous month and an increase of 1.32% from June 2016. According to the ATA, despite the month-over-month decline,
they still expect moderate growth going forward as key sectors of the economy continue to improve slowly. (Source:
American Trucking Associations | Trucking.org)
Truckload
Freight
The spot market for truckload-freight available for pick-up in June increased 2,200 basis points compared to the previous
month, and was 9,000 basis points higher year-over-year. Truck capacity decreased 1,100 basis points for the month,
and decreased 80 basis points year-over-year. (Source: DAT Trendlines | www.dat.com)
US Truck
& Trailer
Orders
Preliminary data for heavy-duty Class 8 trucks net orders in North America were 17,600 units in June 2017, an increase
of 7.8% from May and 38% higher year-over-year. According to FTR, it is assumed that most of the June orders are for
Q4 delivery enabling OEMs to maintain their current build rates throughout the year. The Class 8 market continues to
perform at a steady pace and is consistent with summer’s seasonal trends. Final June 2017 net trailer orders came in
at 18,900 units, up 13.8% from May and up 58.8% from June 2016. According to FTR, June trailer orders were above
expectations, with most segments moderately exceeding their May totals. Backlogs are decreasing, but that’s due to
the high build rates rather than lower orders. Production was the highest since July 2015. (Source: FTR Transportation
Intelligence | ftrintel.com)
Trucking
News Clips
Earlier this month a bill was led in the House of Representatives that would delay the compliance date of the federal
government’s electronic logging device (ELD) mandate by two years. The change, if enacted, would give carriers until
December 2019 to switch from paper logs to an electronic logging device. The introduction of the bill came a day after a
House panel recommended that the Department of Transportation study whether a “full or targeted delay” of the mandate
is needed. Both developments signal that efforts to engage Congress on the issue have gained traction. In a report,
members of the House cited the burden placed on smaller carriers, like owner-operators, and questions surrounding
enforcement and “technological concerns” as reasons to delay the ELD mandate. (Source: TruckersNews.com)
Air
Freight
Air Cargo
Trafc
Global air freight trafc in May 2017 increased by 12.7% year-over-year. This pace is more than three times the ve-year
average growth rate (3.8%) and the strongest start to a year since 2010. (Source: IATA.org)
Atlanta Air
Cargo Trafc
In May 2017, Hartseld-Jackson Atlanta International Airport transported 5455,915 metric tons of cargo, a 3.12%
increase from the previous month and a 7.58% increase year-over-year. (Source: HJAIA)
Ocean
Freight
Port of
Savannah
The Port of Savannah moved 337,710 TEUs in June 2017, a 3.54% decrease from the previous month, but 17.11%
higher year-over-year, and the busiest June in GPA’s history. June capped off a record scal year for the Georgia Port
Authority. In FY17, the GPA moved an all-time high 3.85 million TEUs, an increase of 6.7% over the previous year. In the
last half of FY17 alone, the Port of Savannah handled 1.99 million TEUs, for a growth rate of 11.6% over the same period
in FY2016. Also during FY17, the GPA moved 33.4 million tons of cargo across all terminals, setting another all-time high
record and an increase of 8.3% over FY2016. (Source: GPA)
Port of
Brunswick
At Colonel’s Island, 200+ acres are in the design or development stages, bringing auto processing space to 547 acres.
Twenty-four of 50 acres purchased by Mercedes Benz were paved in May. Another 168 acres will be completed between
mid-July and November, of which 124 acres have been leased. Previously, 20 acres for vehicle processing were
completed and leased to Wallenius Wilhelmsen Logistics. The long-term plan is to add another 510 acres on the island’s
south side to support auto processing, doubling the capacity for cars and heavy machinery in Brunswick. (Source: GPA)
Warehouse
Distribution
Industrial
Vacancy
The nationwide vacancy rate was 5.4% at the end of the rst quarter in 2017, the lowest level in nearly 30 years. It is
down from 5.7% in Q4 2016 and 6.1% in Q1 2016. The industrial vacancy rate in Savannah, GA was 3.0% in Q1 of 2017,
unchanged compared to Q4 2016. (Source: NGKF, Cushman & Wakeeld)
Warehouse
Rent Rates
In Q1 2017, the average asking rent in the U.S. was $6.12/SF, up 1.9% from Q4+ 7.1% from Q1 2016, the
strongest year-over-year increase in the current cycle. Average asking rent in Atlanta was $4.38/SF.
(Source: NGKF)
Logistics Market Snapshot June 2017