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Oct. 13, 2014

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SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 68 THE JOURNAL OF COMMERCE www.joc.com OCTOBER 13.2104 By William B. Cassidy THERE REALLY WAS a Christmas in July this year, at least in terms of increased global container business. That bodes well for North American trucking, intermodal rail and package delivery companies now preparing for an influx of freight ahead of the holiday season. Since the end of the Great Recession in 2009, there's been debate about whether the annual peak has been beaten down, short- ened or in part shifted earlier in the year, and whether midsummer container num- bers would ever return to the heights seen pre-recession. The summer peak for ocean container- ized shipping returned in a big way this year, though perhaps not reaching pre-recession altitudes, as the U.S. economic recovery finally accelerated, buoyed by manufacturing, and the global economy continued to grow. Globally, container shipping activity increased 4 percent in the peak months of July and August, Sandra Moran, chief mar- keting officer of INTTRA, told The Journal of Commerce. "We saw a 10 percent year- over-year increase in export container volumes in China and Indonesia," she said. In July, containerized imports to the U.S. jumped 15.4 percent from June, Moran said. That's the biggest month-to-month increase reported by the online shipping booking service since INTTRA and Cass Information Systems launched their Ocean Freight Index in 2010. U. S. ex por t s i n Aug ust decli ned 1.3 percent from July and 18.7 percent from a year earlier, a decline Cass attributed to lower demand for U.S. products and slower growth overseas. The Cass/INTTRA U.S. import index did drop 7 percent in August from July's record high and fell 1.1 percent below its August 2013 level, but remained 11.5 percent higher than the average for the last 12 months. The index is up 1.1 percent year-to-date. The sharp rise in July imports "demon- strates to us there's more confidence in the U.S. economy, and that the peak season in the U.S. is going to be stronger this year" as goods move inland, Moran said. That's the view at FedEx, where rev- enue and profit surged and volumes rose substantially across its three main divisions in the quarter that ended Aug. 31. FedEx, the world's third-largest global transport operator, increased revenue 6 percent to $11.7 billion. "We're expecting another record peak season in terms of delivery volume," Mike Glenn, president and CEO of FedEx Services, said in an earnings con- ference call transcribed by Seeking Alpha. To handle that surge in volume, FedEx will hire more than 50,000 temporary workers, including package handlers, helpers, drivers and other support positions. Peak-shipping and -delivery activ- ity again is likely to extend right up to the holidays and beyond, thanks to e-commerce sales. That inland peak could come in stages, as goods move from ports to transloading and distribution centers and, ultimately, to wholesalers and retailers. "As it relates to the near peak season, we see volume increases that are consistent with the FedEx earn- ings," Moran said. Much of that freight is probably already in U.S. warehouses. Retail inventories in July grew at a faster pace than sales, according to Commerce Department data. Manufactur- ing and wholesale inventories were leaner, however, and may need to be restocked. That could mean higher-than-antic- ipated freight volumes moving through inland pipelines. JOC Contact William B. Cassidy at wcassidy@joc.com and follow him on Twitter: @wbcassidy _joc. PEAK PERFORMANCE Strong summer growth in containerized imports points to a busy fall for trucking and intermodal rail

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