Fleet managers may want to consider investing in warehouse distribution software to streamline existing operations as the U.S. economy gradually begins to pick up after years of lackluster growth. Business activity in a variety of industries plays a major role in determining the success of freight organizations responsible for executing both domestic and international shipments of goods. When U.S. manufacturers are busy, they will likely require more frequent deliveries of raw materials to ensure they are able to successfully meet an increase in demand. Similarly, growth in consumer spending rates means many retail organizations may need to ship products more often.
A larger growth rate in Q3
The most recent economic data released by the U.S. Department of Commerce (DOC) revealed many business sectors have experienced a slight increase in growth compared to previous years. In fact, gross domestic product (GDP) grew at an overall rate of 2.8 percent in Q3 2013. According to Forbes, these numbers paint a much more positive picture than what was previously expected by economists.
"To be sure, 2.8 percent growth looks strong," Kathy Bostjancic, director of macroeconomic analysis at the market research firm The Conference Board, told Forbes. However, she also said consumers are still relatively cautious with their spending habits, as income gains continued to chart inconsequential growth.
Indeed, the majority of the growth in Q3 has to do with increased business inventories. Even though the U.S. economy has experienced relatively slow industrial activity in recent years, larger supplies contributed $86 billion to GDP - which amounted to roughly 0.8 percent of overall growth.
The fact that many U.S. companies are growing their inventories comes as good news for many fleet managers. As soon as consumer spending improves, businesses across the country will most likely be making more shipments. However, a report from Reuters said many Americans are waiting for U.S. companies to start hiring more frequently before they purchase more products in the market. Disposable income growth actually slowed 2.5 percent in Q3, according to Reuters.
Now is still an opportune time for fleet managers to prepare for future changes in economic activity. Transportation organizations can benefit from investing in logistics software. Not only do these tools make it easier to schedule and assign deliveries, but they also allow managers to save time performing complex tasks that would otherwise have to be manually completed.
The New York Times indicated DOC released its report later than expected because the recent U.S. government shutdown forced many agencies to pause regular reporting activity. The growth rate of 2.8 percent in Q3 is slightly higher than the average quarterly measurement since the Great Recession. According to The Times, the economy had previously been growing at a rate of 2.25 percent. Looking ahead, many economists are concerned about the effects of not only the recent government shutdown, but the ongoing federal budget debates in Congress as well.
"The fiscal drag will dissipate but we're far from takeoff," Guy Berger, an economist for the investment bank RBS Securities, told The Times. "Large parts of the U.S. economy are advancing but at a pace people would consider to be disappointing."
Preparing for future growth
Nevertheless, any indication of growth presents a unique opportunity for fleet managers to consider investing in advanced technology. Many businesses are constantly looking for ways to limit overhead costs. Tools such as delivery routing software allow these companies to identify the most efficient highway directions and ultimately save money on fuel. As a result, they can spend more time focusing on the other moving parts of their operations.