Demand for durable goods jumped in May, according to a new report from the U.S. Department of Commerce. This could lead to additional scheduled deliveries for companies transporting these products locally, regionally or nationally.
More orders for goods could lead to manufacturing spike
Businesses increased their orders for durable manufactured products by 3.6 percent in May, which marks the third consecutive month of gains and shows more consumers and companies are willing to spend on expensive items. This number was in line with expectations of economists polled by MarketWatch, who anticipated a 3.8 percent jump in May.
According to The Associated Press (AP), businesses placed orders for more electronic gadgets, communications equipment, machinery and metals, indicating enterprises are more willing to invest and expand in the coming months. Categories that signal growth in business investment plans also experienced gains. This index excluded the transportation and defense sector, which can vary vastly from month to month, and found orders were up 1.1 percent. This marks the third straight month of improvement for this measure, something that hasn't occurred since the fall of 2011, according to The AP.
More orders lead to increased shipments
As additional businesses and consumers become increasingly confident in the recovering economy, they may be more likely to make big purchases on expensive, long-lasting products. This will impact the transportation industry. Manufacturers will need additional supplies, which will force providers to send extra shipments and increase outgoing orders. To ensure raw materials are getting to multiple facilities in a timely manner, fleet managers will need to guarantee their drivers are taking the most direct route on their runs. Routing software can assist drivers making more deliveries and ensure they are on schedule.
Goods must be shipped out after they're finalized at production facilities. Drivers will need to transport items from manufacturing hubs to company warehouses across the country. And another fleet will be responsible for transporting them to businesses and consumers once purchases have been made. With the steady gains in orders for durable goods, transportation companies that are involved in any point of the supply chain may see a jump in demand for services, thus increasing their reliance on route optimization software.