Inventory Restocking Arrives Earlier, Lasts Longer

U.S. shippers moved more freight than normal in the first quarter, as a wave of inventory restocking hit earlier than in 2010, according to a shipper survey.

About 44 percent of the logistics managers surveyed by Wolfe Trahan said they saw more inventory restocking activity than usual in the first quarter of 2011.

By the Numbers: U.S. Intermodal Shipments.

That restocking will continue through the second quarter, 43 percent of the shippers said, although 47 percent said their inventories are at targeted levels.

“These responses suggest that inventory levels are fairly balanced,” the Wall Street equity research firm said in its second-quarter survey report, released June 6.

Inventories increased by $7.7 billion or 1.3 percent to $587.8 billion in April after climbing in 18 of the last 19 months, according to the U.S. Commerce Department.

Durable goods inventories increased 0.9 percent in April to $350.6 billion. The inventories-to-shipments ratio climbed from 1.30 in March to 1.32 in April.

Wolfe Trahan surveyed more than 2,000 logistics managers in May. Those shippers expect transportation spending to rise 9 percent over the next year.

Shippers are balancing inventory costs against tight domestic transportation capacity and rising rates, volatile energy prices and weak consumer confidence.

Only 19 percent of the shippers surveyed expected inventories to be lower than year-ago levels in the quarter, while 39 percent expected stocks to be higher.

Roughly 59 percent of the shippers said they expect to keep their current inventory targets, while 22 percent said they expect to decrease their target levels.

“Despite higher shipper inventory levels, restocking should continue to be a positive driver of freight volumes in the near term,” Wolfe Trahan said in its report.