Tallies, totals and other trend data in the freight transportation realm
1/25/2023
0.4
American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index rose 0.4% in December after decreasing 2.5% in November, the association reported on Jan. 24. In December, the index equaled 115.2 (2015=100) versus 114.8 in November. “Despite the small gain in December, for-hire truck tonnage clearly decelerated during the final quarter in 2022,” said ATA Chief Economist Bob Costello. “In fact, tonnage outperformed some other key metrics that drive truck freight, like housing starts and factory output during the final month of the year. This is probably because contract truckload freight is still outperforming the spot market and less-than-truckload freight after underperforming both of those sectors in 2021.”
3.0
FTR’s Shippers Conditions Index improved in November to 3.0 from the previous -0.3 reading. A “more favorable freight environment and lower fuel costs boosted the index into positive territory after two months in the negative range,” FTR officials said on Jan. 24. Meanwhile, the fuel cost component “remained slightly negative but improved sharply” month over month while rates were “the most favorable for shippers since June 2020,” they said. Added Todd Tranausky, FTR’s vice president of rail and intermodal: “The outlook has improved overall for shippers, but it will depend on exactly what mode and lane they operate in, as to how much improvement they will feel in their business. Truck-focused shippers are likely to experience the largest improvements relative to rail and intermodal shippers.”
3.9
The shipments component of the Cass Freight Index® fell 3.9% year over year in December, Cass Information Systems Inc. reported on Jan. 12. Month over month, the index fell 3.3%, but “seasonality boosts December’s m/m performance to a 1.2% gain on a seasonally adjusted basis,” Cass officials said. “The larger y/y decline, mainly on a tough comparison, was not a surprise to our readers, but we’d characterize the sequential, seasonally adjusted increase as further evidence of resilient, but still soft freight demand. … With retail sales broadly growing in line with inflation rates, it’s clear that peak holiday shipping volumes were flattish in real terms versus a year ago.”
7.1
“The U.S. Bureau of Labor Statistics reports over the last 12 months the Consumer Price Index for all urban consumers increased 7.1% before seasonal adjustment. At its December 14, 2022 meeting, the Fed raised its benchmark rate a half-point to a range of 4.25% to 4.5% (its highest level in 15 years). All indications point to higher rates in 2023.” — Jan. 25 newsletter from RESIDCO titled “Expect Higher Transportation Equipment Lease Rates in 2023.” RESIDCO is a transportation equipment lessor and asset management company that operates and manages a freight-car and locomotive fleet.
9 & 48.5
New business volume for December was $12.9 billion, up 9% year-over-year from new business volume in December 2022, according to the Equipment Leasing & Finance Association’s Monthly Leasing and Finance Index, which was issued Jan. 25. Volume was up 50% from $8.6 billion in November “in a typical end-of-quarter, end-of-year spike, association officials said. Cumulative new business volume for 2022 was up 6% compared with 2021’s volume. Meanwhile, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index in January is 48.5, an increase from the December index of 45.9.
25
“The rails will beat the market, again — earnings will be up over 25%, including the Canadians and their easy nice combo package of comps plus good operations; high single digits without them. The S&P is expected to decline in the mid-single digit range. That outperformance will, as I always say, prove to be a pain in the rear for regulators and shipper trade associations but if they just wait a bit … for FY23, S&P and consensus rail estimates converge in the mid-to-low single digit range. Both estimates and outlooks are second-half loaded.” — Independent transportation analyst Tony Hatch in a Jan. 23 email to his clients titled “Rails - Q4/22 Preview & Top 10 Qs (We'd Like to Hear Answers)”
33
“Transnet disaster: The South African railroad’s financial and hence operating conditions have become so poor that they are having an enormous negative impact on the overall South African economy — coal volumes down 1/3 (33%) since 2017, leading to a huge export drop (lowest levels since ...1993!) — all this in a bull market for seaborne coal. Why? Gauge issues, government interference and under-investment (the lesson), corruption. Also, as I saw in my visit for the World Cup way back when (2010), a penchant for heavy, heavy trucks (another lesson) leading to infrastructure degradation — and the highest highway fatality statistics in the developed world.” — Independent transportation analyst Tony Hatch in a Jan. 23 email to his clients titled “Rails - Q4/22 Preview & Top 10 Qs (We'd Like to Hear Answers)”
81.31 & 87.63
“Oil prices saw a gain for the second week in a row, with Brent finishing the week at $87.63 and WTI marking $81.31 per barrel. With the Brent/WTI spread increasing on surging Chinese demand and WTI contango still in play, heavy crude blending and exporting antennas are up.” — Ernie Barsamian, CEO and principal of The Tank Tiger, a Princeton, New Jersey, terminal storage clearinghouse, broker and intermediary in a Jan. 24 email message to clients
589
“[Union Pacific Railroad] service should be firmly back on track in 2023. Freight car velocity (-3% Y/Y), locomotive productivity (-5% Y/Y), and average maximum train length (-1% Y/Y) slipped as expected (weather disruptions slowed momentum in December). UNP is working to build more resiliency into its network to sustain the service recovery though. Hiring will continue in 2023 (589 transportation employees currently in training) in targeted locations across the northern region of its network and to backfill for attrition.” — Baird Equity Research’s Garrett Holland in a Jan. 24 report titled “Baird/UNP/Holland: Q422 Review: Restoring Service the Key”
3,500
Anheuser-Busch has partnered with Union Pacific Railroad to transition more than 3,500 over-the-road loads onto the rail network. “It’s Union Pacific’s goal as a company to collaborate with customers and find ways to support them as they continue to grow,” a Union Pacific official said. “This partnership is a great example of how converting over-the-road to rail is a big win for both companies.” — The Jan. 24 edition of the Association of American Railroads' The Signal
56,949
In December, U.S. trailer net orders hit a new monthly record of 56,949 units, eclipsing the previous record set in October 2020, FTR reported on Jan. 23. Order activity for the month was up an astounding 121% versus December 2021. “The surge in orders is unlikely to be sustained going forward, and we have already seen strong moderation in Class 8 orders,” said Jonathan Starks, FTR's chief executive officer and chief intelligence officer. “However, we have now seen more than 347,000 orders placed over the last 12 months, and backlogs are at their highest level in nearly two years. 2023 is starting on solid footing even as the macro uncertainty remains extremely elevated.”
2.1 billion &
12.7 billion
“[Norfolk Southern Corp.] management’s initial 2023 outlook calls for revenue comparable to 2022 (~$12.7B), which assumes recessionary volume pressure is offset by share recapture. Additionally, RPU headwinds from coal, fuel, and accessorials are expected to moderate and offset core pricing gains. … NSC continues to expect ~$2.1B of capex in 2023, in line with the outlook provided at the company’s December Investor Day.” — Baird Equity Research’s Garrett Holland in a Jan. 25 report titled “Baird/NSC/Holland: Q422 Initial Look: Core Results and Recovering Performance Encouraging”