Tallies, totals and other trend data in the freight transportation realm
5/20/2022
-7.38
FTR’s Trucking Conditions Index for March was negative for the first time since May 2020, falling to -7.38 from February’s positive 12.06 reading, FTR officials said on May 17. The culprit? Surging diesel prices … but “a weaker positive contribution from freight rates also was a factor,” FTR officials said. “Fuel costs apparently will represent a big negative factor for May, as well,” said FTR Vice President of Trucking Avery Vise. “The road ahead looks treacherous, but it is not necessarily bad for carriers. A stronger supply of drivers is enabling a shift of activity back to the contract environment from spot, but overall freight volume so far has remained strong.”
0.5
The shipments component of the Cass Freight Index fell 0.5% year over year (y/y), following a 0.6% y/y increase in March, Cass Information Systems Inc. officials reported on May 12. “Freight was slowing even before the war in Europe began, but the effects of the additional surge of inflation and recent interest rate increases seem to have push volumes over the edge,” Cass officials said. “After a nearly two-year cycle of surging freight volumes, the freight cycle has downshifted with a thud. … The prospect of freight recession is now considerable, as substitution from goods back to services spending picks up pace, and as inflation slows overall spending, particularly via higher fuel prices and by pressing up interest rates.”
1
The Port of Los Angeles handled 887,357 twenty-foot equivalent units (TEUs) in April, the second-best April in its 115-year history, port officials said on May 17. Four months in to 2022, the port has processed more than 3.5 million TEUs, 1% ahead of last year’s record pace. “We’ve had a remarkably strong start to the year and cargo continues to flow into Los Angeles despite some of the COVID lockdowns in China,” said Port of Los Angeles Executive Director Gene Seroka. The “situation” in China could “lead to a lull in volume with a fairly quick bounceback once the lockdowns end,” Seroka said.
4.5
“The exposure of our rated infrastructure entities to higher inflation is generally low, given the essential nature and inflation-linked revenue profiles of most infrastructure credits,” Fitch Ratings reported on May 19. “Inflation has spiked in many countries due to a combination of market, social and economic effects from the Covid-19 crisis and the Russia-Ukraine war. Fitch projects U.S. inflation to decline gradually to 4.5% by end-2022 and 2.6% by end-2023. Inflation in the Eurozone and UK is likely to follow a similar path.”
7
“Long-term performance for transports better than cyclical reputation may lead you to believe. Since its inception in 1896, the Dow Jones Transportation Average (DJTA) has returned ~7% annually, with a 50-year average of ~11%. … Despite its cyclical reputation, 25- and 50-year CAGRs for the DJTA have outperformed the broader market.” — Baird Equity Research’s Garrett Holland in a May 20 Transportation/Logistics report titled “A 100-Year Look at Transports, Inflation, and Recessions”
10
The Port of Long Beach had its “most active April” ever and continued its streak of single-month records set in 2022, port officials said on May 13. Dockworkers and terminal operators moved 820,718 TEUs last month, up 10% from the previous record set in April 2021. Imports rose 9.2% to 400,803 TEUs, while exports were down 1.8% to 121,876 TEUs. Empty containers moved through the port increased 16.9% to 298,039 TEUs. “Cargo continues to move at a record-setting pace and may not slow down anytime soon,” Port of Long Beach Executive Director Mario Cordero said. “We are preparing for a likely summertime surge as China recovers from an extended shutdown due to COVID-19.”
18.1 & 22
In April, Northwest Seaport Alliance volumes decreased 12.2% to 266,635 twenty-foot equivalent units (TEUs), with full imports declining 18.1% and full exports declining 22% year-over-year. Volumes “were impacted by ongoing COVID-related lockdowns at key origin ports in China,” alliance officials said on May 18. April 2021 also was a “near-record volume month for imports, which artificially amplifies year-over-year comparisons,” they added. “Year-to-date (YTD) volumes declined 2.7% to 1,167,869 TEUs, with full imports and exports declining 3.6% and 26.6%, respectively.” Meanwhile, =domestic volumes decreased 0.2% compared with YTD April 2021. Alaska volumes decreased 0.5% while Hawaii volumes grew 0.8%. The Northwest Seaport Alliance manages the container, breakbulk, auto and some bulk terminals in Seattle and Tacoma, Washington.
49.6
Confidence dipped this month in the equipment finance market, according to the Equipment Leasing & Finance Foundation’s May 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), issued May 19. MCI-EFI provides a qualitative assessment of the prevailing business conditions and expectations for the future as reported by executives from the $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 49.6, a decrease from the April index of 56.1. “Our current rising rate environment will be good for the overall financial health of equipment finance companies as obligors adapt to the new world rate order and margin is built back into the business,” said MCI-EFI survey respondent David Normandin, president and CEO of Wintrust Specialty Finance. “I do think this will create challenges for many who may not have a long-term stable capital structure.”
50
50 — On May 5, 1972, the final papers were signed transferring the ownership of a small construction company in Norristown Pennsylvania, T.W. Faulkner Jr. Inc., to the Danella Companies and our story began.” — Danella Cos. Inc. Chairman and CEO Jim Danella, noting the Plymouth Meeting, Pennsylvania-based company’s 50th anniversary in a May 20 email. Danella offers a range of services to the rental, gas, electric, steam, water, communications, storm restoration, and railroad industries.
51
This year’s summer peak will be “even more chaotic for global supply chains,” according to a survey of about 200 forwarders, traders and shippers issued May 18 by Container xChange. Container logistics industry “players” expect more disruption in the 2022 third-quarter peak season than they felt in Q3 2021, said officials of Container xChange, a marketplace and technology infrastructure provider for container logistics companies. In the survey, 51% of the respondents expect this year’s peak to be “worse” than last year’s; 26% expect it to be “chaotic”; and 22% expect the level of “chaos” to be the same. Last year, cargo surges resulted in record container shipping freight rates, delivery delays, port congestion, and reliability of container shipping services, Container xChange officials said.
53
Preliminary trailer orders “fell back substantially in April to 16,800 units, 53% below March order activity with a +4% year-over-year comparison,” FTR officials said on May 13. “There is no reason for trailer OEMs to overbook, with increasing uncertainties regarding the supply chain,” FTR Vice President of Commercial Vehicles Don Ake said. “The situation in Shanghai is going to delay some components that are needed to make trailers. In addition, the war in Europe is creating shortages of aluminum with an associated spike in pricing. These and other doubts have delayed OEMs from issuing quotes for 2023 requirements.”
100
Aurora Innovation Inc. and FedEx Corp. have expanded their pilot program to autonomously move FedEx shipments on an additional commercial lane in Texas. In March, Aurora's autonomous trucks — based on the new Peterbilt 579 — began transporting FedEx shipments between Aurora’s new terminals in Fort Worth and El Paso. Aurora, which is making the 600-mile trip on a weekly basis with safety drivers on board, expects to increase the frequency of trips in the coming months. Meanwhile, the company continues to move daily shipments for FedEx between Aurora’s South Dallas terminal and its new Houston terminal. “Since the commercial pilot began in September 2021, Aurora’s deliveries of FedEx shipments between Dallas and Houston have been 100% on time,” Aurora officials said on May 18, adding that “to date, the companies have completed 60,000 miles with zero safety incidents.”
134
The Railway Supply Institute joined 134 organizations in submitting a letter to House and Senate leadership supporting the supply chain subtitle in the America COMPETES Act. The act “contains provisions that would establish a Manufacturing Security and Resilience Program to support businesses working to develop, diversify, preserve, and improve critical supply chains and the manufacturing of critical goods,” the May 10 letter states. “… Through grants, loans, and loan guarantees, the Program would support the development of new technologies, growth in the U.S. manufacturing base, re-tooling of industrial equipment, and production of critical goods. We believe that such a Program will play an essential role in strengthening supply chains crucial for consumers and ensuring Americans’ quality of life and economic prosperity for decades to come.”
790
The Designing the Future of Full Autonomous Ship (DFFAS) consortium recently conducted a trial simulating the operation of a fully autonomous ship at about 790 kilometers between Tokyo Bay and Ise Bay. A container ship was equipped with an autonomous navigation function and connected by satellite and a ground communication line to a fleet operation center providing functions such as remote maneuvering and engine-abnormality prediction. The DFFAS project comprises 30 Japanese companies, including NYK and NYK Group companies Japan Marine Science Inc., MTI Co. Ltd. and Kinkai Yusen Kaisha Ltd.
1,800
“North American Association of Railroad Shippers, an organization close to my analytical heart, held their annual meeting in Kansas City last week. Several really important points came through in the presentations. The railroads acknowledged their issues (Apology Tour II) then stayed on message — the themes remain service recovery (BNSF adding 1,800 T&E employees) and growth — not OR! The rails were pretty well represented by the CEOs of both BNSF and CSX. … It would have been interesting, perhaps even theatrical, to have UP there to talk about their metering/private car limits, etc.). … CSX’s Foote also pushed back on emerging ‘givens’ on PSR itself (Trip Plan Compliance comes from PSR!) and the sense of timing and therefore the root causes of the current set of issues, mostly misunderstood, sometimes purposely (CSX was running the best-ever in its history by year-end 2019!). He also pledged to, as crews move from training (and cost) to revenue service, ‘re-establish (that 2019) basecamp by year-end.’” — Independent Transportation Analyst Tony Hatch in a May 19 message to his clients
1 billion
On May 13, 16 U.S. senators submitted a letter urging their colleagues to provide the Consolidated Rail Infrastructure and Safety Improvements (CRISI) grant program with “the fully authorized level” of funding, which is "tantamount to asking for $1 billion," according to the May 18 edition of the American Short Line and Regional Railroad Association's (ASLRRA) Views & News newsletter. The funding level would be in addition to $1 billion in funds already guaranteed for CRISI by 2021's Infrastructure Investment and Jobs Act. The senators addressed their letter to the Senate panel responsible for drafting the FY2023 transportation spending bill. Many ASLRRA members were "instrumental in reaching out to their congressional delegation asking members to sign on to this letter and two others sent to members in the House," short-line association officials said.
1.7 billion
For the three-month period ended March 31, Haifa, Israel-based ZIM Integrated Shipping Services Ltd. generated $1.7 billion in net income, a 190% increase compared with the same 2021 period and the container liner shipping company’s highest-ever quarterly net income figure, ZIM announced on May 18. Q1 revenues was $3.716 billion, a year-over-year increase of 113%. The average Q1 freight rate per TEU was $3,848, a 100% year-over-year increase.
