Tallies, totals and other trend data in the freight transportation realm
11/21/2022
-2.35
FTR’s Trucking Conditions Index fell in September to a -2.35 reading from a near-neutral -0.25 in August, FTR reported on Nov. 17. The key factors: weaker freight rates and an end to the sharp drop in diesel prices. “After 18 months of mostly double-digit TCI readings, the index has been negative in all but one month since February," FTR officials said. "We expect market conditions to remain mildly negative for carriers in most months at least through 2023, but that weakness likely will not mirror the strength seen in late 2020 through early 2022.”
-1.4
The shipments component of the Cass Freight Index® fell 1.4% month over month in October, Cass Information Systems reported on Nov. 14. Year over year, the index rose 2.9%, decelerating from 4.8% in September. “After a soft 1H’ 22, with freight demand hit by inflation, substitution from goods back to services, and now excess inventory, the improvement in the past few months is still a little puzzling,” Cass officials said, adding the improvement likely reflects a combination of unique comparisons, pre-holidays inventory-building, repositioning of “mistimed inventory,” consumers getting ahead of rising interest rates, and easing supply constraints. “These are all temporary to varying degrees, and quickly declining import trends suggest they may end soon," Cass officials said.
5.0
FTR’s Shippers Conditions Index improved in August to a 5.0 reading up from 4.5 in July, FTR officials said on Oct. 25. Core freight conditions — demand, capacity, utilization and freight rates — were “mildly favorable” for the month, but the biggest boost to the shipper environment came from falling diesel prices, they said. “Shippers face multiple rounds of uncertainty in the coming months as diesel prices turn back higher and the harvest competes for capacity with other freight, while overall active trucking utilization eases back toward its historical average,” said Todd Tranausky, vice president of rail and intermodal at FTR.
5.9
Demand may soften in several end-user markets over the remainder of the year due to high interest rates and expectations for further rate hikes, according to the Q4 update to the 2022 Equipment Leasing & Finance U.S. Economic Outlook. Released Oct. 27 by the Equipment Leasing & Finance Foundation, the report forecasts equipment and software investment growth of 5.9% in 2022, while U.S. GDP growth of 1.8% is expected. “While many of the factors highlighted in the Foundation’s Q4 Economic Outlook have worsened in recent months, including the U.S. housing sector, the global economic backdrop and Fed actions to control inflation, there are bright spots,” said Nancy Pistorio, Foundation chair and president of Madison Capital LLC. “The industrial core of the economy continued to hum along in the late summer and early fall, and demand for equipment remains strong despite concerns of a looming recession.”
9
While Brotherhood of Locomotive Engineers and Trainmen (BLET) members voted to ratify the five-year tentative contract with the nation’s largest railroads, the Transportation Division of the International Association of Sheet Metal, Air, Rail and Transportation Workers (SMART-TD) reached a split decision in their members’ votes, the unions announced Nov. 21. SMART-TD train and engine service members voted to reject their proposed contract, while SMART-TD yardmaster members voted to accept it. BLET and SMART-TD are the two largest rail unions, accounting for half of the unionized workforce at the nation’s largest freight railroads. A status quo agreement between SMART-TD and management is in effect until Dec. 8. Beginning Dec. 9, SMART-TD would be allowed to go on strike or the railroads would be permitted to lock out workers unless Congress intervenes.
9
SSA Marine recently completed a multi-year project to convert 9 ZPMC diesel-electric 1,000 horsepower rubber-tired gantry cranes to 100% grid-tied electric — the “largest deployment of eRTGs in North America and represents 100% of the RTG fleet at the Port of Long Beach Pier J terminal,” SSA Marine officials said on Oct. 31. The multimillion-dollar project was supported by a $9.7 million grant from the California Energy Commission. Project partners include Port of Long Beach, Southern California Edison, Cavotec, and the California Energy Commission.
14
On Nov. 16, UPS closed on its previously announced acquisition of Bomi Group, a multinational health care logistics provider. Through the deal, UPS Healthcare added temperature-controlled facilities in 14 countries and 3,000 employees across Europe and Latin America.
18
For the quarter ended Sept. 30, Werner Enterprises Inc. reported total revenue of $827.6 million, an 18% increase compared with the same 2021 period, “due to Truckload Transportation Services revenue growth of $94.2 million and Logistics revenue growth of $29.2 million,” the company announced on Nov. 2. “Even though operating conditions have become more challenging due to macroeconomic changes that are softening the freight market, we produced good financial results,” Chairman, President and CEO Derek Leathers said. “Strong and resilient performance from our durable Dedicated fleet more than offset moderating results in our One-Way Truckload fleet and Logistics segment. We are expecting a more subdued peak freight market in fourth quarter compared to a very strong peak freight market in fourth quarter a year ago.”
43.7
On Nov. 17, The Equipment Leasing & Finance Foundation released its November 2022 Monthly Confidence Index for the Equipment Finance Industry. The index is a qualitative assessment of the prevailing business conditions and expectations for the future as reported by equipment finance sector execs. Overall, confidence in the equipment finance market is 43.7, a decrease from the October index of 45. "There continues to be uncertainty in the markets as a result of inflationary pressures, rising rates, and the unknown impact of mid-term elections,” said index survey respondent Aylin Cankardes, president of Rockwell Financial Group. “Due to ongoing challenges from supply chain delays, we are seeing increased demand for used equipment. Overall, our customers have been very resilient and underlying growth has been robust so we anticipate a strong finish to 2022, particularly in the energy transition and sustainability finance sector.”
67.7
“BNSF produced a quarter to forget — by almost any measure. In their quarterly bout with the Union Pacific, they were knocked out. While we understand that sequential service improvements and IM service recovery (noted by JB Hunt, by the way) could well make this an irrelevant outlier lost in the mists of time, but in the near term, if this was a heavyweight fight with the UP — it would be stopped. To wit: While revenue growth (16%) matched UP’s, their operating income declined 7% (UP’s grew by 13%). BNSF was the only Class I to show a decline in Operating Income (many actually set records). The OR increased by 820bps to an industry highest 67.7% (versus +190bps, 58.2%).” — Independent transportation industry analyst Tony Hatch in a Nov. 14 email to his clients
181
For CSX, “254 promotions within the quarter and the current active T&E force of 6,819 is 181 from the goal. ... CSX once again stressed that the congestion/service issues are labor, not physical capacity. … In responding to the possibility of an economic slowdown and the potential to flex down in labor costs, CMO [Jamie] Boychuk said they would use attrition (rather than indiscriminate furloughing) to handle.” — Independent transportation industry analyst Tony Hatch on CSX’s Q3 earnings call in an Oct. 25 email to his clients
7,300
For Norfolk Southern Corp, “T&E staffing and network performance should continue to recover. Q322 service momentum was negatively impacted by the potential labor stoppage in September. However, service metrics showed sequential improvement (terminal dwell -5% Q/Q, train speed +9% Q/Q) and recovery has continued in October. T&E headcount (7.3K in October vs 7.0K in Q222) is now above the prior target of ~7.3K for November and trending ahead of the ~7,500 goal by mid-2023 (pipeline still strong at 950).” — Baird Equity Research’s Garrett Holland in an Oct. 26 report titled “Baird/NSC/Holland: Q322 Review: OR and Volume Outlook Slightly Weaker”
