Tallies, totals and other trend data in the freight transportation realm
7/25/2022
-0.3
FTR’s Trucking Conditions Index for May fell back into negative territory with a -0.3 reading, down from April’s 3.21, FTR reported on July 20. Sharp increases in diesel prices in May offset “slightly improved freight market conditions for carriers,” FTR officials said, adding that freight demand, capacity utilization and freight rates were “slightly stronger in May but together were unable to diminish the negative impact of then-record diesel prices during the month.” The outlook: Conditions should continue to close to neutral territory with index readings in either low positive or low negative figures from month to month.
2.3
In June, the shipments component of the Cass Freight Index® dipped 2.3% on a year-over-year basis, similar to the 2.7% year-over-year decline in May, Cass Information Systems officials reported on July 13. On a seasonally adjusted basis, shipments fell 4.1% month over month in June, reversing the 4% increase in May. “Normal seasonality from this index level would imply shipments down 1% year over year in Q3 and down 5% year over year in Q4, as the current soft patch is becoming increasingly clear in the data,” Cass officials said.
2.7
American Trucking Associations’ advanced seasonally adjusted For Hire Truck Tonnage Index increased 2.7% in June after rising 0.3% in May. In June, the index equaled 120.1 (2015=100) versus 116.9 in May. “June’s jump tells me a couple of things: first, the transition in the freight market from spot back to contract continues. … Essentially, the market is transitioning back to pre-pandemic shares of contract versus spot market,” said ATA Chief Economist Bob Costello. “Second, and perhaps equally important, while economic growth is expected to be soft overall in the second quarter, the goods-economy wasn’t as bad as feared."
4-5
Union Pacific Corp.’s “updated 2022 outlook now calls for stronger 2H volumes that should support full-year carload growth of 4%-5%, a full year operating ratio around 58%, 2H Y/Y operating ratio improvement vs. 2021, and second half incremental margins around 50%. Guidance assumptions that were reiterated include pricing gains ahead of inflation dollars, capital spending of $3.3B, a long-term dividend payout target of 45%, and share repurchases in line with 2021.” — Baird Equity Research’s Garrett Holland in a July 21 report titled “Baird/UNP/Holland: Q222 Initial Look: Mixed Quarter as Expected, Working to Restore Service”
5
U.S. ports occupy the top five spots in a list of “60 ports ranked by highest to lowest demurrage and detention charges across shipping lines” issued July 14 by Container xChange. The top five are: Port of New York and New Jersey, Port of Long Beach, Port of Los Angeles, Port of Oakland and Port of Savannah. “All five ports are more than two to three times more expensive than Hong Kong in the seventh spot, and at least 20 times more expensive than leading Asian container hubs such as Dalian in China and Busan in Korea,” Container xChange officials said. Container xChange is a technology company that offers a container trading and leasing platform, payment infrastructure and operating systems to container logistics companies.
5.9
The Equipment Leasing & Finance Foundation on July 14 released the third-quarter update to its 2022 Equipment Leasing & Finance U.S. Economic Outlook. The foundation now is forecasting 5.9% growth in equipment and software investment, and 1.6% growth in GDP this year. “As economic conditions have generally worsened over the last several months, this outlook is noticeably gloomier than the last one,” said Nancy Pistorio, foundation chair and president of Madison Capital LLC. “The Federal Reserve is hiking rates and yet inflation continues to accelerate. However, the report also indicates there are still several important factors, such as pent-up demand, supporting growth for now for equipment finance firms and the broader economy.”
20
“Freight rates have come down by approximately an average of 20% since the beginning of the year 2022 and these will continue to slide gradually, but there will not be a massive decrease because the underlying disruptions in the supply chain are still there. Inflation, for one, has started to create build stress on the U.S. economy and the EU. With inflation and pandemic-induced lockdowns, disruptions will continue to change the equation between supply, demand and prices. In the longer term, these will phase out and create a new normal balance of supply and demand.” — Christian Roeloffs, cofounder and CEO of Container xChange, in a report issued July 21
25
Norfolk Southern Railway increased its conductor trainee pay to $25 an hour, with a minimum of $200 in earnings per shift, the railroad announced on July 21.
28
“Total revenue increased +28% Y/Y driven by +27% RPU growth as volume was largely unchanged Y/Y. … Despite growing macro concerns, CSX emphasized that customer demand for rail service remains greater than the company’s network capacity. Overall in 2H22, volumes are expected to improve as staffing recovers, market disruptions fade, and comparisons ease.” — Baird Equity Research’s Garrett Holland in a July 20 report titled “Baird/CSX/Holland: Q222 Review: Sentiment Too Negative, Service Recovery Slow but on Track”
30
The impact of service disruptions and the inflationary environment has created strong demand for existing midlife equipment. There have been seven consecutive quarters of sequential increases in existing rail rolling stock lease renewal rates. Increases in the first quarter of 2022 have been in the mid-to high teens with average renewal terms of 30 months, and rail cars in storage are down.” — July 18 newsletter from RESIDCO titled “Aero and Rail Investment - A Midyear Macro Perspective.” RESIDCO is a transportation equipment lessor and asset management company that operates and manages a freight-car and locomotive fleet.
42
Kansas City Southern has committed to reducing its scope 1 and 2 greenhouse-gas emissions per million gross-ton miles at least 42% by 2034, from a 2019 base year. — KCS’s 2021 sustainability report update issued July 21
46.1
On July 21, the Equipment Leasing & Finance Foundation released the July Monthly Confidence Index for the $900 billion equipment finance industry. The July index is 46.1, a decrease from the June index of 50.9. When asked to assess their business conditions over the next four months, 3.7% of executives responding said they believe business conditions will improve over the next four months, a decrease from 11.1% in June. 63% believe business conditions will remain the same over the next four months, up from 55.6% the previous month. 33.3% believe business conditions will worsen, unchanged from June.
14,400
In June, preliminary trailer orders fell to 14,400 units, FTR reported on July 18. While orders were down 23% month over month, they were up 20% year over year. “The order number for June met expectations, as OEMs have filled most of the available build slots and are not yet booking orders for 2023,” FTR officials said. Orders should rise substantially in the fall when commitments for next year are firmed up.”
