Tallies, totals and other trend data in the freight transportation realm
7/24/2023
-3.75
FTR’s Trucking Conditions Index (TCI) for May showed “minuscule” month-over-month improvement to a reading of -3.75 from -3.88 in April, indicating a “mildly negative environment” for carriers, FTR officials said on July 21. Falling fuel prices and slightly less unfavorable rates and utilization offset weaker volume as market conditions “remain weak but stable,” they added, noting FTR’s TCI forecast is negative through mid-2024. “If there’s any good news for trucking companies, it’s that conditions are not really deteriorating,” FTR Vice President of Trucking Avery Vise said. “Freight volume is largely stable, and driver capacity appears to be falling steadily but slowly. However, this market climate could stick around well into 2024, resulting in weak freight rates and low margins.”
0.9
“High interest rates and slowing economic growth will continue to impact equipment and software investment growth as the year progresses,” according to the Equipment Leasing & Finance Foundation’s third-quarter update to the 2023 Equipment Leasing & Finance U.S. Economic Outlook. Released on July 19, the report shows that first-quarter economic growth was stronger than initially estimated, leading the foundation to raise its annual U.S. GDP forecast to 1.6%. After investment contracted in the first quarter — “and with a potential recession still looming on the horizon” — the foundation revised its annual estimate for equipment and software investment growth down slightly, to 0.9%.
2.1
American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index rose 2.1% in June after increasing 1.2% in May, ATA reported on July 18. “A multitude of factors have caused a recession in freight, including stagnant consumer spending on goods, lower home construction, falling factory output, and shippers consolidating freight into fewer shipments compared with the frenzy during the goods buying spree at the height of the pandemic,” said ATA Chief Economist Bob Costello. “However, the magnitude of the year-over-year declines is improving, perhaps pointing to a bottom in the freight market.”
8
Economic activity in the manufacturing sector contracted in June for the eighth-consecutive month, according to the latest Manufacturing ISM® Report On Business®, a survey of U.S. supply executives issued July 3 by the Institute for Supply Management. The June Manufacturing PMI® registered 46%, down from May’s the 46.9% — “a seventh month of contraction after a 30-month period of expansion,” said Timothy Fiore, CPSM, chair of ISM’s Manufacturing Business Survey Committee. Of the six biggest manufacturing industries represented in the survey, only one — transportation equipment — registered growth in June, Fiore said.
21
“The dynamics of the freight market continue to shift, leading us into the late phase of the freight cycle. Shippers are in a position of power, with rates still falling and near bottom. In the next phase, the balance will begin to shift. … [Data for June shows] freight costs for shippers have declined roughly 21% from a year ago; freight shipping volumes are soft, down 4.7% y/y; total spending on freight is down 25% from a year ago. This is a function of both lower rates and lower volumes.” — from Cass Information Systems Inc.’s Cass Transportation Indexes-June 2023, issued July 12
21.1
For U.S. rail carload totals in June, “motor vehicles and parts again led the way … with carloads up 21.1% (11,142 carloads) over June 2022 — their 15th straight monthly increase and the biggest percentage increase in those 15 months. Rail carloads of motor vehicles and parts are closely correlated with auto assemblies, which are also up sharply so far this year. U.S. new motor vehicle sales in the first half of this year were up 12.9%.” — from the July 7 issue of Rail Time Indicators, issued by the Association of American Railroads
24
“U.S. grain carloads fell 24.0% in June 2023 from June 2022, their fifth straight decline. In the 426 months since January 1988, when our U.S. carload data begin, only three months (all in mid-2013) had fewer average weekly grain carloads than June 2023 did. Year-to-date carloads through June were down 10.4%. In 2023 through May, U.S. grain exports were down 20.4% from last year. As we explained in last month’s RTI, when grain carloads are up or down by a significant amount, increases or decreases in grain exports are likely the reason.” — from the July 7 issue of Rail Time Indicators, issued by the Association of American Railroads
25
J B Hunt Transport Services Inc. management "noted the freight recession continues (as reflected by EPS -25% Y/Y). Demand trends remain soft, and while contract re-pricing is still a headwind in Q3, earnings trends should be troughing.” — Baird Equity Research in a July 19 report titled “Transportation/Logistics: Read-Throughs from JBHT Mixed, but Odds of Bullish LTL Catalyst Higher”
30
“Q2 results were near expectations, and CSX’s service recovery is proving durable. … While the demand backdrop remains muted, the leading service product is driving more customer engagement (sales pipeline activity +30% Y/Y). Service-led freight conversion, competitive wins, and site development benefits should support improving volume growth and operating leverage.” — Baird Equity Research’s Garrett Holland in a July 20 report titled “Q223 Review: Well Positioned for When Demand Recovers”
45.6 & 55.4
“The [Logistics Managers’ Index] in February 2022 was 75.2, which was characterized as “significant expansion.” It peaked at 76.2 in March 2022 and then began a steady decline. In June 2023, it had fallen to 45.6, its lowest point since it was created in 2016. June 2023 was the fourth consecutive month that the LMI set a new record low. When respondents for the June survey were asked what they thought the LMI would be a year from now, the average response was 55.4 — indicating an expected improvement or, if you prefer, ‘getting back to normal.’” — from the July 7 issue of Rail Time Indicators, issued by the Association of American Railroads. The LMI is based on a monthly survey of supply chain professionals courtesy of researchers at Arizona State University and elsewhere in conjunction with the Council of Supply Chain Management Professionals.
46.4
The Equipment Leasing & Finance Foundation’s July 2023 Monthly Confidence Index for the Equipment Finance Industry is 46.4, up from the June index of 44.1, the foundation reported on July 20. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by executives from the $1 trillion equipment finance sector. “The equipment leasing and finance industry as a whole is relatively nimble,” said MCI-EFI survey respondent David Normandin, president and CEO of Wintrust Specialty Finance. “That is and will continue to be tested this year. I am confident that the industry will step up to the challenges and create solutions to meet the needs of our partners and customers.”