Tallies, totals and other trend data in the freight transportation realm
4/9/2021
-41
In 2020, merger-and-acquisition activity was “significantly impacted” by the COVID-19 pandemic,” said the writers of the EdgePoint “industrials” report issued March 16. “M&A activity in the second quarter was down 41% compared with the first quarter of 2020,” EdgePoint officials said. “In addition, M&A activity was down 39% on a year-over-year basis (Q2 2019). Throughout the second half of 2020, M&A activity gradually resumed, but activity was still well below pre-pandemic levels.” EdgePoint is an M&A advisory firm that specializes in middle- market mergers, acquisitions, management buyouts, and corporate divestitures for businesses and owners.
-9.8
FTR’s Shippers Conditions Index (SCI) for January rose marginally from December’s -10.9 to a “still significant negative reading” of -9.8 for the month,” the freight transportation forecaster reported on March 24. Overall shipping conditions improved “very slightly” in January, with near-term conditions “tough due to rising fuel costs and rates,” FTR officials said. “It is unlikely that shippers’ conditions will improve much over the balance of the year as additional freight demand underpinned by additional consumer stimulus will keep capacity tight through the end of the year,” said Todd Tranausky, FTR’s vice president of rail and intermodal. “Higher rates and higher fuel surcharges are also a risk as the economy recovers. This could add negative pressure to the outlook for shippers later in 2021."
-4.5
American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 4.5% in February after rising 1.8% in January. “February’s drop was exacerbated, perhaps completely caused, by the severe winter weather that impacted much of the country during the month,” said ATA Chief Economist Bob Costello on March 23. “Many other economic indicators were also soft in February due to the bad storms, but I continue to expect a nice climb up for the economy and truck freight as economic stimulus checks are spent and more people are vaccinated.”
5.7
“Freight demand and GDP growth historically cycle close together, and GDP forecasts for 2021 have been revised higher to +5.7% (vs. +4% to start the year),” wrote Baird Equity Research Senior Research Analyst Garrett Holland in an April 6 report. “Importantly, GDP growth is expected to remain strong at +4.1% in 2022 as well.”
6
North American Class 8 net orders for March totaled 40,800 units, a record 6th consecutive month exceeding the 40,000-unit threshold, FTR reported on April 5. March orders were down 9% month over month, but up more than 33,000 units “than the pandemic-impacted March 2020,” the freight transportation forecasting firm said. Class 8 orders totaled 372,000 units for the past 12 months. “There is tremendous pent-up demand being generated due to the constrictions on supply,” said Don Ake, vice president of commercial vehicles for FTR. “The pressure in the market is building, as orders continue to flow into OEMs at a record pace. To have this level of orders roll in for half a year is impressive and unprecedented.”
17
“Only 17 ships were reported waiting” off the Ports of Los Angeles and Long Beach “in recent days, compared with about 30 ships a month ago.” — Hackett Associates Founder Ben Hackett, in an April 7 National Retail Federation press release.
25
“The significant supply side issues will only temporarily belie the strong demand environment, and considerable acceleration in freight demand is still most likely. With much easier prior-year comparisons ahead, if the Cass Shipments Index just takes a normal seasonal pattern from here, it will be up over 25% year over year in Q2. On a two-year stacked basis, the [index] was still 5.6% below February 2019.” — Cass Information Systems Inc. in a March 18 statement accompanying its February indexes.
52
“Loaded inbound container volume growth at the Ports of Los Angeles and Long Beach reaccelerated to +52%” year over year in February, compared with +11% year over year in January and 24W% year over year in December.” — Baird Equity Research Senior Research Analyst Garrett Holland in an April 8 report.
53
In a recently conducted survey investigating public opinion about various federal transportation tax options, the Mineta Transportation Institute asked the following: “Imagine that the U.S. Congress decides to keep the gas tax, but to add a new per mile 'Business Road-Use Fee' for miles that commercial vehicles drive on the job. (These vehicles would continue to pay the current gas tax, as well.) Would you support or oppose this new Business Road-Use Fee for the following types of commercial vehicles?” 53% of respondents strongly support or somewhat support this for "delivery and freight trucks," according to the Association of American Railroads' The Signal, issued April 6.
67.7
The Monthly Confidence Index for Equipment Finance Industry reached a three-year high in March, according to Equipment Leasing & Finance Foundation (ELFA). “Overall, confidence in the equipment finance market is 67.7, an increase from the February index of 64.4, and the highest level since April 2018,” EFLA officials said. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by executives from the $900 billion equipment finance sector. “We are relatively positive on domestic and global economic activity for this year, and likely next,” said survey respondent David Drury, senior vice president and head of equipment finance for Fifth Third Bank. “Despite lingering disruptions, with the tailwinds of government stimulus, central bank liquidity, excess capacity, and pent-up demand, global economic growth may positively surprise in 2021.”
92
The annualized turnover rate for over-the-road truckload drivers held steady in 2020’s final three months, according to the American Trucking Associations’ Quarterly Employment Report, which was issued March 29. In the fourth quarter, the turnover rate for truckload fleets with more than $30 million in annual revenue was unchanged at a 92% annualized rate; the churn rate for smaller truckload carriers dipped two percentage points to 72%. “With the continued tightness in the driver market, it may seem surprising that the turnover rate didn’t jump in the fourth quarter as economic activity and freight traffic increased,” said ATA Chief Economist Bob Costello. “However, paradoxically, strong freight demand may have actually contributed to turnover staying steady by keeping drivers — particularly those engaged in the dry van and temperature-controlled sectors — too busy to change jobs” ATA expects “continued tightness” in the driver market “through 2021 and beyond,” Costello said.
300
On April 6, Canadian Pacific Railway Ltd. and Kansas City Southern announced that 45 customers, ports, transloads and other stakeholders had filed statements with the Surface Transportation Board — bringing the total to more than 300 that support “the planned creation of the first U.S.-Mexico-Canada rail network,” the railroads said. On March 21, CP and KCS announced they'd entered into a merger agreement under which CP would acquire KCS stock in a cash transaction worth $29 billion.
3,800
For its second fiscal quarter ended Feb. 28, The Greenbrier Cos. Inc. reported 3,800 new rail-car orders valued at over $440 million. The company’s diversified new rail-car backlog was 24,900 units with an estimated value of $2.5 billion, Greenbrier announced on April 6. "Our near-term outlook is becoming increasingly optimistic as rail fundamentals improve,” said Chairman and CEO William Furman. “Rail loadings are up year-to-date, driven by increased traffic in grain, intermodal and other categories. Railroad velocity has slowed by nearly two miles per hour. Rail cars in storage have decreased by more than 148,000 units from the 2020 peak storage level. Proposed environmental and other regulations in both North America and Europe should support secular demand for rail as a growing mode for freight transport. Fiscal stimulus and proposed infrastructure legislation are expected to further add to demand."
14,270
The number of rail cars in storage has declined for nine straight months, according to the PFL Railcar Storage report issued April 8. “As of April 1, 2021, there was a total of 378,241 cars in storage, a decline of 14,270 cars (-3.64%) month over month,” the report writer noted. “This is the largest decline in storage cars since October of last year. The number of cars in storage is now 15,609 cars lower than March of 2020 when the pandemic started, signaling a recovery in the rail industry at a time when other industries are still struggling.” The report is produced by PFL Petroleum.
145,200
“The Suez Canal has finally been released, and, as a curious fact, @BrandMentions indicates that there have been 145,200 interactions on Twitter with the hashtag #SuezBLOCKED” — a March 29 tweet (translated) from Vía Tecnológica (@ViaTecnologica), a Dominican emerging technology, science and trends site
$50 billion
The autonomous vehicle market to be a “$50 billion opportunity by 2040,” according to a Lux Research report issued March 25. The report forecasts the adoption of AVs, including Level 2 ADAS systems, through self-driving Level 4 systems. “Level 4, or completely self-driving, vehicles aren’t the only goal,” said Christopher Robinson, senior analyst at Lux Research and the report’s lead author of the report. “Hands-free Level 2 ADAS systems will grow rapidly in popularity across all regions, and by 2039, all vehicles will feature at least this level of autonomy. Level 3 autonomous systems will be introduced in 2021 and by 2040 will make up the largest portion of revenues from autonomous vehicles.”
