Tallies, totals and other trend data in the freight transportation realm



American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 1.5% in June after falling 1% in May, ATA officials said on July 22. In June, the index equaled 111.6 (2015=100) compared with 113.3 in May. “Supply chain issues are likely putting some downward pressure on tonnage,” said ATA Chief Economist Bob Costello. “But it is also likely that tonnage isn’t growing as much as it could because of industry-specific supply constraints. This index is dominated by contract freight, and the for-hire truckload carriers have seen their tractor counts fall because they are having difficulty finding qualified drivers. It is difficult to move more tonnage with less equipment, which is why we are seeing strong volumes in the spot market as shippers scramble to get loads moved.”


Following a 6-year organizing effort, XPO Logistics workers in Miami voted unanimously on July 10 to ratify the first Teamsters contract at the company, International Brotherhood of Teamsters officials said on July 13.


Union Pacific Corp. 2021 outlook upgraded: “Following the strong 1H21 results UNP increased its 2021 guidance and now expects full year volume growth of ~7% (vs. ~6% previously), 200 bps of OR improvement Y/Y (vs. 150-200 bps previously), and ~$7B of share buyback (vs. $6B previously, UNP repurchased $2.7B of stock in Q221). UNP reiterated the outlook for pricing gains ahead of inflation, $500M of productivity gains (realized $235M of benefits in 1H21), capital spending <15% of revenue, and a 45% targeted dividend payout ratio.” — Baird Equity Research Senior Research Analyst Garrett Holland in a July 22 email report following UP’s Q2 earnings announcement


In a Q3 update to its 2021 Equipment Leasing & Finance U.S. Economic Outlook issued July 14, the Equipment Leasing & Finance Foundation forecast 13.3% growth in equipment and software investment, and 6.1% growth in GDP. “The Q3 update indicates that America is now opening for business quickly,” said Scott Thacker, the foundation’s chair and CEO of Ivory Consulting Corp. “The evidence illustrated in the Outlook points to a booming economy for the second half of the year as long as the pandemic remains in check, and despite several potential headwinds which must be monitored carefully. In the shorter term, strong growth for both the economy and the equipment finance industry are expected to be realized this summer.”  


“The WSJ article on [July 8], “Biden to Target Railroads, Ocean Shipping in Executive Order,” set off a series of concerns regarding regulatory scrutiny and systemic threats to pricing power and competition. … As the actual details emerged on [July 9], those risks seem overstated. In the Executive Order on Promoting Competition in the American Economy and related Fact Sheet, <15% of the text is targeted towards transportation.” — Baird Equity Research Senior Research Analyst Garrett Holland in a July 11 transportation/logistics report titled, “Executive Order Fears Overdone”


FTR’s Trucking Conditions Index (TCI) for May “eased slightly” from April’s reading (16.82) to 15.72, FTR officials announced on July 15. “Stronger freight rates would have pushed the index to a third straight record, but a swing in diesel prices from a slight positive in April to a negative in May, along with slightly weaker capacity utilization, offset those gains,” they said. 


In a July 12 email unveiling its June indexes (“U.S. Freight Slows in June; Rates Do Not”), Cass Information Systems Inc. officials said the freight rates “embedded in the two components” of the company’s Freight Index “surged to a 23.4% y/y increase in June from a 10.8% y/y increase in May. … The embedded rates jumped 12.3% m/m on a seasonally adjusted basis in June, more than reversing a 7.8% m/m decrease in May.” The result “confirms that the accelerating trend remained intact through Q2, but the volatility in May and June was partly due to modal mix,” Cass officials added.


During a July 20 virtual celebration, Progressive Railroading recognized 25 North American rail industry professionals who received the 2021 Rising Stars Award. The magazine defines a Rising Star as someone under the age of 40 who has made, or is making, a positive impact on his or her company, organization, department or team, and is viewed by others — peers, colleagues, supervisors, clients or associates — as an up-and-coming leader in the rail industry. Their stories can be read on ProgressiveRailroading.com and will be published in the magazine's September issue.


Confidence in the equipment finance market was up slightly in July, according to the Equipment Leasing & Finance Foundation. The foundation’s monthly confidence index for the equipment finance market (MCI-EFI) for July was 72.9, up June’s index of 71.3, foundation officials said on July 22. “Many industries served by the equipment finance segment are back to full throttle, with only certain negatively impacted industries still working towards recovery,” said MCI-EFI survey respondent Bruce Winter, president of FSG Capital Inc. “This has created growing demand for our products and services and all signs point to increasing activity over the next few quarters. Inflation concerns, driven by unprecedented federal stimulus spending, are front and center and the jury is out as to whether the Fed has correctly forecasted only a short-term bump in inflation.”


RE: Kansas City Southern’s Q2 earnings: “Overall ‘Mexico Energy Reform’ volumes were still up 107% YOY and cross-border overall up 42%. Another was of course the ongoing chip shortage in auto production (but that will just mean pent up demand). Yet another is a contract issue (undefined) that cost KSU $7mm. The Q2/21 numbers were a bit — shocking — confusing (among other things, on a reported basis the CP $700mm termination fee was included, but the CN reimbursement won’t be recognized until that shareholders vote). All wasn’t lost — the OR improved 380bps (adj) to 61.4% and volumes jumped 31%. But the cost of congestion/recovery and of handling the jagged upward slide of the shark’s tooth mean an increase of some 300bps in target 2021 OR to ~60%. But FY EPS Guidance was left barely changed (from “$9+” to “~$9”) and 2022 ($10.50-11ps) unchanged at all. One analyst friend thought that the robust volume expectations for H2, required to make FYG, were a bit Wizard of Oz-like (the deal will be done so ‘pay no attention to the man behind the curtain’).” — independent transportation analyst Tony Hatch in a July 22 message to his clients


CSX “had planned on adding ~400-500 T&E employees in 2021 to improve service as demand strengthened. Headcount increased by ~200 in 1H21 and should continue to rise in 2H21, but it has been harder to add personnel than management expected at the start of the year. Cost inflation was ~3% in Q221, and management expects that level of cost pressure continues through 2H21.” — Baird Equity Research Senior Research Analyst Garrett Holland in a July 21 email report following CSX’s Q2 earnings announcement


For the quarter ended May 31, The Greenbrier Cos. Inc. received 3,800 rail-car orders valued at $400 million. “We are benefiting from the economic recovery in rail-car manufacturing and leasing, as expected,” Greenbrier Chairman and CEO William Furman said on July 9. “New car orders will not increase linearly, but we expect commercial activity to remain strong as our $2.6 billion backlog provides a baseload of orders to support the expanded operation of production lines and our leasing business.”

2.25 billion

Uber Freight and Transplace entered into a definitive agreement for Uber Freight to acquire Transplace for $2.25 billion — consisting of up to $750 million in common stock of Uber Freight’s parent company, Uber Technologies Inc., and the remainder in cash, Transplace announced on July 22. Uber Freight would acquire Transplace from TPG Capital, the private equity platform of alternative asset firm TPG.