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



The shipments component of the Cass Freight Index® rose 0.4% on a year-over-year basis in July, after a 2.3% decline in June and in line with expectations, Cass Information Systems Inc. officials reported on Aug. 15. On a seasonally adjusted basis, shipments rose 0.6% month over month in July, after a 4.1% decline in June. “Freight demand has flattened out this year with inflation near 9% and significant substitution from goods back to services,” Cass officials said. “Considering the extraordinary goods consumption during the pandemic, a reversal as services have reopened shouldn’t be much of a surprise.”


3.5 & 3.75

“Since the end of World War II, a recession has never been declared without a loss of employment. With elevated prices the Federal Reserve is committed to restoring price stability. We should expect the Fed to continue to raise its target interest rate to between 3.5% and 3.75% or more if additional Government spending is approved. Current mixed economic signals demand transportation investment underwriting be disciplined and based on deep industry experience.” — Aug. 8 newsletter from RESIDCO titled “Price Levels Surge as Growth Stalls.” RESIDCO is a transportation equipment lessor and asset management company that operates and manages a freight-car and locomotive fleet.



“BNSF grew net income by 10% (UP’s grew 2%), revenues for both grew 14%, yet BNSF volumes were worse (-6% versus -1%). UP’s OR worsened, er, worse (510bps vs. BNSF’s +280bps) but was still 300bps better (60.2% vs. 63.2%).” — Independent Transportation Analyst Tony Hatch in an Aug. 9 message to his clients



The “total marginal cost of trucking” grew by 12.7% in 2021 to $1.855 per mile, the highest on record, according to The American Transportation Research Institute (ATRI), which on Aug. 10 released the findings of its 2022 update to “An Analysis of the Operational Costs of Trucking. Leading contributors to this increase were fuel (35.4% higher than in 2020), repair and maintenance (18.2% higher than in 2020), and driver wages (10.8% higher than in 2020). On a cost-per-hour basis, costs increased to $74.65. Overall, fleets with 100 or fewer trucks spent 4.9 cents more per mile than fleets with more than 100 trucks, “closing the 2020 gap with larger fleets by 70%,” ATRI officials said.



“Wages for American truckers rose significantly in 2021 as demand for drivers amid the ongoing driver shortage increased competition for talent,” American Trucking Associations officials said on Aug. 10 while releasing the results of a new survey. The median truckload driver earned more than $69,000 in 2021, an 18% increase from the previous survey, officials said. More than 90% of truckload fleets raised pay in 2021, with the average increase hitting 10.9%, they added. Ninety-six percent of fleets also offered referral bonuses for new drivers, and 54% offered sign-on bonuses. “The data supports what industry sources have been saying for some time — the driver shortage has been great for drivers who saw their salaries rise last year,” ATA Chief Economist Bob Costello said.



The Port of Oakland’s total loaded container volume dropped by 28% in July compared with July 202’s total, the port announced on Aug. 17. Last month, 116,629 loaded twenty-foot containers (TEUs) moved through the port, compared with 162,898 in July 2021. "The Port was closed nearly a week last month due to the trucker protests voicing concern over AB5," said Port of Oakland Maritime Director Bryan Brandes. "This congestion reduced our overall July volume."



“The Presidential Emergency Board recommendations on the (U.S.) national bargaining between the railways and their unions was released today …  So now there's another 30-day cooling-off period, and then we get to brass tacks. A union rejection (for the ball’s in their court now) could lead to a (very, very brief) strike, but as I have written before that is highly unlikely and in any event not an investable event.”  — Independent Transportation Analyst Tony Hatch in an Aug. 17 message to his clients



On Aug. 6, the M/V Capri loaded over 134,000 metric tons of coal from Javelin Global Commodities, becoming the first vessel to sail with a draft of 50 feet on the Mississippi River, T. Parker Host officials said on Aug. 10. The M/V Capri sailed from United Bulk Terminals and was coordinated by Host, which specializes in agency services, terminal operations, stevedoring and marine assets. 



On Aug. 18, the Equipment Leasing & Finance Foundation’s August 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Overall, confidence in the equipment finance market is 50, an increase from the July index of 46.1, foundation officials said. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $900 billion equipment finance sector. “We are all now faced with the challenges of supply chain disruption, inflation, labor shortages, and the ‘noise’ that accompanies the upcoming midterm elections in a few months,” said MCI-EFI survey respondent Dave Fate, CEO of Stonebriar Commercial Finance. “Regardless of these challenges, the industry always performs well.”   



Canadian National really blew past Bay and Wall Street expectations as we get to know Ms. Robinson. First, they reported a 260bps reduction in OR to 59% — best in Canada! — hopefully that’s enough for now to hold off the Cult’s bitter-enders. Volumes were flat (units, my preference; +2% in RTMs) which beat the US.  And in their reiterated guidance was a call for 15% ROIC this year — and they got a question on it!” — Independent Transportation Analyst Tony Hatch in an Aug. 4 message to his clients



"Canadian Pacific shows improvement, prepares for the ‘Tale of the 2nd Half’ — and thinks about the next three years. They produced an OR of 59.7% on a slight volume decline (1%); RTMs (-2%) would have been ‘high single digits” but for Canadian grain (6/9 categories overall were up YOY). Unlike CN intermodal (-4% about in line with the NA industry), CP’s volumes increased 14% and they expect that rate to more or less continue (Keith to Street: Curate this!).” — Independent Transportation Analyst Tony Hatch in an Aug. 4 message to his clients



“Roughly 85% of transportation and logistics companies under coverage beat EPS estimates fueled by stronger contractual freight demand and pricing gains. … Q2 results were not expected to confirm an abrupt end to the freight cycle but did yield further evidence that industry demand and pricing trends are softening. … Industry trends have shifted from unprecedented strength to normal now with providers across modes citing significant uncertainty heading into the peak shipping season. … This more cautious sector-specific feedback squares with a growing number of ominous macro-related signals including an inverted yield curve, weakening housing fundamentals, falling commodity prices, sliding new orders, and pooling retail inventory in addition to the lagged headwind from tighter monetary policy.” — Baird Equity Research’s Garrett Holland in an Aug. 5 report titled “Baird/Holland/Transports: Q222 Recap: Not the Time to Chase”



North American Class 8 net orders for July fell to their lowest level since November 2021 at 10,600 units, FTR officials reported on Aug. 3. Order activity was the weakest for the month of July since 2019, down 33% from June and down 60% year over year. “Orders, though paltry, met expectations since OEMs have filled almost all available build slots this year,” said FTR Vice President of Commercial Vehicles Don Ake. “July is typically the weakest order month of the year, so it is no surprise orders dipped to around 10,000 units. Fleets continue to shop around, looking for available trucks, but they are becoming increasingly difficult to find. The supply chain is improving very slowly, but not nearly enough to meet demand.”



Preliminary trailer orders fell back in July 28% from the final trailer orders reported for June to a total of 17,000 units, FTR reported on Aug. 15. Amid “uncertainties and production challenges,” OEMs have “continued to strategically manage backlog levels and maintain strong build rates,” said Charles Roth, a commercial vehicle analyst for FTR. “Under these conditions, order volumes are likely to improve in Q4 as OEMs begin filling their production schedules for 2023.”


5.1 billion

SeaPort Manatee’s annual economic impact has “surged to more than $5.1 billion,” up 30% from two years earlier, while the number of jobs generated by the seaport has grown more than 37 percent, to 37,287, according to a study report released on Aug. 16, port officials said on Aug. 16. The study —conducted by Lancaster, Pennsylvania-based Martin Associates — was modeled upon the fiscal year ended Sept. 30, 2021, during which SeaPort Manatee “broke multiple cargo records, including registering a 53.3% year-over-year increase in containerized cargo activity,” port officials said.