Transportation Industry Updates February 2018

Every month we take a look at the most recent transportation industry trends to help plan for the future. Discover the industry trends for February 2018.

U.S. Trucking

December truck tonnage growth was strong. The incremental improvement in freight is likely driven by increased industrial freight, modest improvement in retail volumes and substitute rail freight. Truckload volumes are expected to remain strong, but growth rates could moderate due to tough year-over-year comparisons, creating marketing price volatility into 2018.

Dry-van spot market rates in January were $2.31 per mile on a four-week rolling average, up 35% year over year, which was likely driven by increased demand, higher fuel surcharges and less capacity. Industry contacts expect 2018 contract rates to increase 6 to 9% year over year, the first significant year-over-year increase since 2015.

January flatbed rates in the spot market were $2.25 per mile on a trailing four-week basis, up 25% year over year, slightly higher compared to the past 2 to 3 months. The improvement is likely driven by strong industrial demand and higher fuel surcharges. Capacity is expected to remain scarce and carriers appear to be taking advantage with flatbed contract increases of 7% to 10% year over year.

Global Containerized Ocean Traffic

January 2018 U.S. container imports were up 8.5% year over year. Full year 2017 imports were up 4.2% from 2016 and up 8% from 2015. The National Retail Federation cited 7% year-over-year growth in 2017 due to different port mix versus Port Import/Export Reporting Service data. Our work indicates volume growth trends will continue into 2018 due to improved global economics.

Ocean spot market rates, according to the Shanghai Containerized Freight Index, from Asia to the U.S. West Coast, averaged $1,500 in the first five weeks of 2018, down 30% year over year. While there were lower versus elevated rates one year ago following Hanjin’s market exit, rates rebounded from a drop in December due to increased Global Reporting Initiative activity.

Airfreight rates in December were up 8.4% year over year compared to one year ago on the East-West Drewry Index Lanes. Our work indicates spot market rates were up 30% to 50% on certain lanes. Our work indicates higher air cargo demand is primarily due to increased eCommerce, cyclical tech freight, increased supply chain speeds and higher duty-free tax thresholds.

Rail Trends

CSX volumes were down 5.9% year over year through the first six weeks of 2018, while Norfolk Southern were only down 0.1% year over year during the same frame. Our work indicates Norfolk Southern is gaining market share from CSX due to recent strategic/service changes at CSX.

Union Pacific’s volumes were down 1.2% year over year during the first six weeks of 2018 while BNSF volumes are up 3.8% year over year during the first five weeks of 2018. Versus Union Pacific, BNSF is growing intermodal volumes at a faster rate, coal declines are less severe and grain growing year over year.

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