Every month we take a look at the most recent transportation trends to help plan for the future. Discover industry updates for February 2019.
The American Trucking Association’s seasonally adjusted Truck Tonnage Index increased 1% year over year in December, moderating from November’s downwardly revised 6% growth. While December’s growth rate was the 20th consecutive month of year-over-year growth, the three-month moving average growth rate slowed to 5%.
Spot market dry-van truckload rates in January were down 18% year over year as the market lapped significant year-ago rate increases. After 2018, contract rates increased 8-11% year over year. It’s predicted that truckload contract rates could be 0-3% year over year next year, while spot market rates could trend lower year over year.
Global Airfreight, Containerized Ocean Traffic
Total U.S. and Canadian container imports rose 6% year over year. Full year 2018 imports rose 8%, faster than the 4% growth in 2017 and 2016. Growth was most likely a result of organic growth plus tariff-related inventory pull forward. With trade tariffs pending, a deceleration in ocean volumes is expected in the first half of 2019.
During January, spot market rates from Asia to the U.S. West Coast averaged $2,000, down from November’s peak $2,600 rate, but remained above June’s $1,200 average rate, according to the Shanghai Containerized Freight Index. The rate increase appears to be a result of capacity reductions since midyear, coupled with strong demand partly due to tariff-related pull forward. 2018 contract rates of $1,000 and $1,200 have resumed securing capacity with less freight being placed on Freight All Kinds (FAK) rates than during October and November. Spot market rates are expected to decline from current levels but remain higher year over year as carriers struggle to operate profitably.
Airfreight rates in December were fairly similar to elevated rates one year ago. Airfreight rates are expected to moderate into 2019 as capacity agreements signed in the first quarter of 2018 expire amidst excess capacity and slowing demand growth trends.
During the first six weeks of 2019, railroad volumes were up slightly year over year. Quarter to date, CSX volumes rose 2% year over year primarily due to intermodal volume declines as the company reduced service.
Union Pacific’s growth rate accelerated slightly from 3% in the fourth quarter to 4% year over year due to strong intermodal volume growth. BNSF’s growth rate fell due to coal, grain and intermodal volume declines.
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