Transportation Industry Updates July 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 July 2018.

U.S. Trucking

The American Trucking Associations’ seasonally adjusted Truck Tonnage Index increased 7.8% year over year in May, its 13th consecutive month of growth, slightly softer than April’s 9.9% increase. As a three-month moving average, tonnage was up 8% in May. Year-to-date tonnage is up 8%, faster than 2017’s 3.8% growth rate.

Truckload spot rates increased further in June from prior months and remain higher, supporting market-wide pricing. During June, average dry-van spot market rates were $2.57, up 24% and 8% over April. Industry contacts expect 2018 contract rates to increase 8-11%, the first significant increase since 2015. Flatbed pricing is seeing the strongest increases with average spot market rates of $2.81 per mile in June, up 27% in 2017, and 4% since April.

In June, refrigeration truckload rates re-accelerated to reach their highest levels since January, averaging $2.90 per mile, up 18% over 2017.

International Ocean And Airfreight Trends
U.S. container imports were up 8.3% in June. Year-to-date imports are up 4.4%. Our work indicates volume will likely grow 3-5% in 2018, slightly slower than the prior year, primarily due to tougher comparisons and higher inventory positions.

In early July, spot rates to move to ocean containers from Hong Kong to the U.S. West Coast have been trending closer to levels from a year ago after roughly nine months of declines. Due to service cuts and various surcharges, rates during the first week of July were up 12% to $1,646, up from the year-to-date average of $1,250. Other spot market indexes indicate rates are trending closer to $1,500.

Rates to the U.S. East Coast from Asia were volatile over the past six weeks, but averaged $2,400, similar to prior month levels. A recent increase in spot market rates due to Global Reporting Initiative activity and other surcharges is likely going to create short-term volatility.

Rail Trends

During the second quarter of 2018, CSX volumes rose 1.9%, its first gain since the third quarter of 2017, with key growths in the coal and intermodal segments. Norfolk Southern’s volume growth continues to trend above CSX, with volumes up 5.9% due to retaining market share gains over the past year.

In the second quarter of 2018, Union Pacific’s volumes rose 3.5% while BNSF volumes rose 5.3%. BNSF growth is faster due to coal outperformance, gain and chemical shipments.

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