Every month we take a look at the most recent transportation industry trends to help plan for the future. Discover the trends and updates for November 2018.
The American Trucking Association’s seasonally adjusted Truck Tonnage Index increased 3% in September, which is the slowest growth rate since June 2017. It was still the 17th consecutive month of year-over-year growth. As a three-month moving average, tonnage was up 5.2% in September. Year-to-date tonnage growth slowed from 7.6% to 7.0%, which is still faster than last year’s 3.8% growth rate.
Average truckload rates were up 10% year over year in September, with the growth rate slowing slightly versus August’s 11% growth, which were likely due in part to refreshed contract rates allowing shippers to exit the spot market. Contract rates in 2018 were up 8-11% year over year for dry-van and 10-15% in flatbed, and initial expectations are for 5% rate increases in 2019.
Global Airfreight, Containerized Ocean Traffic
Total U.S. container imports were up 9% year over year in October. Year-to-date imports are up 6% year over year. Growth was a result of organic growth plus tariff-related inventory pull forward. With trade tariffs pending, there is risk for additional pull-forward of shipments, which could lead to deceleration in the first quarter of 2019.
During October, spot market ocean rates from Asia to the U.S. West Coast continued to rise with the average rate of $2,400 versus $1,200 in late June. The rate increase appears to be a result of capacity reductions since mid-year coupled with strong demand partly due to tariff-related pull forward.
Airfreight rates in September rose versus year-ago and month-ago periods. Airfreight rates are expected to remain higher year over year through 2018 as more capacity has been proactively locked into contract agreements due to capacity constraints with incremental pricing increases likely due to tariff-related demand in the last quarter of 2018.
During the fourth quarter of 2018, CSX volumes rose 2% with growth in coal and industrial products offsetting less intermodal volume partial due to recent intermodal network reductions. Norfolk Southern volumes are growing faster, with ongoing declines in coal volume offsetting strong intermodal and chemical/petroleum volumes.
Union Pacific’s volumes are up 2% and BNSF volumes are up 4%. Coal volume declines remain a drag for Union Pacific, while intermodal volume strength and coal, and chemical/petroleum growth helps. Notably, Union Pacific’s quarter-to-date sand volumes have declined 21%, likely due to local frac sand mines becoming operational, partially offset by higher petroleum volumes.
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