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 September 2018.
The American Trucking Association’s seasonally adjusted Truck Tonnage Index increased 8.6% year over year in July, which is the 15th consecutive month of growth. As a three-month moving average, tonnage was up 7.9%. Year to date, tonnage growth rate improved 8% year over year, which is faster than last year’s 3.8% growth rate.
While spot market prices have stabilized, truckload rates through July remained significantly higher as average dry-van linehaul rates were up 10%. Industry contacts expect 2018 contract rates to increase 8-11%, the first significant year over year increases since 2015. Spot market year over year growth rates have moderated due to lapping year-ago increases. Flatbed truckload pricing is seeing the strongest increases within the truckload sector, as 2018 flatbed contract increases of 10% year over year are expected.
Global Airfreight, Containerized Ocean Traffic
Total U.S. container imports were up 2.4% year over year in August. Year-to-date imports are up 5.9%. The third quarter to date has likely benefited from a tariff-related pull forward. Full year growth is expected to be moderate to 3-5% slower than the prior year, primarily due to tougher comparisons and higher inventory positions. With trade tariffs pending, there is risk for additional pull forward of shipments which could lead to deceleration in the fourth quarter of 2018.
During August, spot market ocean rates from Hong Kong to the U.S. West Coast rose significantly month over month and are trending 50% higher. Some key drivers were capacity reductions in the second quarter and strong volume. Spot rates are expected to remain high for the next 4-6 weeks, but begin to fall in the early fourth quarter as the long-term market oversupply dynamic has not changed. As a result, 2018 contract rates of $1,000 and $1,200 continue to secure capacity for existing prices.
Airfreight rates in July were slightly higher than year-ago periods, but continued to decline from prior month levels. We expect airfreight rates to remain higher year over year through 2018 as more capacity has been proactively locked into contract agreements due to capacity constraints, while pricing power appears limited as capacity has grown faster than volumes for five consecutive months.
Through the second month of the third quarter of 2018, CSX volumes have accelerated 4.2% with key growth in coal and intermodal segments. Norfolk Southern’s volume growth continues to trend above CSX, with quarter to date volumes up 5.7% due to better intermodal and chemical growth, plus retained market share gains over the past year.
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