This month’s Macro examines Oct. and Nov. data. As shown on Slide 7, vols for only 3 of the 6 major modes we track were positive y/y during Oct., similar with the prior month although the mix changed a bit with domestic Truck and Rail vols turning negative y/y and global ocean vols inflecting positive. Moreover, our proprietary Seasonal Freight Index (Slide 8) fell below 49 for the first time in a year in Oct. and our Index reveals freight has now tracked below normal seasonality for 7 of the past 8 months. It’s tough to know how much of the drop-off in Oct. reflects the impact of Superstorm Sandy at the end of the month.
This month’s Macro examines July and August data. As shown on Slide 7, most of the major freight modes we track (Cass shipments, Domestic Air, Int’l Air and West Coast port volumes) were negative y/y in their most recent month, while Rail vols and ATA truck tonnage were modestly positive y/y. Generally, vols in July weakened y/y compared with June for most modes and so far in August, Cass shipments inflected negative y/y and Rail vols decelerated. Further, our proprietary Seasonal Freight Index has remained at or below 50 for 6 straight months, indicating freight vols are tracking slightly below normal seasonality.
This month’s Macro examines May and June data. As shown on Slide 7, domestic freight vols (Rail vols, Cass shipments, ATA truck tonnage, A4A air tonnage) generally improved y/y in May compared with April, but June data points so far are mixed as rail vols strengthened further but the broad-based Cass shipment index inflected negative y/y. Our proprietary Seasonal Freight Index ( Slide 8 ) improved modestly in May and has held in a range of 49-51 for 8 straight months and 16 of the past 17, indicating normal freight seasonality
This month’s Macro examines March and April data. As shown on Slide 7, y/y freight vols (rail vols, Cass shipments, ATA truck tonnage) generally slowed or turned negative in March. In part, we believe this reflects tough comps related to very mild winter weather this year vs. very bad weather a year ago that pushed more freight than normal into March last year. However, our data below show that reported y/y vols have improved in April vs. March for 5 of 6 volume-based freight series reported thus far including rail vols, Cass shipments, and the Ceridian truck index based on diesel consumption.
This month’s macro examines mostly Jan. and Feb. data. After a solid finish to C11 in Dec., vols generally slowed to start C12 with 8 of 15 freight series worse y/y in Jan. than the prior month and absolute vols modestly worse than normal seasonal trends. However, the early data points for Feb. have rebounded as 5 of 9 freight series improved y/y vs. the prior month and vols so far are trending better than typical seasonality. With stronger vols 2 of the past 3 months, our overall seasonally adjusted Freight Index reached its highest level in 12 months (see Slide 8). Note that it’s still tough to get to a great sense of underling demand due to timing issues around Chinese New Year on Jan. 23 this year vs. Feb. 3 a year ago, which also impacts domestic vols such as truckload and intermodal. We await March data to get a truer view of underlying demand.
This month’s macro examines Sept. and Oct. data. Overall, trends remain mixed with 7 of 15 series this month improved y/y compared with the prior month, similar with the pace of improvement witnessed last month. Rail vols have improved y/y so far in 4Q relative to 3Q and the Ceridian Pulse of Commerce index (based on trucker fuel consumption) improved in Oct. for its best month in the past 4. However, the broad-based Cass shipment index slowed materially in Oct. and West Coast ocean port vols inflected back negative y/y in Oct. despite our channel checks which indicate signs of a late peak season. With some series improving and some decelerating, our view is that freight remains choppy but relatively stable overall with few signs of an impending material slowdown or recession.
This month’s macro examines July and August data. Generally, y/y freight vols continue to slow into a weaker global economy and tough comps. We have 4 volume-based freight indicators that were reported for August ” the Cass shipment index, weekly Rail vols, the Ceridian Pulse index (based on trucker fuel consumption) and Hong Kong Air cargo tonnage ” and y/y vols across all 4 modes deteriorated in August compared with July. Still, absolute vols seemingly remain stable and are tracking in line with normal seasonal patterns the past couple of months with no signs yet from freight of a material recession.
This month’s macro examines mostly June and July data. While y/y and sequential vols have slowed throughout the year, this month’s macro reveals that freight vols have stabilized the past couple of months. Notably, 8 of 14 data series in June improved y/y vs. the prior month and 3 of 7 more recent data points through July improved y/y compared with June. Moreover, sequential vols trended in line with normal seasonal patterns in June and the early data points for July are positive (see Slide 10). Thus, into slower but seemingly stable freight vols, we believe the transport stocks continue to reflect too much bad news and should continue to lead the market back up in the near term.
This month’s macro examines mostly May and June data. Our data reveals that freight vols continued to decelerate in May. 12 of 15 series we track deteriorated y/y in May vs. April, while absolute vols have now trended below normal seasonal patterns for 4 of the past 5 months (see Slide 10).
This month’s macro examines April and May data. Following strong March vols, freight vols have clearly slowed in April and May into tougher comps and slower demand – see Slide 10 below which shows that vols have trended worse than seasonally normal in 3 of the first 4 months this year. We also have 3 volume-based domestic freight indicators that were reported so far for May”the Cass shipment index, weekly Rail vols and the Ceridian Pulse index (based on trucker fuel consumption). The data show further weakness in trucking vols on a seasonally adjusted basis, while rail vols currently seem stable.