April C-Suite Synopsis

Posted by The FTR Experts on 4/29/21 12:15 PM

This c-suite synopsis is taken from our State of Freight INSIGHTS report. This report is provided to all of our Premium clients.


TRUCKING: Higher diesel prices cannot wreck trucking’s strong market fundamentals.

RAILCAR: The carload market faced February headwinds. It won't derail the overall pattern of stronger growth in 2021.

INTERMODAL: February's weak results included weather effects and are not indicative of the broader fundamentals.

SHIPPERS: Shipper's face the most challenging market conditions since the beginning of the pandemic.


Mother Nature has made things difficult for analysts and forecasters. February’s severe winter weather had already affected weekly rail and truck spot market metrics, but several key economic indicators for February were distorted by weather. March indicators also will be distorted to the upside by the lack of severe weather, although the third round of stimulus that hit in March will be distortion enough.

• The only real strength was in payroll jobs, which jumped by 916,000 in March after 468,000 jobs added in February.
• The Federal Reserve blamed weather for most of the impact on industrial production, although manufacturing would have been negative anyway, largely due to the impact of the semiconductor shortage on automotive.
• Retail sales were weaker in February, but that probably is mostly due to the timing of the second round of stimulus.
• Universal weakness in housing sales and construction metrics cannot be fully explained by bad weather.

Trucking Sector

• Trucking conditions in February were very strong despite the surge in diesel prices. Freight demand was stable, and both capacity utilization and rates moved in carriers’ favor. Trucking conditions might ease somewhat late in the year, but the market should remain positive for carriers well into 2022.

• FTR’s latest forecast is slightly stronger based on slight improvements in the outlook for most commodity groups. Total truck loadings look to rise 8.3%, up from a 7.8% gain forecasted previously.

• The near-term outlook for active truck utilization could not be any stronger as it is already at 100%, but we have extended the period of maximum utilization through Q3 due to reduced prospects for a significant change in the driver capacity situation. However, we have accelerated our forecasted easing in 2022 a bit.

• Trucking added payroll jobs in March, but the gains still lag what we would expect given that employment remains nearly 3% below the pre-pandemic month of February 2020.

• Truckload rates are forecast to increase nearly 14% in 2021, essentially unchanged from the prior outlook.

Rail/Intermodal Sector

• Intermodal volumes are holding at strong levels, nearly 50,000 carloads above their expected five-year average level over the last month. While they have not continued to rise, they are at undeniably strong levels.

• Those levels could increase in the coming weeks as a wave of delayed large container ships makes their way to east coast ports. The east coast has generally fared better with congestion than their western counterparts, but that could change quickly in the next few weeks
• A parts shortage will dent automotive loadings in the coming weeks as some manufacturers announce extended, unplanned closures as they wait for additional parts to resume production. This could also be a weight on other carload commodities like metals and plastics used in automotive production.
• Chemicals volumes, however, should provide upward momentum to the carload markets, Weather-effected plants are now back to full production and higher crude prices should buoy loadings in the coming months.



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