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C-Suite Synopsis: Freight Transportation for February 2022

Posted by The FTR Experts on 2/23/22 9:15 AM


TRUCKING: Trucking conditions improve, but they might have finally peaked.

RAILCAR: Carload volumes are being held back by four main commodities to start 2022.

INTERMODAL: International volumes remained weak in December and face near-term headwinds to growth in 2022.

SHIPPERS: Fuel costs are proving to be the difference between tough and really tough market conditions.


Economic indicators in December mostly deteriorated from Novembers levels. However, although initial payroll figures for December were the weakest of the year, the Bureau of Labor Statistics revised the data upward in its January report, and January growth was solid as well. Job openings and quits remain at near-record levels. Inflation continued to be a concern in January as the 12-month change in the Consumer Price Index was the strongest in nearly 40 years. Also, crude oil prices in early February topped $90 a barrel for the first time since September 2014, and diesel prices rose to the highest level since May 2014.

• Industrial production and manufacturing output eased slightly in December.
Retail sales fell 1.9% on a seasonally adjusted basis, but unadjusted sales rose to a record level.
Freight volumes are stable at strong levels in truck and stable at weak levels in rail and intermodal.

Tags: trucking, intermodal, Rail, C-suite, State of Freight TODAY

Trucking Sector

• Trucking conditions improved in December principally due to falling diesel prices and stronger freight volumes. Capacity utilization also tightened. Soaring diesel prices in January surely will lead to a lower Trucking Conditions Index reading

• Truck loadings are forecast to rise 3.8% in 2022 after an estimated 5.1% gain in 2021. Meanwhile, spot volume is holding at highly elevated levels, especially in the van segments.

• FTRs outlook for active utilization barely changed in the latest forecast. FTR estimates active utilization in Q4 at just under 98%. We expect only mod-
est further easing with active utilization remaining above 96% through 2023.

Rail/Intermodal Sector

• January saw weather-related rail service disruptions that held velocity at or below historical averages. However, service issues will outlast winter. Railroads said in recent earnings calls that personnel shortages likely will last through mid-2022.

• Intermodal congestion continues at ports and elsewhere. In response, shippers are increasingly shifting inbound cargo away from the U.S. west coast or at least to truck in order to compensate for delays. A sustained shift away from the west coast would hurt rail intermodal because shorter lengths of haul in the east make truck more attractive. U.S. east and Gulf coast ports together achieved gains in December market share.
• Carload also has been weak with most commodity sectors performing below historical averages and below 2021 levels. Automotive volumes may prove weaker than expected as one automaker declared that full semiconductor availability will take until2023. Pulp and paper is holding at weak levels.



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