The federal government has pumped $850 billion of direct stimulus payments to citizens in response to the pandemic (Peter G. Peterson Foundation). In combination with the COVID health mobility restrictions, this cash infusion resulted in changes in retail spending patterns. Since the pandemic started, there has been a surge in retail goods spending as consumers had more money to spend and service spending was severely curtailed.
Moving to a future technology is a constant process. Technology is constantly evolving and changing the world we live in. We do not live in an idle universe. A few years ago, electric engines were in low numbers, although the technology is as old as the internal combustion engine. Today, there are large numbers of electric cars and a growing number of EV trucks on the highways. In the future, there will be millions of electric cars and perhaps hundreds of thousands of trucks. The changes are not only driven by technology, but also by government policy in a quest to have a carbon-free future. Although the future will see a lot of electric cars and light trucks, the conversion of the commercial truck fleets into an all-electric future is more mixed. Battery-powered commercial trucks are a viable alternative to an internal combustion engine, but this must be framed in the doable universe. Although battery-operated trucks will gain market share in coming years, they are not the perfect solution to all of trucking’s needs. Battery-powered trucks still face an uphill climb to the long-haul market. The future of long-haul trucking may well depend on the emergence of a fuel cell vehicle or even a hydrogen-powered vehicle in the quest for a carbon-free future.
Euphoric State
In ’21, we see an economic recovery unlike never before. Of course, I am referring to 1921, after both WWI and the Spanish flu had ended. But the country’s mood now, as vaccines work to end this pandemic, is beginning to rise toward a euphoric state.
Strong growth in pricing
The stress in the freight transportation system continues to show up as strong growth in pricing. The Producer Price (PPI) for rail intermodal freight transportation in March jumped 4.2% from February for the largest gain on record. The PPI is the Bureau of Labor Statistics’ estimate of pricing at the producer level (as opposed to the consumer level, which is the Consumer Price Index.)
Railroads and shippers have plenty of questions about how the potential merger between Canadian Pacific and Kansas City Southern might upend the railroad industry. In this commentary, FTR will try to examine some of the biggest issues.
This c-suite synopsis is taken from our State of Freight INSIGHTS report. This report is provided to all of our Premium clients.
A sharp improvement in the pandemic, surging vaccinations, and overwhelming stimulus have removed much of the uncertainty surrounding freight demand. The real truck freight market question for 2020 is how fast drivers will return.
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In any age, the seeds of the future are planted in the past. Technological and economic forces drive changes across the globe, whether we notice it, or not. The once-sidelined electric engine is making a splash in transportation circles. Humans dominate the planet and it has become a big concern whether they will survive their own technological changes. The weather is getting noticeably warmer, in part driven by human activity in their transportation grid. The rise of globalization has uncovered other facts, some of them unpleasant. Humans have always faced diseases that threaten life. To some degree, isolation was a savior. Tropical and other diseases have existed since humans started on their historic journey. Humans adapted or developed resistance to local strains. Some diseases such as the Black Death did affect large areas of the globe and was spread by sea-borne commerce. The development of transportation grids has made us more vulnerable to diseases, that once were isolated. COVID-19 is an example of a disease that may have only affected a small group of people until globalization and the disease used the interlocked transportation grids to spread itself across the globe.
You’ve probably seen the headlines about some economists becoming increasingly concerned about inflation. So, should we be concerned? (Note: please keep reading. This is not one of those in-depth analysis involving T-bills and yield-curves, but more of a big picture, horse-sense type of view.)
You ask. FTR Experts answer.
