Overview
This week brought scant economic data with the principal indicator reflecting some rare strength in the housing market as sales of existing homes rose. A recent upward move in mortgage rates might dampen further recovery, however. Closer to freight transportation, diesel prices stayed put a week after spiking 21 cents a gallon.
Diesel prices
A week after a 21-cent spike in diesel prices, the national average retail price held steady at $4.109 a gallon. While the prices did not change at the national level, individual regions saw different results.
Prices were down modestly in some of the largest regions for sales volume, such as the Gulf Coast and Midwest, but were up in another sizable region, the Lower Atlantic. Most regions saw only small changes, but in the Rocky Mountain region, the average price of diesel rose 15.2 cents a gallon, nearly matching the increase during the previous week.
Underlying market data showed signs of stability as distillate production rose modestly in the latest week following a sharp drop throughout January and early February. However, production in the latest week was still below where it was two weeks earlier.
Meanwhile, crude prices have moved slightly higher. West Texas Intermediate on February 16 closed above $79 a barrel for the first time since November. Since then, prices have closed mostly been between $78 and $79 a barrel.
Trucking
For-hire trucking companies’ revenues declined 1.3% in the fourth quarter from the third quarter on a not seasonally adjusted basis, but the decrease was expected given that the third quarter typically is the strongest of the year on an unadjusted basis.
The Census Bureau’s data from the quarterly services survey goes back to 2009, and the only years during that period to see an unadjusted increase in revenues during the fourth quarter were 2014, 2020, and 2021. Revenues in 2023Q4 were down 5.6% y/y, which is an improvement from the -11.1% y/y comparison in the third quarter.
Perhaps more notable than the quarterly change was the 8.5% drop in trucking revenues in 2023 versus 2022. Even with the sharp decrease, trucking revenues in 2023 were the second highest ever.
Trucking revenues have declined only twice y/y since 2009 – in 2016 and 2020 – and in both cases the decrease was less than 1%. Revenues in 2016 were just 0.1% below 2015.
Spot Rates
Total broker-posted spot rates in the Truckstop system rose for the first time in four weeks during the week ended February 16 (week 7) solely on the strength of rates for flatbed equipment.
Spot rates for both dry van and refrigerated equipment fell for the fourth straight week after the weather-related spike in mid-January.
The gaps between van spot rates and the stronger five-year averages have been widening, but those averages are greatly distorted by rates early in 2021 and 2022. Van rates also are below comparable 2023 rates but are directionally more in sync.
For more on week 7 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
North American rail carload volume barely moved in the latest week, inching up just 0.4% from the previous week as decreases in coal and grain and a few other commodities were more than offset by increases in chemicals and a few other commodities.
Because some of the biggest week-over-week hits to carload traffic were coal, grain, and to a lesser extent petroleum products, economically sensitive freight outperformed total carload, rising 2.6%.
Through week 7 of the year, total carload traffic in North America is down 5.4% y/y. The only carload commodities in positive territory versus the same 2023 period are chemicals and petroleum products.
Intermodal volume was down 2.2% week-over-week but was up 7.6% y/y. Through week 7, intermodal volume is up 5.2% y/y. Canada is a slight drag on intermodal volumes this year while Mexican intermodal traffic is quite strong y/y.
