Overview
This week was light on economic data with sales of new and existing homes declining and new orders for durable goods increasing slightly. The housing sector might get a boost as mortgage rates dipped below 7% for the first time in six weeks.
Diesel prices fell to their lowest level since early July and are approaching levels not seen since January 2022. Spot rates in trucking rose last week, but the gains – while healthy – were not as large as is typical for a week that includes the International Roadcheck inspection event.
Durable goods orders
In a rare occurrence, the aircraft industry did not sharply distort figures for new orders for durable manufactured goods in April. Total new orders increased 0.7% m/m while orders excluding transportation equipment were up 0.4%. Total new orders were down 0.9% y/y, but orders excluding transportation equipment were up 1.7%.
Nondefense aircraft orders were down 8% m/m in April, but a 1.5% increase in the much larger category of motor vehicles and parts more than offset that decrease. Outside of transportation equipment, categories seeing notable gains were computers and related products and communications equipment, both of which were up more than 3% m/m.
New orders for core capital goods – nondefense capital goods excluding aircraft – ticked up 0.3% and were up 0.5% y/y.
As with all of the Census Bureau’s dollar-based data, core capital goods figures are not adjusted for pricing. To understand better how orders are performing on a unit basis, FTR adjusts the core capital goods data by the Producer Price Index for private capital equipment.
As adjusted by that PPI, new orders for core capital goods were up just 0.1% both m/m and y/y. In current dollars, core capital goods were up 20.9% versus February 2020 while they were down 0.4% in real dollars.
Trucking revenues
The for-hire trucking industry in 2024Q1 posted its lowest quarterly revenues on a not seasonally adjusted basis since the second quarter of 2021.
Unadjusted revenues were down from the previous quarter, but that almost always happens in the first quarter of the year. More meaningful is the 5% y/y decrease versus 2023Q1. Revenues have been down y/y for five straight quarters, although the first quarter of this year saw the second smallest negative comparison during that period.
Revenues for couriers and messengers – less formally, parcel and local delivery – also fell q/q on an unadjusted basis, which always happens because Q4 is consistently strongest due to holiday demand.
Revenues were down 2.8% y/y – the least negative comparison over the last five quarters. Unadjusted Q1 revenues were slightly above 2023Q3 but otherwise were the lowest since the first quarter of 2021.
Seasonally adjusted revenue figures as well as more granular data on trucking will be available in about three weeks.
Truck Rates
Broker-posted spot rates in the Truckstop system increased during the week ended May 17 (week 20), but the gains in each of the three main equipment types were smaller than they usually are for a week that includes International Roadcheck – the annual three-day roadside inspection event.
Dry van and refrigerated saw healthy gains, but they were the smallest week-over-week increases since 2020. Roadcheck performance in 2020 was an outlier, however, due to disruptions in the timing and process owing to the pandemic. Aside from 2020, van rate gains were the weakest since 2017. The flatbed increase was the smallest since 2019.
International Roadcheck, which this year was held May 14-16, disrupts the spot market because the additional roadside inspection activity during the annual event sponsored by the Commercial Vehicle Safety Alliance results in many drivers taking time off to avoid the hassle and scrutiny.
Timing complicates an analysis of Roadcheck’s effect on the market over time somewhat. Before 2020, Roadcheck always occurred during the first week of June. CVSA had planned to move Roadcheck to May in 2020, but lockdowns postponed the event until after Labor Day. The 2021 Roadcheck was in early May, and the event has been in mid-May since 2022.
The total broker-posted rate increased just under 3 cents for the smallest gain in a Roadcheck week in at least a decade except for 2020 when rates were basically flat week over week. Rates were more than 5% below the same 2023 week and more than 6% below the five-year average for the week. Specialized was the only equipment type to see a larger-than-usual increase in spot rates, but it is a very small portion of the spot market.
Total load activity increased 11.6% during the week. Total volume was 5.5% below the same 2023 week and more than 24% below the five-year average for the week. The Roadcheck week volume increase was not as strong as it was last year, but it was comparable to the gains in 2021 and 2022.
For more on week 20 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.
Rail/Intermodal
Week 20 was a mixed bag for rail traffic performance. According to the Association of American Railroads (AAR), total rail traffic was up 1.6% y/y for the week ending May 18.
Carloads were down 1.4% y/y. This is up from -2.6% last week, due in large part to the relative increase in coal from -21.9% last week to -18.4% this week. While coal is still, by far, the biggest drag on rail traffic, this week represents the fourth consecutive week of w/w traffic increases.
Other than coal, the commodities with the greatest y/y declines include coke, down 26.2%, forest products, down 6.6% and metallic ores, down 6.1%. Some of the commodities with the highest y/y growth include farm products, up 41.0%, petroleum products, up 13.8%, grain, up 13.2% and food products, up 13.1%. In total, 11 carload commodities showed y/y growth and 9 showed y/y declines.
Intermodal had another week of growth, consistent with its trend for almost all of 2024. For week 20, total intermodal traffic was up 4.5% y/y. This growth was driven by container shipments, which were up 5.7%, and limited by trailer shipments, down 20.2%.
YTD, total rail traffic is up 2.1% y/y, with carloads down 3.6% and intermodal up 8.2%. Of the 10 carload commodity groups reported by the AAR, five show positive YTD y/y growth, up from 4 last week. These commodities include chemicals, petroleum products, motor vehicles & parts, “other” and most recently, grain.
