Weekly Transportation Update: Wholesale inventories were leaner in September

Overview

The latest week was light on significant economic indicators. Inventories in the wholesale sector were significantly leaner in September than they had been in August. Exports and imports of goods adjusted for inflation saw respectable gains from August levels. Vehicle sales eased slightly. Mortgage rates fell sharply.

International trade in goods

For only the third time this year, seasonally adjusted real exports and imports of goods in September both were higher than they were during the previous month. Real imports slightly outpaced real exports at a 2.5% gain m/m versus a 2.0% gain. The increase in imports was the strongest since April while the gain in exports was the highest since March. Both were slightly negative y/y.

The U.S. grain harvest apparently figured heavily into September’s export strength. Real exports of foods, feeds, and beverages jumped 12.3% m/m. Also seeing notable gains were consumer goods (up 2.9%) and automotive vehicles and parts (up 2.2%). Total real exports were down 0.9% y/y, but automotive was up 14.4%.

Automotive led real goods imports at 4.9% m/m. Imports were up 15.2% y/y. Consumer goods imports rose 3.3% m/m, but they were still down 5.4% y/y. Total real exports were down 0.8% y/y. 

Diesel prices

The national average price of diesel fell 8.8 cents to $4.366 a gallon during the week ended November 6, a week after falling just over 9 cents. Prices were down in all regions, ranging from 1.4 cents a gallon in New England to 16.1 cents a gallon in the Rocky Mountain region.

Crude prices, meanwhile, have fallen sharply in recent trading. West Texas Intermediate on November 8 closed at $75.33 a barrel, which is the lowest price since mid-July. Crude prices were above $85 a barrel as recently as October 27.

Trucking

Spot rates for refrigerated equipment reflected expected seasonal strength in the latest week, but dry van equipment is not yet showing any signs of typical holiday gains. Broker-posted spot rates in the Truckstop system during the week ended November 3 (week 44) rose for only the second time since the
end of August. Volume was up for all equipment types, but refrigerated greatly outperformed the market in load postings as well as rates.

Refrigerated spot rates rose just over 11 cents for the largest increase since early August. Dry van spot rates, however, were up less than 1 cent and maintained the pattern of only slight week-to-week changes that has held sway mostly since they took a step up during the International Roadcheck inspection event back in May. Flatbed spot rates declined just over 1 cent, but that decrease outperformed seasonal expectations.

For more on week 44 spot metrics for truck freight, visit https://freight.ftrintel.com/spotmarketinsights.

Rail/Intermodal

Carload volumes ticked down in the latest week but remain at a level neighboring the volumes of the last few months. The slow-growth trajectory for volumes this year remains steady, and the overall stability in the market supports expectations of volumes that are flat or slightly down in 2024, compared to 2023.

Stability for some sectors is a positive trend. Food products are maintaining at a high level, both historically and when compared to 2022. In other sectors, such as lumber and wood products, this stable environment represents a prolonged weakness as it continues to run underneath prior levels both year-over-year and compared to its historical average.

Grain volume took a step down underneath the five-year average in the most recent week as the U.S. grain harvest winds down. However, volumes were still much closer to the average level than they were during the extended period of weakness prior to September.

Intermodal volumes fell in seasonal fashion and continued to follow right along numbers from 2022. A continuation of this trend would mean a rapid decline in volumes as we approach the Thanksgiving holiday. Intermodal is going to continue to experience a challenging growth environment, both throughout the rest of 2023 and the first two quarters of 2024.