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Freight Transportation Service Index up 1.3% in October, BTS says

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Cass: transportation economy continues to signal solid economic growth
From October 2018 to October 2019, the Freight Transportation Services Index rose 0.5% compared to a rise of 6.8% from October 2017 to October 2018. (The Trucker file photo)

WASHINGTON — The Freight Transportation Services Index (TSI) that is based on the amount of freight carried by the for-hire transportation industry, rose 1.3% in October from September, up after a one-month decline, according to the Department of Transportation’s Bureau of Transportation Statistics’ (BTS).

From October 2018 to October 2019, the index rose 0.5% compared to a rise of 6.8% from October 2017 to October 2018.

The level of for-hire freight shipments in October at 138.6 was exceeded by three previous months and was 1% below the all-time high level of 140.0 in August 2019. Records date back to 2000.

The September index was revised to 136.8 from 136.6 in last month’s release.  Monthly numbers for June through August were revised down slightly.

The Freight TSI measures the month-to-month changes in for-hire freight shipments by mode of transportation in tons and ton-miles, which are combined into one index. The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight. The TSI is seasonally adjusted to remove regular seasons from month-to-month comparisons.

The October TSI was broad based with increases in trucking, water, pipeline and air freight. Both rail carloads and rail intermodal declined.

The TSI increase took place against a background of mixed results for other indicators. The Federal Reserve Board Industrial Production Index declined in October, reflecting decreases in all major industry groups. Personal income increased by less than 0.1%, while housing starts increased by 3.8%. The Institute for Supply Management Manufacturing index increased 0.5 points to 48.3, indicating contraction in the manufacturing sector but not as much contraction as in September.

The Freight Index’s 1.3% increase in October was the largest one-month Freight TSI increase since September 2018. Following a decrease of 2.3% in October, TSI was 1.0% below its record high of 140.0 in August. However, it remained above any level it had reached before the high of November 2018 and in all but one month prior to January 2019. The Freight TSI rose 15.8% from 120 in March 2016 to a level of 139.0 in November 2018, but has been essentially stable (declining by 0.3 %) since then. The October 2019 index was 46.2% above the April 2009 low during the most recent recession.

For-hire freight shipments measured by the index were up 1.9% in October compared to the end of 2018.

As for the long-term trend, for-hire freight shipments are up 13.3% in the five years from October 2014 and are up 40.4% in the 10 years from October 2009.

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Georgia seaports set new record cargo volumes in 2019

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Georgia seaports set new record cargo volumes in 2019
Georgia's seaports are reporting record cargo volumes that moved across their docks in the 2019 calendar year. (Courtesy: Georgia Port Authority)

SAVANNAH, Ga. — The amount of cargo moving through Georgia’s seaports reached record levels in the past year, in part because of continued growth fueled by larger ships traversing the expanded Panama Canal, the Georgia Ports Authority’s top executive said Jan. 28.

The state-operated ports in Savannah and Brunswick handled a total of 38.5 million tons of imports and exports in calendar 2019, the agency reported. That’s an increase of 4.3% compared to last year.

The number of cargo containers, large metal boxes used to ship goods from consumer electronics to frozen chickens, moving across the docks at the Port of Savannah also reached record highs last year. The port handled 4.6 million container units through December, up 5.6% from 2018.

Griff Lynch, the port authority’s executive director, attributed much of the 2019 growth to the expansion of the Panama Canal that opened nearly four years ago. He said shippers are still increasing the size of the vessels using the route, funneling more cargo to the East Coast.

“On the container side, I think it still comes down to the expansion of the canal,” Lynch said. “We’re still enjoying the fruits of that.”

Savannah is the fourth-busiest U.S. port for shipping containerized cargo, behind only the Port of New York and New Jersey, and the ports of Los Angeles and Long Beach, California.

The Army Corps of Engineers is overseeing a $973 million deepening of the shipping channel that connects Savannah’s port to the Atlantic Ocean to make room for the larger ships. Work on the projects second half began in September and is expected to be complete by the end of 2021.

A boost in automobile exports also helped to grow Georgia’s cargo volumes last year. GM and Volvo began exporting vehicles through Savannah last year, with Volvo also shipping cars through Brunswick. Overall, the ports moved more than 657,000 cars, trucks and tractors, up 2 percent from 2018.

Lynch said tariff increases last year during the U.S. trade war with China likely slowed the Georgia ports’ 2019 growth.

Now he expects Georgia to benefit after President Donald Trump signed the first part of a new U.S.-China trade agreement in which China has pledged to buy more U.S. agricultural products.

“We think that’s going to be a big deal for us,” Lynch said. “We’re already seeing it. Poultry is starting to move again, and that has been flat for several years.”

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ATA Truck Tonnage Index increased 3.3% in 2019

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Ata truck tonnage index increased 3.3% in 2019
After falling 3.4% in November 2019, the Truck Tonnage Index recovered in December, posting a 4% monthly increase. (courtesy: ATA)

ARLINGTON, Vir. — American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 3.3% in 2019, about half the annual gain in 2018 (6.7%). The increase was the tenth consecutive year in which the tonnage index has risen above the previous year.
The advanced SA For-Hire Truck Tonnage Index rose 4% in December after falling 3.4% in November. In December, the index equaled 118.2 (2015=100) compared with 113.6 in November.
“Last year was not a terrible year for for-hire truck tonnage, and despite the increase at the end of the year, 2019 was very uneven for the industry,” said ATA Chief Economist Bob Costello. “The overall annual gain masks the very choppy freight environment throughout the year, which made the market feel worse for many fleets. In December, strong housing starts helped advance the index forward.” It is important to note that ATA’s tonnage data is dominated by contract freight.
November’s reading was revised down slightly compared with the December 2019 data. In December 2018, the SA index rose 3%, which was preceded by a 2% year-over-year drop in November.
The not seasonally adjusted index, which represents the change in tonnage hauled by the fleets before seasonal adjustment, equaled 112.7 in December, 2% below the November level (115.1). In calculating the index, 100 represents the index from 2015.
Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

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ACT Research For-Hire Trucking Index: Rates slip amid strong holiday freight

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Act research for-hire trucking index: rates slip amid strong holiday freight
For-hire index rates slip, but signs of freight recovery in 2020 "encouraging" (©2020 FOTOSEARCH)

COLUMBUS, Ind. – The latest release of ACT’s For-Hire Trucking Index showed improvement in for-hire freight volumes and utilization. The data used in the Index included December. Respectively, the data indicated 55.5 and 52.3 diffusion index readings, both up four points from November on a seasonally adjusted basis. But even as for-hire capacity contracted again, the Freight Rates Index slid to 48.7 in December.
The ACT For-Hire Trucking Index is a monthly survey of for-hire trucking service providers. ACT Research converts responses into diffusion indexes, where the neutral or flat level is 50.
Tim Denoyer, ACT Research’s Vice President and Senior Analyst commented, “We see encouraging signs that the freight downturn is in its late stages and the market will rebalance in 2020. However, the ongoing rate pressure, even as volumes ramped into the holidays, is symptomatic of ongoing excess industry capacity. Our survey respondents clearly get it, and reduced capacity for a sixth straight month, so we can pretty easily deduce that private fleet capacity additions through year-end 2019 are the main factor continuing to pressure for-hire rates.”
The ACT Freight Forecast provides forecasts for the direction of truck volumes and contract rates quarterly through 2020, with three years of annual forecasts for the truckload, less-than-truckload and intermodal segments of the transportation industry. For the truckload spot market, the report provides forecasts for the next twelve months.
In 2019, the average accuracy of ACT’s truckload spot rate forecasts was 98%. The ACT Research Freight Forecast uses equipment capacity modeling and the firm’s economics expertise to provide anticipated freight rates, helping businesses in transportation and logistics management plan with confidence.

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