US Freight Drops to Worst May since 2010

[marmar]

US Freight Drops to Worst May since 2010
by Wolf Richter • June 20, 2016


[font color="blue"]Goods economy sinks, drags down trucking & railroads.[/font]

“May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” predicted Rosalyn Wilson at Cass Transportation a month ago. It has now come to pass – only worse.

Freight shipments by truck and rail in the US, excluding commodities, fell 5.8% in May 2016 from the already anemic levels in May 2015, and 7.0% from May 2014, according to the Cass Freight Index, released today. It was the worst May since 2010.

“This year we have failed to see the robust growth in shipments that we expect to see this time of year,” Wilson lamented.

In fact, aggregate shipment volume over the first five months, according to the index, was the worst since 2010. And freight is one of the most reliable gauges of the goods-producing economy.

.....(snip).....

The Index is not seasonally or otherwise adjusted, so it shows strong seasonal patterns. In the chart below, the red line with black markers is for 2016. The colorful spaghetti above that line represents the years 2011 through 2015. The only month this year that was not the worst month since 2010 was February; only February 2011 was worse. That’s how bad it has gotten in the Freight sector: ...............(more)

http://wolfstreet.com/2016/06/20/recession-watch-us-freight-drops-to-worst-may-since-2010/

[TexasMommaWithAHat]

1. Ugh

nt

[Alex4Martinez]

2. Less freight means less fossil fuel burning, less consumption, better for the environment.

I know that the first response people may have is OMG, we must grow or we will die!!!!11!!

But the truth is that except for food production most of the goods we ship around are items that we would do well to live without or live with less of.

We expend far too much energy and resources making and shipping and disposing "stuff".

[tonyt53]

3. It isn't nearly as simple as that. So, how much of your "stuff' are you willing to do without?

The freight industry, both heavy trucking and rail, are using 3%-5% biodiesel blend fuels. Some go even to 10% in the warmer months. They get better fuel economy with those blends, plus they have less issues with the engines. Most have gone with synthetic oil in the engines too. It's not that we have to stop, it is that we have to do it smarter.

[Alex4Martinez]

4. It's not that we have to stop. Exactly.

We can stand to use less in most cases.
The energy and resources aren't just in the fuel use.
I've watched with pride as technology has brought remarkable improvements to fuel efficiency to the over the road freight industry, I worked for a firm with Cummins contracts.

But we can use less, and we can do more to use more locally made products and fewer goods coming from overseas.

[Ikonoklast]

5. This economy will be in recession by the third quarter of next year.

Maybe as soon as the second quarter.

Freight is a leading indicator, and when freight trend lines falter, the economy follows.

Watch the Baltic Dry Index.

[elleng]

6. Right, TROUBLE.

No joke.

[Ikonoklast]

7. Pay down debt, move away from the consumer sector of the market to a more defensive position.

Go to cash.

Or, short the index and anything to do with transport.