Economy
Related: About this forumUS Freight “Plummets,” Worst October since 2011
US Freight Plummets, Worst October since 2011
by Wolf Richter November 12, 2015
[font color="blue"]Trucking, rail, all of it.[/font]
Transportation is a gauge into how well the real economy is doing. And it just keeps getting worse.
In October, the number of freight shipments in North America fell from September, in line with the patterns of the past few years, but it fell more sharply than before. And year-over-year, shipments dropped 5.3% to hit the worst level for October since 2011, according to the Cass Freight Index, after having already plunged in the prior month to the worst level for a September since 2010.
Cass put it this way:
This months decline was much sharper than in recent years and can be directly correlated to falling imports and exports as well as decreased domestic manufacturing levels. Burdened by bloated inventories, and under the shadow of a possible interest rate increase by the Federal Reserve, businesses cut back on new orders placed in the last three or four months. This is resulting in lower import volumes, less freight to move, and faltering industrial production. With the dollar still strengthening, export growth decelerated in the third quarter.
With the exception of January and February, the index has been lower year-over-year every month, which makes for a very crummy year:
The index is broad. It tracks shipment data from all kinds of companies, no matter what mode of shipping they choose, including truck and rail. But it does not cover bulk commodities, such as oil, wheat, coal, etc. Its based on $26 billion in freight transactions processed by Cass annually on behalf of its client base of hundreds of large shippers, as Cass explains. These shippers form a broad sample in all kinds of sectors, including consumer packaged goods, food, automotive, chemical, OEM, heavy equipment, and retail.
Ah, retail . Retailers are already blaming the debacle on the weather. ...............(more)
http://wolfstreet.com/2015/11/12/us-freight-plummets-worst-october-since-2011/
underpants
(182,826 posts)Historic NY
(37,449 posts)A major snarl in railroad traffic is ricocheting through the supply chains of businesses across the U.S., causing delays and losses for shippers of goods ranging from coal to sugar.
Many of the problems stem from pileups at BNSF Railway Co. in a critical northern stretch of the country where it is shipping crude oil from North Dakota's booming Bakken Shale region. The railroad, one of the biggest in North America, was already taxed by the heavy demand for oil transport. But its difficulties multiplied when it ran out of locomotives and crew, as a bitter winter forced it to use smaller trains.
That has caused a ripple effect across the country as shipments have been delayed. Deliveries of empty grain cars to farmers and grain elevators in the Midwest and Great Plains are running about two to three weeks late, the railroad says. The chief of a major sugar producer said he likes to load 50 railcars a day this time of year, but BNSF sometimes brings more than 50 and sometimes 30.
An executive close to big utility companies says coal-fired power plant inventories are running much lower than the usual 30 days. "The railroads tell us they aren't serving power plants until their inventories are in single-digit days," he said.
BNSF isn't the only railroad with capacity problems, but its woes have been aggravated by a big grain harvest and its surging crude business.
The railroad knew it was in trouble when winter hit. "We found ourselves behind the curve," said Bob Lease, vice president, service design and performance, for BNSF. "Now, we are finding we can't fill all of the demand" as quickly as usual.
http://www.wsj.com/articles/SB10001424052702304914904579437680173044774
Shippers will go elsewhere if they can't get their products to market. Fuel prices have made it somewhat more economical. The bigger message perhaps is the decline in manufacturing as inventories increase. Yeah weather seems to always be the excuse...too.
elleng
(130,962 posts)mahatmakanejeeves
(57,477 posts)Surge in Rail Shipments of Oil Sidetracks Other Industries
Pileups at BNSF Railway Is Causing Delays for Shippers of Goods Ranging From Coal to Sugar
By Betsy Morris, Jacob Bunge and John W. Miller
March 13, 2014 9:25 p.m. ET
A major snarl in railroad traffic is ricocheting through the supply chains of businesses across the U.S., causing delays and losses for shippers of goods ranging from coal to sugar.