Economy

Recent Transportation and Logistics Trends

The ATA’s seasonally-adjusted trucking index increased more than 6% in 2013, with particular acceleration in 2H’13, making it the best year since 1998 and providing positive indications for the broader, tangible-goods economy

  • In January, ISM reported that the overall economy expanded for the 56th consecutive month, although the PMI registered a 5% decline to 51.3% for January, reminding investors that while strong, economic growth remains fragile
  • Under-scoring the point, the PMI New Orders index dropped steeply by 13.2% in January to 51.2%
  • Supplier inventories are contracting while production, employment, imports and exports are all growing, albeit at slower paces, supporting the theory that January PMI data may be more weather-driven than a cause for concern
  • Freight pricing inched upwards to start the year according to Cass, with rail and intermodal markets showing greater pricing elasticity; with freight volumes expected to show healthy growth in 2014 however, truckload pricing is likely to show stronger increases as the year continues
  • Consumers showed increased optimism in the economy and job prospects, despite job creation data in January falling well below expectations, boosting both the current consumer confidence index and consumer expectations indicators
  • Growth in grain carloads pushed U.S. freight carloads into growth territory in January, and carload levels remained largely flat y/y with weather likely holding back volumes to an extent in January; Canadian carloads dropped at a greater rate
  • Globally, while regional performance varied, global freight volumes accelerated in 2H’13 and with greater consistency, supporting views of more stability in the global economy
  • While down slightly for the year, Los Angeles container volumes showed strong growth in imports, exports and empties to finish the year; Long Beach reported its third-strongest year on record in container volumes (behind 2006 and 2007) with December’s exports and empties growth off-setting slight weakness in imports
  • T&L valuations remain strong and in many cases have continued to climb, although growth in rail has begun to slow
  • For 2013, M&A volume in transportation and logistics was robust, but not surprisingly fell from 2012 levels
  • Early signs in 2014 point to a very strong year for M&A in transportation and logistics and overall
  • Several recent large M&A transactions, including the acquisitions of Gordon Trucking, Pacer International and Boyd Brothers, may indicate a shift in strategy among large, serial acquirers
  • Notably absent from recent M&A headlines is Roadrunner Transportation, which has acquired 19 companies since 2010

Source: Fleet Owner, Journal of Commerce, IANA, Logistics Management, Bureau of Transportation, ATA, Port of Los Angeles, US DOT, Wall Street Journal, FTR Associates

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