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Tags: trucking | economy | fedex | shipping

WSJ: Trucking Industry Braces for Downturn

WSJ: Trucking Industry Braces for Downturn
(Dollar Photo Club)

By    |   Monday, 12 October 2015 08:47 AM EDT

The trucking industry reportedly is bracing for a downturn, and that’s a poor signal for the U.S. economy.

Private trucking and logistics executives told the Cowen and Co. investment firm that spot-market demand has turned soft this month and that the contractual rate increases they’ve been seeking are cracking, The Wall Street Journal reported.

It was “a clear deterioration from the insight we gained as recently as a couple of weeks ago” the executives said in a report.

The increasingly poor outlook suggests the market is adjusting to the stockpile of inventory that piled up earlier in the year as a result of the West Coast port dispute, the Journal reported.

“People over-ordered … when they weren’t sure if they would be able to get [goods] through the ports,” said FedEx Corp. Chief Executive Fred Smith.

And if timing is everything, then perhaps legendary investor Warren Buffett has struck once again.

After this year, Buffett’s BNSF Railway Co. will be more than 99 percent finished with a second, parallel line to its 2,200-mile (3,500-kilometer) Los Angeles-to-Chicago route.

Doubling up will create a rail superhighway speeding deliveries of toys, electronics, autos and other goods, because trains won’t have to yield to each other on sidings as they do on single tracks.

The goal: help the unit of Buffett’s Berkshire Hathaway Inc. grab cargo now going by road, Bloomberg reported.

“If the rails can improve the reliability of the transit time,” shipping consultant Satish Jindel said, “it helps them compete with the trucks.”

Snatching consumer products and other freight from big rigs is more crucial than ever. Coal, once a pillar of U.S. rail traffic, is fading as utilities burn cheaper and cleaner natural gas. Average weekly carloads are down 20 percent from five years earlier, according to data compiled by Bloomberg.

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StreetTalk
The trucking industry reportedly is bracing for a downturn, and that's a poor signal for the U.S. economy.
trucking, economy, fedex, shipping
321
2015-47-12
Monday, 12 October 2015 08:47 AM
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