Freight and Truck Traffic Point To Recovery

One common metric used by analysts to gauge how the economy is doing comes from freight or rail tonnage. If the economy is doing well, then more goods will be shipped via trucks and trains. This is exactly what is happening.

Andy Lees showed this via a few Bloomberg charts in a note earlier today. Of note:

  • The seasonally adjusted truck tonnage index is at its highest level since September 2008.
  • US railcar container index which is just 4% off its all time high.
  • The ConTex container ship charter index is up 97% since the end of the year.
  • US oil demand is up up 7.3% y-o-y on a 4 week trailing basis.


UBS also does a quarterly trucking survey that is now based on 3500 trucking companies. The latest survey in the US and Canada from earlier this month shows the biggest y-o-y improvement ever recorded in the survey’s 5 year history.

Lees says:

Freight rates (excluding the cost of fuel surcharges) rose y/y for the first time since Q3 2008 and 73% of truckers are seeing further increases in the recently completed bid season. 57% of truckers say they plan to grow the size of their tractor fleet providing the US economy continues to improve at its current pace. Only 1% plan to scale down.

Bottom line: the US economy is in recovery right now. How long this lasts depends on the pace of job growth and income gains.

  1. Gloomy says

    Make up your mind Ed. Is GD 2 around the corner or not?

    1. Edward Harrison says

      “the US economy is in recovery right now. How long this lasts depends on the pace of job growth and income gains.”

      Easy now, my friend. Patience.

      1. Gloomy says

        How long does it take for countercyclical forces to cause a downturn. What do you see as the time frame here. 6 months? a year? more?

      2. Gloomy says

        So in other words, in the long run we will have a depression-as in “in the long run we are all dead”. Very helpful. Thanks a lot.

        1. Edward Harrison says

          I have been away and haven’t been able to respond but I should be posting on this at some point. As I have been saying since this time last year, we are in a technical recovery. This recovery will last as long as stimulus is applied. As soon as the stimulus is withdrawn, we will see that the underlying debt problem is still there and that demand is weak as a result. This will cause a relapse into recession. Until I give an updated view you can read my comments from this October post because they are still operative:

          The question is timing since in October I thought the timing was more remote (2012 or later). Since that time, I have come to believe the timing will be sooner as a result of austerity. Again, I will address this in an upcoming post.

          1. Gloomy says

            I will look forward to it. Thanks.

Comments are closed.

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