June Freight Volumes Solid, But Remain Below 2014 Levels

June freight volumes were solid, but still remain below last year’s levels.

The 0.2 percent rise in the number of shipments was the smallest this year. Manufacturing was very weak for the first half of 2015, but started to recover in June.

Noted Cass, “First quarter orders were sluggish because of both bad weather and shipments that got tied up in the West Coast port problems. The strength of the U.S. Dollar in world markets has severely curtailed exports, which has contributed to the drop in manufacturing.”

On related fronts, the Institute for Supply Management (ISM) PMI increased 1.3 percent in June. The Production Index declined 0.9 percent in June, but should be picking up given the 1.3 percent rise in new orders. Railroad carloadings rose 1.2 percent and intermodal traffic was up 2.9 percent in June.

Freight payments jumped 2.4 percent in June, but were still 5.8 percent lower than June 2014. Freight payments have increased 5.1 percent since the beginning of 2015, less than the 7.6% increase in the number of shipments. This indicates that rates have not been rising substantially. Capacity has been keeping pace with the increase in shipment volume so there has not been significant pressure on rates.

Category: Featured, General Update