Nov 302010

New home inventory continues to drop while months of supply rises, demand is weak

Posted By: Tom Sanderson
Date Posted:  Tuesday, November 30, 2010  4:17 PM

Seasonally adjusted new home inventory increased to 8.6 months of supply in October from 7.9 months in September. The absolute inventory of new homes continues to fall and is now at 202 thousand, the lowest level seen since the late 1960's. Any recovery in the rate of sales would quickly deplete the low absolute inventory level and lead to a significant increase in housing starts (and freight) but that does not appear likely in the near term. The vertical bars in the graphs represent recessions.


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Categories: Housing starts, sales, and inventory
Nov 302010

Diesel prices drop slightly

Posted By: Tom Sanderson
Date Posted:  Tuesday, November 30, 2010  12:15 PM

Weekly retail on-highway U.S. diesel prices decreased by 0.9 cents to $3.162 per gallon, and are down 2.2 cents in the last 2 weeks. Prices are still up 23 cents per gallon since early September and are at the highest level since 10/27/08, when prices were rapidly falling. Diesel prices peaked at $4.764 per gallon in July of 2008 and were above $3 per gallon from September 24, 2007 to November 3, 2008. Up until the last few weeks, prices in 2010 had fallen between pricing levels of the prior two years, but now exceed 2008 and 2009 prices for the same week which is better illustrated in our second graph.


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Categories: Diesel fuel prices
Nov 232010

LTL rates are starting to increase

Posted By: Tom Sanderson
Date Posted:  Tuesday, November 23, 2010  4:48 PM

Stephens Inc. released their 3rd quarter update on publicly traded LTL carriers indicating that in Q3 rates per hundredweight excluding fuel surcharge were up 2.4%% from Q2 of this year. That is the largest sequential increase since 3Q 2004. This is the first sequential increase in the index in the last 7 quarters. LTL rates seem to have bottomed out and are rising again. Some of the capacity issues that may impact the TL segment, like CSA 2010, are not as prevalent in the LTL segment. Stephens is predicting TL rates will increase by 4-5% in 2011.

Graph reproduced with permission from Stephens Inc. For more information contact: Jack Waldo at jwaldo@stephens.com or Justin Long at justin.long@stephens.com


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Categories: Carrier rate graphs
Nov 182010

Diesel prices jump 6.8 cents per gallon

Posted By: Tom Sanderson
Date Posted:  Thursday, November 18, 2010  10:59 AM

Weekly retail on-highway U.S. diesel prices increased by 6.8 cents to $3.184 per gallon, and are up 11.7 cents in the last 2 weeks. Prices had been stable but are now up 25 cents per gallon since early September and are at the highest level since 10/27/08, when prices were rapidly falling. We track an index of the IShares COMEX Gold Trust (IAU) compared to an index of on-highway diesel prices. As much as gold has risen, diesel prices are rising more quickly since the recent low point on 3/16/09. The gold index is up 41% while the diesel index is up 57%. Diesel prices peaked at $4.764 per gallon in July of 2008 and were above $3 per gallon from September 24, 2007 to November 3, 2008. Up until the last few weeks, prices in 2010 had fallen between pricing levels of the prior two years, but now exceed 2008 prices for the same week which is better illustrated in our second graph.


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Categories: Diesel fuel prices
Nov 162010

TL dry van index continues decline, showing capacity availability

Posted By: Tom Sanderson
Date Posted:  Tuesday, November 16, 2010  8:00 AM

Morgan Stanley's dry van truckload freight index continues its gradual decent and is now well under the 1995-2008 average for this time of year. Capacity tightness has eased significantly compared to Q2 2010. While capacity remains tighter than in 2009, the spread between 2009 and 2010 is narrowing. The index measures incremental demand for dry-van truckload services compared to incremental supply. The higher the index the tighter is capacity relative to demand when compared to a prior period. In Q2 it was starting to look like we may see a repeat of the TL capacity shortages of 2004 and 2005, but at this point the graph is tracking very closely to 2006 and 2008 which were strong through Q2 and then plunged toward the end of the year.

 
Graph reproduced with permission from Morgan Stanley. For more information contact: Adam Longson at Adam.Longson@morganstanley.com or Bill Green at William.Greene@morganstanley.com
 

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Categories: Morgan Stanley capacity and demand graphs
Nov 152010

Flatbed capacity remains tighter than normal for Q4

Posted By: Tom Sanderson
Date Posted:  Monday, November 15, 2010  3:21 PM

Morgan Stanley's flatbed freight index is holding steady and is far off the pace of Q2 2010 indicating more readily available capacity at this time compared to Q2 but still a somewhat more tight capacity environment than at this time in the most of the previous years. The flatbed market was particularly hard hit by the fall off in housing starts, but has gained some ground with the growth in U. S. manufacturing. The index measures incremental demand for flatbed truckload services compared to incremental supply. The higher the index the tighter is capacity relative to demand when compared to a prior period.

Graph reproduced with permission from Morgan Stanley. For more information contact: Adam Longson at Adam.Longson@morganstanley.com or Bill Green at William.Greene@morganstanley.com.


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Categories: Morgan Stanley capacity and demand graphs
Nov 152010

Refrigerated capacity remains tight

Posted By: Tom Sanderson
Date Posted:  Monday, November 15, 2010  11:15 AM

Morgan Stanley's refrigerated truckload freight index is holding steady, somewhat below the level of Q2 2010 indicating more readily available capacity at this time compared to Q2. Refrigerated capacity continues to be very tight relative to 2009 and to most other recent years. The exception is the hurricane-induced capacity shortages at the end of 2005 and the strong freight market at the end of 2004. The pricing environment in this segment clearly favors the carriers at this point. The index measures incremental demand for refrigerated truckload services compared to incremental supply. The higher the index the tighter is capacity relative to demand when compared to a prior period.

Graph reproduced with permission from Morgan Stanley. For more information contact: Adam Longson at Adam.Longson@morganstanley.com or Bill Green at William.Greene@morganstanley.com


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Categories: Morgan Stanley capacity and demand graphs
Nov 102010

Purchasing Managers’ Index show strong manufacturing growth in October

Posted By: Tom Sanderson
Date Posted:  Wednesday, November 10, 2010  10:32 AM

The Institute of Supply Management reported that the Purchasing Managers' Index (PMI) increased from 54.4 in September to 56.9 in October. This represents 15 consecutive months of growth. A PMI over 50 indicates growth while a PMI under 50 indicates contraction in the manufacturing sector of the economy. The index reached a low of 32.5 in December 2008 but then recovered more quickly than other areas of the economy and remains one of the brighter spots in the economy today. The vertical bars in the graph represent recessions.


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Categories: ISM manufacturing index
Nov 092010

Diesel prices jump 4.9 cents per gallon

Posted By: Tom Sanderson
Date Posted:  Tuesday, November 09, 2010  4:36 PM

Weekly retail on-highway U.S. diesel prices increased by 4.9 cents to $3.116 per gallon. Prices had been stable for the prior four weeks but are now up more than 18 cents per gallon since early September. Prices have been in a fairly tight range since early March with a low of $2.899 and a high of $3.131, which is better illustrated in our second graph. Diesel prices peaked at $4.764 per gallon in July of 2008 and were above $3 per gallon from September 24, 2007 to November 3, 2008. Up until this week, prices in 2010 had fallen between pricing levels of the prior two years, but now exceed 2008 prices for the same week.


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Categories: Diesel fuel prices
Nov 042010

Truckload rates are on the rise

Posted By: Tom Sanderson
Date Posted:  Thursday, November 04, 2010  11:29 AM

Stephens Inc. released their 3rd quarter update on publicly traded TL carriers indicating that in Q3 rates per loaded mile excluding fuel surcharge were up 2.4%% from Q2 of this year. That is the third largest sequential increase in the 18-year history of the index. From 2009, the Stephens TL index is up 4%. The data does not necessarily represent the entire TL industry as the publicly traded carriers tend to be larger and more successful in general so are also likely to be more successful in raising rates. In addition, shorter lengths of haul increase revenue per mile without necessarily being indicative of price increases. Clearly though, we are in a period of rising TL rates that is expected to accelerate in 2011 if there is any economic recovery to accompany the upcoming capacity and productivity-damaging regulations such as CSA 2010 and changes in hours of service. Stephens is predicting TL rates will increase by 3-5% in 2011.

Graph reproduced with permission from Stephens Inc. For more information contact: Jack Waldo at jwaldo@stephens.com or Justin Long at justin.long@stephens.com


Comments:  (2)
Categories: Carrier rate graphs
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