Apr 192011

Same store sales show mixed results despite generally improving overall retail sales

Posted By: Tom Sanderson
Date Posted:  Tuesday, April 19, 2011  3:00 PM

Same store sales data show mixed results with 4 of the top 10 retailers posting declining same store sales for the most recent reporting period. Target and Best Buy reported drops of 5.5% and 4.6% respectively. At the same time, 4 other retailers posted same store sales gains of 3% or more, led by Costco's 7%. The results are somewhat disappointing considering gains in overall retail sales numbers, bringing home the message that we are not out of the woods when even some of the best retailers are struggling to achieve adequate sales growth. Results have improved from 2010 when same store sales for the same reporting period showed slower growth or greater declines for 7 of the 10. The retail segment drives a tremendous amount of freight transportation and this data shows that demand for freight transportation is picking up steam.

Source: www.retailerdaily.com , www.stores.org , Transplace analysis, excludes fuel sales.


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Categories: Retail sales and same store sales
Apr 192011

Morgan Stanley index shows a flattening of the pace of increasing tightness in TL dry van capacity

Posted By: Tom Sanderson
Date Posted:  Tuesday, April 19, 2011  11:00 AM

Morgan Stanley's dry van truckload freight index indicates some dampening in the rapid rise of tight capacity. While capacity is still tighter than normal capacity for this time of year, the index has leveled off and even dropped a little in the last few weeks. The early Q2 index remains above the trucking boom years of 2004 and 2005. Capacity is also tighter than Q2 2010, when capacity was getting tight and spot market prices were rising. 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. While capacity is not overly tight at this time, TL capacity is tightening sooner than we had expected.


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Categories: Morgan Stanley capacity and demand graphs
Apr 192011

U.S. auto sales top 13 million for second straight month

Posted By: Tom Sanderson
Date Posted:  Tuesday, April 19, 2011  8:28 AM

Annualized seasonally adjusted U.S. sales of domestic and foreign autos and light trucks totaled 13.063 million in March; the sixth month in a row over 12 million, and second straight month over 13 million. Using our more stable 3-month moving average, sales are up 18.5% from the prior year. Sales had been fairly stable between March and September of 2010, but in Q4 sales accelerated, and continue to increase. Auto sales remain about 20% below the average annual sales of 16.7 million from January of 2001 to December of 2007, before sales started to decline in 2008. The low point for sales were the first six months of 2009, when annualized sales averaged 9.621 million. It is clear from the data that the $3 billion Cash for Clunkers program did nothing but reward people for buying cars later or earlier than they had already planned. Our graph shows a 3-month moving average of seasonally adjusted annual rates to smooth out some of the month-to-month volatility.


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Categories: Auto sales and assemblies
Apr 122011

ATA support EOBR mandate

Posted By: Tom Sanderson
Date Posted:  Tuesday, April 12, 2011  11:51 AM

The American Trucking Associations (ATA) have stated their support for a federal proposal mandating that trucking companies use electronic logging devices to monitor driver compliance with the hours-of-service rule (ATA Press Release). The ATA supports both legislation requiring the electronic logging equipment and a rule proposed by the Federal Motor Carrier Safety Administration. "ATA has always been in favor of strong enforcement of safety rules and regulations. This new policy just underlines that support," Bill Graves, ATA president and chief executive officer, said April 7. The Truckload Carriers Association had already expressed support for the new federal initiative.

While ATA's new policy expresses support for an electronic logging mandate, ATA believes any regulation or law should also address several issues including: (1) Cost-effective device specifications allowing for accurate recording of driving hours; (2) data ownership and access in order to protect the privacy of fleets and drivers alike; and (3) relief from the current, significant burden of retaining additional supporting documentation.

Many carriers that already have adopted the technology report not only safety improvements but also productivity gains by better matching loads with drivers considering each driver's available hours.


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Categories: On-board trip recorders
Apr 062011

Manufacturing index tops 60 for third straight month

Posted By: Tom Sanderson
Date Posted:  Wednesday, April 06, 2011  1:11 PM

The Institute of Supply Management reported that the Purchasing Managers' Index (PMI) decreased from 61.4 in February to 61.2 in March. This is the third straight month that PMI exceeded 60 and represents 20 consecutive months of growth. The index matches the peak of the last cycle which was May 2004 when PMI reached 61.4. 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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Apr 052011

Diesel prices inch closer to $4 per gallon

Posted By: Tom Sanderson
Date Posted:  Tuesday, April 05, 2011  6:17 PM

Weekly retail on-highway U.S. diesel prices increased by 4.3 cents to $3.976 per gallon. In the 18 weeks since November 29, diesel prices have risen 81.4 cents from $3.162 and in only one of those weeks did prices decline. Diesel prices have risen 97% since bottoming out at $2.023 on March 16, 2009. A view of weekly prices over the last 3 years is ominous, as 2011 is starting off with much higher prices than seen in 2009 or 2010 (second graph). With the economy showing glimmers of hope and the Fed intent on a weak dollar to support exports, a return to 2008 diesel fuel prices is looking much more likely. 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 (over 13 months) and have been back over $3 since October 4, 2010 (only 5 months).


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Apr 042011

Morgan Stanley indicates that flatbed capacity continues to tighten

Posted By: Tom Sanderson
Date Posted:  Monday, April 04, 2011  4:00 PM

Morgan Stanley's flatbed freight index is rising in a similar pattern to 2010 and 2004, and in fact shows tighter Q1 capacity than in any recent year. The index is not far off the peak levels of Q2 2010, indicating that capacity is nearly as tight as last spring. 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
Apr 042011

New home absolute inventories continue to fall but weak sales drive up months of supply

Posted By: Tom Sanderson
Date Posted:  Monday, April 04, 2011  11:00 AM

Seasonally adjusted new home inventory increased to 8.9 months of supply in February from 7.4 months in January. The absolute inventory of new homes continues to fall and is now at 186 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
Apr 042011

Morgan Stanley refrigerated index shows very tight capacity

Posted By: Tom Sanderson
Date Posted:  Monday, April 04, 2011  8:00 AM

Morgan Stanley's refrigerated truckload freight index shows very tight capacity for this time of year. The index dropped a little in late January and early February, rose rapidly through February and then flattened out again in March. The index is not far below the peak level of Q2 2010 when capacity was extremely tight. Refrigerated capacity is very tight relative all of the reference years for Q1. 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
Apr 012011

Morgan Stanley dry van index indicates van capacity is tighter than Q2 of 2010

Posted By: Tom Sanderson
Date Posted:  Friday, April 01, 2011  5:04 PM

Morgan Stanley's dry van truckload freight index indicates tighter than normal capacity for this time of year. The Q1 index has now risen well above the trucking boom years of 2004 and 2005. Capacity is slightly tighter than Q2 2010, when capacity was getting tight and spot market prices were rising. 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. While capacity is not overly tight at this time, TL capacity is tightening sooner than we had expected.

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