Aug 302011

Federal appeals court throws out EOBR mandate

Posted By: Tom Sanderson
Date Posted:  Tuesday, August 30, 2011  6:52 AM

Siding with the Owner Operator Independent Drivers Association (OOIDA), the 7th U.S. Court of Appeals overturned the FMCSA’s mandate of EOBR use by trucking companies. The court ruled that the FMCSA mandate does not properly protect drivers against harassment by the trucking companies. The court did not address OOIDA’s compliant that the agency did not demonstrate the benefits of the technology. You can read more about the ruling in The Journal of Commerce or Transport Topics. The American Trucking Associations supports the EOBR mandate and expressed disappointment in the ruling.


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Categories: On-board trip recorders
Aug 262011

Retail sales were flat in July

Posted By: Tom Sanderson
Date Posted:  Friday, August 26, 2011  6:06 PM

Seasonally adjusted real retail sales were flat in July at $173.2 billion. (Note that actual sales are deflated using CPI 1982-84=100.) Year-over-year growth was 4.8%, the fifth month in a row under 5%. From peak (Sep '07) to current, retail sales are off 4.0%, a much smaller percentage decline than what has occurred in the housing and auto markets. July sales were 10.7% higher than the trough (Mar '09) of the recent recession. Real retail sales have only recovered to the levels of early 2005, which is not much of a recovery. The vertical bars in the graph represent recessions.

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Categories: Retail sales and same store sales
Aug 262011

Current highway bill extension expected in September

Posted By: Tom Sanderson
Date Posted:  Friday, August 26, 2011  8:31 AM

Indications from both the Senate and House are that we will have an extension to the current highway and transit program postponing a new 6-year bill as is ultimately expected. Senator Barbara Boxer, chair of the Environment and Public Works Committee,  will offer a four-month extension on September 8 continuing all programs at current levels with no policy changes. Meanwhile Representative John Mica chair of the House Transportation and Infrastructure Committee indicated that he will also support a temporary extension when Congress returns in September. Mica is still intending to complete a new 6-year reauthorization bill this fall.

There has been a lot of hand-wringing and hyperbole about the federal government being unable to collect gasoline (18.4 cents) and diesel (24.4 cents) taxes or to continue funding projects when the current extension expires on September 30. While technically true, the fact of the matter is we have already had seven extensions to SAFETY-LU which was originally set to expire September 30, 2009. There was never any chance that the federal government would walk away from $40 billion per year of tax revenues when all they have to do is pass an eighth extension.


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Categories: Highway funding
Aug 252011

Diesel prices continue a slow decline

Posted By: Tom Sanderson
Date Posted:  Thursday, August 25, 2011  3:03 PM

Weekly retail on-highway U.S. diesel prices decreased by 2.5 cents to $3.810 per gallon, the lowest price level since February 2011. Diesel has fallen four straight weeks by a total of 13.9 cents, but remains up 14% year-to-date, from $3.331 in January, and is still nearly double the recent low point of $2.023 on March 16, 2009. A view of weekly prices over the last 3 years shows much higher prices than seen in 2009 or 2010 (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 (over 13 months). Prices have been back over $3 since October 4, 2010 (11 months). In 2008, diesel exceeded $4 per gallon for 23 straight weeks, compared with 6 straight weeks earlier in 2011. Some forecasters are predicting lower fuel prices, but because of the weak dollar and commodity inflation, it still seems likely to me that we will see $5 diesel before we see $3 diesel.

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Categories: Diesel fuel prices
Aug 252011

New home inventories remain low

Posted By: Tom Sanderson
Date Posted:  Thursday, August 25, 2011  2:54 PM

Seasonally adjusted new home inventory held at 6.6 months of supply in July. The average months of supply over the last 48 years is 6.2 so even by this measure the housing picture is improving. The absolute inventory of new homes continues to fall and is now at 165 thousand; lower than inventory levels in the 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
Aug 252011

Housing starts remain flat at very depressed levels

Posted By: Tom Sanderson
Date Posted:  Thursday, August 25, 2011  2:34 PM

Housing starts decreased slightly to 604 thousand in July (seasonally adjusted annual rate) with single unit structures totaling 425 thousand. Total starts reached a low mark of 477k in April of 2009, while single unit starts bottomed out at 360k in January of 2009. Housing starts remain far below the average of just over 1.5 million per year over the last 40+ years, and even farther below the 2.2 million peak of the most recent housing boom. Total starts have been under 1 million (SAAR) for 37 straight months, averaging only 603k during this stretch. Since 1968, the U.S. population has grown from 200 million to over 300 million. Low housing starts not only impact transportation demand for building products but also for appliances, furniture, and other related items. The vertical bars represent recessions.

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Categories: Housing starts, sales, and inventory
Aug 192011

Making sense of CSA can sometimes be an impossible mission

Posted By: Tom Sanderson
Date Posted:  Friday, August 19, 2011  5:32 PM

Highway safety is no laughing matter and some of the unintended consequences of CSA are more likely to induce tears of frustration rather than tears of joy. However, we can all still enjoy a clever and humorous critique of CSA. Bill Bierman, an attorney at Nowell, Amoroso, Klein, Bierman, P.A. has produced just what we need. Please enjoy this video, courtesy of our good friend Bill Bierman.


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Categories: CSA 2010
Aug 192011

U.S. auto assemblies remain flat

Posted By: Tom Sanderson
Date Posted:  Friday, August 19, 2011  8:25 AM

Annualized U.S. assemblies of autos and light trucks increased from 7.6 million in June to 8.5 million in July (seasonally adjusted). Assemblies have been relatively flat for the last 15 months ranging between 7.5 and 8.6 million units annualized (seasonally adjusted). Non-seasonally adjusted assemblies of 6.05 million annualized in July were the lowest since July 2009. Our graph is a 3-month moving average of the seasonally adjusted annualized assemblies. Year over year percentage growth using the three-month moving average is nearly zero. Average monthly seasonally adjusted assemblies were 11.4 million from January of 2001 through December of 2007 indicating that auto assemblies are still at depressed levels.

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Categories: Auto sales and assemblies
Aug 172011

Diesel prices decline for fourth straight week

Posted By: Tom Sanderson
Date Posted:  Wednesday, August 17, 2011  11:36 AM

Weekly retail on-highway U.S. diesel prices decreased by 6.2 cents to $3.835 per gallon. Diesel has fallen four straight weeks by a total of 8.8 cents, but remains up 15% year-to-date, from $3.331 in January, and is still nearly double the recent low point of $2.023 on March 16, 2009. A view of weekly prices over the last 3 years shows much higher prices than seen in 2009 or 2010 (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 (over 13 months). Prices have been back over $3 since October 4, 2010 (10 months). In 2008, diesel exceeded $4 per gallon for 23 straight weeks, compared with 6 straight weeks earlier in 2011. Some forecasters are predicting lower fuel prices, but because of the weak dollar and commodity inflation, it still seems likely to me that we will see $5 diesel before we see $3 diesel.

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Categories: Diesel fuel prices
Aug 102011

Morgan Stanley indicates truckload van capacity-demand balance near average levels

Posted By: Tom Sanderson
Date Posted:  Wednesday, August 10, 2011  11:54 AM

Morgan Stanley's dry van truckload freight index indicates capacity has eased significantly in recent weeks. Demand-capacity balance is very close to the '95-'10 average levels for this time of year. Capacity has been more readily available than 2010 since the lines crossed in April. Unless the economy recovers and we experience a fall peak shipping season, we are not likely to see tight capacity for the balance of 2011. 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.

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


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Categories: Morgan Stanley capacity and demand graphs
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