Economy Continues to Expand as Cargo Diverted From West Coast Ports, Fed Says
The economy continued to expand across most of the country from mid-February to the end of March as cargo was redirected due to labor disputes at West Coast ports, the Federal Reserve said.
East Coast ports said they had significant upticks in cargo volumes as shipments were sent from the West Coast due to months of labor disputes that caused heavy congestion and substantial backlogs, the Fed said in its Beige Book report released April 15.
In the Richmond district, diverted cargo from the West Coast increased volume including imports of retail products destined for the Ohio Valley and grain exports from the Midwest.
Freight volumes in the Cleveland area declined due in part to harsh winter weather that lingered into early March as well as fallout from the labor dispute lessening shipments from the California ports, the Fed said.
Cleveland contacts said improving weather is bringing cargo volume to the high levels seen late last year, but the effects of the labor dispute are expected to persist for several quarters.
In Atlanta, trucking companies said they need to expand capacity after year-over-year increases in demand for freight services. Railroad cargo in the district was described as basically flat compared with the prior year, according to the report.
In Dallas, outlooks among transportation service firms were positive, but there is uncertainty about how the cancellation of new energy projects would affect cargo levels.
Truck trailer manufacturers in the Minneapolis district said they are expecting sales growth of 10% in 2015.
The Kansas City district reported a labor shortage for truck drivers, and St. Louis said several truck transportation firms plan to lay off employees.
The Fed releases its Beige Book report eight times a year. The report, which covered Feb. 23-April 3, was prepared by the Federal Reserve Bank of Cleveland.
See below for the full report.
