Summer Transportation Activity Mixed, Federal Reserve Says
Transportation activity was mixed across the country from July to late August, according to a Federal Reserve report.
Freight volumes picked up in Philadelphia, Richmond and San Francisco but declined in Cleveland, Dallas and St. Louis, the Fed said in its Beige Book report, released Sept. 7.
Overall economic activity expanded at a modest pace with most districts reporting a "modest" or "moderate" pace of overall growth, according to the report.
The survey is based on reports gathered by regional Fed banks to give an anecdotal picture of the economy. The Fed releases its Beige Book report eight times a year. This report covered July 1 through Aug. 29 and was prepared by the Federal Reserve Bank of San Francisco.
In the Cleveland area, freight volume contracted year-over-year and remains at a low level. Contacts told the regional fed they attributed the situation to sluggish growth, especially in the industrial sector.
“We heard several reports about overcapacity in the system, and this overcapacity is forcing some haulers to lower shipping rates and to reduce capital budgets. Spending is now primarily for equipment replacement and maintenance projects. Contacts' outlook is cautious, and a majority expects that volume will begin to increase along seasonal trends during the upcoming months. On balance, freight payrolls have declined over the period. Hiring is limited to replacement. Firms continue to pay cost-of-living increases,” the Federal Reserve wrote in its report about the Cleveland district.
The Atlanta District reported transportation firms continued to cite mixed results with rail activity relatively flat since the last report, and overall volume remained well below year-earlier levels, driven mainly by declines in coal, metallic ores and petroleum products.
“Intermodal traffic continued to decline slightly, while automotive shipments by rail remained strong. Most ports noted year-over-year volume increases in container traffic, bulk cargo and automotive and machinery,” according to the report.
Demand for ocean carriers was down in the Atlanta area, and some trucking contacts told the regional fed of a slowdown in freight volumes, while others indicated broad-based increases that were in line with expectations.
The New York area reported a shortage of drivers due to firms not having enough pricing power to afford raising salaries.
In the Kansas City area, transportation and wholesale trade contacts noted a modest decrease in activity, but many transportation firms expected modest sales growth in the next three months.
At the Philadelphia regional reserve bank, a transportation services analyst noted some uptick in activity but said the underlying numbers remain soft.
The freight trucking industry in the Dallas area was negatively impacted by the energy bust, which has lead to excess trucks on the market.
