Transportation Activity Declined in October and November, Fed Says
The overall economy increased at a modest pace in most regions of the country from late October to November, but transportation was softer, the Federal Reserve reported.
Transportation activity was softer on balance since the previous report, but port activity remained strong. That was largely due to the strength of imports because exports continued to fall, the Fed said in its Beige Book report released Dec. 2. The survey is based on reports gathered by regional Fed banks to give an anecdotal picture of the economy.
Record numbers of containers moved through ports in the Atlanta district, but haulers of exported industrial products reported a continued decline in volume, according to the Fed.
Cargo volume in the Dallas area remained soft in recent weeks due to the slowdown in energy-related cargo, and the regional Fed reported a trucking firm was passing lower fuel costs on to customers.
In the Cleveland area, reports indicated that freight volume contracted over the period. One executive in the district reported the agricultural sector encountered fewer problems getting trucks during the harvest season this year compared with last year. Contacts in the area said they see little change in volume along seasonal trends in the next few months.
“The industry is boosting shipping rates even though volume is lower. Rate adjustments are needed to cover rising equipment and labor costs. The former includes the soon-to-be-mandated electronic logging devices,” the Fed reported.
Despite the rate increases, there has been little pushback from customers “perhaps because rate increases were partly offset by declines in fuel surcharges,” according to the Fed.
The Fed releases its Beige Book report eight times a year. The report, which covered Oct. 24-Nov. 20, was prepared by the Federal Reserve Bank of Richmond.
