Executive Briefings

North American Freight Volumes Declined 1.1 Percent in August

North American freight volumes continued to drop off, and on a year-over-year basis, shipment volumes were down 1.1 percent from last August. This is the third time this year freight shipments have fallen below the level for the same month in 2011. Freight volumes grew 9.9 percent during the first half of the year, but after two months of consecutive contraction, the annual growth has fallen to 8.0 percent.

Weak conditions in both the U.S. and global economies have led to the continued decline in freight shipments. Inventories are building beyond the levels needed to support expected sales, and many retailers and manufacturers have pulled back on restocking. Worldwide orders are in a state of steady decline. In fact, the Chinese Manufacturing Index has fallen in each of the last 10 months, with export orders in August falling at the sharpest rate since March 2009, at the height of the recession. The Institute for Supply Management's August report showed that activity in the U.S. factory sector, which has been carrying the admittedly weak recovery up to this point, has declined now for three months in a row (the index dropped from 49.8 in July to 49.6 in August). ISM's new orders indicator fell another 0.9 percentage points to 47.1.

The Consumer Reports Index measuring consumer financial health showed that back‐to‐school sales have not met retailers' expectations. Their Index fell from 9.9 to 9.4 in August and is well below last year's 12.0 percent. In addition, retailers are reporting more and deeper discounting in an effort to move goods off the shelves. All of this points to a continued drop in freight volume for the remainder of the year.

Read Full Article

Weak conditions in both the U.S. and global economies have led to the continued decline in freight shipments. Inventories are building beyond the levels needed to support expected sales, and many retailers and manufacturers have pulled back on restocking. Worldwide orders are in a state of steady decline. In fact, the Chinese Manufacturing Index has fallen in each of the last 10 months, with export orders in August falling at the sharpest rate since March 2009, at the height of the recession. The Institute for Supply Management's August report showed that activity in the U.S. factory sector, which has been carrying the admittedly weak recovery up to this point, has declined now for three months in a row (the index dropped from 49.8 in July to 49.6 in August). ISM's new orders indicator fell another 0.9 percentage points to 47.1.

The Consumer Reports Index measuring consumer financial health showed that back‐to‐school sales have not met retailers' expectations. Their Index fell from 9.9 to 9.4 in August and is well below last year's 12.0 percent. In addition, retailers are reporting more and deeper discounting in an effort to move goods off the shelves. All of this points to a continued drop in freight volume for the remainder of the year.

Read Full Article