US Transportation Activity Stalls, Fed Reports
U.S. transportation activity stalled from April to July as freight volume and rail cargo declined in several regions, the Federal Reserve reported.
Overall freight volume dropped in Cleveland, and reports from Chicago indicate a decline in demand for transportation services, the Fed said in its Beige Book report released July 13.
Rail cargo volume in the Atlanta and Dallas districts declined with the Cleveland, Atlanta and St. Louis regions citing the slowdown in the energy sector as contributing to low cargo volume, according to the Fed.
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 April 7 through July 1 and was prepared by the Federal Reserve Bank of St. Louis.
Freight volume contracted in the Cleveland area and contacts told the Fed they attributed the decline to a slowdown in economic activity especially in the industrial sector as well as rapid changes in retail distribution.
“We heard reports about overcapacity in the system, and this overcapacity is forcing some haulers to lower shipping rates and to reduce capital budgets. One contact noted that most locomotives scheduled for delivery this year will not be used, but kept in storage. The number of parked locomotives is reportedly the same as in 2008. The outlook by contacts is cautious, and they expect little change in volume on balance during the upcoming months,” the Federal Reserve wrote in its report about the Cleveland district.
The Dallas District said cargo volumes were mixed over the reporting period with chemical plant expansion along the Gulf Coast boosting truck cargo volumes, while declines in courier and air cargo were reported. Overall rail cargo dipped as well; however, grain shipments rose strongly.
In the Richmond area a national trucking firm reported flat demand in recent weeks and forecast the normal season slowing in early summer. In Chicago demand for heavy-duty trucks was weak and inventories of heavy-duty trucks were elevated.
