As I sit here and wonder what to focus on in this week’s T4C commentary I can’t help but think ‘what’s really going on?’. I’m sure that there were notable, real-world actions that occurred over the last few days, but I can’t seem to find them. With so much oxygen being sucked up by what’s going on in the political realm – can the rest of reality march steady onward or will there be significant effects on the rest of the economy? Here’s where things stand.
No Gov Shutdown
That seems to be a notable development. If it holds true. And most find it a positive development as well, but the continued spending habits of our government have some elements worried.
Florence Recovery Continues
While the immediate impact from Hurricane Florence was less severe than originally planned for, it was still one of the most damaging storms that we have had over the last few decades. Significant flooding hazards remain and the recovery process is just beginning.
Spot Markets Continue to ‘Normalize’
After a full year of skyrocketing demand and surging prices, the load boards have begun to downshift back towards a more reasonable level of activity. That being said, MDI and Rates are now below last year’s rising levels, but they are still well above the 5 year averages – up 72% for MDI and 11% for rates.
Is It Demand – or Supply?
Compared to the peak crunch this year (which was week 23 – the week after Memorial Day), Load Availability has dropped 43% while Truck Availability has increased by 26%. So, demand has decreased while supply has increased – markets work and pricing has declined. However, most of the impact came from the demand portion of this equation. There does not seem to be a large increase in capacity as we still remain 33% below the 5 year average for Truck Availability.
If freight demand merely paused as markets reacted to changes in inventories and potential pull-forward effects from tariffs then we could easily get a market that quickly heats back up if the strong consumer and business sentiment indicators lead to continued sales and investment activity.
There is definitely other activity going on the market right now, but you certainly have to work a little harder to unearth it.
This post first appeared on Trans4Cast.com.