North American rail freight had a successful August, according to the Association of American Railroads (AAR). The figures for both railcar and intermodal rail volumes recorded weekly volume increases over consecutive weeks. BMI notes that this rise is not down to any one type of cargo, but is rather a rise across the board. A hot summer saw demand for coal, the single largest rail cargo, rise to fuel airconditioning units. This has been hugely beneficial for the railroads as coal demand had slumped in recent years due to the recession. Other commodities whose volume on the railroads has risen include chemicals, scrap materials and grain. Intermodal traffic on North American railroads has also risen, according to the AAR. BMI expects the number of intermodal containers transported on North American railroads to grow in the coming years, especially in the US.
As we enter the fourth quarter of 2010, we expect the US economy to support the freight transport sector – but perhaps not by very much. In BMI’s macroeconomic scenario this year there will be a recovery with 2.8% GDP growth, but the pace will slow quite sharply in late 2010 and onwards into 2011 when growth comes down to 1.6%. In short, we believe many of the problems that caused the 2008-09 recession have still to work their way through the system; in particular we see a private sector deleveraging cycle in operation which will still take years to unwind. We also believe unemployment will remain stubbornly high, weighing down on consumer spending. Finally, the Republicans are looking to make gains in the November 2010 congressional elections, something that could seriously limit the Obama administration’s room for manoeuvre.
The Air freight sector is expected to remain one of the strongest areas of growth within the US freight transport sector in 2010 with volumes carried expected to increase by 9.2% in freight tonne-km terms to 21.62bn freight tonne-km, reversing much of 2009’s 10.8% contraction.
At the port of Los Angeles (LA) BMI is forecasting 7.6% growth in total tonnage this year which follows a 17.7% contraction in 2009. By the end of 2010 the facility will have handled 52.95mn tones, up from 49.2mn last year. At the country’s largest east coast facility, the port of New York/ New Jersey (NY/NJ) growth is forecast to be more disappointing at just 0.9% year-on-year (y-o-y) in 2010 with the port unable to reverse the heavy 20.7% contraction it suffered in 2009. Throughput volumes are forecast to total 122.8mn tones. Throughput volumes at the port of Houston, which is the largest US Gulf Coast facility, are meanwhile predicted to increase by a robust 6.4% y-o-y this year after last year’s effective standstill (growth of +0.1%) and are forecast to total 226.1mn tonnes. All three ports are expected to register positive growth in container handling in 2010.
There was a 5.7% contraction in the number of rail freight tonne-km achieved in recession-dominated 2009. A visible recovery is forecast in 2010 with 2.49trn freight tonne-km forecast to be travelled, a y-o-y increase of 5.0%. With a dip in growth expected in 2011, the mid-term outlook for the sector is less strong.
A similar growth pattern is expected in the road haulage sector, though the rate of increase predicted by the industry in 2010 is expected to be less strong than rail at 3.3% y-o-y, taking the number of freight tonne-km travelled to 1.99trn tonnes.
BMI forecasts a slender increase in inland waterway freight tonnage in 2010 with the number of freight tonne-kms travelled increasing by just 0.5% y-o-y to 647bn, almost but not quite reversing 2009’s 0.7% contraction.
BMI is forecasting a solid recovery in US trade volumes this year, albeit from 2009’s low base. Imports will expand by 9.0% y-o-y in real terms while, in value terms, they are set to grow by 10.1% to US$2.16trn. Exports outpace imports in both real (+10.0%) and value (+10.0%) terms, and are expected to reach to US$1.64trn. Mirroring a slowing US economy in 2011, BMI expects trade growth to moderate with the real increase in total trade narrowing to 6.2% next year.
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Report Table of Contents:
– United States Political SWOT
– United States Economic SWOT
Business Environment Ratings
– Table: Americas Freight Transport Business Environment Ratings
– US Logistics Performance Index (LPI)
– Long-Term Political Risk
– Long-Term Economics Risk
Industry Trends and Developments
Industry Forecast Scenario
– Air Freight
– Table: Air Freight, 2007-2014
– Maritime Freight
– Table: Maritime Freight, 2007-2014
– Rail Freight
– Table: Rail Freight, 2007-2014
– Road Freight
– Table: Road Freight, 2007-2014
– Inland Waterways
– Table: Inland Waterway Freight, 2007-2014
– Trade Overview
– Table: Trade Overview, 2007-2014
– Table: Key Trade Indicators, 2007-2014
– Table: Main Import Partners, 2002-2008
– Table: Main Export Partners, 2002-2008
– Macroeconomic Environment
– United States – Economic Activity
– Union Pacific Railroad
Country Snapshot: US Demographic Data
– Section 1: Population
– Table: Demographic Indicators, 2005-2030
– Table: Rural/Urban Breakdown, 2005-2030
– Section 2: Education And Healthcare
– Table: Education, 2002-2005
– Table: Vital Statistics, 2005-2030
– Section 3: Labour Market And Spending Power
– Table: Employment Indicators, 2001-2006
– Table: Consumer Expenditure, 2000-2012 (US$)
– Table: Average Annual Wages, 2000-2012 (US$)
– How We Generate Our Industry Forecasts
– Transport Industry
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