Ti’s Global Monthly Monitor
indicates as the US economy continues to improve, freight movements remain
positive.
Despite rising oil prices, freight movement is responding
well to the improving US economy. Many ports are reporting positive gains while
rail and intermodal continue to increase in use. Airfreight, however, continues
to be a concern as declines continue for this mode of transportation.
Many US ports reported good gains in January as restocking activity
continued from December. The Port of Los Angeles reported an almost 6% increase
in containerized shipments, whereas the Ports of Tacoma and Savannah reported
increases of 4% and 4.3% respectively. February is traditionally a slow month
but with the additional Chinese festivities spill-over into the month, there
may be more declines than increases.
Rail and intermodal activity began the year strong thanks to
restocking in early January. However, US February volumes declined almost 1%.
This may be due to declines in coal and grain activity along with the
restocking activity that occurred in January. However, Canadian rails reported
strong gains which may indicate a possible market shift from some US ports to
Canadian ports.
The increase in January ocean freight imports probably
resulted in an increase in intermodal rail activity in February. US intermodal
rail activity increased 1.5% and 9% for Canadian intermodal rail. For the first
two months, US and Canadian intermodal rail activity increased at 1.5% and 5.7%
respectively.
Finally, airfreight remains concerning. Perhaps because of
rising oil prices and fuel surcharges, many shippers have shifted to other
modes. The Los Angeles International Airport reported a 5% decline in total
cargo for January. Chicago’s O’Hare International Airport reported a 10.8%
decline in January cargo. While international cargo declined 9.23%, domestic
air cargo declined over 14% for the month. The decline in domestic air cargo
has been an increasing trend for many US airports over the past year or so
which leads to a strong possibility the freight has shifted to rail and/or
intermodal. A shift from international air cargo to ocean transport is also
quite likely. Like the ports, airports will likely see cargo decline or perhaps
even a slight increase in international cargo for February. However, the
outlook for March appears more promising thanks to Apple’s iPad 3 shipments
from China. Already, airfreight rates have jumped in anticipation as Apple
commandeered multiple airlines and freight forwarders to move its iPad 3 from
China to the US. British Airways, DHL and UPS are among the providers rumored
to be working with Apple.
As we enter the last month of first quarter 2012, it appears
freight movement remained fairly positive. Even though February will probably
remain quiet, freight activity should pick up as the quarter ends thanks to an
increase in manufacturing and the need to replenish inventory. Apple’s launch
of the iPad 3 will also be a big boost to the ailing airfreight market.
