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The best indicator for anything transportation is utilization and how much stuff is actually being moved. Not just the price of moving something from A --> B. Yes, the presence of more movers, as the article points out, suppresses the price because people are competing to offer the lowest possible price to get the business. And, shippers did start investing in new builds extensively when it looked like the economy was set to go boom again which is also having a negative effect price due to the presence of more hulls on the market.

Unfortunately, the amount of stuff being moved is not public record and stays locked away on internal books that get summarized for the quarterly financials if the company is publicly traded. Which means we can infer how much stuff is being moved by reported dollar value but that's a lagging indicator. This leaves us with price to move goods as the major inference point to determine the health of commodities shipping and if the price is crashing, it's usually an indicator there's not a major uptick in the demand for commodities. When the price skyrockets it indicates people are trying to move a ton of stuff quickly and there isn't capacity to do it (causing more hulls to be built) and indicating the economy is hopping.

You can also infer how much is being moved (on a very broad scale) in the US by the on-time record of Amtrak. They do not own the rails, and yield to any freight trains. When less freight is being moved, their on-time records improve.
Interesting. Hadn't thought of that angle before. Be interesting to see the correlations between rail freight company revenues and Amtrak timeliness.
Interesting point of the day. love that
I came here to ask about whether or not we could see more than just Volvo's numbers? Apple releases numbers quarterly no? How are those doing?

And then Volvo is obviously not raw goods, but this article talks a lot about raw goods which I would presume to slowing with China's economic slow down (for how long can one build ghost cities).

My layman's analysis is that the US is in a pretty decent spot right now with a decently diversified economy but lots of other nations around the world are going to have to pull some smart moves if they'd like to sustain decent growth, but economics is a vast vast field with a seemingly unending number of indicators, so I may be totally off.

Excuse me if my questions aren't sophisticated to someone with a better understanding, I do literally plead ignorance here.

Volvo's order book (future orders) is indicative of how shippers see demand for new capacity. If I see demand increasing, I increase my purchase of capital assets (trucks in Volvo's case) to capture the business. If I see demand decreasing or holding constant, I withhold my large capital expenditures and ride my existing fleet as long as possible. It's already a sunk cost and all I'm paying for, at that point, is maintenance/overhead which get included in the rate for the truck.

At a macro level, when we see demand for future transportation assets decreasing that gives us insight into the transportation market and how people who provide the services see it going. They won't buy massive quantities of new goods if they don't see any business. Yes, companies like Apple release quarterly numbers, and we have to examine them in the context of their industry. Apple focuses on consumer electronic goods. As their numbers adjust and change, that gives us insight into (past) demand for consumer electronic goods and the state of the general consumer's purchasing power. You get leading insight into what Apple thinks demand will be, to some extent, by looking at their suppliers. Watch Samsung/TSCM when they announce big contracts from Apple. That gives you an inference as to what Apple thinks demand will be for a product. Same thing with shipping and transportation. Look at the industries that supply the goods and services transportation companies have to make capital expenditures to acquire and you'll get a rough idea of what the companies are thinking the market looks like.

Economy wise, yes, it's complicated to get a finger on the pulse of an economy and a lot of what goes into it. Technology and information travels over cables and electromagnetic waves and we've increased the efficiency of the manufacturing process to such an extent that we can use less people to sustain a higher rate of output than previous generations. However, there are fundamental factors that go into any economy you can measure to get an idea of what's happening and that usually takes the form of commodities. We need raw resources like food, energy, precious metals, and manufactured consumer goods to sustain the economy and most of those goods require special transport equipment to get from the suppliers and manufacturers to the consumers. Monitor that and you get a pulse on the overall health of the economy. The more facets you can monitor (trucks, rail, ships) the better your understanding.

Edit: Fixed wording

Volvo makes freight/shipping trucks, I assume that the author is using those numbers as a proxy for shipping capacity.
> Unfortunately, the amount of stuff being moved is not public record

Not true - you can get a sense of this through ATA's Truck Tonnage Index.

1. http://www.trucking.org/article.aspx?uid=5897732a-ea35-4369-... 2. http://www.trucknews.com/transportation/ata-truck-tonnage-in... 3.

Yes, you can get very general macro insights from metrics like that--if they're publicly available--but they are kind of worthless from a understanding point of view because they don't tell you what/where/when/who. The federal government does something similar with imports/exports for energy. But it's voluntary surveys and not guaranteed to be reliable. Especially since how much someone moves is competitive info.

It's more interesting to know that JP Hunt increased their lettuce hauling business from California to Missouri than it is to know that trucking tonnage creeped up ir down. That doesn't give you insight into the why or what's happening behind the scenes.

Bacause we believe in what we read, acritically, more often than we should.