In this month's "Market Update," our Managing Director of Strategic Account Management, Jeff Greenwell, provides insight on the industry's consumer confidence, tender rejection rate, and more.
POSITIVE NEWS AS WE START THE NEW YEAR!
While industrial production is down, housing has taken an upturn and consumer spending and employment (3.5%) is strong. Consumer confidence is at 99.3, the highest reading since May 2019. Consumer confidence is a leading indicator of economic stability and predictor of future volatility. The current index shows that consumers are optimistic about their current situation and future outlook for personal finances and the economy as a whole. With the phase one trade deal with China being signed this week, therefore opening the doors of trade with China, we expect a positive impact on manufacturing – the one lagging metric in the economy.
TRUCK UTILIZATION, TENDER REJECTION RATE, CAPACITY
Tender rejections went up as expected through the holidays, but has since dropped and then, in the past week, plateaued. We haven’t seen a tender rejection rate this high since March of last year. Capacity has been tight, and the increased trade activity with China and any bump in manufacturing, coupled with low truck utilization, could signal a tighter capacity situation in the coming months. This will continue to drive spot rates up, and we’re predicting that an overall industry rate adjustment could be on the horizon.
2019 WAS A GREAT YEAR FOR BNSF LOGISTICS
We’ve delivered what matters to 2,204 customers and facilitated many unique projects, including:
- Shipping a coffee maker into space
- Transporting turf to the Super Bowl
- Retrieving weather balloons
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