Jun 4, 2019

Bracing for a transportation recession

Illustration: Sarah Grillo/Axios

Airlines are expecting their worst year since 2014, the auto industry has laid off more people than it has in a decade and manufacturing is starting to contract across the globe.

Why it matters: Transportation can be a doubly important signal about the health of the economy. More planes, ships and trains transporting cargo mean companies are selling products and business is growing. More passengers on planes, trains and ships also means more people feel economically confident to travel.

Why you'll hear about this again: While economists are increasingly warning of a recession in 2020, the global slowdown in transportation and trade is upon the world right now.

What's happening: Freight and passenger transportation is slowing across the board.

  • Orders for consumer goods-hauling Class-8 trucks last month fell 52% year over year to the lowest since April 2016 when the industry went through a transportation recession. It was also the 4th consecutive month orders were below the 20,000 mark.
  • Dry van truckload spot rates fell nearly 19% year-over-year in April, and more than twice the historical average month-over-month, the latest ACT Freight Forecast showed.
  • The Cass Freight Index for shipments dropped 3.2% in April, the 5th straight month in negative territory.

The big picture: Air cargo shipments also are solidly negative. April was the first month in which every region on Earth, without exception, showed lower outgoing and incoming changes in weight, year over year, according to cargo market database WorldACD.

  • Worse, every region saw reduced demand from an unimpressive first quarter.

What they're saying:

  • "We are still facing considerable uncertainties," Søren Skou, CEO of Maersk, the world's largest container shipping company, said in May, noting "the risk from trade tensions."
  • "The business environment for airlines has deteriorated with rising fuel prices and a substantial weakening of world trade," the International Air Transport Association said in a release Sunday announcing a downgrade of its 2019 outlook for the global air transport industry.
  • "The environment is really uncertain," Allison Landry, a transportation analyst with Credit Suisse AG, told WSJ. "The common phrases I hear over and over were, 'We're going to wait and see what happens' and 'I hope we don't talk ourselves into a recession.'"

What to watch: The probability of an economic downturn in 2020 is at least 40% due to a falloff in auto sales, an increase in unsold inventory and weakness in government spending, Noel Perry, principal and economist for Transport Futures, told a transportation industry conference in April.

Go deeper: The yield curve inversion is beginning to look a lot like 2006

Go deeper

Trump touts press briefing "ratings" as U.S. coronavirus case surge

Photo: Drew Angerer/Getty Images.

President Trump sent about a half-dozen tweets on Sunday touting the high television ratings that his coronavirus press briefings have received, selectively citing a New York Times article that compared them to "The Bachelor" and "Monday Night Football."

Why it matters: The president has been holding daily press briefings in the weeks since the coronavirus pandemic was declared, but news outlets have struggled with how to cover them live — as Trump has repeatedly been found to spread misinformation and contradict public health officials.

World coronavirus updates: Total cases surge to over 700,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

There are now than more than 700,000 confirmed cases of the coronavirus around the world, according to data from Johns Hopkins. The virus has now killed more than 32,000 people — with Italy alone reporting over 10,000 deaths.

The big picture: Governments around the world have stepped up public health and economic measures to stop the spread of the virus and soften the financial impact. In the U.S., now the site of the largest outbreak in the world, President Trump said Saturday he would issue a "strong" travel advisory for New York, New Jersey and parts of Connecticut.

Go deeperArrowUpdated 48 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 2 p.m. ET: 704,095 — Total deaths: 33,509 — Total recoveries: 148,824.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 2 p.m. ET: 132,637 — Total deaths: 2,351 — Total recoveries: 2,612.
  3. Federal government latest: The first federal prisoner to die from coronavirus was reported from a correctional facility in Louisiana on Sunday.
  4. Public health updates: Fauci says 100,000 to 200,000 Americans could die from virus.
  5. State updates: Louisiana governor says state is on track to exceed ventilator capacity by end of this week — Cuomo says Trump's mandatory quarantine comments "really panicked" people
  6. World updates: Italy on Sunday reported 756 new deaths, bringing its total 10,779. Spain reported almost 840 dead, another new daily record that bring its total to over 6,500.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.