A driver walks past a row of trucks that prepare to leave their shipping containers at the Port of Los Angeles on November 2, 2017.

A driver walks past a row of trucks that prepare to leave their shipping containers at the Port of Los Angeles on November 2, 2017. (Genaro Molina/Los Angeles Times/TNS)

Investors, economists and the news media are quick to characterize market indicators as early signals of economic changes. After more than 10 years of a bull market and expanding economy, there's high interest in finding a barometer to suss out the future direction of both.

There is no single beacon that investors should rely on. Yet an important gauge in the noise of data is the health of the freight transportation industry. It is an important window into the hopes of retailers for the spending appetites of holiday shoppers, too. The stuff we will be buying the weeks ahead was on the roads and rails weeks ago.

Third quarter corporate earnings season begins in earnest in the week ahead. Trucking and railroad companies are among those first up to report their latest quarterly financial results.

Seventy percent of America's freight moves on trucks. Almost half of all rail freight is connected to international trade. The trucking and train business is where trade troubles meet America.

While the individual results from companies like J.B. Hunt Transport, CSX and Union Pacific Railroad are important for their shareholders, their collective performances reflect a core industry underpinning consumer demand and manufacturing might. Trade is a growing worry thanks to the tariff war between the U.S. and China, plus dwindling demand from slowing European economies. And the transportation industry is an integral gear.

Shipping rates have dropped. Shipping volumes are down. There are fewer containers of consumer items, autos, chemicals, coal and agricultural products making their way around America.

What's important to note is the stuff these trucks and trains are hauling includes both imports from China facing new American tariffs, and U.S. exports headed to overseas markets.

While a soft market for transportation may not lead directly to a broader economic recession, it is a sign to watch.

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ABOUT THE WRITER

Financial journalist Tom Hudson hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of "Nightly Business Report" on public television. Follow him on Twitter @HudsonsView.

Visit Miami Herald at www.miamiherald.com

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