There was a significant decrease in the operational costs of trucking last year, the American Transportation Research Institute (ATRI) said on November 24, 2020.  “The average marginal cost per mile incurred by motor carriers in 2019 decreased 9.3% to US$1.65,” ATRI said in its 2020 update to An Analysis of the Operational Costs of Trucking.  “The line-item costs for almost every major line item experienced some level of decrease.  In comparison to the last freight softening, which took place in 2016, marginal costs were still 6 cents higher, indicating the persistence of generally higher costs,” the research organization said.

Operational costs of trucking fell in 2019, November 24, 2020, www.todaystrucking.com

U.S. airlines carried 21.2 million systemwide (domestic and international) scheduled service passengers in July 2020, seasonally-adjusted, up 37.5% from June 2020. BTS reported 20.3 million domestic passengers and 0.9 million international passengers on U.S. airlines flights in July 2020.

July 2020 U.S. Airline Traffic Data, July 16, 2020, www.bts.gov

Executives with Kansas City Southern (KCS) are cautiously optimistic about rail volumes in 2021, with optimism for an economic recovery tempered by uncertainties related to the coronavirus pandemic.  “The recovery has been remarkable, if a bit uneven,” said KCS Chief Marketing Officer Mike Naatz during the company’s third-quarter 2020 earnings call on October 16, 2020. Although certain businesses remain under pressure and COVID-19 is still a risk, KCS has good reason to be optimistic about an economic recovery, Naatz said. He based his observations on customers’ feedback as well as on market conditions such as a tightening truck market.  KCS achieved an operating ratio (OR) of 58.8% in the third quarter, which was an “all-time best” for the company. Operating ratio is a tool used to gauge the financial health of a company, with a lower percentage implying improving health.  By the end of the third quarter, KCS’ volumes were running 60% above the trough of April and May on a daily basis, he said. “It’s a really remarkable story and a remarkable roller coaster,” CEO Ottensmeyer said.  KCS’ third-quarter net profit rose 5.3% as a 16.7% decrease in operating expenses helped to offset a 12% decline in revenue.  Net income in the third quarter of 2020 was $189.7 million, or $2.01 per diluted share, compared with $180.1 million, or $1.81 per diluted share, in the third quarter of 2019.

Kansas City Southern sees opportunities ahead amid lingering headwinds, October 16, 2020, www.americanshippere.com

Trucking is providing one of the few bright spots to the flagging U.S. economy as tight capacity and a driver shortage push contract and spot rates higher across vans, flatbeds and refrigerated trucks, reports Transport Topics.  DAT Solutions said van spot load rates in September 2020 were up 28.8% compared with a year ago. They have continued to rise in October 2020 and now average $2.46 per mile, a 9-cent increase since the beginning of the month.  Flatbed rates are up 9.9% year-over-year and have jumped a nickel in the past two weeks, also to $2.46 a mile. Refrigerated rates are up 19% year-over-year — and 3 cents in the past two weeks — to $2.60 per mile.

US Trucking Market Outpaces US Economy as Capacity Tightens, October 16, 2020, www.ontruck.org