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Thread: World trade suffers biggest collapse since financial crisis - plus some intel

  1. #1

    World trade suffers biggest collapse since financial crisis - plus some intel

    https://www.zerohedge.com/news/2019-...nancial-crisis

    The recent collapse in world trade volume is the worst since the financial crisis and as dangerous as during the dot-com bubble of the early 2000s, according to The Telegraph.
    The ZH item shows approximately 5% drop YoY.

    I was informed last night by a railroad engineer friend that rail volume, particularly raw materials and construction materials, is down about 20% YoY across all rail companies and dropping. He said that word in the yards (train engineers are a very tight-knit group) is that the biggest shareholders and executives are preparing to dump their shares soon. Amazon, however, is increasing their rail use and has been adding a lot of their own containers to the lines to further bypass UPS/Fedex. The rail shipping volume would be down more than the 20% if not for the Amazon expansion into rail. Since his train run covers the Agenda 21 construction boom area that I live, a 20% drop likely means an even bigger drop in other, less construction booming areas.
    Last edited by devil21; 04-17-2019 at 10:46 AM.
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  3. #2
    Zerohedge recession porn. A bit exaggerated. Trade not collapsing- just slowing. (ZH source article is behind paywall)

    https://www.reuters.com/article/trad...-idUSL8N21K2C3

    WTO says global trade slowed in fourth quarter, cuts forecasts

    GENEVA, April 2 (Reuters) - World trade shrank by 0.3 percent in the fourth quarter of 2018 and is likely to grow by 2.6 percent this year, slower than 3.0 percent growth in 2018 and below a previous forecast of 3.7 percent, the World Trade Organization said on Tuesday.

    In its annual forecast, the WTO said trade had been weighed down by new tariffs and retaliatory measures, weaker economic growth, volatility in financial markets and tighter monetary conditions in developed countries. It forecast in September that 2018 growth would be 3.9 percent, down from 4.6 percent in 2017.

    “With trade tensions running high, no one should be surprised by this outlook. Trade cannot play its full role in driving growth when we see such high levels of uncertainty,” WTO Director-General Roberto Azevedo said in a statement.

    “Of course, there are other elements at play, but rising trade tensions are the major factor,” he told a news conference. “I think it’s pretty obvious that the tensions between the United States and China play a big role.”
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

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  4. #3
    Feel free to quote Reuters. I'll take the word of a guy that has practically lived in a rail yard for the last 35 years. YMMV
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  5. #4
    Quote Originally Posted by devil21 View Post
    Feel free to quote Reuters. I'll take the word of a guy that has practically lived in a rail yard for the last 35 years. YMMV
    Data to support his anecdotal claim?

    https://www.joc.com/rail-intermodal/..._20190114.html

    US Railroads: intermodal growth to slow as tariffs pinch

    US intermodal volume is set to grow for the third straight year but at a slower rate than 2018, thanks to international and domestic pressures.

    Tariffs on Chinese goods threaten the consumer confidence that drives the railing of containerized imports and US manufacturing. Trucking will also compete for domestic freight as spot market capacity is more abundant than it was a year ago, pressuring Class I railroad operators and intermodal market companies to be more competitive with price and service.

    Intermodal volume expanded 5.3 percent in 2017 but slowed to 4.8 percent last year, according to the Association of American Railroads (AAR). Industry analysts with Stephens Inc. forecast 4.5 percent growth in 2019, but estimates are contingent on a trade deal with China rather than an escalation of $200 billion in US tariffs to 25 percent from 10 percent, which is set to take effect in March. International loads represent about 56 percent of total US intermodal volume, according to TTX Co. and the Intermodal Association of North America (IANA).

    Tariffs are a transportation headwind
    There is already evidence that tariffs have driven down volume. Despite the ports of Los Angeles and Long Beach handling more than 16 million TEU last year, outbound international moves to Chicago dropped nearly 20 percent between July and November. Los Angeles-to-Chicago container traffic represents up to 10 percent of overall volume, according to IANA.

    Eric Starks, CEO of FTR Intelligence, argues that shippers built up inventories in reaction to tariffs.

    “This is not a significant positive on the transportation market, or manufacturing, as we move into the first half of this year. We need to monitor how this translates into inventory-to-sales ratios,” he said on a Jan. 10 webinar.

    Historical data show when the inventory-to-sales ratio climbs, demand for transportation recedes — as in 2009 and 2016.

    Walter Kemmsies, chief strategist of ports, airports, and global infrastructure with Jones Lang LaSalle, believes a trade war would translate into an intermodal recession in 2019, but he considers this outcome unlikely.

    Mark McKendry, vice president of intermodal for NFI Industries, explains how global trade disruptions trickles down to domestic transportation too.

    “If high tariffs are applied to Chinese goods, consumption will be reduced; further, domestic output would diminish because of the increased cost of raw materials ...[However] the likelihood of a full-blown trade war with China is quite low,” he said in a Jan. 8 blog post.

    Manufacturing costs rise when US tariffs apply to Chinese components. Finished goods become more expensive and eventually US consumers cannot afford them.

    Railroads don’t have much power to influence international business. They cannot control global trade, alter US trade policy, or rip up multiyear contracts with ocean carriers. But they can control aspects of domestic intermodal, about 44 percent of volume.

    They decide where to offer service, the number of trains, and price per container. They also make decisions that impact train speeds and dwell times. Shippers also typically operate on contracts negotiated every 12 months.

    Railroads face more competition on domestic freight than international. A 40-foot container is unlikely to be drayed 2,000 miles from Los Angeles to Chicago because most drivers wouldn't accept such a job. But everyday freight is placed on 53-foot trailers through the truckload spot market. This forces railroads to provide a competitive product to customers, particularly now when truck capacity is easier to book than a year ago.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.

  6. #5
    I guess a lot has changed since January 14th when that article was posted and their projections were wrong.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  7. #6
    Quote Originally Posted by devil21 View Post
    I guess a lot has changed since January 14th when that article was posted and their projections were wrong.
    Link?

    down about 20% YoY across all rail companies and dropping.
    Actually closer to down one percent YoY as of latest data.

    https://www.aar.org/news/aar-reports...april-13-2019/

    WASHINGTON, D.C. – April 17, 2019 – The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending April 13, 2019.

    For this week, total U.S. weekly rail traffic was 528,167 carloads and intermodal units, down 1.2 percent compared with the same week last year.

    Total carloads for the week ending April 13 were 260,800 carloads, up 1.0 percent compared with the same week in 2018, while U.S. weekly intermodal volume was 267,367 containers and trailers, down 3.2 percent compared to 2018.

    Three of the 10 carload commodity groups posted an increase compared with the same week in 2018. They were coal, up 6,284 carloads, to 82,065; petroleum and petroleum products, up 3,736 carloads, to 13,387; and chemicals, up 395 carloads, to 32,355. Commodity groups that posted decreases compared with the same week in 2018 included nonmetallic minerals, down 3,675 carloads, to 34,173; motor vehicles and parts, down 1,120 carloads, to 17,704; and grain, down 1,006 carloads, to 21,640.

    For the first 15 weeks of 2019, U.S. railroads reported cumulative volume of 3,707,826 carloads, down 2.8 percent from the same point last year; and 4,002,599 intermodal units, down 0.8 percent from last year. Total combined U.S. traffic for the first 15 weeks of 2019 was 7,710,425 carloads and intermodal units, a decrease of 1.8 percent compared to last year.
    Red line is for 2019. Green is 2018. Blue is 2017 and purple is 2016. Slightly below last year but above the two previous ones. Chart at link is interactive.



    https://www.aar.org/data-center/rail-traffic-data/
    Last edited by Zippyjuan; 04-17-2019 at 02:23 PM.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.

  8. #7
    Not sure why you're arguing with me. Just passing on some on-the-ground information from someone that actually drives the trains and is in a pretty good position to know how much cargo is being transported. You know, since it's kind of his job to know those things.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  9. #8
    Quote Originally Posted by devil21 View Post
    Not sure why you're arguing with me. Just passing on some on-the-ground information from someone that actually drives the trains and is in a pretty good position to know how much cargo is being transported. You know, since it's kind of his job to know those things.
    Pretty sure if you made a thread about how Trump is doing so great with our trade deals zippy would come in and feed us a bunch of fear porn about much the tariffs are affecting the economy.
    "He's talkin' to his gut like it's a person!!" -me
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    "Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing." - Ron Paul

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  11. #9
    Quote Originally Posted by dannno View Post
    Pretty sure if you made a thread about how Trump is doing so great with our trade deals zippy would come in and feed us a bunch of fear porn about much the tariffs are affecting the economy.
    Zerohedge is always saying things are about to collapse.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.



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