Strong seaborne shipments are winding into strengthening NAM intermodal
August 15, 2024
Key Observations:
Real-time fundamental and price data for the transportation sector show healthy activity pulsing through arteries of the real economy. These commodity flows support our view to maintain and build risk in pro-growth strategies (Keep Tucking, 26-Jun-2024).
Container throughput at the Port of Los Angeles surpassed 939K twenty-foot equivalent units (TEUs) last month to bring the ytd total to 5.67 million TEUs as of Jul 31. This cumulative traffic marks an increase of +17.6% YoY. Container imports through nearby Port of Long Beach are 2.55M TEUs ytd as of Jul 31: +540K (+26.8%) YoY.
LA Port cites “an influx of year-end holiday goods…a bit earlier than usual to avoid any risk of delay” on potential labor strikes, new tariffs, and ongoing Red Sea conflict. True. But focus on these drivers risks overlooking this: NAM rail traffic growth increased to +3.0% YoY as of Aug 10 (3M mavg of weekly numbers) from +1.8% YoY (Apr 6).
Monthly DOE data show U.S. exports of crude oil and oil products surpassed 1.6 billion barrels in the first five months of 2024 for growth of more than +101 million barrels over the same interval a year ago. This 10.6 million b/d of average flow marks growth of +673 thousand b/d (+6.8%) YoY. The DOE’s timelier weekly data through Aug 9 show solid export growth sustains: the average is 10.7 million b/d since mid May, for growth of +429 thousand b/d (+4.2% YoY).
On people transport, the count of air travelers passing through TSA checkpoints tallies to 460 million persons ytd as of Aug 14, an increase of 27 million through the same day a year ago, +6.3% YoY.
The commodity flows are value accretive for the businesses we spotlighted six weeks ago. In trucking, the share price for Schneider National (SNDR) is consolidating above its 50-day after a +30% advance since mid-June that still looks early in its development. Likewise, the shares of midstream operator ONEOK (OKE) made a fresh 52-week high yesterday (+23% ytd)…and again this morning.
Source: Port of Los Angeles, Port of Long Beach, AAR, DOE, TSA, Bloomberg, Blacklight Research.
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