Market Overview

Today's Pickup: Big U.S. Freight Customers To Report Results This Week

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This week will provide further evidence about what effect U.S. tariffs on $250 billion worth of Chinese goods is having on shipper behavior as some of the country's largest importers report earnings. The dollar value of goods from China hit a record $50 billion in September on the combination of holiday stocking and the "pull forward" effect of shippers trying to avoid the 10 percent tariffs slated to start at the end of the third quarter. Those goods will likely start showing up on the balance sheets of major retailers that are exposed to tariffs. On Thursday, Walmart Inc (NYSE: WMT) will report third-quarter earnings. The nation's largest retailer typically sees its inventories levels swell in the third-quarter just ahead of the holiday shopping season, with quarter-on-quarter growth of 15% in inventories seen this time last year. Best Buy Co Inc (NYSE: BBY) will also report Q3 results on Thursday. Its inventories jumped 29 percent quarter-on-quarter this time last year. 

Did You Know?

Over-the-road trucking is looking at another strong year of rate gains this year. Data from the Bureau of Labor Statistics showed 9.5 percent growth in long-distance truckload rates during October. The conditions suggest a generally tight industry, says FreightWaves chief economist Ibrahiim Bayaan. But the less-than-truckload side of the business is seeing more modest year-on-year growth of 4.1 percent in rates.

Quotable

"If there has been a pull forward, we haven't necessarily seen it reverse in October. That might speak to a strong economy, strong consumer demand. It certainly doesn't suggest these tariffs have massively discouraged Americans from buying products in China."  — Panjiva research analyst Chris Rogers on the state of Chinese exports to the U.S.

In Other News

UPS and Teamsters reach accord. One of the largest parcel and LTL shipping companies will be able to take freight again. (FreightWaves)

Where 27% growth is considered ‘less spectacular.' China's version of Black Friday hits record level, but growth down from last year. (CNN)

Blockchain proves its mettle. Trading firm Cargill and miner Rio Tinto use technology to ship cargo of iron ore. (International Mining)

Arrest made in driver assault. Incident occurred to Missouri driver during Labor Day parking stop. (Idaho State Journal)

Winter weather expected to hit Midwest. Snow expected in Southern Plains down through northern Arkansas (National Weather Service)

Final Thoughts

Military veterans make up a larger percentage share of the U.S. workforce involved in the transportation industry than do non-veterans, and there's a big push to keep up that level of participation.  XPO Logistics Inc (NYSE: XPO) just announced a free, four-week accelerated driver training program for veterans. Department of Labor statistics show 10.2 percent of employed persons that are veterans are involved in transportation and material moving occupations compared to a 5.9 percent share of the non-veteran workforce. Still, the sheer size of the civilian workforce means veterans are just under million drivers compared to 8.4 million non-veteran drivers. Perhaps reflecting the aging driver pool, Vietnam War-era and earlier veterans saw higher overall employment figures in transportation than Gulf War era veterans.

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