How significant is the tariff impact? Wall Street closely monitors port, truck, and supply chain data
When the economic outlook is uncertain, traders often pay attention to shipping and logistics data, and transportation stocks are often seen as the "barometer" of the market. The import volume at the Port of Los Angeles is expected to decline by 35% compared to the same period last year; trucking companies are reducing orders for heavy trucks, with the cancellation rate of North American heavy truck orders reaching a nearly two-year high in March
Wall Street is closely monitoring shipping data to gauge the impact of the Trump administration's tariff policies on the economy, with investors looking for early signs from port, trucking, and rail data.
According to media reports on Wednesday, traders typically focus on shipping and logistics data when the economic outlook is uncertain, and transportation stocks are often seen as a "barometer" of the market. During the COVID-19 pandemic and the 2008-09 financial crisis, investors tracked changes in freight indices for commodities such as coal, grain, and fertilizers.
Investors are preparing for future turbulence, as the Dow Jones Transportation Average, which tracks stocks of shipping, rail, and logistics companies, has underperformed the blue-chip Dow Jones Industrial Average by more than 9 percentage points this year, marking its worst performance in the past decade.
Shares of major U.S. freight companies such as J.B. Hunt Transport Services, Knight-Swift Transportation Holdings, and shipping company Matson have plummeted this year.
Port Congestion Turns to Slump: Import Volumes Plummet
U.S. retailers and manufacturers have been stockpiling furniture, clothing, electronics, and all other goods that enter the U.S. via container shipping, leading to a surge of containers at the Ports of Los Angeles and Long Beach.
However, some companies have suspended shipping bookings, with Ryan Petersen, CEO of San Francisco-based freight forwarding company Flexport, stating that container shipping bookings from some countries to the U.S. have dropped by 60% since April 9.
Ocean carriers are also increasingly canceling trans-Pacific routes to the U.S. Flexport data shows that nearly 30% of such voyages were canceled as of the week of May 4. Imports at the Port of Los Angeles are expected to decline by 35% compared to the same period last year.
Petersen stated:
This will have a huge impact on the logistics industry, and consumers may not see this until later.
Trucking Industry: Orders Decline, Outlook Grim
Data from ACT Research shows that trucking companies are reducing orders for heavy trucks due to tariff concerns.
In March, net orders for heavy trucks in North America fell to 16,500 units, a year-on-year decrease of 5.9%, with the order cancellation rate reaching a nearly two-year high. Ken Vieth, president of ACT Research, stated that dealer inventories reached a record 91,600 units in March, and truck drivers "are facing profit levels similar to those during the global financial crisis."
Supply Chain Pressures Emerge: Global Supply Chain Index Falls to Five-Year Low
The GEP Global Supply Chain Volatility Index hit a five-year low in March. This index is based on S&P Global's monthly survey of 27,000 companies across 40 countries, measuring factors such as commodity demand, inventory levels, and transportation costs GEP Consulting Vice President John Piatek stated that the main reason for the decline in March was the reduction in manufacturing activity in North America, as companies are preparing for higher procurement costs and a potential slowdown in consumer spending. Piatek expects the readings for April to show further cuts by companies as they prepare for "worse economic conditions."
