Two from Barron's. First up, April 25:
If you’re looking for a canary in the economic coal mine, check the freight business.
Trucks, trains, and ships that transport goods from around the world to the U.S. are the economy’s circulatory system. Problems are emerging: Business activity is slowing down as trade between the U.S. and China stalls, putting millions of jobs at risk.
Truckers Knight-Swift Transportation Holdings and Old Dominion Freight Line both reported first-quarter numbers this week. Knight-Swift stopped offering sales guidance for the next two quarters at a time, opting instead for one quarter, and won’t go back “until enough clarity develops.” For its part, Old Dominion said April was off to a soft start, with revenue a day in the month down 7% year over year so far.
Following earnings, Wall Street analysts cut their price targets on Old Dominion stock, bringing the average target down by $9 a share to $168. Knight-Swift’s average price target came down $4 to $50 a share.
Union Pacific, a railroad company, also reported earnings. Analysts, worried that volumes will fall off in the second half of 2025, cut their price targets, with the average falling by $6 to $256. Barclays cited deteriorating trans-Pacific trade for its cut.
Deteriorating might be an understatement. “Trade between China and the U.S. [is] collapsing,” wrote Apollo Global Management Chief Economist Torsten Slok on Friday. Container ships leaving China for the U.S. are down some 50% over the past few weeks, according to data from Apollo. Similar data from Bloomberg also shows a sharp downturn.
Slok has some dire warnings. “The consequence will be empty shelves in US stores in a few weeks and Covid-like shortages for consumers and for firms using Chinese products as intermediate goods,” he said. Inflation will pick up as well.
“In May, we will begin to see significant layoffs in trucking, logistics, and retail—particularly in small businesses such as your independent toy store, your independent hardware store, and your independent men’s clothing store,” added Slok....
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And April 24:
Supply Shortages Loom as U.S. Shipments From China Plummet
President Donald Trump’s tariff war is sharply slowing traffic on a major shipping route between China and the U.S. The pain of a near-standstill in goods shipments could spread from trucking companies to retail shelves in a matter of weeks.
Ocean container bookings from China to the U.S. fell 64% in the first week of April compared with the week earlier, according to logistics data platform Vizion. Overall imports to the U.S. also fell 64%. Categories with the most dramatic drops included imports of apparel, fabrics and other textiles, Vizion said in a blog post.
The rate to ship a 40-foot container between Shanghai and Los Angeles has halved, according to data from Bloomberg, implying little demand for the critical shipping route.
In the past week, cancellations of voyages and port calls have also risen, in what maritime analysis firm Sea-Intelligence called “a dramatic change in the market,” in a report on Thursday....
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