Analyst: No 2009 Freight Recovery

A leading freight transportation analyst warned March 9 he is cutting his volume and earnings estimates under a “deep recession, no recovery” U.S. forecast for all of 2009.

Edward Wolfe of Wolfe Research said he also expects no more than a mild bounce in 2010. However, he sees indications that freight declines may be easing in several sectors.

The closely watched analyst told investors he does not look for final consumer demand to give any lift to freight activity for all of this year, and looks for average rail, trucking and express volumes to fall by 13 percent, 12 percent and 7 percent, respectively.

In 2010, he expects flat rail traffic, with trucking up 1 percent and express recovering just 0.4 percent.

With his new forecasts, Wolfe said, “we have assumed virtually no improvement in the current weak demand environment for domestic and international freight -- that is, no increase in freight volumes from inventory restocking, monetary, fiscal or infrastructure stimulus, increasing credit flows or other improvements in the economy.”

Wolfe also said freight traffic trends “for domestic rail, airfreight, truck and ocean imports have all improved modestly (year over year) in their most recent reported months.”

That also means, he said, that his chopped-back volume forecast “likely provides a bottom finally” in what his firm will project in freight earnings for 2009. Up to now, he said, his periodic cuts in estimates amounted to “trying to catch a falling knife,” while his new approach is to “cut our numbers hopefully to the bone.”

Contact John D. Boyd at jboyd@joc.com.