Freight Market Indicators in May 2021
May 2021 - Transportation Market Report
Manufacturing Purchasing Manager's Index (PMI)
• Economic activity in the manufacturing sector grew in April. This is the 11th consecutive month of expansionary growth.
• Absenteeism, short-term shutdowns to sanitize facilities, and hiring/retaining workers are significant headwinds despite the growth.
• New Orders Index continues to rise (64.3%), Production Index is up (62.5%), Order Backlog rises again (68.2%), and New Export Orders continues to improve (54.9%), Customers Inventories remain in the ‘too low’ category (28.4% - a new all-time low). All of these are positive indicators for continued growth
On-Highway Diesel Fuel Updates
• On-Highway Diesel is up 23% since January.
• Colonial Pipeline cyberattack resulted in some panic buying which has driven up the price of fuel. At it’s peak, 0ver 11,000 gas stations reported being out of gasoline. More information here.
• EIA projection for 2021 has increased to $2.97/gallon
Key Takeaways
The price of diesel is more in line with 2019 levels. As more and more COVID-19 restrictions are lifted, we expect consumption to continue to rise. Airline travel is increasing, and ocean freight bunker consumption will remain extremely strong. Given the amount of refineries that shut down during COVID, demand will outpace supply which should keep costs elevated through the summer.
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