Tender rejections:
After increasing from 6.52% to 8.91% last week, we expect national rejection rates to continue to rise but at a slowing pace in the coming week as carriers struggle to recover from spiking demand.
Manufacturing outlook:
The coming week will give a refresher for industrial production. Manufacturing is plagued by a lack of business investment, trade war uncertainties, and now, the latest threat is the coronavirus. The Institute for Supply Management had back-to-back months of expansion months in the Purchasing Managers Index, but results have not materialized into anything tangible for manufacturing.
Intermodal rates and volume
Overall intermodal volume for the North American railroads declined 11.9% y/y in week 10. In general, intermodal volume and pricing have not shared the recent improvement that has taken place in the truckload market driven by retail restocking. We attribute that divergence to lower volumes of imported goods from China, which impacts international intermodal primarily and domestic intermodal secondarily.