We have a plan for 2020, Do You?
Beginning in the summer of 2019, we published reports warning that shipment volumes had “gone from ‘warning of a potential slowdown,’ to ‘signaling an economic contraction.'”
The financial markets shrugged off the declining volume of goods being transported, especially in high value low density goods.
International trade struggled first in China, but then in all the other countries which do business with China, as the damage driven by U.S. tariffs expanded beyond the initial intended target.
On February 25, 2020, as the Dow Jones remained near its all time highs, we published our proprietary Broughton Capital Airfreight Index® report for the APAC (Asia Pacific) region. In that report, we warned Covid-19 was already “Driving negative economic consequences more dire than SARS and could produce short-term economic calamity rivaling the 2008-2009 Great Recession.”
To download a complimentary copy of the January report click this link https://www.broughtoncapital.com/broughton-capital-air-indicies-apac-january-2020/
To subscribe to these reports on an ongoing basis: Subscribe Now and catch the ‘Covid-19 Discount’ while you still can.
After record dropping declines in the equity, debt, and commodity markets, it became time for us to publish this monthly report again on April 1, 2020.
We did our best to refrain from taking a victory lap, and made the following predictions: the negative macro-economic impact will be more severe in the short-term than most are predicting, and more stimulative in the intermediate to long-term than anyone is predicting. The most important influence that will emerge will not be the magnitude of the recovery overall, but the widely disparate consequences in each segment of the economy as well as the sociological course changes produced. The ‘Robotization from Coronization’ will upend multiple segments of the domestic and global economy (and then outlined what we believe those changes will be).
We applauded the trucking industry for its response to empty shelves and identified them as the strongest group of unsung heroes in this pandemic.
After digging into the math behind the rate of contagion in each country, we made two more predictions:
- “We expect the number of new cases reported daily in the U.S. to peak within 7 to 10 days (at between 33,500 and 38,500 per day), and then begin to stabilize or even slightly decline in 12 to 16 days.” That was on April 1st, and after topping 34,000 on April 4th, new cases started sequentially declining.
- “Hospitals (and health care workers) will be highly stressed but not completely overwhelmed. With less than 10% of those infected requiring hospitalization, only 35,000 incremental beds will be required at the peak. Since patients who are infected and hospitalized, either succumb, or recover and are discharged in 14 to 21 days, the demand for hospital beds will only be a percentage of the new cases which have occurred in the trailing 3 weeks.”
We are now predicting that Covid-19 will be declared “Completely Contained” by mid-May, perhaps even sooner. Although drastic, the quarantines imposed by organizations and hygiene practices practiced by individuals, are proving to be highly effective.
Meanwhile, a surge in freight flows in most modes (airfreight, truck, and rail) is signaling an economy that is as anxious to ‘get back to work’ as most Americans are. We are not overlooking or minimizing the economic damage which has already been inflicted, but if freight flows continue to serve as solid a predictive indicator, as they have once again demonstrated themselves to be, then the recovery will be strong and swift in the weeks and months to come.
We believe that those who have walked the plant floor intuitively understand what is happening long before those in the ivory towers of Wall Street do. They are our greatest resources.
To provide the broadest and deepest database of goods flow available in order to drive dispassionate investment and operating decisions.
To use the factual data of transportation goods flow to help actively manage and quantimetrically managed money beat the performance of passively managed money. We are the Independent Variable in today’s marketplace.
AREAS OF EXPERTISE
We have developed econometric models and proprietary methods for:
- Predicting freight flows in each mode;
- Translating those freight flows into economic forecasts;
- Converting freight flows, marketplace data, and asset utilization metrics into earnings predictions for transportation companies.
This allows us to provide cost effective, precision research that has value for investors in transports and investors seeking a differentiated, data based way of predicting economic outcomes.
We would love to hear from you. Reach out to our team to find out what we can do to help you reach your goals.