Weak international trade is hurting international airfreight. Global airfreight volume has fallen for 10 consecutive months year over year (the longest losing streak since 2008). In the three months ended August, North American airlines’ U.S. dollar revenue from air-cargo between China and the U.S. fell 26% relative to the same period in 2018. While transportation […]
Article 1, Section 10, of the U.S. Constitution (the “Contract Clause”) contains a list of prohibitions concerning the role of the States in political, monetary, and economic affairs [1]. The laws of some countries require damages that may be recovered for breach of contract or other obligations be limited to the level of damage or […]
“Economic Nationalism” The President’s September 24th address to the United Nations promoted ‘sovereignty’ above international relations. “The future belongs to sovereign and independent nations, who protect their citizens, respect their neighbors and honor the differences that make each country special and unique.” His favorite themes? Unfair trade, imbalanced defense spending, illegal immigration, creeping socialism, and […]
A new leasing standard The Financial Accounting Standards Board (FASB) issued its new leasing standard, Accounting Standards Update (ASU) No. 2016-02, Leases (ASC 842), in February 2016. It’s bringing $2 trillion of operating leases onto public company balance sheets, affecting the entities that enter into lease arrangements or sign contracts containing service agreements that support […]
Mounting Trade Concerns Slow Supply Chains Brace for slower economic growth. Freight volumes in the United States and around the World are falling due to escalating trade tensions and an uncertain future. Most recessions have been brought on by mistakes in some combination of fiscal, monetary or financial supervision. Former Fed Chairman Ben Bernanke once […]
Precision Scheduled Railroading’s Various Effects The S&P 500 posted its best first half in 22 years. US Job openings outnumber the unemployed by widest gap ever. The U.S. economy continues to expand (2.1% in the Second Quarter). Yet U.S. Domestic rail freight volumes are down. Chinese challenges to the Western Global Trading System certainly are […]
Signs are evident in politics and trade negotiations that economic and geopolitical rivalries are creating global uncertainties. Avoiding turbulent weather is a combination of art and science. With cues from weather charts, radar returns, and real time reports from other aircraft, Pilots are trained to avoid thunderstorms and slow to ‘turbulence penetration speed’ to avoid […]
In an environment where uncertainty is commonplace, investment in transportation equipment is often driven by residual value estimates as lenders and lessors compete for market share. Many factors influence the future value of equipment. Most are not very predictable. All require an active aftermarket for the asset under consideration. Physical factors include wear and tear […]
The Chinese government has deployed strategies that help its state owned companies acquire state-of-the-art technologies in order to break into global markets. By leveraging the country’s low labor cost China exports more than $2 Trillion of goods a year (in 2018 the U.S. imported over $419 billion more goods from China than it exported to […]
Transportation equipment investment serves as an engine for economic development and job creation. It enables people and goods to access markets and services more efficiently and ‘induces’ demand growth. Available, reliable, and competitively priced alternatives allow business and consumers to shift their focus to business development and new consumption. Infrastructure investment works in a similar […]
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Growing Aero and Rail InvestmentsMarch 19, 2025 - 8:09 amBoeing delivered 45 jets in January[1]. That’s 19 more than Airbus’ January deliveries. COMAC and Embraer each delivered three aircraft in January 2025. Airbus plans to deliver 820 commercial aircraft in 2025, 7% more than in 2024 (Boeing delivered 348 in 2024). Boeing’s 737 deliveries remain capped at 38 aircraft per month. The newly appointed […]
2025 Core Themes for Aero and Rail InvestmentFebruary 5, 2025 - 9:27 pmStrong GDP growth, sticky inflation, and a soft landing–core themes for aero and rail investment. The economy’s performance in 2025 will drive the Fed’s future interest rate decisions. Higher ticket revenues and lower energy prices (jet fuel is expected to be less expensive in 2025) will benefit air carriers. The International Air Transport Association estimates the […]
Looking Forward to 2025 Aero and Rail InvestmentJanuary 7, 2025 - 7:37 pmNovember’s jobs report exceeded expectations (payrolls increased by 227,000[1]) yet the Fed lowered its benchmark interest rate December 18th by a quarter of a percentage point (to between 4.25% and 4.5%). Fed Chairman Powell’s recap: “I think we’re in a good place, but I think from here it’s a new phase and we’re going to […]