U.S. transportation growth to plateau, says Fitch Ratings

Revenue growth remains healthy for all major U.S. transportation sectors, though recent events could level off the rate of growth for some segments in the coming months according to Fitch Ratings in its U.S. Transportation Trends spring report.

The most notable developments of late concern U.S. airports. Passenger traffic is still quite healthy with nearly all of Fitch-rated U.S. airports experiencing positive traffic growth last year and roughly three-quarters of those airports seeing 3% growth or higher. But that could change due to recent events around the Boeing 737 MAX. 

“Currently, this model aircraft is relatively new and represents a small proportion of flights. However, the pace of growth in airport traffic could become susceptible if the grounding of the 737 MAX planes becomes extended or delivery of new orders are delayed or cancelled,” said Senior Director Seth Lehman.

While port volume and cargo growth saw an uptick in 2018 as shippers rushed to move cargo ahead of tariff-related deadlines, volumes are expected to moderate in 2019 and grow more in line with GDP. Shipping industry consolidation will also continue, which will inevitably help to shape future cargo growth for ports and terminals over time. 

“Other disruptors worth keeping a close eye for ports on in the coming months include initiatives towards increasing terminal automation, and trade policy implications on imports and supply chain decisions, and shipper preparations ahead of the roll-out of IMO 2020 fuel regulations,” said Senior Director Emma Griffith.

Griffith also share insights with LM for the upcoming “Top 30 Ports” feature to be published next month. Among her key observations was that increased automation is “inevitable.”

The second half of 2018 was a mixed bag for toll roads, with solid 3.9% revenue growth in the third quarter falling to just 1.6% in the fourth quarter, coinciding with the slowing U.S. economy. Looking to 2019, Fitch expects rising inflation and slower but still solid GDP growth will boost traffic and toll rates throughout the country, which is good news for toll roads as they should see higher revenues in the coming months. 

“Toll roads throughout the southwest and southeast in particular should see higher revenue growth given stronger demographic trends,” said Director Scott Monroe.