This article was originally published on Equipment Finance Advisor.

If you have ventured out on the road in your car recently (and aren’t driving an EV), then there is little doubt you have grimaced at the gas pump. Driven by eye-popping inflation and the Russian invasion of Ukraine, oil prices are surpassing rates not seen by the American consumer since 2008, when oil was trading at over $140 per barrel and the country was on the cusp of the Great Recession. But there is a larger story involving the price we pay at the pump. But how have these recent economic developments affected our broader and more interconnected world of equipment finance?

As a whole, equipment financing saw drastic increases in March. The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) reports economic activity from 25 companies in the $900 billion equipment finance sector.1 The MLFI-25 showed overall new business volume for March was $10.6 billion, up 14 percent year-over-year from March 2021, and volume was up 49 percent month-to-month since February 2022.2

However, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) has slowly crept down through March, April, and May. The index reports a qualitative assessment of the prevailing business conditions and expectations for the future as reported by key executives from the $900 billion equipment finance sector. Overall, confidence in the equipment finance market (on a scale of 1-100) has dipped from 58.2 in March to 56.1 in April to 49.6 in May.3

To read the MLFI-25 and the MCI-EFI together: while business has remained strong through the months in which oil prices have surged, overall confidence in the equipment finance industry has slightly decreased over the same timeframe.

Further, the past three months reveal additional variations between railcars, trucks, vessels, and aircraft. To better assess each sector’s relative strength and to explore interesting narratives surrounding these industries, it is worth the time to examine each across these three months. What follows is both a qualitative and quantitative analysis of the different ways transportation industries and transportation assets have adapted through the current economic climate.

1. One if by Land:

Railroad equipment and trucks have had slightly differing tales throughout the past three months. The Foundation’s Momentum Monitor Sector Matrix (Momentum Matrix)4 uses recent momentum data (Index) and historical strength to place various equipment finance industries into four general categories: 1) Weakening/Struggling, 2) Peaking/Slowing, 3) Recovering/Emerging, and 4) Expanding/Thriving. These categorizations allow us to identify the overall health of a sector on a monthly basis and string together trends across March, April, and May.

Railroad Equipment

In March, the Index placed railroad equipment in the Peaking/Slowing category, stating railroad equipment investment growth would remain strong over the next two quarters.5 In line with March’s prediction, April saw the elevation of railroad equipment into the Expanding/Thriving category, with the Index noting that growth would remain elevated over the next six months.6 Though its recent momentum went unchanged in May, railroad equipment regressed into the Weakening/Struggling category, suggesting that railroad equipment investment growth is unlikely to accelerate over the next six months.7

This demotion in categorization is slightly puzzling, for investment in railroad equipment increased 23 percent in Q1 2022 and is up 16 percent year-over-year for May. But the high-level takeaway is that the railroad industry has been fairly strong over these three months, coinciding with the general belief that railways see more business as oil prices increase. However, as is a reoccurring theme throughout this article, while this three-month period coincides with the rising oil prices, oil itself is not the sole reason for these macroeconomic results across each equipment finance sector. Rather, while oil prices undoubtedly influence this data, other factors like the interest rates following the inflation hikes affect these numbers as well. And perhaps the central thrust remains the omnipresent repercussions of the coronavirus, the related supply chain shortages, and the sky-high demand for transportation assets.


The Momentum Matrix placed trucking in the Peaking/Slowing category in March, indicating that truck investment growth was unlikely to accelerate over the next six months.8 In April, while the quadrant of Peaking/Slowing remained, trucks inched closer to Expanding/Thriving, though the Index similarly suggested that investment growth was unlikely to improve.9 In that same month, however, the Momentum Matrix catapulted truck growth well into Expanding/Thriving, bolstered by a 2.5 percent rise in the shipments of heavy-duty trucks.10 Strangely, investments in trucks fell 6.7 percent over Q1 2022 and were down 9.5 percent from last year’s levels.11 Nonetheless, May’s Index positively indicated that truck investment growth might improve in the next two quarters.12

Equipment finance, by and large, has a strong grip on the wheel despite the challenging economy that surrounds it.

Despite slow months in March and April, trucking appears to be in a healthy position in May. However, oil prices have had a much more severe effect on individual truck drivers than they have on larger trucking companies. More than 350,000 registered owner-operator truck drivers face an economic crisis as fuel prices impact their diminishing bottom lines.13 As the market shifts from a pro-trucker market to a pro-shipper market, we may see a direct correlation between the prices of oil and the number of owner-operators who transition to either selling their trucks to become company drivers or lease their services to a larger fleet.14

2. Two if by Sea

To dip our toes into another sector, vessels were placed in the Peaking/Slowing category in March, with the Index’s position suggesting that vessel investment growth was unlikely to accelerate over the next two quarters.15 In April, vessel performance descended further into Weakening/Struggling, meaning investment growth would continue to slow over the same timeframe.16 However, May saw vessels catapult into Expanding/Thriving with a 3.2 percent increase in investment from last year’s levels.17 The Index noted vessel investment growth could rebound over the coming six months.18

March, April, and May show differing levels of investment success within the maritime industry. With gas boats already costly to operate, the recent spike in gas prices has only added to the overbearing costs for many vessel-owning businesses. While high demand continues to defend the vessel industry against rising costs, these past few months have led to an increased focus on legislation to provide further aid to vessel owners and their businesses. On the local level, concerned citizens and politicians have pursued state-level change in the form of mitigating gas taxes, exemplified by Californians’ recent efforts to temporarily suspend the state’s 51 cents per gallon gas excise tax.19 Georgia is looking into similar legislation20, and Maryland recently enacted a law suspending its 36 cents per gallon fuel tax.21

Nationally, oil prices have led to renewed calls to repeal the polarizing Jones Act. Passed in 1920, the Jones Act heavily restricts domestic transportation of goods to only those vessels that are U.S.-flagged, U.S.-built, U.S.-crewed, and U.S.-owned. While there remains ample U.S. crude oil suited for U.S. refineries, the protectionist Jones Act further hinders the ability to transport this fuel through the nation’s waters.22 The CATO Institute has called on the Biden Administration and Secretary of Defense to waive the Jones Act, and Representative Ed Case (D-Hawaii), Representative Scott Perry (R-Penn.), and Senator Mike Lee (R-Utah) have recently brought further attention to the Act, with some calling for its total repeal.23 However, the interests this Act has protected for over a century are deeply prized and deeply rooted. The American Maritime Partnership recently wrote President Biden as well, explaining why it must remain law to protect American industry interests.24 Regardless of ideology, the recent rise in political dialogue surrounding the Jones Act is intrinsically tied to the recent spike in oil prices. While demand may continue to bolster vessels from a macroeconomic perspective, the next few months present a fascinating opportunity to watch the momentum, or lack thereof, of these recent political developments.

3. Three if by Air

To round out our transportation methods, the aircraft sector was placed into the Peaking/Slowing category for March, with the Index indicating aircraft investment growth had peaked and was unlikely to improve in the coming two quarters.25 In April, while there was slight improvement to land aircraft on the fence of Peaking/Slowing and Expanding/Thriving, the Index repeated that investment growth would likely remain weak for the next six months.26 The sector fell further in May with placement into the Weakening/Struggling category of the Momentum Matrix. The Index noted civilian aircraft exports had decreased by 4.3 percent, and new aircraft defense orders fell 26 percent in March.27 In line with March and April, the May Index similarly held firm that aircraft investment growth would likely remain weak over the coming two quarters.28

These numbers make some intuitive sense from an individual consumer’s perspective: higher oil prices lead to higher ticket costs, and in an inflated, down-turning economy with another coronavirus wave approaching, individuals would choose not to fly. Indeed, from a 30,000-foot perspective, if many Americans choose not to fly, the already fragile and recovering airline industries would bear an even heavier burden.29 However, as with trains, trucks, and vessels, sky-high demand may provide solace to the aircraft industry, for even with airfares at new heights, travelers still appear ready to fork over the money to fly after spending the last two years shuttered indoors.30 The question remains why the aircraft sector has not rebounded like vessels and land transport, sectors that face similar obstacles.


Oil prices, inflation, supply chain backlogs, coronavirus recovery, and sky-high demand for transportation assets paint the portrait of the current economic climate. While aircraft are in the riskiest position within the Momentum Matrix, it is by no means catastrophic, and equipment finance sectors, in general, have been fairing quite well over the past three months. This is, to some extent, counterintuitive as a reasonable person could have predicted that an industry heavily tied to fuel might be struggling in today’s economic climate. Such a prediction could have been correct, but that is not the case. Equipment finance, by and large, has a strong grip on the wheel despite the challenging economy that surrounds it.

Further, this article highlighted a handful of the interesting sector-specific narratives this economy has ushered in: how demand currently trumps incredibly high gas prices; how owner-operators of trucks may migrate towards corporate sanctuary; and how the Jones Act is once again under political crosshairs. These narratives will continue to spin lives of their own, even as it relates to growing calls for action that may one day drastically limit our dependence on oil altogether. Indeed, the recent spike in oil prices has led to renewed publicity surrounding the viability of green initiatives in transportation sectors. The use of clean vehicles in fleets is accelerating. Hydrogen-powered trains may continue to sprout across the globe. The importance of net-zero emissions via sustainable jet fuel appears to be growing across the aviation industry.31 Perhaps these many dialogues will once again fade into the background when oil prices lower to more acceptable levels. But one thing remains clear: if these past three months are any indication, equipment finance will continue to adapt to any challenge that comes its way, and further storylines of interest will continue to emerge, many of them firmly tied to equipment finance and its well-oiled machines.

2 Id.
4 Foundation-Keybridge Equipment & Software Investment Momentum Monitor - Equipment Leasing & Finance Foundation (
5 PowerPoint Presentation ( (“March Matrix”)
6 PowerPoint Presentation ( (“April Matrix”)
7 Foundation-Keybridge Equipment & Software Investment Momentum Monitor - Equipment Leasing & Finance Foundation ( (“May Matrix”)
8 March Matrix
9 April Matrix
10 May Matrix
11 Id.
12 Id.
14 Id.
15 March Matrix
16 April Matrix
17 May Matrix
18 Id.
25 March Matrix
26 April Matrix
27 May Matrix
28 Id.