Shipment volumes in April 2017 were up 4 percent compared with the same 2016 period, while expenditures grew 6 percent year-over-year, potentially signaling a sustained positive trend towards growth, according to the latest Cass Freight Index Report.
The North American freight market showed positive growth for the fourth straight month in April 2017 after breaking a string of 20 consecutive months of negative volume growth in January, according to the latest Cass Freight Index Report.
Shipment volumes for the month grew 4 percent compared with the same 2016 period and 3.7 percent from March.
Expenditures posted a 6 percent year-over-year increase in April, and a 3.1 percent bump from the previous month, also signaling a trend towards positive growth. According to Cass, freight payment growth turned positive for the first time in 22 months in January 2017.
The report attributed the long drought in growth in part to weakened demand and crude oil prices falling below $30 a barrel.
But the drought is no more, according to Donald Broughton, an economist with Avondale Partners and author of the report. The proprietary Cass Truckload Linehaul Index (which measures linehaul rates and does not include fuel) rose 1.3 percent year-over-year in April, or the first increase posted since February 2016, while the proprietary Cass Intermodal Price Index (which does include fuel), increased 2.7 percent compared with April 2016.
Broughton said parcel volumes associated with e-commerce in particular continue to show outstanding rates of growth, with both FedEx and UPS reporting strong U.S. domestic volumes.
According to the proprietary Broughton Capital index for March, airfreight has also seen strong year-over-year growth, with volumes the Asia Pacific lane jumping 10.7 percent year-over-year in April and the Europe Atlantic lane growing 3.7 percent.
Rail, on the other hand, has been the weakest mode in terms of freight flows over the last two years, noted Broughton. In recent weeks, however, even rail volumes have turned positive.
According to data from the Association of American Railroads (AAR), carload volumes originated by U.S. Class 1 railroads jumped 7.9 percent year-over-year in the past four weeks, while intermodal units are up 1.6 percent. Instead of dragging down the index, rail volumes are starting to become a positive contributor, said Broughton.
Considering that trucking is one of the “most reliable reads on the health of the domestic economy,” it is encouraging to report that in terms of tonnage, the “three-month moving average reached +2.49 on a not seasonally adjusted basis in January,” said Broughton.
However, trucking volumes in February and March were down 2.73 percent and 0.07 percent, respectively, this pulling the three-month moving average growth rate down to just 0.35 percent.
While the trucking industry data released by the American Trucking Associations (ATA) indicates the sector is gaining momentum “recent tepid results by brick-and-mortar retailers appear to be taking their toll” on volumes, said Broughton.
North American freight market growth hits fourth straight month
