Shipment volume and payments were up for the third month in a row despite first quarter GDP increasing only 0.2 percent, according to the latest Cass Freight Index Report.
According to the latest Cass Freight Index Report, North American shipment volumes and expenditures rose for the third month in a row in April 2015. The logistics payment solutions provider noted this increase came despite what it characterized as “anemic” GDP growth of only 0.2 percent in the first quarter.
Cass said that both rail and truck sectors reported increased loads in April, with the strong U.S. dollar increasing imports but hampering exports. “U.S. demand is rising at a time when the strong dollar makes foreign goods more attractive and when countries with struggling economies such as China have been discounting their goods to increase sales,” it added.
Overall shipment volumes rose 4.2 percent in April compared to March, but were still down 2.5 percent compared to April of 2014. Rail shipments grew significantly in April, with carload traffic up 25.6 percent and intermodal up 27.6 percent.
Truck shipments increased 1.1 percent in March 2015 (the latest month for which figures were available), after falling in February due to bad winter weather across the country.
Transportation employment was up in April, with the majority of the increase coming via jobs in truck driving, despite the April jobs report being the lowest so far this year, according to the report.
Freight expenditures grew 1.6 percent in April, following a 1 percent increase in March and a 4.3 percent increase in February, but payments were still 4.7 percent lower than in April of 2014. The report noted growth in freight spending is slower than in shipment volumes, which indicates a lack of change in rates. “In fact, spot rates in April were actually running close to or below contract rates,” said Cass.
Cass noted the U.S. and global economies did not grow as much as expected in the first quarter despite the increase in freight movement in the U.S., but said it expects growth to increase as the year goes on.
“Manufacturing should perk up in the coming months as demand increases,” said Cass. “With the strong dollar, raw material prices are lower for imported materials. Although capacity is not a problem, many companies have already announced increased levels of capital investment to update and improve plant and equipment.”
“Although construction spending slipped in March, first quarter 2015 spending is 3.2 percent higher than the same period a year ago. Drops in drilling and energy exploration accounted for a significant portion of the drop in non-residential construction. With warmer months ahead, construction should pick up steam,” it said.
“The global economic picture is not as strong as the U.S. picture, so exports will continue to be weak,” it added.
The Cass Freight Index is based on domestic freight shipments of hundreds of the company’s clients across a wide variety of industries. Cass Information Systems processes more than $26 billion in annual freight payables.
North American freight volumes jump 4.2% in April
