Strong Indicators from Top Freight Index

These indices are displaying accelerating strength on top of increasingly difficult comparisons. Demand is exceeding capacity in most modes of transportation by a significant amount. In turn, pricing power has erupted in those modes to levels that continue to spark overall inflationary concerns in the broader economy.

As Cass explained in previous months, the group does not fear long-term inflationary pressure as technology provides multiple ways to ever-increase asset utilization and price discovery in all parts of the economy, but especially in transportation. “In fact,” Cass noted, “we are seeing more signs that ELDs (Electronic Logging Devices) initially hurt the capacity/utilization of truckers, especially small truckers, but many of the truckers most adversely affected are now beginning to recover some of the loss in utilization through gains in efficiency.”

Year-over-year, shipments first turned positive twenty months ago, while expenditures turned positive seventeen months ago. The current level of volume and pricing growth is signaling that the U.S. economy is not only growing, but that the level of growth is expanding. The 11.9% YoY increase in the May Cass Shipments Index is yet another data point confirming that the strength in the U.S. economy continues to accelerate. This level of percentage increase is usually only attained when emerging from a recession, not when comping against already strong statistics.Data continues to confirm that both the consumer economy and the industrial economy in the U.S. is growing at an accelerating pace.

Indications of accelerating strength have been coming from several modes of transportation, but none more visibly than in flatbed trucking which is a key heavy industrial indicator.