Freight Shifts into Slow Growth Mode

Although North American freight shipments continued to climb in May, according to Cass Information Systems, “they are still well below those of the last several years.”

Expenditures for freight fell for the third time in five months. The current economic outlook is volatile, which has led to slow uneven growth.

The May freight shipments index rose 1.3 percent from April. This represents the high point so far for 2016, but it was still 5.8 percent below May 2015 and 7.0 percent lower than May 2014.

This year we have failed to see the robust growth in shipments that we expect to see this time of year.

Truck tonnage continues to slide for both linehaul and spot markets.

Also in May, railroad carload shipments and container shipments were up 1.9 and 2.1 percent respectively. The Association of American Railroads (AAR) reported that May carloads were 10.3 percent lower than in the same month in the 2015, while intermodal container shipments were 3.3 percent lower than last year.

Port activity improved slightly in May, but not enough to contribute to a great increase in domestic movements. Industrial production dropped 0.4 percent in May, with the biggest declines in manufactured goods, especially autos.

The decline was much larger than had been forecast. The Institute for Supply Management’s PMI index for production declined 3.0 percent–the third decline in a row.

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