Dive Brief:
- Trucking shipments increased 12.5% YoY in January while expenditures increased 14.2% YoY, according to the Cass Freight Index. That is staggering growth, marking January 2018 the strongest year since before 2013.
- Shipments did decline by 1.7% MoM and expenditures dropped 1.8% MoM, normal trending for the start of a new year.
- Continuing to confirm the trend, the sky-high numbers indicate a tightening capacity market as volumes continue to swell and inflate trucking rates and prices.
Dive Insight:
The trucking surge shows no sign of peaking, and because capacity is still not keeping up with demand, rates and prices are climbing.
January's all-time high also shows that the e-commerce surge shows no sign of slowing. The data suggests that consumers are spending more with online retailers than traditional brick-and-mortar retailers, contributing to trucking growth.
But what's really contributing to big growth is not so much consumer spending as it is industrial shippers — ever since U.S. industrial activity recovered in 2014, it's been on the upswing, as reinforced by all the recent positive manufacturing data.
While growth is usually viewed as a positive thing, the increase in volume will undoubtedly lead to price hikes, which will pinch shippers and consumers. Furthermore, there's now a concern for inflation because, as the Cass Freight Index notes, as prices are rising, the value of the U.S. dollar compared to other currencies has been falling.
If inflation is a real concern, then the capacity crunch — likely exacerbated by the ELD mandate — could aggravate it even more. The trucking industry is amid intense upheaval, and equilibrium is still a long way off.
