Dive Brief:
- Trucking shipments increased 5.9% month-to-month in May and 11.9% YoY to 1.307, while expenditures grew 4.9% month-to-month to 2.875 with a 17.3% YoY increase, according to the Cass Freight Index.
- "Demand for spot market truckload shipments reached new heights in May," according to the DAT Freight Index, "with dry van and refrigerated ("reefer") rates hitting their highest levels since January, and flatbed rates setting a new record."
- The Cass Freight Index also noted that truckers are recovering quickly from the slow in capacity due to the electronic logging device (ELD) implementation, and the industry shows no sign of being adversely affected by the "trade war."
Dive Insight:
Part of May's massive surge in volumes and pricing can be attributed to seasonal peaks. As the DAT Index noted, May was a peak shipping month for Florida, which contributed to the 10-cent month-to-month hike in reefer rates (a 50-cent hike YoY).
But the economy is also continuing to accelerate at an increasingly rapid pace. Now, the Cass Freight Index is predicting 2018 to be an "extremely strong year ... barring a negative 'shock event.'"
Not even the U.S. tariffs and retaliatory tariffs from its major trading partners seem to qualify as a "shock event": according to DAT data, June is already "poised" to smash records, based on trucking's volumes and pricing each week in June,.
While former director of the National Economic Council Gary Cohn said the effects of tariffs could outweigh gains gleaned from a booming economy, the reverse is also true: if the economy continues at this pace, it could outweigh potential losses from tariffs.
