Written by Steven Hansen
Headline data for the CASS Freight Index show that freight volumes show slowed month-over-month – and the year-over-year growth is 15.6 % (compared to the beginning of the recovery one year ago). In the opposite corner, the American Trucking Association (ATA) index declined but is in expansion year-over-year.
Analyst Opinion of Truck Transport
The CASS index is inclusive of rail, truck, and air shipments. The ATA truck index is inclusive of only trucking industry member movements (ATA’s tonnage data is dominated by contract freight).
I put a heavier weight on the CASS index year-over-year which is more consistent with rail and ocean freight.
Econintersect tries to validate truck data across data sources. It appears this month that the truck employment rate of growth was stagnant. Please note using BLS employment data in real-time is risky, as their data is normally backward adjusted (sometimes significantly). Additionally, Econintersect believes that the BLS is not capturing all truck employment.
ATA Trucking
American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 1.2% in July after falling 2% in June. In July, the index equaled 109.8 (2015=100) compared with 111.1 in June.
Said ATA Chief Economist Bob Costello:
Softness in tonnage over the last few months is due more to supply constraints, rather than a big drop in freight volumes. Not only are there broader supply chain issues, like semiconductors, holding tonnage back, but there are also industry specific difficulties, including the driver shortage and lack of equipment. For-hire truckload carriers are operating fewer trucks than a year earlier. It is difficult to haul significantly more freight with fewer trucks and drivers.
In addition to these supply issues, retail sales and housing starts, both large drivers of truck freight, retreated in July, although both rose on a year-over-year basis.
June’s reading was revised down to -2% from our July 20 press release.
ATA Truck tonnage this month
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source: ATA
CASS FREIGHT INDEX REPORT
The following was reported by CASS:
The shipments component of the Cass Freight Index® grew 15.6% y/y in July, decelerated from the 26.8% y/y increase in June.
- On a seasonally adjusted (SA) basis, the shipments index declined by 3.1% m/m in July, after a 4.2% m/m drop in June.
- The two-year stacked change slowed from 4.2% in June to 0.5% in July.
The short-term skid is consistent with recent slowdowns in rail and LTL volumes, much of which is attributable to equipment and driver capacity constraints. Shipment volumes remain limited to no small extent by the capacity of the freight network, as the 121 containerships anchored off North American ports on August 10th attest to.
- Equipment. A chassis shortage has impacted intermodal capacity; trailer shortages have hit TL and LTL; and constraints on Class 8 tractor supply chains are impacting all of these modes, which comprise the vast majority of the Cass shipments index.
- Drivers. Though the BLS trucking employment data continued to improve in July and the ACT Research For-Hire Driver Availability Index showed improvement recently (see below), driver capacity is still tight. Better-paid drivers taking a bit more vacation were likely a factor in the volume slowdown as well.
Fading federal stimulus was also likely a contributor, though the elevated U.S. savings rate and tight inventories mitigate this risk.
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https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/may-2021
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