The Cass Freight Index showed positive numbers in April for the fourth straight month, indicating a possible end to the “freight recession.” Source: Cass Information Systems

The Cass Freight Index showed positive numbers in April for the fourth straight month, indicating a possible end to the “freight recession.” Source: Cass Information Systems

It seems just as soon as one report comes out saying there are indications the economy (and trucking) continues to get better, another follows that seems to point the other way.

The Cass Freight Index, which measures overall freight volumes and expenditures, showed both measures were positive in April for the fourth straight month. The writer of the report, Donald Broughton of the economic and equity research firm Broughton Capital, pointed out the “data is suggesting that the consumer is finally starting to spend a little.” The numbers, he said, indicated the “overall freight recession” that began in 2015 appears to be over, while freight seems to be gaining momentum in most segments and the overall economy “continues to get slightly better.”

But not everyone in trucking is feeling the positive effects equally.

For instance, consumers aren’t spending at brick and mortar retailers. Just look at how many have closed this year or have reported lower sales. While parcel volumes associated with e-commerce continue to show outstanding rates of growth, according to Broughton, with both FedEx and UPS reporting strong U.S. domestic volumes, truckload volume isn’t showing such growth.

Fewer truckload shipments are going to retailers and more is coming from distribution centers. Broughton noted figures from February, the most recent month available, show dry van loads fell on a year-over-year basis five out of the last eight months.

Then there’s the American Trucking Associations For-Hire Truck Tonnage Index, which in April fell from the month before for the third straight month on a seasonally adjusted basis. The tonnage actually hauled by fleets before any seasonal adjustment fell 7.8% in April from March.

One likely reason, ATA Chief Economist Bob Costello pointed out, is that “housing starts fell substantially in April…and residential construction generates heavier truck freight.”

There are signs that these are temporary glitches.

Truckload linehaul rates may finally be ready to turn around for the better following recent declines. The Cass Truckload Linehaul Index in April, while virtually unchanged from the month before, increased from April 2016, hitting its highest level since January and ending 13 straight months of year-over-year drops.

Add to this spot truckload rates, as measured by the DAT North American Freight Index, while down 2.5% in April from March, were above levels from the same month the previous two years. Freight volume was up 60% when compared to April 2016.

This bump in the spot market, according to Broughton, could lead to contract pricing rates being back in positive territory by the end of the year. His truckload linehaul pricing forecast for 2017 remains in a range of between a 1% decline to a 2% improvement.

As for housing starts, just call the April decline a pause. For the lion’s share of the market, single-family home starts, the outlook remains strong, especially with low unemployment in the U.S.

While this mixture of reports can be confusing, there is little expectation that the economy or trucking will hit a wall anytime soon. The ride, like any on the open highway, will continue to face both bumps and smooth spots.

Evan Lockridge covers trucking business and economic news for HDT, both in his monthly column in HDT's Hotline section and on A freelance writer, he has been covering the trucking industry in print, online, and on the air since 1991.

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Evan Lockridge

Evan Lockridge

Former Business Contributing Editor

Trucking journalist since 1990, in the news business since early ‘80s.

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