- 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.
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.