Shipment volumes continued their rise last month, jumping 5.8 percent from February to March after a 5.6 percent increase from January to February, according to the Cass Freight Index.
Money spent on freight also rose last month, increasing 6.5 percent compared to February’s number.
According to the Cass report, analysts foresee freight strengthening in the next few months, but since the economy has still not turned a corner, it’s hard to predict how freight will react. History, however, is on the industry’s side for continued near-term growth, as Cass reported that for the past two years, freight shipments and spend have seen rises in the five months starting in February. The same figures, however, show stagnation or erosion during the second half of the year.
In March, volumes rose year over year by 4.2 percent, besting the previous growth record from October. Freight spend increased by 4.4 percent year over year.
Cass reported that truck tonnage should be up for March, as weekly truck-loading indicators have showed an increase in activity. Rail carloads were up by 0.3 percent last month on the strength of petroleum products, but intermodal showed a 5.1-percent decrease.
Cass analysts warn that these numbers may start to decline after the middle of the year, and that even though many see better economic times this year, 2013 is still likely to mirror the historic trend. New job growth is weak, the impact of the sequester still hasn’t been felt, and while consumer spending has risen, this spending has been tied to food, fuel and other non-discretionary goods. Overall, Cass analysts still see an extremely volatile picture.
In the freight market, the picture is even more cloudy. While orders and production have been showing some increases, most of that activity is limited to intra-Asian trade, so it has little affect on the U.S. In fact, manufacturing in the United States has been slowing. Slow consumer sales means less product is in the supply chain, and retail sales data has been weak. On the other hand, retail inventories are rising, the housing market is improving, and U.S. exports have been on the rise, according to the Cass report.
“We remain on the cusp of true recovery, a place that has become very familiar,” the analysts wrote. “Consumer demand for goods is still not strong, and disposable income isn’t enough to increase consumption of services. 2013 will continue to be stronger than 2012, but not robust.”