US Freight Spending, Shipments, Rates & Costs all Surge
by Wolf Richter, Wolf Street:
Transportation Recession of 2015 and 2016 is just an Ugly Memory.
The transportation recession of 2015 and 2016 has receded into memory, and the trucking industry is hopping and railroads are getting their share, rates are surging, and so are costs, and the money is flowing. The Cass Freight Index, which tracks US shipment volumes by all modes of transportation, rose 7.2% year-over-year in December, to the highest level for any December since 2007.
The Cass Freight Index is not seasonally adjusted, with peaks in early summer for back-to-school season and in September during shipping season ahead of the holiday sales season. December marks the end of shipping season, and shipments normally plunge from November. But in December 2017, instead of plunging, shipments barely edged down from November. In the chart, the difference between 2017 (red line with black markers) and 2016 (black line with red markers) shows the severity of the transportation recession and the powerful recovery since:
The green line in the chart above represents 2014, which had been a banner year for US transportation until it began to unravel at the end of 2014 and descended into the full-blown transportation recession covering much of 2015 and 2016.
The index is based on “more than $20 billion” in annual freight transactions, according to Cass Information Systems. It does not cover bulk commodities, such as oil and coal but is focused on consumer packaged goods, food, automotive, chemical, OEM, and heavy equipment, shipped via truck, rail, barge, and air.
The chart below of year-over-year percentage changes in the Cass Freight Index for shipments shows the severity of the transportation recession in 2015 and 2016 — which I covered, including in May 2016, with Freight Rail Traffic Plunges: Haunting Pictures of Transportation Recession. The chart also shows just how powerful the recovery has been:
The e-commerce boom gets part of the credit, with e-commerce sales surging 15.5% in the third quarter of 2017, according to the Commerce Department, and 18% over the holiday period, according to Adobe. Cass: “Data continues to suggest that the consumer is finally starting to spend a little, albeit not with brick and mortar retailers.”
Read More @ WolfStreet.com
Source: https://www.sgtreport.com/articles/2018/1/24/us-freight-spending-shipments-rates-costs-all-surge
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