Headline data for the CASS Freight Index show that truck volumes show volumes slowed month-over-month - but the year-over-year growth is now in double digits. In the opposite corner, the American Trucking Association (ATA) index also declined but is finally in expansion now 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 continues to improve. 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 0.3% in April after increasing 2.3% in March. In April, the index equaled 114.7 (2015=100) compared with 115.1 in March.

Said ATA Chief Economist Bob Costello:

After a revised increase in March of 2.3%, the April index declined just slightly. The outlook is solid for tonnage going forward as the country approaches pre-pandemic levels of activity, with strong economic growth in key areas for trucking - including retail, home construction and even manufacturing.

Additionally, the index increased on a year-over-year basis for the first time since March 2020. Part of the reason for the gain was due to an easy comparison with when the index fell significantly in April 2020. But I'm expecting increases, albeit smaller than April's, on a year-over-year basis going forward. Trucking's biggest challenges are not on the demand side, but on the supply side, including difficulty finding qualified drivers.

Compared with April 2020, the SA index jumped 6.9%, which was preceded by a 2.4% year-over-year decline in March.

ATA Truck tonnage this month

source: ATA

CASS FREIGHT INDEX REPORT

The following was reported by CASS:

The shipments component of the Cass Freight Index® grew at a record 27.6% y/y pace in April, accelerating from a 10.0% y/y increase in March. While it has never risen this much on a y/y basis, the only past declines as large as during the economic quarantine of Q2'20 were during the 2008-2009 financial crisis. So, the pandemic recovery is progressing considerably faster than the recovery from the Great Recession, when y/y growth peaked at 18.5% in mid-2010.

Yet, this strong acceleration was expected because it was more than explained by the easier comparison against the Q2'20 pandemic shutdown. On a seasonally adjusted (SA) basis, the Cass Shipments Index fell 3.1% m/m from March to April, giving back most of the 3.4% m/m (SA) increase in March.

While some of the March m/m increase was make-up from activity lost during the polar vortex in February, our sense is the April m/m decline was due more to ongoing supply constraints and the deepening semiconductor shortage, which resulted in considerable downtime in auto and truck manufacturing in April. On the Class I railroads, motor vehicle carloads fell about 20% from March to April. Near-term supply chain risks remain, with constrained chip supply unlikely to be fully resolved quickly as lead times on new semiconductor manufacturing capacity are generally about 18- 24 months.

• Still, if the Cass Shipments Index continues on a normal seasonal pattern from here, it will be up 27% y/y in Q2, with growth slowing to about 10% y/y in Q3 as prior year comparisons improve.
• On a two-year stacked basis, the Cass Shipments Index was 1.3% below April 2019, just slightly below the pre-crisis level.

source