The second quarter began with a bang for truckers and a pang for shippers, as freight volumes and shipping costs rose sharply in April, according to the Cass Freight Index.
The Cass index, which measures freight volumes and shipper spending, suggests trucking hit a reset button in the first quarter, with higher demand and tight truck capacity pushing up rates.
By April, the Cass Freight Expenditures Index had hit its highest point in 15 years, and the Cass Shipments Index had climbed to its highest point since June 2011, the Cass report said.
U.S. freight volumes in the first quarter were 10 percent higher than in the fourth quarter, an inversion of historical patterns. In April, freight volumes rose 1.5 percent from March and 5.5 percent from a year ago, but freight spending by shippers increased at twice that rate.
The Cass Freight Expenditures Index for April rose 2.8 percent from March. That’s much less than the 5.4 percent increase in March and the 6.8 percent increase in February, but shipper spending was still 10 percent higher than it had been in April 2013, according to Cass.
The freight payment firm, which handles $23 billion in transactions a year, doesn’t offer much hope for lower rates to shippers. Cass expects moderate economic growth in the second quarter will keep pressure on available truck capacity and truck pricing.
“Growth in employment and manufacturing in some key sectors such as construction and motor vehicles is an indicator that the economy is strengthening,” said Rosalyn Wilson, senior business analyst with Delcan and author of the Cass Freight Index report.