Why the Heck Is the Trucking Business Slowing Down?

Posted: May 14, 2015 in Economics

Given the exuberance of 2014, carriers have added lots of new trucks to replace older equipment and to add capacity, but by mid-April, the phrase “excess capacity” started cropping up. And the idea that the spot market was suffering as shippers were relying more on their contractual partners made sense.

But turns out, overall shipping volumes and money spent on shipments have been dropping for two months. The Cass Freight Index, which tracks them, usually rises in the early part of the year from the lows in January. This seasonal pattern is also playing out this year, with a difference:

The index for shipping volume in March dropped 5% from a year ago. But maybe it was a fluke and April would make up for it. But no. Now the index for April dropped 2.5% from a year ago! The index for shipping expenditures fell 3.5% in March and fell again 4.7% in April!

The first quarter was crummy. We already know that. The estimate for Q1 GDP growth will likely sink into the negative over the next two revisions. But April is in the second quarter! This weakness is now infecting it as well. That’s what the trucking industry is saying. And the trucking industry, as Julian pointed out, experiences the “slowdowns before the rest of the country becomes aware of them.”

Full Story @ [wolfstreet]

China Export Shipping Declines by Two-thirds

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