Freight shipments slowed to only a 1.4 percent rise in March, following an 8.3 percent jump in February, according to the Cass Freight Index. Expenditures for freight declined 1 percent in March, reversing a portion of the 6.3 percent increase in February. Manufacturing and building construction have been on an upward trend and have just started showing up in the supply chain.
The March freight shipments index rose 1.4 percent but still remains 1.5 percent below the same month a year ago. March shipments have grown at a slower pace than each February for the last couple of years, so this is not unexpected; however, the March 2016 index is still 6.2 percent lower than the December 2015 index, indicating that the plummet in January is going to take some time to dig out of. On an average bases, the first quarter of 2016 was 3 percent lower than the same period in 2015.
The Institute for Supply Management’s PMI index continued to move up in March, posting a 4.6 percent rise. Notably, the index has just passed back over the 50 index level, indicating growth, for the first time since August 2015.
This is the third consecutive month of growth and is a sign that manufacturing may finally be recovering from its slump. High inventories are still a big concern and will moderate future growth. Freight payments declined 1 percent in March on the heels of a strong 6.3 percent growth in February.
The decline is a departure from the trend seen in recent years. Capacity was not an issue for any of the modes in most places, so spot prices were flat or down. Truck rate changes have been extremely moderate, and most shippers are not expecting much of a change in the first half of 2016. Slow economic growth is not a good environment for rate increases. After falling to the lowest levels in recent history in February, diesel prices are creeping back up, rising 4.6 percent in March.