American truckers have developed a slow leak.
U.S. shipments as measured by the latest Cass Freight Index dropped 5.3 percent last month from a year ago, making it the worst October since 2011. The year-over-year decline was the eighth straight and the biggest since November 2009. Trucks transport almost 70 percent of the nation's freight by weight, according to American Trucking Associations.
Railroads are also having a rough go of it, with combined carload and intermodal originations down 4.3 percent in October from the same period last year, Association of American Railroads data show. Shipments of products by road, rail and water are considered barometers of the economy's current progress, and the latest data indicate a chill has set in.
To figure out what's behind the weakness, one only has to look at the woes affecting American manufacturers — a first-half surge in inventory expansion, a fragile world economy and cutbacks in the nation's oil and gas fields.
"Expect freight to continue to trail off through year's end," Rosalyn Wilson, an analyst at Parsons Corp., wrote in the latest Cass Freight release. "Retailers and wholesalers have ample supply for the holiday season, so imports and freight shipments should not strengthen considerably."
With slumping demand for raw materials and less capital spending in the oil patch at the same time companies work off bloated inventories, the onus for transportation lies with American consumers, which Wilson called "the silver lining in the storm clouds." Any slowdown in household spending and the recent weakness in trucking will probably extend through early 2016.