`All gas. No brakes’

On a nonseasonally adjusted basis, the shipments subindex rose in December by 6.7% year-on-year, picking up steam from the 2.7% year-on-year gain in November, according to the data. Based on a two-year “stacked” basis, which averages out the monthly activity for the period, the subindex is 1.8% lower than in December 2018, said Tim Denoyer, ACT’s lead research analyst and the report’s author.

Cass combines data from truckload — which accounts for half of the indexes — railroad, less-than-truckload (LTL) and parcel, among other modes.

The current upcycle, which began in the May-June period, “still has several powerful growth tailwinds” following a two-year freight downturn, Denoyer said. The recent injection of around $900 billion in stimulus, along with the prospects for more federal aid with Democrats soon to be in control of the executive and legislative branches, will boost GDP growth and, by extension, freight volumes and pricing, he said.

ACT recently raised its 2021 GDP growth forecast to 5.1%, following a 3.7% contraction in 2020.

With the expenditures subindex hitting record highs, the “transition from an early-cycle environment to mid-cycle environment is underway,” Denoyer wrote. The headline of the ACT report seemed apropos under the circumstances: “All gas. No brakes.”

The improvement in the shipments subindex can be tied to improving trends in the rail sector, especially in intermodal where volumes had a very strong finish to the year, ACT said. The volume gains are expected to carry over into 2021 as U.S. retailers push to replenish depleted inventory stocks and containership lines reduce their number of “blank” (or canceled) sailings ahead of the Lunar New Year, which runs Feb. 12-26 and when virtually all Chinese factories close and workers scatter to their respective home cities and provinces, Denoyer said.

Cass’ Truckload Linehaul Index, which measures shifts in per-mile rates independent of fuel and add-on charges known as “accessorials,” rose 1.1% in December on a year-on-year basis. This followed a 0.6% gain in November, the first year-over-year increase in 15 months. However, truckload rates are quickly firming as evidenced by the 6% implied rate increase in December, ACT said.