The Freight Transportation Services Index (TSI), which is based on the amount of freight carried by the for-hire transportation industry, fell 0.6 percent in September from August, falling for the second consecutive month, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ (BTS). The September 2016 index level (121.5) was 28.2 percent above the April 2009 low during the most recent recession.
The level of freight shipments in September measured by the Freight TSI (121.5) was 2.6 percent below the all-time high level of 124.7 in July 2016. BTS’ TSI records begin in 2000.
The August index was revised down slightly to 122.2 from 122.3 in last month’s release. The July index was revised up slightly to 124.7 from 124.5.
The Freight TSI measures the month-to-month changes in freight shipments by mode of transportation in tons and ton-miles, which are combined into one index. The index measures the output of the for-hire freight transportation industry and consists of data from for-hire trucking, rail, inland waterways, pipelines and air freight. The TSI is seasonally adjusted to remove regular seasons from month-to –month comparisons.
Analysis: The September Freight TSI fell 0.6 percent due to declines in trucking, pipeline and rail intermodal, while air freight, water, and rail carloads rose. The September decrease took place as the economy was relatively stable. The Federal Reserve Board Industrial Production index rose only 0.1 percent in September, though employment grew by 161,000 jobs and housing starts were 1.9 percent above the August level.
The 0.7 percent third quarter decrease matched slow growth in Industrial Production, which remained unchanged in the third quarter, while Gross Domestic Product (GDP) growth quickened to 2.9 percent in the third quarter. GDP growth in the second and third quarters outpaced the 1.5 percent growth of TSI over those two quarters, after two earlier quarters when GDP grew less than 1 percent and TSI declined.
Trend: The Freight TSI decreased 0.6 percent in September following a 2.0 percent decline August, for a total decline of 2.6 percent over the two months. These two months of decreases followed four months of consecutive monthly increases, leaving the Freight TSI at its lowest point since March. The September level was 0.1 percent below the level at the start of 2016.
The third quarter decrease of 0.7 percent followed an increase of 2.3 percent in the previous quarter, for a net increase of 1.5 percent over the six months. Since the beginning of 2015 Freight TSI has declined in five out of seven quarters and is down 1.8 percent since peaking at 123.7 at the end of the fourth quarter of 2014. The index remains high compared to earlier years, rising 28.2 percent since the low of 94.7 in April 2009.
Index highs and lows: Freight shipments in September 2016 (121.5) were 28.2 percent higher than the recent low in April 2009 during the recession (94.8). The September 2016 level was 2.6 percent below the historic peak reached in July 2016 (124.7).
Year to date: Freight shipments measured by the index were up 0.1 percent in September compared to the end of 2015.