March 2016 Freight Transportation Services Index (TSI)

Wednesday, May 11, 2016

The Freight Transportation Services Index (TSI), which is based on the amount of freight carried by the for-hire transportation industry, fell 0.9 percent in March from February, falling for the second consecutive month, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ (BTS). The March 2016 index level (120.0) was 26.7 percent above the April 2009 low during the most recent recession (Tables 1, 2, and 2A).

Freight Transportation Services Index, March 2011 - March 2016

Freight Transportation Services Index, March 2011 - March 2016

The level of freight shipments in March measured by the Freight TSI (120.0) was 2.8 percent below the all-time high level of 123.5 in November 2014 (Table 2A). BTS’ TSI records begin in 2000. See historical TSI data.

The February index was revised down to 121.1 from 122.2 in last month’s release, and the January index was revised down to 122.9 from 123.1.

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.

Analysis: The March Freight TSI decrease of 0.9 percent from February was broad in terms of mode – all freight modes decreased except for air freight, which rebounded after a significant decrease in February. The decrease was driven by continued weakness in the mining (including oil and gas well drilling and servicing), utility and manufacturing sectors of the economy. The Federal Reserve Board Industrial Production index declined 0.6 percent in March, its second consecutive monthly decline. Housing starts were 8.8 percent below the February level.

The first-quarter TSI decline of 1.2 percent from the second quarter matched trends in the larger economy. Gross Domestic Product (GDP) growth decreased to the relatively slow annual rate of 0.5 percent. The Industrial Production index also declined during the first quarter.

Trend: Following declines of 1.5 percent from January to February and 0.9 percent from February to March, the Freight TSI was 2.4 percent below its level of December 2015. The index fell to the lowest point since March 2014, 2.8 percent below the high point of November 2014. The two-month decline was the largest since January 2014. The first-quarter decline of 1.2 percent was the largest quarterly decline since the third quarter of 2012. It was the first time that Freight TSI has declined for two consecutive quarters since the first quarter of 2009, when the economy was in recession. The Freight TSI has now declined in four of the last five quarters. The index remains high compared to earlier years and has increased by 26.7 percent since its low of 94.7 in April 2009. For additional historical data, go to TSI data.

Index highs and lows: Freight shipments in March 2016 (120.0) were 26.7 percent higher than the recent low in April 2009 during the recession (94.7). The March 2016 level was 2.8 percent below the historic peak reached in November 2014 (123.5).

Year to date: Freight shipments measured by the index were down 1.2 percent in March compared to the end of 2015 (Table 3).

Long-term trend: Freight shipments are up 8.5 percent in the five years from the post-recession level of March 2011 and are up 7.2 percent in the 10 years from March 2006 (Table 5).

Same month of previous year: March 2016 freight shipments were down 2.4 percent from March 2015 (Tables 4, 5).

1st quarter changes: The Freight TSI fell 1.2 percent in the 1st quarter (Table 10).

The TSI has three seasonally adjusted indexes that measure changes from the monthly average of the base year of 2000. The three indexes are freight shipments, passenger travel and a combined measure that merges the freight and passenger indexes. See Seasonally-Adjusted Transportation Data for numbers for individual modes. TSI includes data from 2000 to the present. Release of the April index is scheduled for June 8.

Passenger Index: The TSI for passengers rose 0.4 percent in March from its February level (Table 6). The Passenger TSI March 2016 level of 124.0 was 2.6 percent above the March 2015 level (Table 7). The index is up 9.3 percent in five years and up 11.7 percent in 10 years (Table 5). The passenger TSI measures the month-to-month changes in travel that involves the services of the for-hire passenger transportation sector. The seasonally adjusted index consists of data from air, local transit and intercity rail.

Combined Index: The combined freight and passenger TSI fell 0.5 percent in March from its February level (Table 8). The combined TSI March 2016 level of 121.3 was 0.9 percent below the March 2015 level (Table 9). The combined index is up 8.7 percent in five years and up 8.4 percent in 10 years (Table 5). The combined TSI merges the freight and passenger indexes into a single index.

Revisions: Monthly data has changed from previous releases due to the use of concurrent seasonal analysis, which results in seasonal analysis factors changing as each month’s data are added.

BTS research has shown a clear relationship between economic cycles and the Freight and Passenger Transportation Services Indexes. See a study of this relationship using smoothed and detrended TSI data. Researchers who wish to compare TSI over time with other economic indicators, can use the FRED database, which includes freight, passenger and combined TSI, and which makes it possible to easily graph TSI alongside the other series in that database. See TSI data on FRED.

For a video explanation of the TSI, see Overview of the Transportation Services Index. A BTS report explaining the TSI, Transportation Services Index and the Economy, is available for download.