DATA CENTER BOOM: Why freight demand is stronger than you think

An explosion in data center construction is quietly driving freight demand, according to Dr. Jason Miller. While conventional metrics such as the Cass Freight Index may understate this demand, Miller's analysis reveals significant truckload volumes being generated by the infrastructure buildout. Air freight imports have increased 17% year-over-year, with computers, GPUs, and electrical goods destined for data centers being moved via expedited truck.

Additionally, primary metals volumes—primarily steel, switchgear, and electrical equipment—have also risen year-over-year. Heavy equipment manufacturers, including Caterpillar, Eaton, and Cummins, are reporting higher volumes compared to last year, a trend that contradicts the notion of declining freight demand. Overall freight volume growth is estimated at roughly 1% to 1.5% above year-ago levels, which is lower than the 3.5% to 4% growth seen in 2018 but still positive.

Tender rejections are around 13%, and net operating authorities have increased slightly from recent lows. Heavy truck sales have recovered to an annualized pace of about 450,000 units, after dropping between September 2025 and April 2026. Long-distance dry van employment has bottomed at approximately 494,000 jobs in February and has since crept up to around 500,000, indicating a modest recovery.

Miller expects new carrier entry to be significantly slower than in previous expansion cycles and does not foresee meaningful capacity additions until mid-2027, which aligns with the typical nine-month to one-year lag observed in prior cycles. The biggest near-term risk to the demand outlook, according to Miller and fellow analyst Ken Adamo, is Federal Reserve policy.

Historically, rate-hiking cycles have led to a material drop in trucking demand within three to six months. The 30-year Treasury yield has reached its highest level since 2007, and August producer price inflation is expected to look worse than July's due to rising energy prices. A 2024 study found that elevated trucking freight rates were the 10th most important industry factor explaining year-over-year price changes in 2022 versus 2021, making the sector one of the Federal Reserve's primary concerns.

Miller projects that the market might see softer spot rates around mid-to-late 2026, with contract rates following the next major RFP season. He advises that the regulatory focus should shift towards more unannounced FMCSA compliance checks, particularly on hours-of-service and speeding, to address the increased safety risks posed by a larger carrier base with a higher proportion of very small operators.