Data Center Buildout Adds 1.5% Freight Volume Hidden From Cass Index

Why are freight volumes stronger than the Cass Index shows?

Freight demand is running 1% to 1.5% above year-ago levels, driven by data center construction that the Cass Freight Index does not capture, according to Dr. Jason Miller. Cass shipments were down 4.5% year over year in July, but that figure undercounts industrial freight tied to AI infrastructure buildout. Air freight imports are up 17% year over year, with computers, GPUs, and electrical goods moving onward via expedited truck to data center sites. Primary metals volumes, driven by steel, switchgear, and electrical equipment for the same facilities, are also up year over year.

Heavy equipment manufacturers including Caterpillar, Eaton, and Cummins have each reported higher volumes in 2026 compared to 2025. Miller said that trend is difficult to reconcile with narratives of declining freight demand. Tender rejections have settled around 13%, and net operating authorities are up slightly from recent lows, suggesting capacity is beginning to respond to improved rates but has not surged.

How much capacity is coming back?

Long-distance dry van employment bottomed at approximately 494,000 jobs in February and has edged up to around 500,000, a modest recovery. Heavy truck sales have recovered to roughly a 450,000-unit annualized pace after cratering between September 2025 and April 2026. Miller expects new carrier entry to be significantly slower than the waves seen in 2018–2019 or 2021–2022, and does not anticipate meaningful capacity additions until mid-2027, consistent with the roughly nine-month to one-year lag observed in prior cycles.

A 2019 Bureau of Labor Statistics paper by Stephen Burks and Kristen Monaco found that trucking draws new drivers from a broad range of occupations including material handling and office work rather than predominantly from construction. That means capacity does not flood back simply because construction slows.

What kills this demand cycle?

The biggest near-term risk is Federal Reserve policy. Miller warned that a rate-hiking cycle has historically produced 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 likely to look worse than July's given energy prices alone. A 2024 study found that elevated trucking freight rates ranked as the 10th most important industry factor explaining year-over-year price changes in 2022 versus 2021, making the sector one the Fed monitors closely.

Miller projected that typical expansionary cycle dynamics, which have historically run 18 to 21 months, point toward running room into early 2027, given that the market appeared to shift in December 2025. He forecast spot rates trending softer around mid-to-late 2026, with contract rates following after the next major RFP season.

Why small fleets should care about data center freight

Data center construction generates expedited loads with tight delivery windows. That freight moves at spot rates, not contract. If you run lanes near major metro areas where hyperscalers are building facilities (Northern Virginia, Phoenix, Dallas, Atlanta), you are already seeing the demand signal in tender rejections and rate offers. The volumes are real, but they are not evenly distributed. Carriers running general dry van freight in secondary markets may not see the same tightening.

The risk is timing. If the Fed hikes rates in response to inflation driven partly by freight costs, demand can drop within three to six months. That means the current rate environment may not last into 2027. Small fleets that locked in higher contract rates during the recent RFP season have insulation. Those running spot-only are exposed to the downside when rates soften mid-to-late 2026.

What the enforcement debate means for small carriers

Miller argued the regulatory debate is not about economic re-regulation but about enforcement capacity. He called for more unannounced FMCSA compliance checks focused on hours-of-service and speeding rather than maintenance. "Brokers now playing a primary role in a lot of shippers' routing guides," Miller said, has expanded the carrier base but also concentrated safety risk in a long tail of very small operators with less incentive to comply.

That statement lands differently depending on where you sit. If you run a clean operation with current insurance and no HOS violations, tighter enforcement helps you. It removes competitors who undercut rates by cutting corners. If you are skating on expired insurance or running over hours, the next 12 months will be harder. Brokers are already tightening vetting standards as capacity tightens and shippers demand safer carriers.

The settlement-statement math

A 1% to 1.5% volume increase does not translate directly to a 1% to 1.5% rate increase. Rates move faster than volumes when capacity is tight. Tender rejections at 13% mean roughly one in eight loads tendered to a carrier gets refused. That is not loose capacity. It is not 2018 tight (when rejections hit 25%), but it is tight enough to support rate increases on lanes where demand is concentrated.

For a five-truck fleet running 10,000 miles per truck per month at $2.50 per mile all-in, a 10-cent rate increase adds $5,000 per month to gross revenue. That is $60,000 annualized. If fuel stays flat and you are not adding trucks, that flows to the bottom line. The question is whether you can hold that rate into 2027 or whether you lock it in now during RFP season.

What happens when rates soften

Miller forecast spot rates trending softer around mid-to-late 2026. That does not mean a collapse. It means the current upward pressure eases as capacity catches up to demand. Contract rates follow spot with a lag, typically after the next major RFP season. If you are negotiating annual contracts now, you are negotiating at or near the peak. If you wait until Q1 2027, you may be negotiating into a softer market.

The data center buildout is real, but it is not infinite. Hyperscalers will finish the current wave of construction. When they do, the expedited freight tied to GPUs, switchgear, and electrical equipment will drop. The question for small fleets is whether you positioned yourself to capture the upside while it lasted and whether you have enough contract coverage to ride out the softening when it comes.