Data center construction is generating materially stronger freight demand than headline industry metrics suggest, according to Dr. Jason Miller, as conventional measures such as the Cass Freight Index undercount the industrial activity fueling the current market. Cass shipments were down approximately 4.5% year over year in July, but Miller and fellow analyst Ken Adamo argued that figure undercounts the industrial freight activity fueling the current market tightening.
The demand signal shows up in adjacent data points. Air freight imports are up 17% year over year, with that cargo — computers, GPUs, and electrical goods destined for data center facilities — moving onward via expedited truck. Primary metals volumes, driven by steel, switchgear, and electrical equipment tied to data center construction, are also up year over year. Heavy equipment manufacturers including Caterpillar, Eaton, and Cummins have each reported higher volumes in the current year compared to last, a trend Miller said is difficult to reconcile with narratives of declining freight demand.
The numbers behind the boom
Miller pegged overall freight volume growth at roughly 1% to 1.5% above year-ago levels — well below the 3.5% to 4% growth seen in 2018, but still positive. The key indicators:
| Metric | Current Reading |
|---|---|
| Cass shipments (July, year over year) | Down ~4.5% |
| Air freight imports (year over year) | Up 17% |
| Overall freight volume growth (Miller estimate) | +1% to +1.5% |
| Tender rejections | ~13% |
| Heavy truck sales (annualized pace) | ~450,000 units |
| Long-distance dry van employment (February bottom) | ~494,000 jobs |
| Long-distance dry van employment (current) | ~500,000 jobs |
“When you start looking at Caterpillar, Eaton, Cummins, all of these heavy equipment manufacturers, especially in the case of Cat and Cummins saying, hey, we’re doing more volume this year than last year — that’s where it’s hard to square with the idea that freight volumes are down,” said Miller.
Capacity response remains restrained
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. Heavy truck sales recovered to roughly a 450,000-unit annualized pace after cratering between September 2025 and April of this year.
On the labor side, long-distance dry van employment bottomed at approximately 494,000 jobs in February and has edged up to around 500,000 — a modest recovery. 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, Miller noted, found that trucking draws new drivers from a broad range of occupations including material handling and office work rather than predominantly from construction — relevant as data center construction competes for labor.
Federal Reserve policy is the key risk
The biggest near-term risk to the demand outlook, both analysts agreed, 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. He noted that the 30-year Treasury yield has reached its highest level since 2007, and that 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.
Watch list
- Federal Reserve rate decisions and their three-to-six-month lagged impact on truckload demand.
- August producer price inflation data, which Miller said is likely to look worse than July’s on energy prices alone.
- Spot rate direction into mid-to-late 2026, with contract rates expected to follow after the next RFP season.
- Capacity entry timelines — Miller does not expect meaningful additions until mid-2027.
- Air freight import volumes for computers, GPUs, and electrical goods, which are leading indicators for data center construction demand.
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