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

Don’t let traditional metrics fool you. Dr. Jason Miller uncovers how an explosion in data center construction is quietly fueling significant freight demand, often going unnoticed by conventional measures. We dive into how this overlooked sector is influencing the market and what it means for capacity and rates in the near future. Plus, what Federal Reserve rate hikes could mean for demand down the road.

Freight demand tied to data center construction is materially stronger than headline industry metrics suggest, according to Dr. Jason Miller, who contends that the ongoing buildout of AI infrastructure is generating significant truckload volumes that conventional measures such as the Cass Freight Index are not capturing. 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 is visible 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.

“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 Jason Miller.

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. 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 have recovered to roughly a 450,000-unit annualized pace after cratering between September 2025 and April of this year.

On the capacity side, Miller said long-distance dry van employment bottomed at approximately 494,000 jobs in February and has edged up to around 500,000 — a modest recovery. He 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.

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. On the regulatory front, Miller argued the debate is not about economic re-regulation but about enforcement capacity, calling 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.

• Air freight imports up 17% year over year, with GPU and electrical goods cargo moving onward via expedited truck to data center sites
• Overall freight volume estimated at 1%–1.5% above year-ago levels; meaningful new carrier capacity entry not expected until mid-2027
• Federal Reserve rate hikes pose the biggest near-term demand risk, with trucking historically seeing volume drops within 3–6 months of a hiking cycle

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.