Manufacturing at 4-Year High Signals Strong Freight Demand Ahead

U.S. manufacturing posted its strongest reading since May 2022, with the ISM Manufacturing PMI climbing to 54.0% in May, up 1.3 points from April. The data marks the fifth consecutive month of expansion and sends a clear signal to trucking that industrial freight demand is strengthening. New Orders surged to 56.8% while Production held at 54.3%, with the Backlog of Orders index climbing to 52.2%. These metrics point to sustained factory activity heading into summer. Supplier Deliveries hit 60.6% for the second straight month, the highest level since May 2022, signaling stretched vendor lead times and typically translating to more expedited freight and tighter scheduling windows for carriers. Customer inventories remain low at 42.7%, historically a signal for continued production and restocking shipments. National dry van spot rates reflected the uptick in demand, with linehaul rates increasing $0.07 per mile to a 7-day average of $2.39 per mile. This is $0.72 per mile, or 43%, above last year and $0.38 per mile higher since before Roadcheck Week. However, carriers face mounting cost pressures. Diesel fuel appeared among commodities rising in price for a third consecutive month, driven by Middle East oil market volatility. Trucking services were cited among prices increasing. In panelist comments, 57% flagged pricing volatility as an active concern, with 42% mentioning the Iran conflict. The takeaway: freight demand is the strongest in four years, but carriers operating on thin margins face headwinds from rising fuel and input costs they may struggle to pass through to customers.