Freight: Aluminum's canary in the coal mine

When end-users are building stock, it suggests higher growth than net consumption. This risk will grow as we cope with inflation and the temptation by buyers to purchase ahead of price increases.

We need to be especially cautious about this now, as the impact of import tariffs remain uncertain.  

Conversely, when end-users are de-stocking, it signals that demand may be declining faster than true net consumption. The best example came during the 2008-2009 Global Financial Crisis (GFC) when CFOs around the world sought to boost liquidity. They instructed procurement officers to slash purchases dramatically and eliminate working capital tied up in inventories. 

Despite the potential trap created by inventory changes, freight must be studied as a leading indicator of demand.

Truck freight

Truck freight is the epitome of just-in-time demand, as trucks are booked when shippers need to move products now. In the aluminum market, trucks have displaced rail for nearly all domestic point-to-point movements. Rail has become too unreliable, too slow, and some consumers lack rail sidings to accommodate railcar shipment.  

The Department of Transportation’s Bureau of Transportation Statistics (BTS) provides the most reliable public data on truck freight. They source high-level data from the American Trucking Association (ATA), which provides more detailed data on a subscriber-based model.

The BTS publishes a monthly “Truck Tonnage Index,” with July 2015 as the (100). The latest data is for July 2025, showing an index of 113.3. This compares to 112.5 in June and 113.5 in July 2024. July 2023 was 115. 

These tonnages indexes are relatively “flat” year over year. That pattern is consistent with freight rates, where flatbed trucks are the dominant equipment for aluminum.  

Our private sources for flatbed spot rates show August 2025 rates down 0.4% year over year. That confirms the market is not seeing any real demand-pull for freight.

Rail freight

The Association of American Railroads (AAR) remains the best source of U.S. rail data. The AAR excludes the U.S. operations of Canadian National, Canadian Pacific, or Canadian Pacific Kansas City railroads. While this limits visibility into aluminum movements within the U.S., it should capture those cross-border movements from Canada to the U.S., where the real volume lies.  

Our assessment is that U.S.-originating aluminum from producers like Alcoa and Century Aluminum is likely moving almost entirely by truck, so visibility loss here is minimal. At press time, the American Short Line and Regional Railroad Association (ASLRRA) has not released any new data on “last mile” movements of major commodities. We will continue to monitor for updates that correlate with AAR data.

AAR U.S. carload shipments by leading commodities for the week ended Sept. 27, 2025:

Thoughts on the highlighted sectors:

• Coal shipments are seeing a temporary boost from the delayed retirement of older generating capacity, though the strength of this support may not last.
• Metallic ores and metal shipments are down overall, likely owing to a drop in ore shipments outweighing gains elsewhere. Since the ferrous market is the largest domestic market by volume, this is likely driven by a decline in iron ore shipments, rather than aluminum. Inversely, ferrous scrap shipments, which are not subject to Section 232 tariffs like iron ore and pig iron, appear to have offset a large amount of the decline in ore shipments as scrap more attractive for electric arc furnace (EAF) mills. In a similar vein, primary metal products have probably cushioned the blow, supported by an uptick in domestic demand relative to imports. That shift tends to generate more U.S. rail traffic as material moves between domestic facilities and the fact that these products are harder to substitute than feedstock and downstream products.
• Motor vehicles and parts shipments are seeing gains, likely tied to Section 232 tariffs on imported autos and parts. The tariffs appear to have pushed more sourcing toward U.S. suppliers, which shows up as higher rail traffic. That lift reflect trade policy effects rather than a fundamental improvement in demand.
• Forest product shipments remain under pressure, with shipments reflecting weaker lumber and wood demand amid slower housing starts.

Why This Matters

Studying freight data for clues on demand requires patience. One or two months of data does not establish a trend. We need to see at least one or two quarters of consistent data before drawing real conclusions.  

The data on the truck market suggests that commodity demand is simply moving sideways, with no clear breakout either up or down. Because aluminum is so dependent on trucking for its final mile-delivery, it is important to monitor both freight rates and the index closely for any signs of slowdown. Everyone is focused on when demand destruction might hit, and freight could be our first warning sign.

Rail data is less informative for aluminum, as it is much more heavily weighted toward steel raw materials and products. However, it still warrants attention – because if steel catches a cold, aluminum will likely catch it too.