A widely followed monthly index of U.S. shipping activity hit levels in March that reinforced what shippers and carriers are discovering: that tightening capacity and soaring diesel fuel prices are driving up shipping costs at a much faster rate than volumes.

The index, published by freight audit and payment firm Cass Information Systems, is based on the expenditures and shipments of 400 shippers that use Cass's services. In March, the freight expenditure index—a measure of shipper spend—reached 2.22, a 33.6-percent increase from March 2010, and a 6.3-percent jump from February's numbers.

The survey's index of shipments reached 1.108, a 13.8-percent increase from the year-ago period, and a 6.9-percent increase over February, which is being viewed as a relatively slack month for shipments due to the impact of severe winter weather in parts of the country.

In a statement accompanying the report, Bridgeton, Mo.-based Cass said that "tightening capacity and soaring fuel prices continue to drive rates up, thus accounting for the remarkable difference between spend and volume growth. This trend is expected to continue through the remainder of 2011."

The report added that "increased volumes in shipping, as well as positive news on other economic indicators, continues to provide evidence that the U.S. economic recovery is continuing forward."

Rosalyn Wilson, who now oversees the Cass report and is also the author of the annual State of Logistics Report produced by the Council of Supply Chain Management Professionals, said the dichotomy between the volume and expenditures indices reflects the impact of higher rates, most notably fuel surcharges. By contrast, rates and surcharges were relatively constrained at this time last year, though volumes were growing, Wilson said.

As of April 4, the average price for a gallon of diesel fuel stood at $3.975, up 96 cents from the same period in 2010. In California, average diesel prices stand at $4.32 a gallon.

Thomas R. Wadewitz, lead transport analyst for JPMorgan Chase & Co., said in a research note that the sequential growth in shipments was "meaningfully stronger than the growth during the 2004-2006 period, the last sustained uptrend for motor freight demand. Wadewitz added as a caveat that the sequential growth was likely skewed by weather-related traffic softness in February.

Wadewitz, who views the index as a valuable barometer of volume trends in the less-than-truckload and truckload markets, said the shipment index is rising at a slightly faster clip than the industry's daily tonnage figures, an indication that the firm's first-quarter industry tonnage forecast ranges from "reasonable to slightly conservative."

Connecting the Cass data with truckload market trends is more difficult due to the fragmented nature of the truckload sector, Wadewitz said. He surmised that demand for truckload transportation is trending in line with or slightly better than normal demand patterns at this point in the truckload cycle.