(Bloomberg), The U.S. real economic activity is slowing dramatically. The result is a lower demand for autos and trucks, as well as a decrease in freight volumes. This leaves transport stocks vulnerable to further decline.

The U.S. heavy truck market is a good indicator of economic activity. It accounts for 65% of North American freight value. However, new truck sales are down sharply. They have fallen 23% annually. The same is true for new auto sales. The combined sales of trucks and cars are at an all-time low that was previously associated only with recessions.

It isn’t a prediction of a recession. A rapid shift in regimes across the economies and markets is a sign of recession. We are not seeing this. This sharp fall in vehicle sales indicates that slowing growth may be in the mail.

Also, freight volume growth is slowing. After reaching 20% in 2012, the annual growth of containers at Los Angeles’ Port of Los Angeles has been steadily declining to 0%. China’s lockdowns are evidently having an effect. Cities and regions accounting for over 40% of China’s 2020 GDP are in full or partial lockdown. This is the worst decline in 10 years of index history. The Shanghai freight index has fallen 13% since six weeks ago.

Although shipping rates are falling, it’s not realistic as exporters cannot load the boxes into their warehouse and then move them on to the ships.

While China’s lockdown may have been a factor in falling shipping rates, the real cause lies elsewhere. The fall in global liquidity is a result of central banks stepping back from their historically loose monetary policy to curb inflation. A collapse in global liquidity means that shipping rates will remain low for the foreseeable future.

This cycle has made it clear that commodities and their movements around the globe are inextricably linked to liquidity. As a commodity producer, if you don’t have the liquidity to cover the margin on your short futures positions, bankruptcy means you can’t ship and deliver your commodities, exacerbating the rise in prices and triggering more margin calls.

The underperformance in transport stocks is likely due to the liquidity-driven declines of truck and shipping usage. The S&P transport index is down 11% from its high of  last month. Transports and autos are roughly flat to the S&P year-to-date, so should begin to lag. It is also a smart idea to keep your weight low in the medium- to long-term sectors during an inflationary period.

• NOTE: Simon White is a macro strategist for Bloomberg’s Markets Live blog. His observations do not constitute investment advice. See the MLIV Blog for more Market commentary.

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