Cass Freight Index shows mixed data for August shipments and expenditures

Increasingly consistent may be the best way to describe current market conditions, according to the most recent edition of the Cass Freight Index Report, which mostly saw sequential and annual declines for freight shipments and expenditures.

Many freight transportation and logistics executives and analysts consider the Cass Freight Index to be the most accurate barometer of freight volumes and market conditions, with many analysts noting that the Cass Freight Index sometimes leads the American Trucking Associations (ATA) tonnage index at turning points, which lends to the value of the Cass Freight Index.

August shipments were down 0.4 percent compared to July at 1.115 and off 1.1 percent annually for its 18th straight annual decline. The report explained that a combination of growth in a few areas mostly related to e-commerce, with lower levels of expansion in transit modes serving the auto and housing/construction sectors led to slightly lower shipment volumes, while the modest sequential volume gain provides a “glimmer of hope that the contraction in volumes may be getting closer to an end.”

August expenditures at 2.278 dropped 6.3 percent annually, which was steeper than the 5.1 percent annual decline in July, but were up 3.3 percent compared to July.

Cass attributed these declines to excess capacity in trucking, rail, air freight, barge, ocean container, and bulk, as well as the ongoing decline in diesel and jet fuel, and corresponding fuel surcharges that “influence pricing realized by shippers.”

And it also observed that in most modes the gap between spot and contract pricing is closing slightly, which has more to do with slight contract pricing declines than a function of spot pricing improvements. Looking ahead, Cass does not expect material pricing changes for most modes, with the exceptions being in the parcel market and some forms of expedited transit relating to e-commerce.

Donald Broughton, the report’s author and transportation analyst for Avondale Partners, wrote that the U.S. economy continues to be in a state of transition, due in large part to U.S. consumers opting to pay down debt and increase their savings as gas prices have fallen, explaining that the “consumer has not yet picked up where the industrial economy left off.”