Cass Freight Index inches down in December

Freight volumes finished 2010 on a somewhat uneven growth path in December, according to the most recent edition of the Cass Information Systems Freight Index.

The index, which measures the number of shipments and expenditures that are processed through Cass’s account payable systems, has been up in eight of the last ten months.

December shipments at 1.049 were down 3.6 percent compared to November’s 1.088, but shipments remained over 1.0 for the eighth straight month, with May 2010’s 1.014 shipment mark being the first time shipments eclipsed 1.0 since November 2008. December shipments were up 12.4 percent year-over-year.

December shipment expenditures at 1.912 were down 3.9 percent compared to November’s 1.989. Expenditures were up an even 20 percent compared to December 2009.

As LM has previously noted, many trucking industry executives and analysts consider the Cass Freight Index as an accurate barometer of freight volumes and market conditions, with Credit Suisse analyst Chris Ceraso stating in research notes 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.

The ATA recently reported that its advance seasonally-adjusted (SA) For-Hire Truck Tonnage index was down 0.1 percent in November, following a revised 0.9 percent bump in October. The ATA also reported that its not seasonally-adjusted index (NSA), which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 108.9 in November, down 3.7 percent from October and up 8.3 percent year-over-year.

The Cass and ATA numbers come at a time when there continue to be various underlying mixed signals regarding the economic recovery and its strength. While December retail numbers were strong, anecdotal evidence indicates that they typically do not factor into December numbers, as those numbers are based on orders made by manufacturers and retailers earlier in the year.

But in any event, it has not stopped carriers from being optimistic about freight volume prospects for 2011.

“It may be a seasonal effect, but it is clear things are picking up on a sequential basis lately, but there is still a long way to go to really get back to where things were before the downturn,” a truckload carrier told LM.

And while the Cass Freight Index was down on a sequential basis in two of the last three months of 2010, a research note by Robert W. Baird analyst Jon Langenfeld indicated that freight trends overall are stable, with lean inventories and modest restocking offsetting consumer demand headwinds from earlier in the year.

“Despite a more muted peak than expected, November trucking volumes were better than seasonal as peak season extended longer than expected,” wrote Langenfeld. “Demand outlook for 2011 is positive, with industrial end-markets likely outperforming retail.”

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