Cass Freight Index is down again in January

Following a decline in December freight shipments, the first month of 2011 continued that trend, according to the most recent edition of the Cass Information Systems Freight Index.

<div style=The December decline was typical, as retailers filled their shelves early for the holidays and did not need to restock in December. Read the complete report.
" class="img-responsive" />
The December decline was typical, as retailers filled their shelves early for the holidays and did not need to restock in December. Read the complete report.

in the News

Private Fleet vs. Dedicated: Which one is right for you?
UPS turns in strong Q1 performance
Universal Asset Management see significant time, money and labor savings with FedEx Freight Box
Future of WMS mapped out in Oracle Forecast
Is Your Logistics Strategy Keeping Pace with Your Manufacturing Efficiency?
More News
By ·

Following a decline in December freight shipments, the first month of 2011 continued that trend, according to the most recent edition of the Cass Information Systems Freight Index

January shipments at 1.010 were up 12.3 percent year-over-year and down 4 percent compared to December’s 1.049. Shipments remained above the 1.0 mark for the ninth straight month, with May 2010’s 1.014 shipment mark being the first time shipments eclipsed 1.0 since November 2008.

January shipment expenditures at 1.859 were up 27.2 percent over January 2010, and expenditures were down 3 percent compared to December’s 1.912 expenditure reading.

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’s advance seasonally-adjusted (SA) For-Hire Truck Tonnage index was up 2.2 percent in December, following November’s revised 0.6 percent decline (up from -0.1 percent) and a cumulative 2.8 increase over September and October. The ATA said that the current SA index is 111.6 (2000=100), marking the highest level since September 2008.  And on an annual basis, the SA is up 4.2 percent, topping November’s 3.3 percent gain.

The ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment, was 107.2 in December, down 1 percent from November, which was down 3.7 percent from October. The NSA was up 4.4 percent in December compared to December 2009’s 102.9 reading.

An analysis of the January Cass numbers provided by Rosalyn Wilson, senior analyst with Delcan Corporation, noted that shipment volume got off to a slow start in the first half of January, but increased substantially as the month progressed.

“Lingering retail inventories—combined with a very cautious approach to product replenishment—resulted in moderate shipments of consumer goods,” wrote Wilson. “This does not signal another long-term downward trend for freight, but is rather one of the bumps expected during the recovery. Consumers are not leading the recovery as they have after previous recessions, which mean this is new ground for charting the future. The trend will be for much leaner inventories and immediate response to inventory stockpiling. Industrial production has been rising for the last several months and manufacturing orders have also picked up substantially, both of which will lead to increasing freight volume.”

Wilson added that with freight capacity still fairly abundant there has not been significant pressure on rates, even though freight expenditures were up 27.2 percent annually in January. She explained that with the inventory re-build of the first half of 2010, in which carriers were able to successfully increase rates, complete, carriers have not yet since regained the pricing power they had during that time. But, rates, she said will rise quickly should shipment volumes grow and capacity tightens.

In an interview with LM, FTR Associates President Eric Starks said that tightening is more of an issue on the truckload side than the less-than-truckload (LTL) side, although he noted there are some signs of capacity imbalance on the LTL side but not to the level seen for truckload.
“The pressure is mainly on the truckload sector,” he said. “As business activity picks up, though, we think the LTL sector will be impacted, too. The freight environment in the fourth quarter was somewhat stagnant, but as things move forward it will accelerate through this year and that is a good thing.”

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 retail numbers and consumer confidence appear to be gaining steam, sluggish unemployment and housing data continue to be a drag on the overall economic outlook.

Despite the mixed messages, myriad shippers and carriers have told LM they are more positive on volume growth prospects in 2011, but they are acknowledging it will be a gradual return to pre-recession levels, even though most signs are pointing in the right direction.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Private Fleet vs. Dedicated: Which one is right for you?
Having the right fleet for your business can give you an advantage over the competition and lower transportation costs.
Download Today!
From the April 2017 Issue
While adoption rates have remained relatively flat, yard management systems (YMS) are helping logistics operations turn that important space between the loading dock and the gate into a vital link in the supply chain.
Information Management: Wearables come in for a refit
2017 Air Cargo Roundtable: Positive Outlook Driven by New Demand
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Maximize Your LTL Driver Adherence with Real-time Feedback
This webinar shows how companies are using real-time performance data to optimize the scheduling of their city fleets, as well as the routing of their standard, accelerated and time-critical shipments.
Register Today!
EDITORS' PICKS
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...

ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...