Cass Freight Index is down for first time in five months

Shipments and expenditures are both down, and other freight indices are showing some recent slippage

By ·

Following four straight months of sequential growth, the Cass Information Systems Freight Index declined in July.

The Index, which measures the number of shipments and expenditures that are processed through Cass’s account payable systems, indicated that July shipments at 1.011 were 8.6 percent lower than June shipments and 6.7 percent higher than July 2009. While shipments were down for the first time in five months, shipments remained above 1.0 for the third straight month. May marked the first time that shipments were above 1.0 since November 2008.

July’s shipment expenditures at 1.832 were 4.5 percent lower than June’s 1.919, and were 18.6 percent better than July 2009’s 1.491.

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.

One thing in common that the most recent Cass Freight Index and the ATA tonnage index have in their most recent editions is that shipment and tonnage levels, respectively, are down. These findings are in sync with other recent economic reports that the economic is slowing down after a promising first half of 2009.

Among the recent economic indicators are recent reports from the Department of Commerce, which noted new orders for manufactured goods decreased 1.2 percent in June to $406.4 billion, and shipments declined 0.8 percent to $411.2 billion, and new orders for manufactured durable goods in June 2010 fell 1.0 percent, to $190.5 billion and inventories rose 0.9 percent in June.

What’s more, the Institute of Supply Management reported yesterday that its manufacturing index, also known as the PMI, has declined for three straight months, although it remains above 50 percent which indicates the economy is growing.

Charles W. “Chuck” Clowdis, Managing Director, Transportation Advisory Services, at IHS Global Insight, told LM that it appears the inventory replenishment phase has passed and the economy has been sluggish also, coupled with the fact that consequently, tonnage and revenue gains have slowed likewise.

“Full recovery appears further out than we had previously hoped,” said Clowdis. “In my opinion, the unemployment rate continues to keep consumer spending low-not only by those unemployed obviously, but making employed individuals even more cautious about spending.”

And while year-over-year numbers may continue to mildly improve, compared to 2005-2006, the economy has a ways to go yet, according to Clowdis. And shippers, he said are bracing for rate increases. But the best news for them is that as recovery slows, the increases requested by transport providers will not be as large as they may have been with lessened capacity and rising fuel costs.”

Even though industry conditions may appear to be losing traction, a trucking industry executive whom declined to be identified said his company continues to see demand holding up relatively well.

“Shippers are clearly interested in securing capacity,” he said. “They’re taking steps to ensure they have the resources they need from their key carriers, particularly as we approach the higher-volume seasonal shipping months.” 


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
Face security threats head-on. Protect data beyond perimeter.
Traditional Data Loss Protection (DLP) solutions present a number of serious shortcomings and challenges for companies deploying them, creating a clear gap in the market.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Securing IoT data across the connected supply chain
Learn why a holistic approach to IAM is the most effective way to govern access to your systems and information requested by your partners, vendors, customers, and connected devices.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...