Subscribe to our free, weekly email newsletter!

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 Jeff Berman, Group News Editor
August 03, 2010

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 headshot
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. .(JavaScript must be enabled to view this email address).

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!

Recent Entries

Kurt Nagle, president and CEO of the American Association of Port Authorities recently voiced his endorsement of this trade legislation

While many auto executives expect more industry recalls in 2015 and 2016, just 8 percent use advanced predictive analytics to help prevent, prepare for, and manage recalls, according to a recent online poll from Deloitte.

Purolator white paper highlights common Canadian shipping mistakes. From failing to appreciate the complexity of the customs clearance process to not realizing that Canada recognizes both French and English as its official languages, U.S. businesses frequently misjudge the complexity of shipping to the Canadian market. This often results in mistakes - mistakes that can come with hefty penalties and border clearance delays, and that can result in lingering negative perceptions among Canadian consumers.

At a certain point, it seems like the ongoing truck driver shortage cannot get any worse, right? Well, think again, because of myriad reasons we could well be in the very early innings of a game that is, and continues, to be hard to watch. That was made clear in a report issued by the American Trucking Associations (ATA), entitled “Truck Driver Analysis 2015.”

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA