Cass Freight Index report remains in positive territory

Freight shipments and expenditures both showed significant signs of improvement for the second straight month, according to the most recent edition of the Cass Freight Index Report from Cass Information Systems.

By ·

Freight shipments and expenditures both showed significant signs of improvement for the second straight month, according to the most recent edition of the Cass Freight Index Report from Cass Information Systems.  

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.

With both shipments and expenditures positive for the first two months of the year, as well as what the report’s author, Avondale Partners analyst Donald Broughton, described as a “growing number of data points suggesting that the economy is getting better, it appears that Broughton’s previous thesis of the freight recession coming to an end is indeed accurate.

For February, the most recent month for which data is available, shipments were up 1.9 percent annually at 1.075 and up 7.0 percent compared to January. This increase comes on the heels of a 3.2 percent annual gain in January, a 3.5 percent annual gain in December, a 0.3 November decline, and a 2.7 percent gain in October, which marked the first time it headed up in the previous 20 months.

One of the drivers for shipment gains, as has been the case in recent months, is e-commerce volumes continuing to show outstanding rates of growth, with both FedEx and UPS each reporting strong U.S. domestic volumes, coupled with strong airfreight gains in the Asia Pacific and Europe Atlantic lanes, which were up 8.0 percent and 5.9 percent, respectively in the Avondale Partners index in the most recent month available (January).

Freight expenditures at 2.383 headed up 3.2 percent annually and 5.1 percent compared to January. This follows January gains, which was the month that expenditures turned positive for the first time in 22 months, with January 2016 being its lowest level in five years, with weak demand and crude oil at less than $30 per barrel as the main reasons.

Broughton explained that part of the gains in expenditures is due to a steady increase in fuel prices over the last six months, which is being seen through pricing gains for truckers and intermodal shippers.

And he was bullish in regards to the current state of freight over all.

“Data is suggesting that the consumer is finally starting to spend a little,” he wrote. “It also suggests that, with the surge in the price of crude in October of last year, the industrial economy’s rate of deceleration first eased and then began a modest improvement led by the fracking of DUCs (drilled uncompleted wells), especially in the fields with a lower marginal production cost (i.e., Permian and Eagle Ford). We have been questioning, ‘How fast will the recovery from here be?’ However, the overall freight recession, which began in March 2015, appears to be over and, more importantly, freight seems to be gaining momentum.”

Another factor leading to the analyst’s optimism was that at the manufacturing, wholesale, and retail levels, inventory-to-sales ratios are seeing steady declines.


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
Download the Full 2017 Logistics Management Salary Survey
How does your earning power match up with your logistics and supply chain peers? Find out by downloading the full 2017 Salary Survey from Logistics Management
Download Today!
From the April 2017 Issue
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management market, and in marked contrast to 2016, paints a rosier outlook for career placement and advancement.
Is Your Tractor Trailer Yard a Black Hole?
Information Management: Wearables come in for a refit
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...