Cass Freight Index report sees mixed results in October

A combination of factors led to some semblance of shipment growth for the month of October, 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.

October shipments saw a 2.7 percent gain compared to October 2015 at 1.121, heading up for the first time on an annual basis in 20 months, and a 0.9 percent September to October gain, according to Cass. Cass called it a “more than normal fall surge” in volumes, which it said was driven by varying results across modes, including: e-commerce driven continued volume growth for parcel and airfreight (FedEx and UPS shipments were up 10 percent and 5.2 percent respectively in the most recent quarter); sequential improvements in truck tonnage; and less bad rail and barge volumes.

While still somewhat premature, Cass noted that this shipment data points to increased consumer spending in tandem with the industrial economy’s rate of deceleration easing.

“Simply put, the winter of the overall freight recession we have seen for a year and an half in the U.S. may not be over, but it is showing signs of thawing,” wrote Avondale Partners analyst Donald Broughton, the report’s author.

October freight expenditures remained in the red, with a 3.8 percent annual decline to 2.343 and a 2.2 sequential decline.

Even though there were both annual and sequential declines, the report explained that the rate of contraction is less bad, especially when compared with declines in May, June, July, and August, which dropped 10.1 percent, 8.8 percent, 5.1 percent, and 6.3 percent, respectively. 

Cass attributed the increase to the steady rise in fuel over the last six months while noting it is seeing some improvements in pricing for both truckers and intermodal shippers. 

As for the election of Donald Trump as President, Broughton said that “the extent to which Trump's inititiaitves could lead to higher rates of economic growth and larger volumes of freight flowing through the U.S. economy will depend upon which of the initatives are (or are not) enacted and to which extent they are enacted.”