Subscribe to our free, weekly email newsletter!


Cass Freight Index report shows multiple signs of an improving freight transportation market

By Jeff Berman, Group News Editor
July 07, 2014

Signs of strength in the freight transportation market were apparent in the most recent edition of the Cass Freight Index Report from Cass Information Systems.

The Cass Freight Index accurately measures trends in North American shipping activity based on $23 billion in paid freight expenses of roughly 350 of America’s largest shippers, according to Cass officials.

As LM has reported, many trucking industry 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.

June freight shipments—at 1.201—were up 6.0 percent annually and were 2.4 percent higher than May en route to its highest level since November 2007, which was slightly ahead of the recession. Shipments remained above the 1.0 mark for the 47th consecutive month. On a year-to-date basis, shipments are up 15.8 percent, with the report noting that shipment gains have been spurred in part due to gains in the construction and manufacturing sectors. And the report cited the recent ISM Manufacturing Report on Business issued last week, which observed that new orders in June headed up 3.5 percent, “indicating that demand for transportation should remain strong for the next several months, [but], despite record new levels of equipment orders, a lack of drivers is restricting growth in truck capacity.”

On the expenditures side, expenditures––at 2.760 in June––were up 12.1 percent compared to June 2013 and 4.2 percent higher than May. June’s expenditures level also stands as a new record high, according to the report and are up 15.6 percent year-to-date.

With rate growth clearly intact, Rosalyn Wilson, senior business analyst with Parsons, and author of the annual CSCMP State of Logistics report, wrote in the Cass report that according to the monthly Cass Truckload Linehaul Index truckload rates have been higher in each month this year, and rail rates have also headed up since the start of the year. She explained that these respective rate increases are pushing up transportation costs with the combination of tight capacity and higher shipment volumes expected to push up rates more quickly throughout the rest of the year.

While the recent GDP revision showed a 2.9 percent contraction, which is the worst GDP reading in five years, and was due in large part to poor winter weather in January and February, coupled with a reduction in healthcare spending due to the Affordable Care Act, and the end of extended unemployment benefits, Wilson wrote that should infer there is a direct correlation between GDP and transportation.

“Despite some talk that the slowing and then contracting economy could signal another recession, the foundation and building blocks for a growing economy are stabilizing and growing,” wrote Wilson.

Other things working on an improving economy’s side, as outlined by Wilson, are: increasing sales of new and existing homes, gains in industrial and government construction over the last several months, and growth in manufacturing for most of the last year.

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

Shippers are trying to make sense of quickly shifting ocean carrier alliances and partnerships—with the viability of some players even brought into question.

The questions for the most recent Semiannual Economic Forecast, which was released last week, included: 1-has the strength of the U.S. dollar had a negative, negligible or positive impact on their organization’s profits?; 2-has the net impact of the depressed prices of oil and related commodities been negative, negligible, or positive for their organization’s profits; and 3-how would they characterize the combined impact of their organization’s profits on the strength of the U.S. dollar and the depressed prices of oil and related commodities.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico dropped 5.8 percent on an annual basis in March to $90.5 billion.

Shippers sourcing their goods out the Port of Oakland’s largest marine terminal will soon need to make an appointment drayage providers before their cargo is released.

U.S. Carloads fell 10.6 percent at 244,290, and intermodal containers and trailers were off 6.5 percent at 262,693.

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA