Cass Freight index sees declines amid seasonal patterns and tough annual comparisons

July lived up to its reputation as a slow month for freight activity, based on the results of 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.

July freight shipments—at 1.141––were off 1.6 percent from June, which currently stands as the highest shipment level of the year and is down 1.6 percent annually. June represented the 59th month that shipments topped the 1.0 mark.

Cass officials said in the report that July’s shipment data has been consistent over the last five years in its declines, adding that it is a slow freight month “as it lies between the surges of back-to-school and the holidays. And it also explained that new orders were down in April and May due to higher inventories, coupled with the summer months typically tend to see retail sales make room for fall and holiday stock, resulting in lower volumes,

Despite the declines in both shipments and expenditures, Cass pointed out that they still match up well with recent years along with the fact that there needs to be an “element of caution” in comparing 2015 to 2014, based on the fast that 2014 was the best year for freight since the recession.

Expenditures in July at 2.482 were down 4.5 percent compared to June and 6.4 percent compared to July 2014. The decline in July represents the only the second one in 2015 and was in line with a 3.9 percent drop off from June to July last year. Cass explained that the decline in expenditures topped the shipments decrease, which infers that the trend in lower tonnage equated into a stable rate environment.

While the economy in 2015 is not as strong as it was in 2014 to date, Rosalyn Wilson, senior business analyst with Parsons, and author of the annual CSCMP State of Logistics report and contributor to the Cass report, pointed out that 2014 was paced by consumer spending gains.

“Comparing [2015] to the previous several years demonstrates that the economy is exiting its prolonged dormant state and consumers are finally leading the way,” she commented. “For the remainder of the year, both imports and exports should pick up, domestic production will gain strength, and consumers will spend.”