Cass Freight Index shows positive gains in March

The operative word when describing the March edition of the March Cass Freight Index report released on Friday by Cass Information Systems appears to be “improvement.”

By ·

The operative word when describing the March edition of the March Cass Freight Index report released on Friday by Cass Information Systems appears to be “improvement.”

The Cass Freight Index accurately measures trends in North American shipping activity based on $20 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.

Freight shipments in March, like February, were up both sequentially and annually in contrast to January, which was down on both fronts, with volumes up for the second time in four months. Shipments—at 1.114—were up 5.8 percent compared to February and up 4.2 percent compared to March 2012, marking the largest annual gain in shipments since October 2012. February marks the 32nd consecutive month shipments were above the 1.0 mark since May 2010, when shipments moved above the 1.0 mark for the first time since November 2008.

Driving the increase in shipments, according to the report, were signs of spring to a certain extent, which it said “should lead to some strengthening in the freight sector in the coming months.”

But it cautioned that does not mean that things are smooth on the economic front, with ongoing headwinds in both the national and global economies. As an example, Cass pointed out that in each year since 2010 freight shipments and expenses have trended up from February to June but ended up stagnating or fully eroding in the second half of each year. And shipments since the end of 2012 to now are up 6.4 percent compared to the same period a year ago, according to the report.

March freight expenditures at 2.42 were 6.5 percent above February and up 4.2 percent compared to March 2012. Cass said that a large amount of the increase can be attributed to an increase in the number of shipments, coupled with anecdotal reports of higher truckload rates on the spot market as a result of improved demand.

Should demand hold, Cass said that increased trucking costs resulting from Hours-of-Service changes could further push up rates, and on the rail side the report explained that total rail freight costs are up while rates are not, due to a shift from lower-rated commodities like coal and grain and bulk chemicals to higher-rated commodities like petroleum and motor vehicles and parts.

“Although there are many positive indicators pointing to a more robust 2013 than originally thought, it is likely that the economy will follow the trend of the last three years—stronger growth in the first half of the year and then a slow fade,” wrote Rosalyn Wilson, senior business analyst with Delcan Corporation and author of the annual CSCMP State of Logistics report, in her analysis of the report. “We remain on the cusp of a true recovery, a place that has become very familiar. Year-over-year increases, published more often than month-to-month statistics because they appear stronger, are not telling the whole story. Consumer demand for goods is still not strong, and disposable income isn’t enough to increase consumption of services. 2013 will continue to be stronger than 2012, but not robust.”

Charles W. “Chuck” Clowdis , Jr., Managing Director-Transportation Advisory Services, at IHS Global Insight observed the irony in that on the same day when encouraging freight numbers were announced in the Cass report that an uninspiring March jobs report, with the Department of Labor announcing a relatively stagnant unemployment rate of 7.6 percent. This marks the lowest unemployment rate in four months, but is due largely to people having stopped their job searches, among other factors, according to reports.

“It is still darn-hard to find a job,” said Clowdis. “A metric I have begun to pay attention to is the ‘job participation rate’ which is roughly the share of the U.S. population actually working or actually looking for a job. The rate fell to 63.3 percent in March, lowest level since 1979.  While freight tons and revenues may be up, eventually this activity must translate into “someone buying something’. Spending is most often done by people confidently at work. Good signs; cautious enthusiasm.”


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
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
A growing number of low-cost lift trucks offer new avenues for pairing equipment and applications, but less cautious buyers might find that small up-front costs come at a steep price. Selecting the proper lift truck, lift truck tips 2016, Choosing the right Lift Truck
Megatrends in ocean freight
Ocean Cargo Roundtable: What’s in store for 2017?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...

Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....
Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...