Subscribe to our free, weekly email newsletter!


Cass Freight report tells ongoing story of mixed economic signals

By Jeff Berman, Group News Editor
December 06, 2013

The trend of bumpy end-of-the-year economic activity remained intact in November, according to the most recent edition of the Cass Freight Index Report.

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—at 1.105—were down 1.0 percent compared to October and were up 1.1 percent compared to November 2012. Despite declining in November, shipments have remained above the 1.0 mark for 40 consecutive months since May 2010, when shipments moved above the 1.0 mark for the first time since November 2008. 

“The decline in shipments was not unexpected as this is the same weak year-end environment we have observed for the last three years,” 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, adding that “stronger than expected manufacturing activity and shipments of seasonal goods offset a general slowing of freight movements to temper the drop in shipment levels.”

Wilson added that the 1.1 percent shipment decline is better than October’s 3.5 percent fall off, adding that the Institute for Supply Management’s Manufacturing report Production PMI saw a 3.3 percent jump in November due in large part to export production, with export goods shipments and the seasonal jump in food and beverage shipments not strong enough to overcome the drop in shipments for things like apparel, appliances, and electronics.

The report stated that November freight expenditures were up 0.6 percent compared to October and were up 7.8 percent compared to November 2012. Wilson said the slight sequential rise can likely be attributed to a surge in spot market rates in the last two weeks of November, citing data from TransCore which noted end of month spot market activity was solid for van and flatbed loads and subsequently upped average rates up 2 cents per mile.

“We’re seeing mixed economic signals as we approach the end of the year. Many indicators have improved during the last several months, including new home sales, new jobs, new export orders, and manufacturing production, new orders and backlog,” wrote Wilson. Exports rose in recent months, but largely based on the strength of oil product exports. Container exports and imports, largely aimed at the consumer market, have trended downward. Despite the better than expected third quarter GDP, the fourth quarter will not be as strong. December is likely to provide a weak finish to a relatively weak 2013 for the freight industry.”

Sentiment from shippers and carriers is in line with Wilson’s assessment, as a flattish overall economy is continuing a sort of “more of the same” environment for carriers and logistics services providers.

A truckload carrier told LM that market conditions appear to be in a holding pattern, with the caveat that things could improve closer to the middle of 2015.

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

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.

Now that the deal, which had to clear several regulatory hurdles in multiple countries, is official, FedEx executives were able to speak a little bit more freely, albeit being somewhat guarded in regards to certain integration specifics at the same time.

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