Subscribe to our free, weekly email newsletter!


February Cass Freight Index report shows annual and sequential gains

By Jeff Berman, Group News Editor
March 06, 2012

In what its authors described as “the possible reversal of a very long trend,” the February edition of the Cass Freight Index Report showed that the change in shipments from January to February exceeded the monthly change in expenditures.

The Cass Freight Index accurately measures trends in North American shipping activity based on $17 billion in paid freight expenses of more than a hundred 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.

February shipments at 1.072 were up 2.5 percent compared to January and up 3.5 percent compared to February 2011. This marked the 21st 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.

Expenditures at 2.295 were up 1.2 percent compared to January and up 9.8 percent compared to February 2011. Cass officials said the increase in February shipments reversed the downward trend which had been occurring over the past three months.

They added that the gains in shipments reflect the strength of the manufacturing sector, as evidenced by the Commerce Department’s report that Manufacturers’ Shipments. Inventories, and Orders were up for the third straight month in January, with a 0.4 percent gain.

On the Expenditures side, Rosalyn Wilson, senior business analyst at Delcan Corporation and author of the Annual State of Logistics Report published by the Council of Supply Chain Management Professionals, wrote in her monthly analysis of the report that February’s 9.8 percent annual gain pales compared to January’s 22.1 percent gap, explaining that the gap has been slowly eroding since early 2011 although it has remained ahead of the gap in year-to-year shipments.

“Flatter rates are indicative of the sluggish economy and adequate capacity,” wrote Wilson.

“Fuel costs have been rising during 2012, but total spending does not seem to reflect this increase. The conclusion would be that carriers have eased up on base rates to compensate for higher fuel surcharges.”

And while the economy has shown signs of improvement in recent months, Wilson stressed that there is a long way to go before the recovery is complete. Among the reasons she cited were how consumers are still spending a high percentage of paychecks on necessities as food and gas prices rise, as well as more consumers turning to credit, which sparked a ten percent gain in consumer debt from November to January, its highest level in ten years.

What’s more, Wilson explained that there are no clear signs that a fast turnaround for the freight industry can be expected. Instead, she explained that there are several signs of that 2012 may be more reflective of uneven growth, which has been occurring over the last three years.

While shipments outpaced expenditures in February, according to Cass data, it remains to be seen how things will play out in the coming months, especially on the truckload side.

“If the economy continues to expand at a modest pace, capacity shortages should become more frequent and more widespread as few carriers are looking to significantly increase the size of their fleets,” said John Larkin, Stifel Nicolaus analyst. “With more rapid economic expansion, the capacity shortage could become more severe, quickly. Those shippers that had not locked in capacity at a reasonable price might find themselves coping with skyrocketing spot market prices.”

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

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA