February Cass report shows signs of improvement

Freight market conditions for February showed a bit of an upswing in the most recent edition of the Cass Freight Index Report from Cass Information Systems Inc.

By ·

Freight market conditions for February showed a bit of an upswing in the most recent edition of the Cass Freight Index Report from Cass Information Systems Inc.

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.

February freight shipments—at 1.073—were down 0.4 percent compared to February 2013 and were up 7.3 percent compared to January, snapping a four-month stretch of sequential declines. Shipments remained above the 1.0 mark for the 43rd consecutive month, when shipments moved above the 1.0 mark for the first time since November 2008. 

The report noted that the number of shipments followed a similar pattern evidenced in recent years by reversing a January decline.

On the expenditures side, February at 2.419 was up 6.4 percent annually and up 6.8 percent from January to February. Even though expenditures were up sequentially and halted two months of declines, the report pointed out that the 6.8 percent increase stands as the weakest January to February gain going back to 2010.

What’s more, expenditures were up 15.8 percent when compared to February 2011 and now represent the highest February expenditures level in the report’s history.

Rosalyn Wilson, senior business analyst with Delcan Corporation and author of the annual CSCMP State of Logistics report, said “expenditures have grown at a faster rate than shipment volume and the economy has yet to feel the rate increases that should be coming later this year when capacity tightens and carriers take back the reigns for rate control.”

With a cautious eye, Wilson noted that things are looking up, while there are still plenty of things to keep an eye on when it comes to market conditions and related growth prospects, including still growing but lower manufacturing data from the Institute for Supply Management although the most recent ISM report showed decent traction for new orders and backlog of orders, which could translate into increased production, and subsequently more freight, in the coming months.

“February freight volumes showed a strong recovery from the weak start to 2014 that January delivered, right in line the predictions of many who expect the economy to gain momentum and shipping volumes to gain strength,” said Wilson. “But there are still some strong headwinds to overcome in the freight sector - the most obvious being the nearly imperceptible growth in volumes. The global marketplace remains weak, so our exports are lagging expectations. While unemployment continues to fall, the number of new jobs created each month is not enough to sustain the economy.”

She added that as the Federal Reserve reduces its bond purchases, interest rates will continue to rise, which will have repercussions in the freight sector, as inventory levels that are currently higher than previous crisis level, when carrying costs were minimal, will become more burdensome and probably lead to a drawdown similar to that during the recession.

And on the trucking side, Wilson said capacity is at exactly the right level for the volume of freight at the moment, but will quickly be inadequate later this year if the predictions of a robust 2014 materialize.

Shippers and carriers have told LM trucking capacity is very tight, due in part to the harsh winter weather as well as volume gains.


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
Supplier Relationship Micro Management
Optimizing Across Six Guiding Principles
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
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
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...