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
Logistics Network Analysis
Logistics network monitoring is an important step in understanding what actually occurs throughout your supply chain.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
IAM, IoT and the Connected Supply Chain
There are three primary models of Identity and Access Management (IAM) technology that CTOs, CSOs, and Supply Chain executives are using to enhance their trading partner communities. While each leverages IAM and the IoT as core components only an “Outside-in” approach truly connects people, systems and things reliably and securely across the supply chain.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...