Freight shipments and expenditures see annual declines and sequential gains

February freight shipments and expenditures saw annual declines and sequential gains, according to the new edition of the Cass Freight Index, which was recently issued by Cass Information Systems. 

Many freight transportation and logistics 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.

What’s more, the Cass Transportation Indexes accurately measure changes in North American freight activity and costs based on $38 billion in paid freight expenses for the Cass customer base of hundreds of large shippers.  

February’s shipment reading, at 1.115, saw a 4.5% annual decrease, following annual declines of 7.6% in January, annual declines of 9.5%, 8.9%, and 7.2%, for October, November, and December, respectively—and remaining below August 2022’s 1.278 reading, which marked the highest level for shipments since May 2018. Shipments rose 7.3% compared to January and up 2.0% on a month-to-month seasonally adjusted (SA) basis and down 4.8% on a two-year stacked change basis.

In the report, Tim Denoyer, the report’s author and ACT Research vice president and senior analyst, wrote that February’s shipment readings suggest what he called encouraging signs of the beginning of a freight recovery, noting that the 7.3% sequential gain was slightly ahead of seasonal expectations. And the 4.5% annual decrease (the smallest decline in 10 months) points to the gap continuing to close, coupled that with normal seasonality, annual shipments are expected to be down 1% annually in March prior to turning positive in May.

“While seasonality remains soft in the near term and there are no more extra days on the calendar, underlying volumes have shown improvement,” wrote Denoyer. “In Q1, the shipments component of the Cass Freight Index is set to rise about 3% from Q4’23 in SA terms, less than 1 percentage point (pp) of which can be attributed to Leap Day. It’s been over two years since the first y/y decline of this freight recession, and with destocking playing out and goods consumption rising, we see this improvement as an encouraging sign that a recovery is beginning. Real disposable incomes slowed to start 2024, but goods prices are now declining overall, and with the ongoing strong labor market, freight demand fundamentals are improving.”

February expenditures, at 3.225, were down 19.8% annually, representing an improvement compared to previous months, with January off 24.3% and line 23.3%, 25.6%, and 23.7% annual decreases, seen in October, November, and December, respectively. Expenditures increased 4.0%, from January to February, and were up 1.8%, for the same period on a SA basis.

“This index includes changes in fuel, modal mix, intramodal mix, and accessorial charges, so is a bit more volatile than the cleaner Cass Truckload Linehaul Index,” wrote Denoyer. “U.S. freight spending, as measured by the expenditures component of the Cass Freight Index, fell 19% in 2023, after a record 38% surge in 2021 and another 23% increase in 2022. It is set to decline about another 14% in 1H’24, assuming normal seasonal patterns from here.”