November Cass Freight Index sees shipment volumes down for second straight month

A watchful eye on inventory levels by retailers kept freight shipments and expenditures down on a sequential basis for the second straight month, with mixed results annually, according to the November 2011 edition of the Cass Freight Index.

By ·

A watchful eye on inventory levels by retailers kept freight shipments and expenditures down on a sequential basis for the second straight month, with mixed results annually, according to the November 2011 edition of the Cass Freight Index.

This 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.

November shipments at 1.056 were down 2.3 percent compared to October and down 2.9 percent annually. Shipments were north of the 1.0 mark for the 18th straight month since May 2010, when shipments moved above the 1.0 mark for the first time since November 2008. November represents the first time in 2011 that same month shipments were lower annually.

Expenditures at 2.268 were down 1.2 percent compared to October and up 14 percent compared to last year, which is roughly half of what annual expenditures comparisons have been in previous months prior to August, which was up 15.8 percent annually, with January through July averaging 30.9 percent annual increases for expenditures.

As LM has reported, many trucking industry executives and analysts consider the Cass Freight Index as 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.

In her analysis of the November report, 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, noted that while retailers reported record sales for Black Friday, those products had shipped earlier in the year and did not contribute to November shipment volume. She added that inventories have been rising steadily higher throughout the year as consumer spending has been tempered to a large degree, coupled with what she described as a dramatic drop in factory activity.

The factory activity drop-off, she said, is in the form of fewer new orders, production, and order backlogs, with retailers slow to replenish their growing inventories and consumers largely sticking to purchasing essentials.

While November’s numbers did not stand out from previous months on a material basis, Wilson said that there are various signs that the economy will see more growth in the fourth quarter, including unemployment dropping below 9 percent, a slight increase in consumer spending, and increased railroad carload volumes spurred by capacity and driver shortage concerns on the trucking side. But at the same time she observed that the most recent jobs report was due to 315,000 people who stopped looking for work and incomes dropping 2.1 percent, according to data from the United States Department of Commerce.

Despite the host of challenges at the moment, shippers and carrier have told LM things remain stable for the most part, given the current headwinds of increasing fuel costs, regulatory red tape for multiple modes, and a difficult time finding available drivers for motor carriers, which has in turn created some problems for shippers in securing capacity.

Robert W. Baird & Co. analyst Benjamin Hartford wrote in a research note that certain transport modes experienced “seasonal build, including domestic intermodal and domestic parcel. But all in, 2011 peak season [was] muted; truckload demand comparable to prior-year volumes, pressured by shipper inventory restraints and consumer demand uncertainty.”


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
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
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
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo