Subscribe to our free, weekly email newsletter!


September Cass Index report shows seasonal growth but long-term outlook remains cautious

By Jeff Berman, Group News Editor
October 10, 2011

Despite sequential gains in shipments and expenditures, the September 2011 edition of the Cass Freight Index points to less than smooth sailing for the economy through the remainder of the year.

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.

Cass data indicated that September shipments at 1.200 were up 5.0 percent compared to August, with shipments topping the 1.0 mark for the 16th straight month since May 2010, when shipments moved above the 1.0 mark for the first time since November 2008. On an annual basis, September shipments were up 7.5 percent compared to September 2010.

Expenditures at 2.388 were up 4.6 percent compared to August and up 17.6 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.

While September expenditures and shipments are up and in line with the expected seasonal increase, according to Cass officials, it does not suggest in any way that it marks the beginning of a trend towards more positive economic growth.

Among the factors cited by Cass for this are: sluggish retail sales growth; low job growth numbers; projected 2011 GDP growth of roughly 2 percent or less for the next year; and stalled consumer confidence and consumer spending levels, among other factors.

“There are no signs that the consumer sector is going to turn around in the foreseeable future,” wrote Rosalyn Wilson, senior analyst with Declan Corporation, in her monthly analysis of the Cass report. “Although all modes reported modest gains in volume during the month, we do not expect shipment volumes to continue to expand at this level—partially as a result of lower order volumes in both the U.S. and abroad in recent months. Rates should level off for the remainder of the year, and volumes will hold steady due to seasonal freight shipments.”

Wilson also noted that the Institute for Supply Management’s (ISM) Manufacturing Report on Business in September checked in at 51.6 (a reading of 50 or higher indicates expansion is occurring).

And while this report points to economic growth, Wilson explained that some of its key metrics, including New Orders and Backlog of Orders, have been declining for the last three and four months, respectively.

But Bradley J. Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee, told LM that the news was not all bad in the September report, citing gains in Production and Employment in the manufacturing sector in September.

“Manufacturing is looking at the fourth quarter and the holiday season with cautious optimism…which could be at least respectable,” said Holcomb. “This does not necessarily translate into big numbers, but it certainly is a good sign for manufacturing.”

What’s more, should the fourth quarter end up being relatively solid, it could spell good news for further upticks in freight transportation expenditures and shipments as measured by Cass.

This was a consistent theme at last week’s Council of Supply Chain Management Professionals (CSCMP) Annual Conference in Philadelphia, where many shippers and carriers indicated that current business levels are fairly flat but are optimistic about possible fourth quarter growth. There is a definite chance, though, that this growth could be minimal, with many calling for “muted” Peak Season.

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

Even as Congress was putting the finishing touches on a 10-month short-term funding extension to the federal aid highway bill that temporarily averts a funding crisis, Transportation Secretary Anthony Foxx was ripping the measure as a short-term “gimmick” that once again fails to adequately fund U.S. infrastructure needs in the long run.

ISI is comprised of Integrated Services, ISI Logistics and ISI Logistics South and is focused on the warehousing and transportation needs of automotive shippers. RRTS said that in 2013, Integrated Services generated revenues of approximately $21 million adding that Integrated Services is expected to be accretive to Roadrunner’s earnings in 2014.

The market for supply chain management software continues to expand, highlighting the importance of software in today’s supply chains.

Over the past five years emerging markets have maintained their “growth dynamic,” observes John Manners-Bell, CEO, of the London-based think tank Transport Intelligence (Ti).

Amid the talk and coverage about things negatively impacting the trucking industry like increasing regulations, tight capacity, and equipment-related issues and challenges, there is one thing to always remember about the sector: it moves a lot of freight, make that more than a lot, actually.

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA