September freight shipments and expenditures see annual declines, notes Cass Freight Index

Freight shipment and expenditure readings were mostly down in September, 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 $44 billion in paid freight expenses for the Cass customer base of hundreds of large shippers.  

September’s shipment reading, at 1.163, fell 6.3% annually, faring better than August’s 10.6% annual decline, while trailing August 2022’s 1.278 reading, which marked the highest level for shipments since May 2018.  Shipments rose 1.7% compared to August. On a two-year stacked change basis, September shipments were down 1.8% and up 1.7% on a month-to-month seasonally adjusted (SA) basis.  

This marked the 14^th time in the last 21 months shipments have seen annual declines, which Tim Denoyer, the report’s author and ACT Research vice president and senior analyst, wrote is similar to prior downcycles in both length and magnitude, with the exception of the pandemic downturn.

“The 2023 peak season is off to a muted start with a slightly improving trend, as expected,” he wrote. “We continue to expect modest [annual] growth in consumer spending this holiday season, driven by the acceleration in real disposable incomes, and the ongoing strong labor market. U.S. real disposable personal income growth slowed from 5.4% [annually] in June to 3.7% in August, per the BLS, as fuel prices surged. The recent violence in the Middle East threatens to send oil prices higher, though they remain down from recent highs. While geopolitical risks are elevated, U.S. consumers will have more in their pockets this holiday season, with good income growth rates supported by disinflation.”

September expenditures, at 3.452, fell 25.4% annually, in line with August’s 25.0% decline, and were off 0.2% compared to August. On a two-year stacked-change basis, September expenditures were down 9.6% and were down 1.6% on a month-to-month seasonally adjusted basis.

“The expenditures component of the Cass Freight Index rose 23% in 2022, after a record 38% increase in 2021, but is set to decline about 18% in 2023 and 11% in 1H’24, assuming normal seasonal patterns from here,” wrote Denoyer. “Both freight volume and rates remain under pressure at this point in the cycle, but fuel price increases could somewhat limit the savings for shippers.”