Cass Freight Index ends 2020 with solid growth

Freight shipments and expenditures, for the month of December, continued to highlight an ongoing strong run of freight market improvements to finish 2020, according to the new edition of the Cass Freight Index, which was published this week 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.

The report’s December shipments reading—at 1.122—saw a 6.7% annual increase, ahead of November’s 2.7% annual gain, while the December reading trailed November’s reading of 1.154. And November was 2.4% ahead of October (the first time this reading was positive in nearly two years), while the November reading trailed October’s 1.180, which represents the strongest growth for the metric, going back to October 2018, as well as highest reading since September 2019.

The report observed that the 6.7% annual gain in December was due, in part, to an easier annual year comparison, with shipments up 1.1%, from November to December.

“After a small sequential pullback in November, this acceleration brings us closer to the strong growth environment which we expect to continue in 2021,” wrote the report’s author Tim Denoyer, ACT Research vice president and senior analyst. “On a two-year stacked basis, the Cass Shipments Index was still 1.8% lower than December 2018, and even as [annual] comps are set to accelerate considerably, it will likely take some time for volumes to increase on this basis.”

December freight expenditures—at 3.077—saw a 13% annual increase, turning in its highest reading on record, well ahead of November’s 5.7% annual gain.

The report explained that the uptick in expenditures was mostly due to higher freight rates, which rose 6.8%, from November to December, on a seasonally-adjusted basis relative to the 1.1% gain in shipments for the same period.

“Freight rate increases continued to accelerate in December, and though spot market rates had started to decelerate in late 2020, the market gapped higher following the latest round of federal stimulus signed 12/27/2020,” wrote Denoyer. “Though deceleration in spot rates has begun again as of mid-January, it is still safe to say freight rates will broadly continue to accelerate in the near term.”