Cass Freight Index Report is strong again in May

The most recent edition of the Cass Freight Index Report from Cass Information Systems pointed to an ongoing thesis describing the state of the United States freight economy as “extraordinarily strong,” given the ongoing gains in freight shipments and expenditures.  

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.

Through May, the most recent month for which data is available, freight shipments and expenditures have now seen annual gains for 19 and 16 months, respectively, the report said.

“The Cass Freight Shipments and Expenditures Indices are clearly signaling that the U.S. economy is ignoring all of the angst coming out of Washington, D.C. about the increased threat of inflation or the rise in interest rates,” wrote the wrote the report’s author Broughton Capital Founder and Managing Partner Donald Broughton. “These indices are displaying accelerating strength on top of increasingly difficult comparisons. Demand is exceeding capacity in most modes of transportation by a significant amount. In turn, pricing power has erupted in those modes to levels that continue to spark overall inflationary concerns in the broader economy.”

May freight shipments, at 1.307, increased 11.9% compared to May 2017 and were up 5.9% over April. Broughton noted that these percentage increases are very strong against tough annual comparisons, which helps to explain why capacity is so constrained and realized pricing is so strong.

And he added that the first five months of 2018 are so strong that barring a negative “shock event,” 2018 will be a very strong year for the transportation sector and the economy.

May freight expenditures, at 2.875, were up 17.3% annually and up 4.9% over April. This marks a continuation of increases from throughout 2017 and into 2018.

“We have to go back to the easy comparisons of 2009-2010 to find such large percentage increases and the current comparison is anything but easy,” Broughton wrote.