Cass Freight Index shows November freight shipments and expenditures declines
November freight shipments and expenditures readings saw annual and sequential declines, 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.
November’s shipment reading, at 1.094, was down 8.9% annually, less steep than October’s 9.5% annual decrease, while trailing August 2022’s 1.278 reading, which marked the highest level for shipments since May 2018. Shipments were down 1.3% compared to October and were up 0.3% on a month-to-month seasonally adjusted (SA) basis.
This marked the 16th time in the last 23 months shipments have seen annual declines, which the report said is similar to prior downcycles in both length and magnitude, with the exception of the pandemic’s downturn.
Tim Denoyer, the report’s author and ACT Research vice president and senior analyst, wrote that the annual decline remains exaggerated, due to unusual excess inventory repositioning over the second half of 2022.
“The 2023 peak season has been decidedly soft in the for-hire market, as real retail sales are still down from year-ago levels,” he wrote. “Overall U.S. freight volumes are more flattish on an annual basis as private fleet insourcing persists, in our view. The acceleration in real disposable incomes, supported by a surprisingly sharp disinflation, and the ongoing strong labor market suggest demand fundamentals will improve in 2024. With normal seasonality, this index would be down 3%-4% month-over-month in December, leaving it down about 9% annually.”
November expenditures, at 3.331, were off 25.6% annually, topping October’s 23.3% annual decline, while falling 1.3%, from October to November. On a two-year stacked-change basis, November expenditures were down 22.1% and were down 0.9% on a month-to-month seasonally adjusted basis.
Denoyer noted that 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 another 14% in 1H’24, assuming normal seasonal patterns from here.
“Both freight volume and rates remain under pressure at this point in the cycle,” he observed.
