Freight shipments and expenditures see January declines, notes Cass Freight Index

January freight shipments and expenditures readings saw sequential and annual 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.  

January’s shipment reading, at 1.039, fell 7.6% annually—following annual declines of 9.5%, 8.9%, and 7.2%, for October, November, and December, respectively—and remaining below August 2022’s 1.278 reading, which marked the highest level for shipments since May 2018. Shipments were off 3.5% compared to December and flat on a month-to-month seasonally adjusted (SA) basis and down 3.6% on a two-year stacked change basis.

Tim Denoyer, the report’s author and ACT Research vice president and senior analyst, observed that the 3.5% sequential decrease was consistent with December in SA terms, adding that despite the harsh winter weather during the month, the decline was in line with normal seasonality.

“Freight transportation is, of course, an outdoor sport, and it’s tough to say with precision if this January was worse than most, but if so, the underlying trend in freight improved in January,” he wrote. “It’s been two years since the first [annual] decline of this freight recession and with destocking playing out and goods consumption rising, the downturn is likely nearing its end.”

Looking ahead, Denoyer said that the acceleration in real disposable incomes, supported by surprisingly sharp disinflation and the ongoing strong labor market, suggest freight demand fundamentals will improve in 2024.”

January expenditures, at 3.102, fell 24.3% annually, in line 23.3%, 25.6%, and 23.7% annual decreases, seen in October, November, and December, respectively, while falling 4.0%, from December to January. Expenditures fell 2.5% on a month-to-month SA basis and 23.0% on a two-year stacked change basis.

“U.S. freight spending, as measured by the expenditures component of the Cass Freight Index, fell 19% in 2023, after a record 38% surge in 2021 and another 23% increase in 2022,” noted Denoyer. “It’s set to decline about another 16% in 1H’24, assuming normal seasonal patterns from here.”