April Cass Freight Index sees shipment and expenditure declines
The April edition of the Cass Freight Index, which was issued this week by Cass Information Systems, showed further signs of shipment and freight expenditure declines.
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.
April’s shipment reading—at 1.172—saw a slim 0.5% increase, which was in line with March’s 0.6% annual gain and also 0.9% below the normal seasonal pattern. The annual gains seen in April and May are below the annual gains seen in February, which was up 3.6%. On a two-year stacked basis, shipments were up 27.0% against March 2020, which marked the onset of the Covid-19 pandemic. Shipments were down 2.6% and down 3.5% on a month-to-month and month-to-month seasonally-adjusted basis, respectively.
The report’s author Tim Denoyer, ACT Research vice president and senior analyst, that freight volumes are likely to remain in the red in the coming months, due to the expectation that global supply chain disruptions are set to intensify, with what he described as more softness on the horizon.
“Freight was slowing even before the war in Europe began, but the effects of the additional surge of inflation and recent interest rate increases seem to have push volumes over the edge,” wrote Denoyer. “After a nearly two-year cycle of surging freight volumes, the freight cycle has downshifted with a thud. It’s possible the April data include some indirect impact from lockdowns in China, but with container ship backlogs still off North American ports, the direct effects on finished goods imports seem more likely in the June/July timeframe. The prospect of freight recession is now considerable, as substitution from goods back to services spending picks up pace, and as inflation slows overall spending, particularly via higher fuel prices and by pressing up interest rates.”
April expenditures—at 4.510—saw a 30.6 annual gain, spurred on by a near 40-year high, for inflation, with the Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) showing yet another new high, rising 8.3% in April, shy of March’s 8.5% annual gain, which marked its biggest percentage gain going back to 1981.
Expenditures rose 89.6% in a two-year stacked basis and were up 0.2% and down 2.0% on a month-to-month and month-to-month seasonally-adjusted basis, respectively.
Denoyer noted that the two-year stacked comparison is up against the worst of the pandemic shutdown, making it less meaningful, while the expenditures component of the Cass Freight Index was up 90% compared to April 2020, with shipments up 27% and rates up 49%, respectively.
