Cass Freight Index Report sees more shipment and expenditure declines in January

The most recent edition of the Cass Freight Index Report issued this week by Cass Information Systems continued an ongoing trend of annual freight shipment and expenditure declines, for the month of January.

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.

January shipments—at 1.022—fell 9.4%, marking its largest annual decline going back to 2009, while also dropping 2.9% compared to December.

The report’s author, David Ross, transportation analyst at Stifel, explained that while there is still optimism according to the broader stock market, freight trends remain stuck in neutral. And he added that the coronavirus is continuing to create uncertainty around containment and eventual impact on global supply chains, with some factories having reopened but not close to 100%, with others having pushed reopening back to March 1.

Addressing shipments, Ross observed that along with January posted its steepest annual decline since 2009, it also represents its lowest annual reading in about three years.

“This follows a sluggish end to 2019, where many blamed last month’s weakness on timing of the holidays,” Ross wrote. “There could have been a residual impact post-New Years, but with the negative [annual] and sequential decline, and the deceleration in the [annual] growth rate we don’t see much good news in this volume number.”

January expenditures—at 2.568—fell 8% annually and were down 5.7% compared to January 2019.

Ross noted that the fall-off in pricing was not as severe as on the shipments side, as industry pricing was generally still a little higher that year-ago levels.

“[O]verall expenditures fell less than volumes due to better pricing power still exhibited by the rail, parcel, and LTL sectors,” wrote Ross. “We expect transport pricing growth to moderate in 2020 but remain inflationary. And, as usual, our best estimate on fuel (a significant part of overall freight costs) is that it stays roughly flat from here.”