May Cass Freight Index shows further continuation of freight shipment and expenditure trends

The May edition of the Cass Freight Index, which was recently issued by Cass Information Systems, showed mixed signals for 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.

May’s shipment reading—at 1.235—fell 2.7% annually, which was steeper than April’s 0.5% annual decline. Shipments rose 5.4% compared to April, and on a two-year stacked change, May shipments saw a 31.7% gain, up against the early days of the pandemic.

The report’s author Tim Denoyer, ACT Research vice president and senior analyst, wrote that the effects of the China lockdown are still ahead and likely to be muted for various reasons. And he added that after a nearly two-year cycle of surging freight volumes, two key drivers of growth for the freight cycle-goods consumption and inventory restocking are faltering.

“Normal seasonality from here would have the shipments component back up 2% y/y in June and flat to up 1% for 2022,” stated Denoyer. “The news from the retail sector and in the oil markets suggest that’s probably optimistic, but at this point, it’s a pretty stable environment. No major downturn.”

May expenditures—at 4.287—were up 27.5% annually, in line with April’s 30.6% annual gain and continuing to be paced by major inflation gains, with the Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) showing yet another new high, rising 8.6% in May, topping April’s 8.3% annual increase, for his largest percentage increase since 1981.

Expenditures were up 91.1% on a two-year stacked basis and down 5.9% compared to April on a seasonally-adjusted basis.

“This index rose 38% in 2021, after a 7% decline in 2020 and no change in 2019,” wrote Denoyer. “Tougher comparisons in the coming months will naturally slow these y/y increases, particularly next month. With a normal 0.5% m/m increase, the y/y change would slow to 15% from 28% in May. And simply using normal seasonality from here, the increase in 2022 will be about 19% after a 30% increase in the first half.”