September Cass Freight Index Report points to gains
Following August, which saw freight gains hit a 4.5-year high, the September edition of the Cass Freight Index, which was recently issued by Cass Information Systems highlighted still-strong freight demand activity, coupled with softening rates, due an ongoing two-year stretch of a “buildup of supply.”
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.
September’s shipment reading—at 1.241—rose 4.8% annually, topping August’s 3.6% annual gain, while falling 2.9% compared to August, which marked the highest level for shipments (1.278) since May 2018, and also falling 2.9% compared to August on a seasonally-adjusted basis. On a two-year stacked basis, shipments were up 5.4%.
The report’s author Tim Denoyer, ACT Research vice president and senior analyst, wrote that U.S. freight volumes continued to exceed low expectations on September, “with more buoyant demand than feared in the start of peak shipping season.”
What’s more, he explained that following a soft first half of the year, freight demand has been buffeted by the pairing of inflation and the substitution, or shift, for consumer spending, from goods to services. And he pointed to various factors attributable to this development over the last two months, including: retail discounting to clear excess inventory in some categories; seasonal inventory building ahead of the holidays; repositioning mis-timed inventory; easing supply chain constraints (especially in auto production); and easier prior-year comparisons.
On the expenditures side, September’s reading—at 4.627—climbed 21.2% annually, and was basically flat with August, rising 0.3%, following a 2.9% sequential decrease in September, while falling 1.9% compared to August on a seasonally-adjusted basis. On a two-year stacked change basis, expenditures are up 60.2%.
Denoyer wrote that following normal seasonality patterns from September, the Cass Expenditures reading is on track for a 23% gain in 2022 and decrease annually starting in February 2023.
