Freight Index Disappoints in September
After offering a glimmer of ‘less bad’ hope in August (only down 1.1% YoY and up 0.4% sequentially), the Cass Freight Index shipments data in September disappointed, providing hindsight that August only delivered ‘false hope.’
September data is once again signaling that overall shipment volumes (and pricing) continued to be weak in most modes, with increased levels of volatility as all levels of the supply chain (manufacturing, wholesale, retail) continue to try and work down inventory levels.
That said, there have been a few areas of growth, mostly related to e-commerce, with lower levels of expansion being experienced in transit modes serving the auto and housing/construction industries. All of this added up to lower shipment volume in September on a YoY (Year-over-Year) basis, marking the nineteenth straight month of year-over-year decline.
Bottom line, the Industrial Recession in the U.S. that began in March of 2015 continues to weigh on overall volumes.
In a reversal of roles from last month, it was the Cass Freight Expenditures Index that proved an initial glimmer of potential hope. Expenditures (or the total amount spent on freight) was up 5.2% sequentially, and the YoY rate of contraction appeared to be ‘less bad’ as it only contracted 3.8% (much less than the rates of contraction in May, June, July, and August; down 10.1%, 8.8%, 5.1%, and 6.3% respectively).
The group sees this increase as a result of the steady increase in the price of fuel over the last six months and not the increase in pricing power of any single mode. As an example, the proprietary Cass Truckload Linehaul Pricing Index (which does not include fuel) fell 3.5% on a YoY basis in the month of September.
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