Freight Volumes Rise to Build Holiday Inventories

The number of freight shipments increased 1.7 percent in September, reversing a two month slide.  

According to Cass Information Systems, which issued the report, this is a traditional month for a rise because shippers are receiving goods for the holiday season.   The strong U.S. dollar and a sluggish global economy are continuing to make imports very attractive. Railroad cargo, both carload and intermodal, jumped up 22.6 percent over August levels, which accounts for much of the increase in the freight

As expected, freight shipments and payments rose in September following two months of decline. Looking back over the last several years, September is often the final growth spurt for the year.  Freight payments rose 2.4 percent, which coincides with an increase in shipments.

Spot prices have been lower because of adequate capacity during the slowdown in August. Trucking companies are holding rate increases down, and offering capacity guarantees in exchange for higher rates.   There has also been a steady growth in dedicated carriage agreements.

Cass expects “rate increases for the trucking sector to be modest through the end of the year. The exceptions are UPS and FedEx which have already announced a round of price increases that will go into effect in November, just as the holiday shipping season begins to heat up.”

Category: Featured, General Update