Freight Index Suggests Positive Trend

In a spot of good news and consistent with what many in the industry have been calling a “more than normal fall surge” in volumes, the Cass Shipments Index was up on a year-over-year (YOY) basis for the first time in 20 months. 

Although it is far too early to make a ‘change in trend’ call, data is beginning to suggest that the consumer is finally starting to spend a little and that the industrial economy’s rate of deceleration has eased. Simply put, the winter of the overall freight recession we have seen for over a year and a half in the U.S. may not be over, but it is showing signs of thawing.

Expenditures (or the total amount spent on freight) were still down (‐3.8% on a YOY basis), but the rate of contraction appeared to be ‘less bad’ as it only contracted 3.8%. We see this increase as a result of the steady rise in the price of fuel over the last six months, but we are seeing some improvements in pricing power of truckers and intermodal shippers.

From an economic standpoint, one truism is worthy of repeating: Volume leads growth. Repeatedly, the markets across a variety of industries indicate that volume goes up before pricing starts to improve and volume goes down before pricing starts to weaken.

Tags: Cass Shipments Index

Category: Featured