Freight Volumes Decline in December as Inventories Remain High

Both the number of shipments and freight transportation expenditures continued a downward slide in December, falling 4.9 and 2.7 percent respectively.

At the same time, holiday season retail store sales were strong, but did not meet expectations in 2015. Online sales blew past last year’s record and more than made up for lower brick and mortar sales.

According to Cass Information Systes, the declines are not unusual for December, but they capped off a second quarter of decline.

What’s more, the group noted that “2015 did not even begin to reach the heights we reached in 2014. By the end of 2015, both shipment volume and expenditures fell back to 2013 levels. Expenditures for freight transportation were 5.2 percent lower than at the end of 2014 and shipment volume was down 3.7 percent  from the same period.

Freight payments fell for the third month in a row, dropping 2.7 percent. This follows a seasonal pattern and aligns somewhat with the drop in shipments. It also reflects falling spot rates caused by excess capacity. There was an increase in spot rates in the week leading up to Christmas, but this was not enough to offset lower expenditures due to lower volume.
Despite favorable employment/unemployment reports and moderate growth in household wealth and income, consumers are still very conservative. There was little expansion in credit and higher savings rates. In general, consumer

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