While June showed great growth in the Cass Shipments Index year-over-year, the measure actually fell versus its May level.
Supply Chain Digest Says...
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| As a note, the index baseline (index = 100) is from January 1990. That means that at a level of 148.4, contract US truckload rates are up 48.4% from 1990 until now, 31 years later. |
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The shipment index, which encompasses a number of transport modes but it heavily weighted to truckload freight, was up 26.8% versus June of 2020, but was down 4.2% versus the prior month after rising 5.9% in May versus April.
The shipment index is just one metric in Cass’ monthly freight report, drawn from the billions of dollars of freight bill payments Cass Information Systems processes for its customers.
Cass says the decline it its index is consistent with trends in other broad freight measures, including rail volumes and spot truckloads.
While the winding down of federal stimulus payments may be part of the explanation for the drop, Cass says “our industry discussions suggest shipment volumes continue to be hindered by supply constraints, which range from driver and trailer shortages in TL and LTL to chassis shortages hampering intermodal capacity.
In terms of freight spend, the Cass Expenditure Index was up a giant 56.4% year-over-year in June off very depressed levels in the month a year ago. On a month-over-month basis, expenditures were also up a sharp 9.4% from May.
With shipments having fallen in the June versus May, the rise in payments implies a 12.3% increase in rates in the month.
Cass also publishes its Linehaul Index each month, which tracks US per mile contract truckload rates before fuel surcharge and other accessorial charges.
The index came in at 148.4 in June, down slightly from 149.0 in May, meaning rates fell slightly month-over-month. That broke a string of 11 consecutive monthly gains in the index.
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US truckload rates should continue to move higher in the near-term, Cass says, driven by robust demand and tight supply.
Even though truck, trailer and chassis production are still limited by parts shortages, capacity is beginning to accelerate, Cass says, as drivers respond to higher pay and parts constraints begin to ease, which will change the trajectory of truckload rates.
As a note, the index baseline (index = 100) is from January 1990. That means that at a level of 148.4, contract US truckload rates are up 48.4% from 1990 until now, 31 years later.
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for May:
Source: Cass Information Systems
Cass says that while it expects US freight volumes to continue to rise in coming months, “the dynamics of tight supply and exceptionally strong demand, which have characterized the past year or so will not last indefinitely, and several of the indicators we monitor are auguring new trajectories.”
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