It’s no secret to US transportation managers, but rates for moving cargo continue accelerate, with one key measure reaching an all-time high in March.
Supply Chain Digest Says...
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| “In addition to strong demand and tight equipment supply, the driver shortage is a major factor in the freight market equation,” Cass concludes. |
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Cass Information Systems is fresh out with its series of metrics in the transportation sector, insight gleaned from its processing of tens of billions of dollars of shipper freight bills annually.
We can start with the Cass Linehaul Index, which measures US full truckload contract rates before any fuel surcharge or other accessorial fees. The index rose 10.1% year-over-year in March from the same month in 2020. On month-over-month basis, the seasonally adjusted index was a sharp 2.0% higher than February, in the ninth straight monthly increase.
That put the index at 143.1 - exceeding the prior all-time record of 142.4 in October 2018.
The index baseline is January 1990, when the index is set to a value of 100. That means US truckload rates are up 43.1% since that initial period – not much given it represents a space of now over 30 years. But that doesn't matter to shippers seeing rising rates right now.
The Cass Shipment Index, which tracks shipment activities across a blend of modes, led by full truckload but also rail, LTL and parcel, was up 10.0% in March versus 2020, though some of that is surely the result of the freight slowdown seen last March as the virus outbreak started in the US.
But Cass finds freight expenditures rose much faster than shipments in March, up 27.5% year-over-year. The gap between the growth in expenditures and the growth in shipments has an implied increase in rates of 15.5% on average year-over-year across the several modes of freight transport Cass uses.
“We still expect this trend to press higher near-term, as strong freight demand meets shortages of both drivers and trucks,” Cass wrote relative to the results.
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As always, Cass provides a chart that nicely summarizes the freight market results for March.
Source: Cass
“In addition to strong demand and tight equipment supply, the driver shortage is a major factor in the freight market equation,” Cass concludes, adding that “While it’s a complex issue, the record low driver availability here in early 2021 has perhaps played an even larger role in driving freight rates to record levels recently than the truck production challenges.”
What is your take on this Cass data for March? Let us know your thoughts at the Feedback section below.
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