The folks at Cass Information Services and partner Tim Denoyer of ACT Research were out this week with their report on August freight conditions, with carriers mostly having a good time of it again.
Supply Chain Digest Says...
|
|
Cass concludes by noting that "the dynamics of tight supply and exceptionally strong demand which have characterized the past year or so will not last indefinitely," |
|
What do you say? |
Click here to send us your comments |
|
Click here to see reader feedback |
|
The shipment index, which encompasses a number of transport modes but is heavily weighted to truckload freight, was up up 12% versus August of of 2020, and was also up about 5% versus July, after surprising declines in shipments month-over-month in June and July.
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 drops in June and July in part reflect freight back-ups due to a lack of chassis in US intermodal yards. Since that problem still exists, Cass assumes some freight must have been diverted from rail to truck in August, driving the monthly growth.
It also says US shipment volumes might have been even higher if not for on-going port challenges, with a recent queue of about 125 containerships at anchor off North American ports. The ports of Los Angeles and Long Beach alone just hit a new record of 49 ships anchored at sea awaiting a berthe.
The report notes that the chassis shortage has resulted partly from huge tariffs on key imported steel back in May, leading to "dismal" chassis production this year. Class 8 tractor and trailer supply chain challenges have also US freight limited capacity.
Cass also tracks changes in freight expenditures, and compares that to the change in shipments.
The Cass Freight Expenditures Index was up a giant 42% year-over-year in August off very depressed levels in the month a year ago. That was about the rise in July as well. However, on a month-over-month basis, expenditures were also a strong 11.3% compared to July.
Expenditures are comprised by two components: volumes of freight moved, and the rates shippers pay to move it.
With shipments up 5% August versus expenditures up 11.3% versus the prior month, it implies a rise in rates of about 6% versus July.
In another measure of rates, Cass also publishes its Linehaul Index each month, which tracks US per mile contract truckload rates before fuel surcharge and other accessorial charges. It showed a more modest increase in those rates.
The index came in at 148.8 in August, up 12.6% versus 2020 but just 1.1% month over month. But Cass believe this low growth in truckload rates for the month was an aberration, and that "shippers should not to get too excited and carriers not to worry too much."
(See More Below)
|
CATEGORY SPONSOR: SOFTEON |
|
|
|
|
As a note, the index baseline (index = 100) is from January 1990. That means that at a level of 148.8, contract US truckload rates are up 48.8% from 1990 until now, 31 years later, or about only 1.29% on average per year.
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for August:
Source: Cass Information Systems
Cass concludes by noting that "the dynamics of tight supply and exceptionally strong demand which have characterized the past year or so will not last indefinitely," with a prediction that "there’s good reason to hope easing will start in Q4."
Any thoughts on this month's Cass report? Let us know your at the Feedback section below.
|