Cass Information Systems is fresh out with its monthly freight report for December, which again now as for several months shows mixed news on freight volumes and rates, with some softening but mostly holding steady.
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So, it seems truckload rates at least are holding fairly steady, down a little from November but up a little versus 2021.
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The monthly report from Cass and partner Tim Denoyer of ACT Research is based on data from the billions of dollars of freight bills that Cass pays for its shipper clients.
The Cass Shipments Index, which includes multiple modes but is weighted towards full truckload freight, was up 1.2% versus November on a seasonally adjusted basis, but down 3.9% versus December 2021, which the report notes was a particularly strong month.
Overall, the report says, “We’d characterize the sequential, seasonally adjusted increase as further evidence of resilient, but still soft freight demand.”
It adds that normal seasonality would normally have shipments back in positive territory year-over-year in the first half of 2023, but notes that sharpening declines in imports, especially into the West Coast, suggest near-term trends may soften further.
Freight expenditures fell 5.5% month over month in December after a 1.8% increase in November. With the 1.2% gain in shipments, it implies rates overall were down almost 7% versus the prior month. However, the inferred rate decline moves to more flat if non-seasonally adjusted shipment volumes are uses, which showed a 3.3% decline in November.
This index includes changes in fuel, modal mix, intramodal mix, and accessorial charges, and so also saw the effects of falling diesel prices, which saw a decline of about 40 cents per gallon from the start to the end of December.
For the full year, the expenditures component of the Cass Freight Index rose 23%, after a record 38% increase in 2021. However, the index is set to retrench in 2023, Cass says.
Cass notes that “freight rates are on track to fall 5% in 2023 just based on the normal seasonal pattern of this index. With loose market conditions and some welcome relief in diesel prices, the actual decline is likely to be a good bit larger.”
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Another look at rates comes from the Cass Linehaul Index, which measures US per mile truckload rates before fuel surcharge and other accessorials.
That index fell 1.0% month-over-month December to a level of 150.5, after a 1.2% month-over-month decline in November. (The index baseline in January 2005, with the index for that month equal to 100, so they have risen 50.5% since then.)
On a year-over-year basis, the Cass Truckload Linehaul Index was up 1.7% after a similar increase in November.
So, it seems truckload rates at least are holding fairly steady, down a little from November but up a little versus 2021.
Summing things up, Cass comments that “After a long downtrend in 2022, the recent bounce in spot rates and tightening in the spot/contract spread suggest a bottoming truckload rate cycle. This should turn the trajectory of freight markets in 2023, and the cycle is likely to enter yet another phase later in 2023.”
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for November.
Source: Cass
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