The Cass Freight Report for January was released last week, and showed trucking volumes sagging a bit, as the data as with previous months shows mixed indicators.
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Summing things up, Cass and Denoyer comment that “Although LTL and intermodal volumes are down significantly, outperformance in truckload volumes shows the freight downturn is still likely to be mild overall.”
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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 covers several modes but is weighed towards full truckload rates, was flat month-over-month on a seasonally adjusted basis.
It was up 4.3% versus January 2022, but the report reminds us that last January the Omicron wave of COVID was in full swing, temporarily reducing freight volumes.
The report says there has been a considerable increase in the proportion of truckload freight over the past several months, suggesting freight is migrating to truckload from other modes. The data indeed also saw declines in less-than-truckload (LTL) and intermodal volumes.
US freight expenditures were basically flat in January (+0.2%) on a seasonally adjusted basis compared to December. With shipments also flat as noted above, it implies rates were flat in January as well. However, we note that the expenditures index also includes changes in fuel, modal mix, intramodal mix, and accessorial charges in addition to the base rates.
On a year-year basis, expenditures saw 1.7% growth, again on an easy comparison from 2022.
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 0.9% month-over-month January to a level of 149.2, after a 1.0% month-over-month decline in December. (The index baseline in January 2005, with the index for that month equal to 100, so they have risen 49.2% since then.)
On a year-over-year basis, the Cass Truckload Linehaul Index saw a large 5.6% decline last month after a 1.7% increase in December.
Cass said that the Linehaul Index includes both spot and contract freight, adding that “With spot rates already down significantly, the larger contract market is likely to continue adjusting down more gradually but in the same direction.”
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Summing things up, Cass and Denoyer comment that “Although LTL and intermodal volumes are down significantly, outperformance in truckload volumes shows the freight downturn is still likely to be mild overall.”
They add that “We believe an accelerated bottoming process has begun in the freight rate cycle, with spot rates further below operating costs than ever before.”
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for January:
Source: Cass Report
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