The Cass Freight Report for October was released Tuesday and it showed transportation volumes were down sharply versus September and year-over-year, with expenditures down even more than the drop in freight movements.
Supply Chain Digest Says...
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The linehaul index now stands at 141.1, meaning contract truckload rates are up 41.1% versus the baseline month of January 2005 (index =100), or an average annual increase of just 1.9 % over that time.
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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, fell 4.7% in October versus September, more than reversing the modest past two months of gains to reach a new low in this current freight cycle, though Donoyer note the October data set includes automotive, so the brief UAW strike may have had an impact on the data.
Shipments were down even more year-over-year, falling 9.5% versus October 2022, more than the 6.3% year-over-year in September.
The report notes that US freight volumes, as measured by the Cass Freight Index, have fallen in 15 of the past 22 months year-over-year, similar to prior downcycles in both length and magnitude.
Cass data tracks trends in for-hire carriers. Cass believes volumes are better for private fleets, with Denoyer observing that “private fleet insourcing persists.”
While shipments fell 9.5% in October versus prior year, freight expenditures fell 23.0% over the same period.
This suggests a significant reduction in rates in October versus 2022, estimated by Cass at about a 15% decline.
Another look at rates comes from the Cass Linehaul Index, which measures US per mile truckload rates before fuel surcharge and other accessorials.
In October, the index was basically flat versus September, rising 0.6% after a similar 0.5% month-over-month increase in September.
But the year-over-year change in truckload rates was more stark, with the index dropping 8.3% versus a 9.1% decline in September.
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The linehaul index now stands at 141.1, meaning contract truckload rates are up 41.1% versus the baseline month of January 2005 (index =100), or an average annual increase of just 1.9 % over that time.
On the overall state of the freight market, Denoyer writes that “general economic conditions remain better than those in the for-hire freight market. Although private fleet capacity expansion continues to pull freight from the for-hire market, we think equipment purchasing patterns are changing, which should propel the cycle forward in 2024, even if the broad economy slows.”
On rates, Denoyer observes that “With spot rates stabilizing over the past several months, downward pressure on the larger contract market is lessening, with a few instances of contract rate increases bucking the downtrend of late.”
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for October:
Source: Cass Information System
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