It’s been tough times in the US freight sector for more than two years, but things look a bit better of late, according the Cass Freight Report.
Supply Chain Digest Says...
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| He adds that private fleets continue to show a surprising willingness to add capacity despite wider than normal cost disadvantages versus the market, which Denoyer makes more sense in the context of significant equipment cost increases he sees ahead in 2027. |
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The Cass report for November was released late last week and it showed shipment volumes were up a solid 2.8% versus October on a seasonally adjusted basis.
Shipments declined by 0.7% in November versus the same month in 2023, but that was the narrowest decline in 21 months.
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 index covers several modes but is weighed towards full truckload.
After rising 13% in 2021 and 0.6% in 2022, the Shipping Index declined 5.5% in 2023. With normal seasonality, Denoyer says the index will fall about 4% for the full year in 2024.
The Expenditures Index, which measures the total amount spent on freight, rose 3.1% month-over-month in November (seasonally adjusted).
With shipments up 2.8% and expenditures a bit more, at 3.1%, it implies a modest increase in rates.
Another look at rates comes from the Cass Linehaul Index, which measures US per mile truckload rates before fuel surcharge and other accessorials.
In November the index rose 0.8% month-over-month, the third straight small increase from a cycle low in August.
The year-over-year decline in the index narrowed to 1.1% from 2.2% in October and 3.5% in September. With a tougher comparison in December, it still seems unlikely to turn positive until early 2025, Denoyer said.
In some interesting concluding comments, Denoyer again cites the growth of contract carriage by private fleets as impacting for-hire carriers.
“Using the Cass Freight Index as a proxy for the for-hire sector, we can infer private fleet volume growth of roughly 6% for most of the past year, slowing recently as the declines in for-hire shipments moderate,” Denoyer said, adding that “In this context, the 4% decline that the Cass Freight Index is headed toward in 2024 implies a roughly 5% increase in private fleet volumes coming from the carriers’ business.”
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He adds that private fleets continue to show a surprising willingness to add capacity despite wider than normal cost disadvantages versus the market, which Denoyer makes more sense in the context of significant equipment cost increases he sees ahead in 2027.
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for November:
Source: Cass
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