Cass Information Sytstems is fresh out with its monthly freight for October, which again now as for several months shows mixed news on freight moves and rates, though it expects some downturns in the market soon.
Surpply Chain Digest Says...
|
 |
| We'll note the Linehaul Index is currently at about 153, versus a baseline value of 100 in January 2010. That means US truckload rates are up 53% in the nearly 13 years since then. |
 |
What do you say? |
| Click here to send us your comments |
 |
| Click here to see reader feedback |
|
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 about flat versus September, up 0.3% on a seasonally adjusted basis, and a stronger 2.9% versus October 2021.
"With freight demand hit by inflation, substitution from goods back to services, and now excess inventory, the [freight] improvement in the past few months is still a little puzzling," the report says.
Denoyer said that diconect likely reflects a combination of:
• Inventory building ahead of the holidays
• Repositioning of mis-timed inventory
• Consumers getting ahead of rising interest rates
• Easing supply constraints, particularly in auto production
These are the same factors the report used to explain the market strength last month as well.
The September expenditures component of the Cass Freight Index, which measures the total
amount spent on freight, was down 4.0% versus October on a seasonally adjusted basis. Given freight volumes were up just 0.3%. it implies a drop in rates of 3.7%.
However, on a year-over-year basis, the expenditures index was up 11% from October 2021, down from 21% rise in September.
The Cass Expenditures Index incudes changes in fuel, modal mix, intramodal mix, and accessorial charges in addition to core rates changes.
(See More Below)
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, that index was up 2.0 year-over-year, down from a 3.9% rise in September and a 7.4%% increase in August. Month-over-month, the linehaul index fell a modest 1.5%, slightly more than the 2.2% decline in September.
Relative to the index, Cass notes that "As a broad market indicator, this index includes both spot and contract freight, and with spot rates already down significantly, it’s only a matter of time until the index begins to decline on a year-over-year basis."
We'll note the Linehaul Index is currently at about 153, versus a baseline value of 100 in January 2010. That means US truckload rates are up 53% in the nearly 13 years since then, or an average of about 3.3%.
In additional commentary, Denoyer observes that "We would still describe the freight market as soft, with much of the recent strength on a year-over-year basis more statistical noise than signal, as evidenced by the 5% year-over-year decline in shipments that will take place in December if normal seasonality plays out from here."
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for Octoberber:
n
Source: Cass Information Systems
Any thoughts on the Cass report? Let us know your at the Feedback section below.
|
