Cass Freight Index turns in strong October output

Both freight shipments and expenditures, for the month of October, turned in strong performances and highlighted an ongoing strong run of freight market improvements, according to the new edition of the Cass Freight Index, which was published this week by Cass Information Systems.

Many freight transportation and logistics executives and analysts consider the Cass Freight Index to be the most accurate barometer of freight volumes and market conditions, with many analysts noting that the Cass Freight Index sometimes leads the American Trucking Associations (ATA) tonnage index at turning points, which lends to the value of the Cass Freight Index.

“One of the drivers of the recent resurgence in freight activity has been healthy consumer spending, as U.S. retail sales had another very good month, increasing 5.2% in October,” wrote David Ross, the report’s author and transportation analyst at Stifel. “This was driven by a mixture of the continued reopening of the economy and businesses, schools starting back up, and optimism around healthcare advances, including a vaccine (there are >20 in various trial phases presently). The momentum of good news has continued after the election, as optimism further increased, due to the declared positive results showed by at least a couple of the vaccines still in trial and the promise of Operation Warp Speed to get them out ASAP when ready.”  

October shipments—at 1.180—headed up 2.4% annually, which moved the reading into positive territory and represents the strongest growth for the metric, going back to October 2018, as well as highest reading since September 2019, while up 27.8% compared to the low point seen last April. October shipments were 0.3% ahead of September.

On the expenditures side, October came in at 2.886, marking a 3.1% annual increase and a 0.1% decline compared to September. This was 28.7% higher than the May 2020 low, with Cass observing that these pricing gains came with significantly lower fuel surcharge revenue.

And the report added that revenue per shipment trends are up, as trucking rates rose, while off of a better annual comparison than September.

“The present constraints on drivers and industry supply are real,” wrote Ross, “so even with better demand, fewer trucks are running and rates are rising significantly. How much capacity can be coaxed to enter next year in this tight supply/demand environment will play heavily into the ultimate growth in the shipper’s average freight bill.”