April Cass Freight Index Report posts strong gains against mild annual comparisons

April freight shipment and expenditures showed strong annual growth gains, 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.

The report’s shipment reading—at 1.178—saw a 27.6% annual gain, which outpaced March’s 10% annual increase, and was down 3.1% compared to March on a seasonally-adjusted (SA) basis.

The report’s author Tim Denoyer, ACT Research vice president and senior analyst, wrote that the 26.7% annual increase is a record, explaining that the only past declines as large as during the “economic quarantine of Q2 ’20 were during the 2008-2009 financial crisis.”

And he also observed that this rate of growth was expected, as it was up against the easier comparison of the second quarter 2020 pandemic shutdown.

“While some of the March m/m increase was make-up from activity lost during the polar vortex in February, our sense is that the April m/m decline was due more to ongoing supply chain constraints and the deepening semiconductor shortage, which resulted in considerable downtime in auto and truck manufacturing in April.”

Looking ahead, Denoyer said that if shipments remain on a normal seasonal pattern from here, they are expected to see a 27% annual increase in the second quarter, with the expectation that annual growth will slow down to 10% in the third quarter, as annual comparisons see improvement.

On the spend side, Cass reported that April expenditures—at 3.452—headed up 45.1% annually, setting a new record and topping March’s 27.5% annual increase, and saw a 1.1% SA gain compared to March.

The report pointed out that on normal seasonal patterns, the easier comparisons would suggest annual growth at or above 50% in May and June and subsequently slowing to more than 30% annual growth rates in the third quarter.

And looking at freight rates, which Cass said is the calculation of expenditure divided by shipments and explains the overall movement in rates, decreased to a 13.7% annual gain in April compared to a 15.8% annual gain in March.

It said that this annual decline is attributed to a more difficult annual comparison that may have been due to what it called unusual changes in mix in the April 2020 shutdown period.