January Cass Freight Index report sees annual shipments and expenditures gains

Freight shipments and expenditure readings were saw annual gains to kick off 2023, according to the most recent edition of the Cass Freight Index, which issued 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. What’s more, the Cass Transportation Indexes accurately measure changes in North American freight activity and costs based on $44 billion in paid freight expenses for the Cass customer base of hundreds of large shippers.  

January’s shipment reading—at 1.124—saw a 4.3% annual increase, more than reversing December’s 3.9% annual decrease, which was preceded by a 3.9% October decrease and a 0.4% November decrease. It also trailed August’s 1.278 reading, which marked the highest level for shipments since May 2018. On a two-year stacked change basis, January shipments were up 1.3% and were down 3.2% and flat on a month-to-month and month-to-month seasonally adjusted (SA) basis, respectively.

The report explained that 4.3% annual increase is not too meaningful, as January 2022 saw the Omicron wave of the pandemic “in full swing,” resulting in widespread absenteeism and supply-side pressure on shipments, coupled with more severe weather in January 2022. And it added that with normal seasonal patterns, shipments are expected to be flat annually in February and March. It also observed that following a soft holiday season, with overstocked inventories and a sharp decline in imports, its outlook is cautious, with volumes on a high plateau.

“There has been a considerable increase in the proportion of truckload (TL) freight over the past several months, suggesting freight is migrating to TL from other modes,” wrote the report’s author Tim Denoyer, ACT Research vice president and senior analyst. “This fits with the robust growth in truckload capacity metrics. The resilience of volumes thus partly reflects share gains by the truckload sector, particularly contract and dedicated freight currently, amid declines in less-than-truckload (LTL) and intermodal volumes.”

January expenditures—at 4.096—saw a 1.7% annual increase, following a 4.3% December decline and October and November annual gains of 11.1% and 4.7%, respectively. Expenditures were up 33.4% on a two-year stacked change basis and were down 3.2% compared to December and down 0.2% compared to December on a month-to-month SA basis.

The report observed that the 1.7% annual increase was up against an easy comparison.

“In 2022, the expenditures component of the Cass Freight Index rose 23% after a record 38% increase in 2021, but it is set to retrench in 2023,” wrote Denoyer.