February Cass Freight Index report sees annual shipment and expenditures declines

After seeing solid freight shipment and expenditure readings to start 2023, February saw a reversal according to the most recent edition of the Cass Freight Index, which was issued today 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.  

February’s shipment reading—at 1.167—was down 0.3% annually, up against an easy annual comparison, while rising 3.8% over January’s 1.124 reading. That was preceded by a 3.9% annual increase in December, a 0.4% November decrease and a 3.9% annual gain in December. 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, February shipments were up 3.3% and down 0.3% on a month-to-month seasonally adjusted (SA) basis.  

The report’s author, Tim Denoyer, ACT Research vice president and senior analyst, wrote that that slight SA sequential decline extended what he called a streak of remarkable stability, from October through February. Addressing the 0.3% annual gain, he explained that the primary headwinds impacting freight volumes were soft retail sales trends, as well as ongoing destocking, and he also noted that sharp import declines suggest that this type of environment is likely to remain intact over the next several months.

“There has been a considerable increase in the proportion of truckload (TL) freight over the past several months, amid declines in less-than-truckload (LTL) and intermodal volumes,” wrote Denoyer. “This suggests freight is migrating to TL from other modes, which fits with the robust growth in truckload capacity metrics, which have hardly started to slow at this point.” 

The February expenditures reading—at 4.020—was off 9.7% annually, while seeing a 1.9% decline, from January to February. Expenditures were up 28.4% on a two-year stacked change basis and down 3.9% on a sequential SA basis.

“The expenditures component of the Cass Freight Index, which measures the total amount spent on freight, fell 1.9% m/m in February, and on some volatile comparisons fell to a 9.7% y/y decline after a 1.7% y/y increase in January,” said Denoyer. “Looking at the m/m changes, with shipments up 3.8% but total expenditures down, we infer that rates were down 5.5% m/m.

The report added that expenditures increased 23% in 2022, following a record 38% in 2021, with the expectation it will “retrench” this year.