Cass Freight Index shows more annual gains but at a reduced rate

The most recent edition of the Cass Freight Index, which was published this week by Cass Information Systems, saw significant gains, albeit at reduced growth rates, compared to earlier in 2021, for August, the most recent month for which data is available.

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 1.234—was up 12.3% annually, which was well short of the 26.8% annual gain in July. But it was up 4.8% compared to July and was up 5.0% compared to July on a seasonally adjusted (SA) basis.  

The report’s author Tim Denoyer, ACT Research vice president and senior analyst, wrote that shipment growth, in the coming months, is expected to slow to mid-single-digit growth, due to more difficult year-end annual comparisons.

“The recovery after a skid in June and July amid further slowdowns in rail volumes suggests trucking is picking up slack from the railroads, currently snarled by the chassis shortage,” he wrote. “But shipment volumes remain limited by the capacity of the freight network, as shown by the backlog of 125 or so containerships at anchor off North American ports. SoCal just hit a new record of 49. This containership backlog clearly represents a stronger and longer than average peak season demand outlook. The extent to which constraints on equipment and driver supply ease in the coming months will largely dictate volumes, with declines likely to continue in intermodal and more pressure on trucking to shoulder the load.”

August freight expenditures—at 3.832—saw a 42.2% annual gain, below July’s 56.4% annual spread, and were up 9.2% compared to July, and were up 11.3% compared to July on an SA basis.

Denoyer observed that should normal seasonality play out for the rest of this year, the full-year increase in this index would be 35% in 2021, after a 7% decline in 2020 and no change in 2019.

“Tougher comparisons in the coming months will naturally slow these [annual] increases further, but extraordinary growth rates will continue in the near-term, driven by increases in both shipment volumes and freight rates,” he noted.