Cass Freight Index presents mixed May shipment and expenditures readings

May freight shipments and expenditures readings, saw mixed annual and sequential readings, according to the new edition of the Cass Freight Index, which was recently issued 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 Index 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.  

May’s shipment reading, at 1.098, fell 5.8% annually and was flat compared to April. This annual decline was steeper than April and May annual declines, at -4.0% and -3.6%, respectively, and topped February’s 4.5% annual decrease, while below January’s 7.6% decline. May was also below August 2022’s 1.278 reading, which marked the highest level for shipments since May 2018. On a two-year stacked change basis, shipments fell 11.1%.

Tim Denoyer, the report’s author and ACT Research vice president and senior analyst, wrote in the report that May shipments were down 3.1%, from April to May, on a seasonally-adjusted (SA) basis, coming in at a 46-month low, citing ongoing softness in for-hire demand.

“After showing improvement in Q1, the shipments component of the Cass Freight Index has softened significantly in Q2,” explained Denoyer. “Several other indicators look more positive in May, including imports, intermodal volumes and spot truckloads. We think the 5.8% y/y decline in the shipments component of the Cass Freight Index was due in part to the consolidation of LTL shipments into TLs and/or insourced to private fleets. The Cass data set has considerable LTL mix, and LTL shipments have been consolidated into truckloads at an outsized pace over the past year. After rising 0.6% in 2022, the index declined 5.5% in 2023. With normal seasonality from the May level, the index will fall about 4% y/y in June. The index is trending toward a similar decline for the full year.” 

Looking at expenditures, the May reading, at 3.288, decreased 9.0% annually, marking an improvement compared to April’s 16.8% annual decline, as well as March, February, and January, which saw respective annual declines of 18.5%, 19.8%, and 24.3%, respectively.

From April to May, expenditures increased 1.9%, while falling 23.3% on a two-year stacked change basis and eking out a 0.8% sequential SA basis.

“With shipments flat m/m, we infer the 1.9% increase in total freight expenditures was due to rates being up 1.9% m/m in May,” noted Denoyer. “In seasonal terms, the index rose 0.8% m/m, with shipments down 3.1% and rates up 3.9%. The expenditures component of the Cass Freight Index fell 19% in 2023, after a record 38% surge in 2021 and another 23% increase in 2022. It is set to decline about 16% in 1H’24, assuming normal seasonal patterns from here, and 10% for the full year.”