The Cass Freight Index reveals continued declines in July’s freight shipments and expenditures, reflecting evolving market dynamics. The logisticsmgmt source.
- July’s Cass Freight Index shows a significant annual drop in both shipments (8.9%) and expenditures (24.4%).
- Despite challenges, evolving dynamics like improved real incomes and destocking recovery are impacting the freight industry.
- Analysts anticipate an 18% expenditure decline in 2023, while fuel price hikes could limit shippers’ savings.
Freight shipment and expenditure figures for July have once again registered declines, as reported by the latest edition of the Cass Freight Index. This index, known for its accuracy in reflecting freight volumes and market conditions, serves as a pivotal indicator for freight transportation and logistics experts. Analysts have often highlighted the Cass Freight Index’s ability to lead the American Trucking Associations (ATA) tonnage index during turning points, amplifying its value within the industry.
In the realm of shipments, July recorded a reading of 1.122, indicating an 8.9% year-on-year decrease and a 2.2% drop compared to June. This figure also lagged behind August 2022’s reading of 1.278, which marked a peak not seen since May 2018. When assessed over a two-year period, July shipments were down by 4.7%, and on a month-to-month seasonally adjusted basis, they fell by 1.2%. The report’s author, Tim Denoyer, noted that while declining retail sales and destocking continue to be dominant factors, the landscape is shifting with improved real incomes and a receding impact of destocking.
Display Parallel Trend
Concurrently, expenditure metrics also experienced a downward trajectory. July’s expenditures, measured at 3.423, depicted a substantial annual decline of 24.4%, mirroring June’s 24.5% annual decrease. This figure also displayed a 2.8% decline in comparison to June’s statistics. On a two-year stacked-change basis, July expenditures showed a decrease of 2.5%, with a 2.0% drop in the month-to-month seasonally adjusted measurements. Denoyer highlighted that the expenditures component of the Cass Freight Index had seen a remarkable 23% surge in 2022, following a record 38% increase in 2021. However, projections indicate an 18% decline for 2023, assuming normal seasonal patterns.
As the industry navigates these fluctuations, Denoyer brought attention to various nuances in the landscape. He pointed out that while both freight volume and rates are under pressure in the current cycle, the potential increase in fuel prices could curtail savings for shippers. Additionally, Denoyer projected that while the index is expected to see a slight month-to-month increase in August due to normal seasonality, the annual comparison could reflect an 11% decline, largely attributed to the unusual circumstances of the previous year when destocking led to a surge in freight demand.
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