ST. LOUIS — Cass Freight Index’s shipping component fell 0.2% month-over-month in March, as for-hire demand remains broadly consistent.
The index fell 2.3% month-over-month in seasonally adjusted (SA) terms, giving back the 2.0% month-over-month increase in February from Leap Day, according to a news release, which indicates that markets are “steady as we go.”
Underlying volumes did show improvement in Q1, as the shipments component of the Cass Freight Index rose about 2% from Q4’23 in SA terms.
“The 3.6% year-over-year decline was the smallest in a year, and although freight demand is broadly better than the for-hire market, it’s still hard to see amid ongoing private fleet growth,” the news release notes. “After rising 0.6% in 2022, the index declined 5.5% in 2023. With normal seasonality, the index will fall 2%-3% year-over-year in April and turn positive year-over-year in June.”
Cass Freight Index — Expenditures
The Expenditures component of the Cass Freight Index, which measures the total amount spent on freight, rose 0.1% month-over-month, but fell 18% year-over-year in March.
With shipments down 0.2% month-over-month, Cass infers rates were up 0.2% month-over-month in February.
The index fell 1.3% month-over-month (SA), with shipments down 2.3% and rates up 1.0%.
This index includes changes in fuel, modal mix, intramodal mix and accessorial charges, so is a bit more volatile than the cleaner Cass Truckload Linehaul Index.
“U.S. freight spending, as measured by 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 another 14% in 1H’24, assuming normal seasonal patterns from here, and 9% for the full year,” according to Cass officials.
Inferred Freight Rates
The rates embedded in the two components of the Cass Freight Index declined 15% year-over-year in March and have now declined 15%-21% for 10 straight months.
“Cass Inferred Freight Rates rose 1.0% month-over-month SA from what increasingly looks like a floor,” according to the news release.
Based on the normal seasonal pattern, this index would rise month-over-month in April, with the year-over-year decline moderating to the low teens.
“The normal seasonal pattern from here would put inferred rates down 8% for the full year,” the news release notes. “Even if rates begin moving higher from here, as is increasingly likely, freight will very likely remain deflationary this year.”
Truckload Linehaul Index
Stability continued for the Cass Truckload Linehaul Index in March, with a 0.2% month-over-month increase after a 0.1% month-over-month increase in February. The 4.7% year-over-year decline continued to gradually narrow.
The index has been in a very tight range, from 140.4 to 142.0, over the past nine months as the market finds a floor.
“As a broad truckload market indicator, this index includes both spot and contract freight,” according to the news release. “With spot rates steady over the past several months, downward pressure on the larger contract market is lessening, with some instances of contract rate increases bucking the downtrend recently.”
Freight Expectations
The tragic Baltimore bridge collapse caused major logistical challenges but is unlikely to significantly affect the freight market balance. Given Baltimore’s importance as a roll-on/roll-off port for machinery and autos, spot flatbed rates have risen at ports near Baltimore and for loads heading into the Baltimore area, where backhauls are currently tougher to find.
“While a freight channel might open sooner, it looks like the port will be largely closed to container traffic through May, and the bridge will take years to rebuild,” the news release states. “But the highway system is pretty resilient overall, and the bigger underlying supply and demand trends in the spot market were strongly suggesting higher rates in Q2, even before this (typically inflationary) loss of capacity.”
Born in Pine Bluff, Arkansas, and raised in East Texas, John Worthen returned to his home state to attend college in 1998 and decided to make his life in The Natural State. Worthen is a 20-year veteran of the journalism industry and has covered just about every topic there is. He has a passion for writing and telling stories. He has worked as a beat reporter and bureau chief for a statewide newspaper and as managing editor of a regional newspaper in Arkansas. Additionally, Worthen has been a prolific freelance journalist for two decades, and has been published in several travel magazines and on travel websites.
