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Cass sees uncertainty in markets, warns of two possible ‘storms’



ST. LOUIS — Cass Information Systems said Thursday that November was another month of high volatility and a sense of growing uncertainty in both the U.S. and global financial markets.

Cass is a provider of transportation, utility, waste and telecom expense management and related business intelligence services, disbursing more than $50 billion annually on behalf of its clients.

“Despite all of the ‘hand-wringing’ on Wall Street, the transportation economy continues to signal economic expansion,” said a report written by Donald Broughton, founder and managing partner of Broughton Capital, an economic and equity research firm. “The hard data of physical goods flow, which is uninfluenced by human emotion, confirms that people are still making things, shipping things, and buying/consuming things. Although not at the scorching pace attained earlier this year, expansion is still taking place at an above average pace.”

Broughton said Cass was not alarmed about the growth in shipments slowing to only 0.6 percent in November.

However, he said Cass would be negligent if it did not acknowledge two storm clouds on the economic horizon:

  • The tariffs and threats of even higher tariffs (even though the latest headlines and tweets suggest that there may be a resolution) with China (the world’s second largest economy) has throttled volumes in some areas of the U.S. economy (most notably agriculture exports and other select raw materials);
  • The recent decline in WTI crude (currently below $55 a barrel) has not fallen below the marginal cost of production for fracked crude in almost all areas of the U.S., but it has made it less profitable and significantly lowered the incentive to drill ever more holes, effectively slowing the rate of growth in the industrial economy.

“These potential problems acknowledged, Cass maintains a cautiously bullish outlook given the freight markets, or more accurately goods flow, have a well-earned reputation for predictive value without the anchoring biases that are found in many models which attempt to predict the broader economy,” Broughton said.

Transportation continues to be a leading indicator of the health of the U.S. economy, Broughton said.

“Shipments first turned positive 26 months ago, while expenditures turned positive 23 months ago,” Broughton said. “The current level of volume and pricing growth is suggesting that, while it’s still growing, the U.S. economy is simply not growing at the rate it was and that it may have reached its short-term expansion limit. The 0.6 percent year over year increase in shipments is a deceleration from the 6.2 percent achieved last month and is an even more marked deceleration from the low double-digit levels achieved in the first five months of 2018. Cass is confident that the increased spending on equipment, technology and people will eventually result in increased capacity in most transportation modes. That said, many modes are continuing to report ‘limited amounts of capacity’ or even “no capacity” at any price shippers are willing to pay.”

The consumer economy is accelerating, Broughton said.

“There are many widely disparate variables influencing the consumer economy. Everything from demographics and immigration policy, to interest rates and tax policy, to productivity growth and the unemployment rate influence the direction of, and the rate of change in, the consumer economy,” Broughton said. “Cass monitors all of these factors and dozens more, but in the short-term, we find the most reliable predictors of the consumer economy are dry-van truckload and import container volumes. Import container volume is especially predictive in the fall of the year as retailers prepare for the holiday shopping season.”


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Werner Logistics recognized as Enterprise Business of Year at tech celebration



Members of the Werner Logistics team include (front row) Rajan Bhattarai, Stacey Richter, Marina Brown, Vajra Anugu, Lavanya Gudimetla, Kim Smith, Padmaja Ravipati and Manoj Eedara; (back row) Andy Damkroger, Ronnie Thomas, Johnny Boykin and O’Brien Chin.  (Courtesy: WERNER ENTERPRISES)

OMAHA, Neb. — Werner Enterprises, a transportation and logistics provider, has been recognized as the Enterprise Business of the Year at the 2019 AIM Tech Celebration.

Werner associate Marina Brown was also named the Tech Champion of the Year.

“Werner Logistics continues to show our ability to differentiate the Werner portfolio with creative and innovative solutions,” said President and Chief Executive Officer Derek Leathers. “It is especially important to acknowledge our talent and culture because without them none of these groundbreaking achievements are possible.”

Leathers said Werner Logistics was named Enterprise Business of the Year for its outstanding application of technology. Other criteria included innovative product/project deployment, groundbreaking ideas or implementations or an outstanding return on technology investment.

The Tech Champion of the Year Award is a special recognition conferred by the Tech Celebration award committee to an individual or group who has contributed their time and talents to AIM and other tech community initiatives to develop tech awareness and skills in others. Brown is an Application Development Manager at Werner.

The AIM Institute, headquartered in Omaha, is an innovative not-for-profit that grows, connects and inspires the tech talent community through career development and educational programs. Through these efforts, the AIM Institute improves thousands of lives across the Silicon Prairie.

Werner Enterprises was founded in 1956.

For more information, visit




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FTR’s September Shippers Conditions Index Stays in Positive Territory



September Shippers Condition Index is unchanged over August but forecast indicate upward trend.

Bloomington, Ind.– FTR’s Shippers Conditions Index (SCI) for September remained unchanged from August at a 6.4 reading. All measures included in the SCI were positive with less favorable fuel pricing offsetting more favorable freight volume, capacity utilization, and logistics cost factors.

FTR projects the Shippers Conditions Index to trend towards neutral through 2020 as freight demand softens and capacity utilization firms. The potential impact of a global reduction in the sulfur content of marine fuel due to IMO 2020 remains a wildcard.

Todd Tranausky, vice president of rail and intermodal at FTR, commented, “Shippers’ place in the freight market remains solidly positive as the year moves into its final quarter. We expect shippers’ position in the marketplace to slowly deteriorate in 2020 as capacity tightens and freight demand recovers.”

The November issue of FTR’s Shippers Update, published November 7, 2019, details the factors affecting the September Shippers Conditions Index. Also included in November is an analysis of trucking failures, the total number of carriers operating and the effect on overall capacity.

The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem…and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.

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ATA For-Hire Truck Tonnage Index declines 0.3% in October



ATA’s tonnage data is dominated by contract freight, which is performing significantly better than the plunge in spot market freight this year. (The Trucker file photo)

ARLINGTON, Va. —  The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index declined 0.3% in October after rising 1% in September. In October, the index equaled 118.1 (2015=100) compared with 118.5 in September.

“October’s tonnage change, both sequentially and year-over-year, fits with an economic outlook for more moderate growth in the fourth quarter,” said ATA Chief Economist Bob Costello. “The ongoing slowdown in manufacturing activity also weighed on truck tonnage last month.”

It is important to note that ATA’s tonnage data is dominated by contract freight, which is performing significantly better than the plunge in spot market freight this year.

September’s reading was revised up compared with our October press release.

Compared with October 2018, the SA index increased 1.7%, the smallest year-over-year gain since June. The index is up 3.9% year-to-date compared with the same period last year.

The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 125.4 in October, 8.4% above the September level (115.7). In calculating the index, 100 represents 2015.

Trucking serves as a barometer of the U.S. economy, representing 70.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 10.77 billion tons of freight in 2017. Motor carriers collected $700.1 billion, or 79.3% of total revenue earned by all transport modes.

ATA calculates the tonnage index based on surveys from its membership and has been doing so since the 1970s. This is a preliminary figure and subject to change in the final report issued around the 5th day of each month. The report includes month-to-month and year-over-year results, relevant economic comparisons, and key financial indicators.

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