Freight shipments fell to a cycle low in October, according to data compiled in the Cass Freight Index.
A Tuesday report showed October shipments on Cass Information Systems’ platform were off 9.5% year over year (y/y) and 2.8% lower (seasonally adjusted) than in September. The sequential decline erased two months of gains. The data set has exposure to the auto industry and was likely impacted by recent work stoppages.
“The 2023 peak season is off to a muted start, but we think overall freight volumes are better than those in the for-hire sector measured by Cass data, as private fleet insourcing persists,” ACT Research’s Tim Denoyer said.
He said normal seasonal trends during November would produce a 9% y/y decline in shipments for the month.
October 2023
y/y
2-year
m/m
m/m (SA)Shipments-9.5%-6.8%-4.7%-2.8%Expenditures-23.3%-14.8%-2.2%-2.4%TL Linehaul Index-8.3%-6.5%-0.6%NMTable: Cass Information Systems. SA (seasonally adjusted)
Chart: (SONAR: CLAV.USA) The Contract Load Accepted Volume Index measures accepted load volumes moving under contractual agreements. It excludes all rejected tenders. CLAV.USA has inflected positively y/y. To learn more about FreightWaves SONAR, click here.
Freight expenditures captured by the company fell 23.3% y/y and were down 2.4% seasonally adjusted from September. Netting the shipments decline from the expenditures decline implies actual rates were up 0.5% from the prior month but down 15.2% y/y.
This was the fifth straight month the expenditures subindex, which includes fuel surcharges, recorded a 20%-plus y/y decline. The data set is expected to decline 18% y/y in 2023, following two years of outsize gains.
The expenditures subindex is also forecast to decline 14% in the first half of 2024 compared to an expected decline of 11% a month ago.
“With spot rates stabilizing, sequential declines are likely to slow from here, but the freight market is likely to deliver more savings to shippers this holiday season,” Denoyer said.
Chart: (SONAR: NTIL.USA). The National Truckload Index (linehaul only – NTIL) is based on an average of booked spot dry van loads from 250,000 lanes. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. Spot rates are still 9% lower y/y.
Cass’ truckload linehaul index, which excludes fuel and accessorials, also reached a cycle low during the month. The data set declined 8.3% y/y. However, this was the slowest y/y rate of decline recorded by the subindex since February and it was down just 0.6% from September.
“We continue to expect modest y/y growth in consumer spending this holiday season, driven by the acceleration in real disposable incomes and the ongoing strong labor market,” Denoyer said.
However, he noted that the broader economy is stronger than the for-hire market.
“Although private fleet capacity expansion continues to pull freight from the for-hire market, we think equipment purchasing patterns are changing, which should propel the cycle forward in 2024, even if the broad economy slows,” Denoyer said.
Data used in the Cass indexes is derived from freight bills paid by Cass (NASDAQ: CASS), a provider of payment management solutions. Cass processes $44 billion in freight payables annually on behalf of customers.
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