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Freight Data Showing Optimism For New Cycle

According to payment services provider Cass Information Systems, April data indicated optimism for an improvement in May, although year-over-year comparisons are expected to remain low in the future.

In April,the shipments component of the Cass Freight Index experienced a 2.4%year-over-year decline and a 1.3% decrease when seasonally adjusted compared to March. This sequential decline followed a 3.8% drop in March.


The report,published on Monday, mentioned that the warm weather in the first two months of the year likely caused shipments that would typically occur in March and April to be moved earlier. However, there were indications of seasonal improvement in other industry data sets.


Tim Denoyer from ACT Research noted that several freight data series started April weak but showed improvement throughout the month and into May. He expects at least a seasonal improvement in May, although the year-over-year decline may worsen due

to challenging comparisons with inventory building a year ago.


FreightWaves data showed a modest increase in loads under contract, with the Contract Load Accepted Volume Index demonstrating higher volumes in late April and May.

Denoyer added that declining real retail sales trends and ongoing destocking are the main obstacles affecting freight volumes. However, the situation is changing as real incomes improve and the worst of the destocking is likely in the past.

For the second consecutive month in April, Cass' shipments index also indicated a decline in a two-year-stacked comparison, following 17 consecutive increases.


Assuming normal seasonal trends moving forward, year-over-year shipments are expected to be 1% to 3% lower in the coming months.

In April, Cass' expenditures subindex, which reflects the total amount spent on freight movement, decreased by 14% compared to the previous year. This data set includes diesel fuel, which experienced an average year-over-year decrease of more than 20% during the month. The subindex also declined by 4% when

seasonally adjusted from March, marking the fifth sequential decline.

After substantial increases of 38% in 2021 and 23% last year, the index is projected to decline by 12% this year.


Considering seasonally adjusted figures, with volumes down 1.3% and total costs down 4% sequentially, it is assumed that actual freight rates across the platform decreased by 2.7% from March and 11.9% year-over-year.


Cass' linehaul index for truckload shipments, which measures linehaul rates excluding fuel and accessorial charges, experienced a 12.3% year-over-year decline in April. The data set includes rates from both spot and contracted loads. The linehaul index also decreased by 0.8% compared to March, marking the 11th consecutive sequential decline.


Truckload rates continue to face pressure due to sluggish freight demand, and carriers are staying in business longer than anticipated at the beginning of the year.


Denoyer estimates that Department of Transportation (DOT) operating authorities have declined over the past seven months. He also highlighted the decline of long-haul trucking jobs by 1% sequentially in the first quarter, predicting negative year-over-year growth in jobs data by June if current trends persist.

Denoyer concluded by saying, "After a prolonged period of low activity, we foresee the U.S. freight transportation industry on the cusp of a new cycle as we

transition from the bottoming phase to the early phase of the freight cycle in

the upcoming months."


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