Freight recession in US continues, Cass Oct report shows

The Cass Freight Report for October showed shipment volumes were down modestly compared to September, while rates were mixed.

The monthly report from Cass and partner Tim Denoyer of ACT Research is based on data from the billions of dollars of freight bills that Cass pays for its shipper clients.

The Cass shipments index, which covers several modes but is weighed towards full truckload, was basically flat in October versus September in seasonally-adjusted terms, falling by just 0.1 per cent. Without seasonal adjustment, the index was down 1.9 per cent.

However, shipments declined by 2.4 per cent year on year (YoY) in October after a 5.2 per cent YoY drop in September.

Since the second quarter (Q2) this year, Denoyer has identified a trend weighing on freight volumes for carriers: For-hire fleets likely are seeing soft demand because of significant private fleet capacity additions in the past couple of years. That has led many private fleets to now more actively compete for spot freight to fill empty backhauls.

The expenditures component of the Cass Freight Index, which measures the total amount spent on freight, fell by 1.5 per cent month on month in October, partly due to another decline in fuel prices. The YoY decline was a sharp 5.9 per cent versus 6.6 per cent in September.

With shipments down by 1.9 per cent and expenditures falling less, at minus 1.5 per cent, it implies a modest increase in rates.

“As private fleet growth is slowing, it’s worth highlighting the significant capacity contraction by for-hire fleets. In Q3, we estimate the publicly traded fleets were 5.9 per cent smaller than a year ago. While the sequential decline in tractor count slowed, the current low-margin environment is not motivating investment,” Denoyer observed.

Fibre2Fashion News Desk (DS)