Cass: Volume, rates expected to ‘level off’ in fourth quarter

Click to enlargeClick to enlarge

The freight sector was relatively flat in
 September, with a drop in North American shipment 
volume and a slight increase in total freight
 expenditures, or payments, according to the latest Cass Freight Index.

Other freight indicators have shown that shipment weights have been rising steadily, so a decrease in the actual number of shipments does not necessarily indicate a drop in freight activity. In a typical summer trend, the economy as a whole cooled in August and September, the report notes.

“The freight industry continues to experience the strongest year since the recession ended, and while there are still headwinds, things should continue to improve for the industry,” says Rosalyn Wilson, a supply chain expert and senior business analyst with Parsons. “The rise in costs, especially related to labor, are pressing hard on rates and should break through in early 2015.”

The number of shipments fell 1.4 percent in September compared to August levels, but on a year‐over‐year basis the number of shipments in September was only 0.7 percent higher than a year ago. Since the end of 2013 the number of freight waybills has increased 12.2 percent, Cass reports.

The September freight expenditures index rose 0.8 percent, almost exclusively on increased tonnage. Diesel fuel prices have been falling since March, which reduced the fuel surcharges added to carriers’ linehaul rates and pushed down total expenditures for freight movement, the report notes.

September 2014 payments are 3.5 percent higher than the corresponding month a year ago and 11.7 percent higher than December 2013.

“It appears that for the last quarter we can expect a leveling off in freight shipment levels and more steady rates,” Wilson says.