Unwelcome Change at Cass

On december 10, I received an email announcing "New Partnerships to Help Deliver More Accurate, Relevant Insights"

First, we’ve partnered with the University of Tennessee’s Global Supply Chain Institute to enhance the methodology used to produce our truckload and intermodal indexes, which are widely used barometers of transportation pricing.

We are also joining forces with financial services firm Stifel to provide monthly insights into the freight market dynamics that the data represents. Managing director and head of their well-known Global Transportation & Logistics Research practice, Dave Ross, will author our new Cass Transportation Indexes Report. The report, which will be an adaptation of the existing Cass Freight Index Report, will cover all of our indexes and, by design, be shorter and more consumable than the previous publication.

​Hollow Version

The November Cass Transportation report, Flat is the New Up, is a hollow version of the former.

  • China - Gone
  • Global Reports - Gone
  • Cass to GDP Comparisons - Gone
  • Recession Comparisons - Gone

Most of the hard-hitting analysis is gone. Here are a couple of key snips from the new report.

Cass Freight Index - Shipments

Both the shipments and expenditures components of the Cass Freight Index remain down from their peaks in May and September of 2018, respectively, but both appear to be getting “less bad” with y/y comps not off as much as we saw in October. Over the coming months, expect y/y growth to flatten out, as the industrial economy is expected to bottom, while the consumer remains relatively healthy.

Shipment volumes, which have been negative y/y all year, fell 3.3% y/y in November. We’ve been talking for several quarters now about how we’re in another freight recession (the other being 2015-2016) during this long-tenured economic expansion in the U.S., which shows most clearly in the rail carload, LTL tonnage, and Cass shipment data. Some of this is due to an inventory destock (primarily at the retail level), while much is due to the softening industrial economy (where we believe inventories are still elevated). Moving into 2020, we expect volumes to flatten out but not surge much, and a turn to positive y/y comps in the shipments index could be seen as soon as January 2020.

Cass Freight Index - Expenditures


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​Freight expenditures (i.e., the total dollars spent on freight), dropped 1.4% vs year-ago levels. Although spending is down, the fact that shipments dropped more than spending implies that pricing remains above late 2018 levels. The fact that average spend per unit is up may sound strange, given the sharp drop in spot truckload rates in 2019 vs 2018, but most shippers move freight through the contract market, which necessarily lags any big changes in supply/demand. Therefore, many contracts that were repriced in 2018 still carried into and through much of 2019. Since the Cass Freight Index is a mix of freight modes (but >50% truckload), the outperformance of expenditures vs volumes reflects not only the aforementioned lag effect but also the better pricing power exhibited by the rail, intermodal, parcel, and LTL sectors. We expect transport pricing growth to moderate in 2020 but remain inflationary, so our forecast is for freight expenditures to modestly outpace a generally flattish volume environment.

Gone - GDP - This is Last Month's Chart

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Gone - Eurozone - This is Last Month's Chart

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Gone - AsiaPacific - This is Last Month's Chart

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Gone - Shanghai - This is Last Month's Chart

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Flat is the new up, and less is the new more.

Mike "Mish" Shedlock

Cass Freight Index Down 9th Month "Signaling Economic Contraction”

Year-over-year freight volume is down nine consecutive months starting December of 2018.

U-Turn in Trucking: Cass Truck Shipment Index Down 4th Consecutive Month

The Cass Freight Index, a measure of truck shipments is down for the fourth consecutive month year-over-year.

Cass Year-Over-Year Freight Index Sinks to a 12-Year Low

Year-over-year, the Cass shipping index turned in its worst performance since the Great Recession.

Recession Looms: Cass Freight Index Negative for 7th Month

According to Cass, "Freight shipments signal economic contraction".

Cass Truck Transportation Index in Freefall

The Cass Truckload Linehaul Index is down for the third consecutive month.

Cass Freight Index Contracts 8th Month: Cass Predicts Negative GDP by Q3 or Q4

Based on global shipping indexes, Cass expects a US GDP contraction in the third or fourth quarter.

CPI Flat 3rd Consecutive Month, Year-Over-Year Down 3rd Month

Thanks to falling energy prices the CPI is once again steady, with year-over-year rates down a third month.

Cass Freight Index Showed Economic Weakness Way Before the Pandemic

Numerous freight charts point to a weakening economy months before the coronavirus hit.

Factory Orders Inch Higher Only Because of Aircraft, Shipments Down 4th Month

Factory orders rose 0.1% but shipments which feed GDP reports were down for the fourth consecutive month.