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Rebound Slower Than Expected 

David Ross, CFA at Stifel and author of the Cass Report, says the rebound "unfolded slower than we anticipated."

He also comments "It won’t be like this for long."

In a move back in the right direction, Ross says "We do not believe we will reach 2019 freight activity levels until 2021 (at the earliest) due to the significant rise in unemployment and other results of government intervention."

Shipment Volumes

Cass Freight Index - Shipment Volumes May 2020

We are now close to 80% through the second quarter of 2020, and we see volumes down double-digits for most carriers across most modes in the U.S., including truckload, LTL, intermodal, and rail. 

E-commerce (including parcel and big and bulky last mile) remains a hot area, as long-term trends in consumer buying patterns were accelerated in recent months. 

Rail Traffic

Cass Rail Traffic May 2020

Freight Expenditures 

Cass Freight Expenditures May 2020

Expenditures had the worst month since the Great Recession.

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What ? No May Rebound?

I am not sure why anyone expected a freight rebound in May with all the lockdowns in place.

The Cass report used to be written by Cass. It is now written by Ross. 

For several months I have argued against the perspective of Ross.

But after attempting to portray things in both directions for May, I agree with this key comment: "We do not believe we will reach 2019 freight activity levels until 2021 (at the earliest)."

What About June?

There will be a rebound in June, albeit from an abysmal level.

Fade Trade of the Day: Economy Off to the Races

The risk is people will take any rebound and make a case for a V-Shaped recovery out of it.

That is just what Larry Kudlow, Trump's economic advisor, did this past weekend.

I called the notion that the "Economy Off to the Races", the Fade Trade of the Day.