The April edition of the Cass Freight Index, which was released this week by Cass Information Systems, showed further signs of declining shipping and freight spending.
Many freight forwarding and logistics executives and analysts regard the Cass Freight Index as the most accurate barometer of freight volumes and market conditions, with many analysts noting that the Cass Freight Index sometimes tops the American Trucking Associations (ATA) tonnage index at the turns, which gives the value of the Cass Freight Index.
The April shipments reading at 1.172 registered a slight 0.5% increase, matching March’s 0.6% annual gain and also 0.9% below the normal seasonal trend. The annual gains seen in April and May are lower than the annual gains seen in February, which were up 3.6%. On a two-year stacked basis, shipments were up 27.0% from March 2020, which marked the start of the Covid-19 pandemic. Shipments declined 2.6% and 3.5% on a seasonally adjusted month-over-month and month-over-month basis, respectively.
Report author Tim Denoyer, vice president and principal analyst at ACT Research, wrote that freight volumes are expected to remain in the red over the coming months, due to anticipation of escalating disruptions. of the global supply chain, with what he described as smoother on the horizon.
“Freight was slowing even before the start of the war in Europe, but the effects of the further push in inflation and recent interest rate hikes appear to have pushed volumes to the limit,” Denoyer wrote. “After a nearly two-year cycle of rising freight volumes, the freight cycle has gone downhill with a thud. April data may include an indirect impact from blockages in China, but with container ship backlogs still off North American ports, direct effects on finished goods imports seem more likely in the period. June July. The prospect of a freight slump is now considerable, as the substitution of spending on goods for spending on services accelerates and inflation slows overall spending, particularly via higher fuel prices and pushing up interest rates.
April spending – at 4,510 – saw an annual gain of 30.6, boosted by a nearly 40-year high, for inflation, the Bureau of Labor Statistics’ consumer price index (CPI) (BLS) posting a new high, up 8.3% in April, less than March’s 8.5% annual gain, which marked its biggest percentage gain since 1981.
Spending increased 89.6% on a two-year cumulative basis and increased 0.2% and decreased 2.0% on a monthly and seasonally adjusted monthly basis, respectively.
Denoyer noted that the two-year stacked comparison compares to the worst of the pandemic shutdown, making it less meaningful, while the expense component of the Cass Freight Index is up 90% from April 2020. , with shipments up 27% and prices up. 49%, respectively.