The impact of the Omicron variant on freight shipments and expenses in January was evident, according to the most recent edition of the Cass Freight Index, which was released this week by Cass Information Systems.
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 January shipments reading, at 1.078, fell 2.9% annually, after a 7.7% annual gain in December and annual gains of 4.5%, 0.8% and 0.4% for November, October and September, respectively. And it increased by 5.5% on a two-year cumulative change basis. Shipments were down 10.8% and 7.4% from December, month-over-month and seasonally-adjusted monthly change, respectively.
Report author Tim Denoyer, vice president and principal analyst at ACT Research, noted that U.S. freight volumes faltered in January due to the surge in Omicron business.
“The 7.4% m/m (SA) decline in January in the shipments component of the Cass Freight Index is about as good an answer as we get to the question of the magnitude of the impact of the Absenteeism and Omicron-Related Quarantines on Freight Economics. writes Denoyer. “Although these effects persist in February, they are starting to fade and we expect a rebound in the coming months as the number of cases drops sharply.”
Further, Denoyer explained that this was not a demand-driven decline, as inventories are still thin and consumer balance sheets are strong.
“Although the backlog of container ships off Southern California fell to 78 as of February 9, from a peak of 109 a month earlier, according to our friends at MX SoCal, the backlog has increased in several other ports, especially Houston, Charleston and Virginia,” he wrote. “It was yet another setback on the supply side.”
January spending – at 4.027% – recorded a 31.2% annual increase, alongside US wholesale inflation rising 9.7% year on year for the month, according to US Department data. work. Expenses increased by 56.8% on a two-year cumulative change basis and decreased by 8.9% and 6.1%, respectively, on a month-to-month and two-year change basis. a seasonally adjusted monthly change.
“This index increased by 38% in 2021, after a drop of 7% in 2020 and no change in 2019″, writes Denoyer. “Stricter comparisons in the coming months will naturally slow these year-over-year increases, but just using normal seasonality from here, the increase in 2022 will still be around 20% at this trend level under Omicron pressure.”