CASS Freight Index February Report

Posted On 1st April 2015
The CASS Freight Index can be used to observe monthly changes in the level of freight shipping activity. This includes the volumes of freight shipping that have been observed during a certain month as well as the expenditures in the sector. The CASS Freight Index involved hundreds of clients who dominate different industries and takes into account their domestic freight shipments. January 1990 is used as the base month so you can obtain historical data.

In the February report, there was a significant rise in the North American freight shipping volume but a decline in the total freight expenditures. Analysts have attributed this decline to the problems in labor negotiations in some parts of the West Coast which have been seen to affect the economy. Freight expenditures have gone down due to the contract negotiations but this is expected to take up to 3 months in order for them to get back to normal. Freight services from top LTL carriers and freight shipping companies are still expected to deal with issues like congestion and capacity issues in the coming months.

From the report, there was an increase in freight shipping volumes by 5.5 percent in February. This is 0.9 percent higher than what was observed a month ago. This increase in freight shipping can be attributed to the cold temperatures of February where there was more transportation of heating oil, coal and sand. There was also an increase in truck tonnage according to the American Trucking Associations.  

But rail intermodal traffic went down by 7.6 percent. Freight shipping volume is expected to pick up in the coming months since the contract disputes that existed in February have been settled. Strikes in the industry have negatively affected its performance. But there is also the issue of the system’s inability to handle the high demand that will be experienced once the volume of freight shipping increase in the coming months.
Freight expenditures on the other hand increased by 4.3 percent. This is a significant improvement because of the fact that they have been declining in the past 3 months. However, there have not been widespread rate increases throughout the month which is why the increase is mainly attributed to the rise in freight shipping. Analysts expect the rates to rise in March.

Overall, the first quarter of 2015 has been seen to be quite slow. But this shouldn’t be viewed as a concern. A similar trend was observed last year when there were weather issues that disrupted the West Coast. Once some of these issues were resolved, the economy began to pick up. Since the consumers are still expected to come in, you shouldn’t expect the slowdown to become a long term problem. The conflicts in the industry have also been resolved which means that better results are likely to be observed in the coming months.

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