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Cass Freight Index Posts Unusual Drop for August

September 14, 2015

By Evan Lockridge

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North American freight shipment volume and expenditures dropped for the second month in a row during August as the summer slowdown hit.

That’s according to the Cass Freight Index, which saw a 2% drop in freight spending compared to July and an 8% decline from August 2014.

The drop in freight spending was sharper than expected, as truck spot prices fell lower due to abundant capacity, according to Rosalyn Wilson, supply chain expert, and senior business analyst with the management services firm Parsons, who provides analysis for the report.

The decline in shipments did not follow the typical upward movement in August, but given the weak level of new manufacturing orders placed in June and July it is not unanticipated, she said. Shipments fell 1.2% in August when compared to July while posting a bigger 4.6% drop year-over year.

“The expected pickup in freight shipments in September should drive overall freight expenditures back up,” Wilson said. “Rates will remain flat for the most part, as trucking companies forgo rate increases to keep their best customers.”

The August drop happened at a time when retailers normally stock up for fall sales, but high inventories and a rising inventory to sales ratio slowed ordering earlier this year.

“Although activity continues to be slower than last year, it’s still much better than we have seen in other recent years,” Wilson said. “Despite many headwinds, the transportation sector continues to grow and prosper, largely because consumers are back in the marketplace.”

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