The freight logistics sector was relatively flat in September, with a drop in North American shipment volume and a slight increase in total freight expenditures, or payments, according to the latest Cass Freight Index.

The number of shipments fell 1.4% in September compared to August levels, while compared to the same time a year earlier it was only 0.7% higher.

Since the end of 2013 the number of freight waybills has increased 12.2% according to Rosalyn Wilson, supply chain expert, who provides analysis for the report. She said this has recently been affected by new orders at U.S. factories falling 10.1% in August, the largest amount on record according to the U.S. Department of Commerce. But that is likely a short-term drop. This decline came on the heels of a record 10.5% increase in July, with almost all of these changes attributed to the commercial aircraft industry.

Wilson said the remaining sectors were largely unchanged in August, so the impact should be narrowly targeted on carriers moving aerospace materials. Other economic indicators affecting shipments are the Institute for Supply Chain Management’s Purchasing Managers Index falling 4.1% in September, a decline Wilson said is attributable to the recent drop in global demand and the relative strength of the U.S. dollar, which makes U.S.-produced goods more expensive overseas.

“Manufacturing slowed in August but inched back up in September, indicating that there should not be a dramatic fall‐off in freight as we have experienced in the final months of the last few years," she said. New export orders reached a four and a half-year high in China, supporting predictions of strong U.S. import activity to end the year.

Meantime, September freight expenditures index rose 0.8% from the month before, almost exclusively on increased tonnage. Diesel fuel prices have been falling since March, which reduced the fuel surcharges added to carriers’ linehaul rates and pushed down total expenditures for freight movement, according Wilson.

She noted September 2014 payments are 3.5% higher than the same month a year ago and 11.7% higher than December 2013. “It appears that for the last quarter we can expect a leveling off in freight shipment levels and more steady rates,” said Wilson.

Data in the Cass Freight Index includes all domestic freight modes and is derived from $23 billion in freight transactions processed by Cass annually on behalf of its client base of hundreds of large shippers.

According to Wilson, the freight industry continues to experience the strongest year since the recession ended, and while there are still headwinds, things should continue to improve for the industry.

“The rise in costs, especially related to labor, are pressing hard on rates and should break through in early 2015. The volume growth that has supported the strengthening in freight is still fragile and susceptible to outside forces,” she said. “Consumers, the missing key for recovery, are getting back in to the game. Consumer confidence and, more importantly, consumer spending have been on the rise along with household income. A good holiday season would be a big boost for the end of the year.”

By Evan Lockridge