The October Cass Freight Index report shows shipment volumes increased by 2% over last October, but decreased by 10% compared to September. Even with the decrease in volume, Cass says rates paid by shippers were up significantly in the same period.

While shipment volume declines are not unusual from September to October, the rate of decline was steeper than might have been anticipated, the report says.

For example, the September-October volume declines in 2010 and 2009 were -5.2% and -4.7% respectively. A downturn in shipment activity was anticipated last month, at least partially driven by the softening of order volumes both domestically and overseas.

However, expenditures on freight increased 16.1% year-over-year and decreased 4% month-to-month. In both cases, expenditures moved in the same direction as volumes, but at dramatically different paces.

The numbers appear to show that efforts by carriers to push up rates, and recover increases in operating costs, appear to be sticking. The result is that while the weight of a shipment (averaged across all modes) has risen about 1% year-over-year, the cost of transporting that average shipment has escalated dramatically.

"While I will leave it to the economists in our midst to relate the trends illustrated in the Cass Freight Index to other economic indicators, I can say that the 'feeling' we're getting from our shipper clients is caution -- caution that the worst is likely over, but slow going is probably prudent until the footing for growth becomes a little more solid," notes Frank Cirimele, director products & services, Cass Information Systems, Inc.