The amount of freight moved and how much shippers paid recovered somewhat in June in the U.S., but both are below levels from a year ago, according to the latest Cass Freight Index report.
Evan Lockridge・Former Business Contributing Editor
July 16, 2015
3 min to read
The amount of freight moved and how much shippers paid recovered somewhat in June in the U.S., but both are below levels from a year ago, according to the latest Cass Freight Index report.
The number of shipments increased 0.2% from the month before, the smallest gain of the year, but fell 3.4% compared June 2014. This put the index for shipments at a level of 1.16, its best performance since last September.
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According to the report, the lower level from a year ago had to do with weak manufacturing in the U.S. for the first half of the year, due to both bad weather and shipments that were tied up with West Coast port problems during the first quarter.
On a more positive note, it points to trends from the previous several years, showing the June growth is on par, excluding last year, which was an exceptionally good year for freight.
Meantime, freight payments jumped 2.4% in June, but were still 5.8% lower than June 2014. This resulted in the expenditure index measuring 2.599, its highest level since last November
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Freight payments have increased 5.1% since the beginning of 2015, less than the 7.6% increase in the number of shipments.
All this indicates that freight rates have not been rising substantially, said Rosalyn Wilson, supply chain expert, and senior business analyst with the management services firm Parsons, who provides analysis for the report.
“Capacity has been keeping pace with the increase in shipment volume so there has not been significant pressure on rates,” she said. “At just below 100% capacity utilization, the trucking industry is still walking a delicate tightrope, but carriers are reporting that they are reluctant to give up a good customer because of rates and are settling for lower rates.”
According to Wilson, the economy is still tepid, but freight is improving despite the slow growth.
“As we head into the second half of the year, expect a leveling off or even a drop in July shipment volume. This is traditionally a slow month. Things will begin to pick up again in August as we head into school and then holiday shipping,” she said.
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Parsons also expects the just completed nuclear deal with Iran will lift the sanctions against Iranian oil, to get it flowing again.
“This will dramatically lower the price of oil and give consumers some extra cash in their pockets, which should translate to stronger retail sales in the latter part of the year,” she said.
The Cass Freight Index represents monthly levels of shipment activity, in terms of volume of shipments and expenditures for freight shipments. It is based upon the domestic freight shipments and freight invoices paid on behalf of hundreds of Cass Information Systems’ clients, representing a broad spectrum of industries. freight invoices paid on behalf of Cass Information Systems’ clients, representing a broad spectrum of industries.
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