|January 2023||Year-over-year change||2-year stacked change||Month-to-month change||Month-to-month change (SA*)|
|Cass Freight Index - Shipments||1.124||4.3%||1.3%||-3.2%||0.0%|
|Cass Freight Index - Expenditures||4.096||1.7%||33.4%||-3.2%||-0.2%|
|Cass Inferred Freight Rates||3.644||-2.5%||NA||0.0%||-0.1%|
|Truckload Linehaul Index||149.23||-5.6%||6.5%||-0.9%||--|
* SA = seasonally adjusted
The shipments component of the Cass Freight Index® fell 3.2% m/m in January. On a seasonally adjusted (SA) basis, the index was unchanged from December, better than expected with support from mild weather and improving auto production.
There has been a considerable increase in the proportion of truckload (TL) freight over the past several months, suggesting freight is migrating to TL from other modes. This fits with the robust growth in truckload capacity metrics. The resilience of volumes thus partly reflects share gains by the truckload sector, particularly contract and dedicated freight currently, amid declines in less-than-truckload (LTL) and intermodal volumes.
The expenditures component of the Cass Freight Index, which measures the total amount spent on freight, fell 3.2% m/m in January, but returned to 1.7% y/y growth on an easy comparison.
Matching the shipment decline of 3.2% m/m in January, we can infer that rates were unchanged from December (see our inferred rates data series below).
This index includes changes in fuel, modal mix, intramodal mix, and accessorial charges, so is a bit more volatile than the cleaner Cass Truckload Linehaul Index.
In 2022, the expenditures component of the Cass Freight Index rose 23%, after a record 38% increase in 2021, but is set to retrench in 2023.
The rates embedded in the two components of the Cass Freight Index declined 2.4% y/y in January, after turning to a 0.4% decline in December.
Along with sharp declines in ocean rates and many commodity prices, lower freight costs aid the outlook for significant disinflation needed to improve economic conditions.
Cass Inferred Freight Rates are a simple calculation of the Cass Freight Index data—expenditures divided by shipments—producing a data set that explains the overall movement in cost per shipment. The data set is diversified among all modes, with truckload (TL) representing more than half of the dollars, followed by less-than-truckload (LTL), rail, parcel, and so on.
The Cass Truckload Linehaul Index® fell 0.9% m/m in January to 149.2, after a 1.0% m/m decline in December.
ACT Research provides forecasts for the Cass Freight Index in its monthly Freight Forecast deep dive. How are their forecasts performing? For 2022, ACT’s forecasts for the shipments component of the Cass Freight Index were 97.5% accurate on average for the 24-month forecast period. Their January 2021 forecast, two full years out, was 99.8% accurate.
ACT's full-year 2022 DAT spot rate forecasts were 99.7% accurate from Q2’21 (19-21 months out) for dry van and 98.5% for reefer. DAT dry van spot rates, net fuel, finished 2022 at $2.06 per mile, in line with ACT forecasts to the penny from 18 and 19 months out (June and July 2021).
Although LTL and intermodal volumes are down significantly, outperformance in truckload volumes shows the freight downturn is still likely to be mild overall. We believe an accelerated bottoming process has begun in the freight rate cycle, with spot rates further below operating costs than ever before.
For more on the future of freight markets, the ACT Research Freight Forecast provides analysis and forecasts for a broad range of U.S. freight measures, including the Cass Freight Index, Cass Truckload Linehaul Index, and DAT spot and contract rates by trailer type. The service provides monthly, quarterly, and annual predictions for the TL, LTL, and intermodal markets over a two- to three-year time horizon, including capacity, volumes, and rates. The Freight Forecast is released monthly in conjunction with this report.
Release date: We strive to release our indexes on the 12th of each month. When this falls on a Friday or weekend, our goal is to publish on the next business day.
The material contained herein is intended as general industry commentary. The Cass Freight Index, Cass Truckload Linehaul Index (“Indexes”), and other content are based upon information that we consider reliable, but Cass does not guarantee the accuracy, timeliness, reliability, continued availability or completeness of any information or underlying assumptions, and Cass shall have no liability for any errors, omissions or interruptions. Any data on past performance contained in the Indexes is no guarantee as to future performance. The Indexes and other content are not intended to predict actual results, and no assurances are given with respect thereto. Cass makes no warranty, express or implied. Opinions expressed herein as to the Indexes are those of Stifel and may differ from those of Cass Information Systems Inc. All opinions and estimates are given as of the date hereof and are subject to change.