Data from Cass Information Systems for December showed a sharp decline in freight volumes due to a smaller reduction in spending, meaning freight rates rose during the month. A report on Tuesday showed truckload long-haul rates continued to improve from cycle lows in August.
Freight volume measured by the Cass Freight Index fell 7.3% from November and 6.5% year-on-year. Even excluding the typical seasonal decline from November to December, the index still fell 3.1%, erasing November's sequential gain of 2.8%.
This is the largest year-over-year decline in the shipments index since January 2024 and the lowest index reading since June 2020. However, there has been some noise this month. Midweek holidays may have exacerbated the seasonal slowdown. Additionally, some shippers delayed shipments throughout the fall to avoid a possible dockworker strike on January 15.
December 2024
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m/m (SA)ShipmentsexpenditureTL Line Transport Index
January volumes are also off to a slow start, but winter storms are widespread and some hesitation on trade policy remains ahead of President-elect Donald Trump's inauguration on Monday.
The Cass Freight Index is a trucking-centric data set in which more than half of all spending is related to trucking. LTL, rail and parcel shipping mainly make up the remainder.
"Continued capacity additions are putting pressure on the leasing market," the report said. Cass's January forecast said sales would be down 6% year-on-year, assuming normal seasonal trends.
The index fell 4.1% year-on-year in 2024 after falling 5.5% in 2023.
The freight expenditure index, which reflects total freight expenditure including fuel, fell 2.6% month-on-month (up 0.5% seasonally adjusted) in December and fell 3.4% year-on-year. Diesel prices this month fell by about 12% year-on-year (down about 1% from the previous quarter).
Excluding changes in shipments from changes in spending means actual freight rates are likely to be up 3.3% year-over-year this month. This is the first time since November 2022 that year-on-year interest rate increases have been implied.
The interest rate index is expected to be positive year-on-year in January and throughout 2025.
The expenditure index will fall by 11% year-on-year in 2024 after falling by 19% in 2023. The index will grow by 38% and 23% in 2021 and 2022, respectively.
The truckload long-haul index, excluding fuel and surcharges, increased for the fourth consecutive month in December, up 1.2% from the previous month. The year-on-year decrease was 0.4%, the smallest decrease since the end of 2022.
The index, which includes changes in spot and contract freight rates, "is now on the verge of turning positive year-over-year for the first time in two years, possibly in January," the report said.
The index fell 10% year-on-year in 2023 and fell 3% last year.
“Winter weather is driving spot activity in January, but the supply response over the past few months has been interesting,” the report concluded. “While the reduction in Grade 8 supply over the past few months supports a resumption of markups in 2025, capacity increases ahead It will be considerable."
The data used in the index comes from freight bills paid by CASS (NASDAQ: CASS ), a provider of payment management solutions. Cass handles $38 billion in freight payables on behalf of its customers each year.
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Firm rates first appeared on FreightWaves following a collapse in freight volumes in December.