A monthly index of shipping activity registered sequential and year-over-year gains in September, but the index's authors said the increases were seasonal in nature and don't indicate a sustained pickup in shipping and economic activity.
The index, compiled by freight auditing and payment firm Cass Information Systems Inc., measures shipments and expenditures of hundreds of clients, who collectively spend about $17 billion on transport services a year. According to the index, shipments in September rose 5 percent over August, and 7.5 percent year over year. Expenditures increased 4.6 percent over August and 17.6 percent from the same period in 2010, the index showed.
September's figures are considered seasonal and reflect what is usually a strong month for shipping activity.
Dollars spent on freight in September reversed the steady decline the index has reported since June. The increases were due largely to an increase in truck rates, as motor carriers pass on higher costs to their shipper customers. Expenditures have been rising in the past few months at a significantly faster pace than shipments.
"Rates should level off for the remainder of the year, and volumes will hold steady due to seasonal freight shipments," Rosalyn Wilson, the index's author, wrote in a report.
Wilson said the U.S. economy is likely to enter into a recession early next year. However, with businesses operating with very lean inventories, no credit crisis, and expectations already set at low levels, the situation will not be anywhere near as dire as in late 2008 and the first half of 2009, Wilson wrote.
Wilson said the economy would experience below-trend growth heading into 2012. As a result, the freight sector will recover very slowly through next year, she said.