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Home » Shipping index shows steep sequential decline in volumes
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Shipping index shows steep sequential decline in volumes

November 7, 2011
Mark B. Solomon
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A monthly index of shipping activity released on Nov. 4, 2011, showed steeper-than-expected sequential volume declines in October. It also revealed a slower rate of decline in shipping expenditures, indicating that rate increases imposed by truckers throughout 2011 appear to be sticking.

The index, compiled by the freight auditing and payment firm Cass Information Systems Inc., measures shipments and expenditures of hundreds of Cass' clients, who collectively spend about $17 billion on transportation services annually. According to the index, shipment volumes in October fell 10 percent from September's figures but were up 2 percent year-over-year.

For the past 10 years, the index has reported declines in shipment volumes from September to October. However, the pace of the decline compared to the previous two years surprised Cass' analysts. In 2010 and 2009, shipment volumes from September to October fell 5.2 percent and 4.7 percent, respectively.

Although spending on freight fell 4 percent month-to-month, it was up 16.1 percent from October 2010 levels, according to the index. The year-over-year increase is significant considering that the weight of the average shipment has risen by only 1 percent over that time, according to Cass.

The slow pace of the sequential decline in expenditures relative to the drop in volume, combined with the double-digit gains over 2010, show that motor carriers have been able to raise rates but only enough to cover increases in their operating costs.

Rosalyn Wilson, an analyst at the Vienna, Va.-based consultancy Delcan Corp. and the index's primary author, has said throughout the year that truck rate increases will not lead to greater profitability for the carriers, but will instead just help them meet rising expenses.

In a statement accompanying the release of the October data, Wilson said Cass' shipper clients are cautiously optimistic, believing that the "worst is likely over" but choosing to be very conservative "until the footing for growth becomes a little more solid."

Transportation Trucking Business Management & Finance
KEYWORDS Cass Information Systems
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Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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