North American truck shipment volumes rebounded in August from a lackluster July, but spending declined, as rates remained stubbornly flat, according to the monthly Cass Freight Index released yesterday.
The index, published by Cass Information Systems Inc., a freight audit and payment company, said volumes in August rose 2.3 percent over July results, which showed a 3.9 percent sequential drop. However, freight expenditures dipped sequentially by 0.3 percent. Capacity was not as tight as expected, as evidenced by a weakening throughout the month in spot-market rates, which are prices for noncontract freight. Spot rates soared to unprecedented levels during the first quarter, as bad winter weather curtailed scheduled capacity and put a premium on available space.
Spot rates then continued to remain strong through the first half of the year, according to Cass.
Freight spending in August was 8 percent higher than year-earlier figures and 10.8 percent above December 2013 levels, according to the index. Capacity is expected to tighten anew in September, traditionally the third quarter's strongest month as holiday goods begin to enter the country, according to Cass. However, Cass said that based on last month's trends there is no guarantee that scarce capacity will translate into higher rates, at least in the contract market, which accounts for about three-quarters of all truckload capacity.
Rosalyn Wilson, the report's author, has said that 2014 will be the best year for freight since 2006, which marked the start of a prolonged freight recession that was worsened by the Great Recession that followed. Wilson said that demand should continue to be strong through the rest of the year, unlike previous post-recession years when otherwise solid performances were marred by weak fourth quarters.
In a statement accompanying the data, Wilson wrote that "economic indicators still show hope that the fourth quarter ... may not experience the dramatic drop-off that has come to characterize the economy's performance since the recession."
The monthly data is based on the $22 billion in annual freight payables that Cass processes on behalf of its clients.