U.S. shipment activity last month hit its highest level for any November since 2007, an indication that, unlike other post-recession years, 2014 will end on a strong note, according to a monthly index of freight activity released today by audit and payment firm Cass Information Systems.
Shipment levels in November increased 4.2 percent from the same period in 2013, though volumes were down sequentially by 0.2 percent, according to the report. November is seasonally a slow month for shipments as most goods that need to be available for the pre-holiday shipping season have already entered U.S. markets. This year's lull was even more pronounced because retailers stocked up earlier than usual because of concerns of labor unrest at West Coast ports. As a result, the relatively slight sequential monthly decline was an encouraging development, according to Rosalyn Wilson, the report's author.
Shipper expenditures in November dropped 0.7 percent over October's results, mirroring the sequential monthly decline in volumes. However, year-over-year spending levels rose 5 percent and are near the record-high levels set in June.
The November sequential data is the third such monthly drop since August. The October sequential declines were due in part to increasing congestion at West Coast ports, especially at the country's biggest port complex, the Ports of Los Angeles and Long Beach, which kept goods from moving in a timely manner.
Wilson, who at mid-year said 2014 would be the best year for freight activity since 2006, said nothing in the November data changed her view. Unlike the last three years when November and fourth quarter volumes were "very dismal," this year portends to be different, she said in an e-mail.
Wilson forecast that the volume gains would continue into 2015, leading to an imbalance favoring demand over existing supply, capacity shortages across surface transport modes, and rising rates for truck and rail services.
The data is culled from more than $22 billion in annual U.S. freight payables processed by Cass on behalf its clients across a wide range of industries.