Cass Freight Index Rises in December

The Cass Freight Index, a measure of shipping activity in trucking and other transportation modes, rose in December but expenditures declined, Cass Information Systems said.

Shipping increased 4% in December from the year before but declined 6.3% from November, the St. Louis-based firm said.

“Slumping retail sales, which dropped 0.9 percent in December according to the National Retail Federation, contributed to the decline in freight shipments as restocking was not needed. Fourth-quarter 2014 freight shipment volume was the strongest since the start of the recession in 2007,” Cass said in its report.

Freight expenditures increased 3.6% from last year but declined 6.7% from the prior month.

“Despite the difficulties getting goods out of the ports of Los Angeles and Long Beach due to labor and capacity issues, both railroads and trucking companies posted shipment volumes that were significantly higher than for the same period in 2013,” Cass said.

Last year was the best year for the logistics industry in the seven-year recovery, according to Cass, with growth in freight volumes and revenues.

“The industry’s performance in 2014 was markedly better than that of the previous two years. Freight rates have only recently begun to spike upward, especially spot market rates. Despite the gains in 2014, freight volume overall has not yet returned to pre-recession values; however, costs to move the freight are substantially higher than 2006.” Cass said.

Cass expects freight volumes and carrier revenue are expected to grow steadily in 2015, with higher rates passed on to shippers and consumers.

“The industry began to invest heavily in itself again in 2014, a sign that the supply chain is expected to expand. There are, of course, some headwinds to be faced such as increased shortages, costs and unionization of labor; a rapidly changing fuel market; credit availability and interest rate increases; and global economic forces,” Cass said in its report.