Corianne Egan, July 9, 2014, JOC.com
Five straight months of growth have pushed North American freight shipments to a height not seen since the beginning of the recession, according to the Cass Freight Index.
Cass reported its volume index rose yet again in June, coming in at 1.2, which is 2.4 percent higher than May’s index reading and 6 percent higher than June 2013. The expenditure index was 2.76, 4.6 percent higher than May’s index and 12.1 percent higher year-over-year. Although the U.S. Commerce Department reported the country’s economy shrank by 2.9 percent in the first quarter, Cass said that is not necessarily having an impact on the transportation industry.
“Sales of both new and existing homes are increasing, industrial and government construction have been up for the last several months, and manufacturing has been largely growing for close to a year,” Cass said. “Retail sales have yet to show signs of significant growth, but they are not shrinking either, and consumer confidence levels have surpassed pre-recession levels.
“The current growth sectors in the economy depend on transportation services, so the outlook remains good for transportation.”
June’s volume index was at the highest level since November 2007, just before the country’s last recession. Volumes have grown 15.8 percent since the beginning of the year.
Expenditures are expected to keep rising in all transportation, Cass said. Trucking rates have been higher in each month, and rail and intermodal rates have continued to rise as well, causing transportation costs to rise. Tightening capacity and higher volumes should push expenditures up at a higher rate for the rest of the year, Cass said.
Cass, a freight payment firm that handles $23 billion in transactions a year, compiles the indices from its client base of hundreds of large shippers representing consumer packaged goods, food, automotive, chemical, OEM, retail and heavy equipment. Annual freight volume per organization ranges from $1 million to more than $1 billion, Cass said.