In September, freight volumes showed a slight increase, while total freight expenditures decreased, according to a report from Cass Information Systems. The shipments subindex of the Cass Freight Index rose by 1.7% from August and exhibited a 6.3% year-over-year improvement, marking a more positive trend compared to the previous month’s 10.6% decline. Although the peak season started somewhat modestly, experts anticipate modest year-over-year growth in consumer spending during the upcoming holiday season.

Freight expenditures on Cass’ platform for September were down 1.6% compared to the previous month and dropped 25.4% year-over-year. This decline, coupled with the modest increase in shipments, suggests a likely 3.3% sequential decrease in actual freight rates. These market-driven rates have been consistently falling over the past 18 months.

The expenditures subindex encompasses various elements, including fuel surcharges and accessorial fees. It is noteworthy that truckload freight represents over half of Cass’ freight spending. This subindex has recorded around a 25% year-over-year decrease for the past four months, showing a 9.6% decline compared to September 2021.

The report attributes the downward pressure on rates to soft freight volumes and surplus capacity, which is expected to benefit shippers during the holiday season. While spot rates have indicated some market stability, the report suggests that normal seasonality will likely lead to an 18% expenditure decrease this year, with an 11% decline expected in the first half of 2024.

Cass’ truckload linehaul index, which excludes fuel and accessorials, showed a 0.5% sequential increase in September, reversing a previous decline. It experienced a 9.1% year-over-year decrease, marking the smallest decline since February. This modest increase is seen as a potential sign of rates nearing their lows, though it may not indicate a significant trend change.

The report suggests that the freight cycle is starting to stabilize, with smaller year-over-year declines. However, a significant shift in the freight cycle is expected only when capacity tightens, which may take some time based on early 2024 equipment production indicators.

Data for the Cass indexes is derived from freight bills paid by Cass, a provider of payment management solutions, processing $44 billion in annual freight payables on behalf of customers.

Inspired by: https://www.freightwaves.com/news/september-cass-data-shows-freight-cycle-starting-to-flatten-out