The folks at Cass Information Services and partner Tim Denoyer of ACT Research were out this week with their report on February US freight conditions, with carriers mostly having a good time of it again.
Supply Chain Digest Says...
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| At a level of 158.8, contract US truckload rates are up 58.8% from 1990 until now, 32 years later, or about only 1.44% on average per year. |
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The shipment index, which encompasses a number of transport modes but is heavily weighted to truckload freight, was up up 8.6% from January, and up 3.6% year-over-year. That was after shipments in January fell 7.4% in an Omicron-related decline
The shipment index is just one metric in Cass’ monthly freight report, drawn from the billions of dollars of freight bill payments Cass Information Systems processes for its customers.
Next, Cass also tracks changes in freight expenditures, and compares that to the change in shipments.
The expenditures component of the Cass Freight Index, which measures the total amount spent on freight, rose 10.6% month-over-month in February and was up a high 42% year-over-year.
Expenditures are comprised by two components: volumes of freight moved, and the rates shippers pay to move it.
With shipments up marginally in February and a jump in expenditures of 42% versus 2021, the inferred rate increase was 37% year-over-year in February, up from 35% in January.
Inferred rates were up a much lower 1.6% month-over month, but it still rose to an all-time record high.
Cass commented that "After rising 23% in 2021, Cass Inferred Freight Rates are on a 23% trend again for 2022."
In some consolation for shippers, Cass notes that "We are seeing tangible signs of improvement in driver availability, which could begin to slow the trend in freight rates."
In another measure of rates, Cass also publishes its Linehaul Index each month, which tracks US per mile contract truckload rates before fuel surcharge and other accessorial charges. It showed a more modest increase in those rates.
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The index was up 12.6% year-over-year in February after an upwardly revised 12.8% increase in January to a level of 158.0.
As a note, the index baseline (index = 100) is from January 1990. That means that at a level of 158.8, contract US truckload rates are up 58.8% from 1990 until now, 32 years later, or about only 1.44% on average per year.
Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for February.
Source: Cass Information Systems
Cass concludes by noting that "Strong freight demand and significant capacity limitations are continuing to press truckload rates higher. As intermodal network congestion gradually eases over the course of 2022, a reversal to shorter length of haul will likely add upward pressure to this index above and beyond market rate increases."
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