Explore the latest data from the Cass Freight Index, revealing a continued decline in shipments and expenditures in November. Uncover insights into the ongoing formation of the freight cycle bottom and signs that suggest stabilization in the near future.

Freight Cycle Bottom Continues to Form in November

The Cass Freight Index, a measure of freight shipments and expenditures, showed further declines in November, indicating that the freight cycle bottom is still forming.

Shipments

Shipments were down 8.9% year over year (y/y) in November and 1.3% from October (up 0.3% on a seasonally adjusted basis). This brings the Cass shipments index to its lowest level since January 2022. However, the report suggests that the declines are flattening, with December also likely to produce a 9% y/y decline.

Expenditures

Freight expenditures were off 25.6% y/y and down 1.3% from October (up 0.9% seasonally adjusted). The November reading was the lowest since February 2021. However, excluding the change in shipments, actual rates were roughly flat with October (up 0.6% seasonally adjusted).

Truckload Linehaul Index

The Cass truckload linehaul index, which excludes fuel and accessorials, fell to a cycle low, down 0.3% sequentially and 7.5% y/y. The index was at its lowest level since February 2021 during the month, but the y/y declines continued to narrow. Compared to two years ago, the index was down 5.9%.

Analysis

ACT Research’s Tim Denoyer believes that the acceleration in real disposable incomes, supported by disinflation and a strong labor market, suggests that demand fundamentals will improve in 2024. He also expects modest y/y growth in consumer spending this holiday season, driven by the same factors.

Denoyer notes that recent private fleet expansions have pulled some freight out of the for-hire trucking market, but that overall, softer rates are pushing “net revocations of operating authorities to a record net pace.”

Conclusion

The freight cycle bottom continues to form, with shipments and expenditures declining. However, the declines are flattening, and there are signs that demand fundamentals may improve in 2024. This suggests that the freight market is likely to stabilize in the coming months.