Shipment volumes and freight expenditures continued their decline in the new year, with a “bumpy ride” predicted for the future, according to January’s Cass Freight Index Report.
“Although GDP figures for the second half of 2013 indicate that the economy is strengthening, this has not yet translated to the transportation sector,” the report said, which is based on a monthly index of shipping activity.
Shipments for the month dropped 3.6 percent from December and were 2-percent lower than a year ago, according to the report. Freight shipment in January followed the usual trend, it said, of experiencing a post-holiday decrease, making January the slowest month of the year. In fact, shipment levels in January were the lowest since 2010, the report said.
The report also included a list of indicators it said supported the case that a quick turnaround would not happen in February, including drops in the New Orleans Index, the PMI Production Index and China’s PMI.
“Bad weather has continued into February and may foreshadow a stormy February for freight shipments,” the report said. “Inventory levels are not contracting. This is good for the GDP calculation, but not so good for those holding the inventory or the transportation sector.”
As far as freight spending, it dropped 5.1 percent in January, which the report attributed to a 3.6-percent decline in number of shipments.
In its overall picture summary, the report painted a bleak picture for the next month, noting a weak global marketplace, the reduction of bond purchases from the Federal Reserve and higher interest rates.
The report continued: “Obtaining credit to purchase new vehicles will become more difficult, probably squeezing out smaller and marginal trucking companies that don’t have the capital to expand their fleet or — almost as important — modernize their fleets. Continue to expect a bumpy ride.”