The Cass Truckload Linehaul Index is down for the third consecutive month.
It’s a measure of market fluctuations in per-mile truckload linehaul rates, independent of additional cost components such as fuel and accessorials
The index fell another 1.2% year over year in May after declines of 0.6% and 2.3% in March and April respectively.
With three consecutive months of price declines, the domestic truckload market continues to face softer demand and excess capacity.
Cass notes “Driver pay increases, overall fleet growth, reduction in carrier bankruptcies, and an easing of the 34-hour restart rule are some of the contributing factors.”
Cass Freight Index
The Cass Freight Index is a measure of North American freight volumes and expenditures.
That index is anemic compared to prior years.
The freight index for every month this year is below the respective values for 2103, 2014, and 2015.
Mike “Mish” Shedlock
and yet the ISM index shows a “growing faster” in May!
“The more I know the less I understand”
latest (May) ISM a mixed bag
Manufacturing 50.8 —> 51.3
Non Manufacturing 55.7 —> 52.9
https://www.instituteforsupplymanagement.org/about/MediaRoom/newsreleasedetail.cfm?ItemNumber=30492
The economic czar let one data set slip through without a massage.
It’s easy to explain. Every year, apple devices get thinner so you need less volume to transport a given amount.
Burgers get thinner too.
What measure is used for the railroad? I live by an active rail line that supports the port of Norfolk in Hampton roads. My measure is often I get caught by the railroad crossing and bridge lifts. I can tell you that they are a lot fewer than the use to be.
Bigus, in response to your railroad question.
http://wolfstreet.com/2016/05/04/freight-rail-traffic-plunges-aar-april-report-photos-idled-engines-transportation-recession/
Mish if one looks at the chart with past years it may just be a seasonal fluctuation………………Barry B
This along with cardboard container volume is one of the real leading indicators of economic activity. I often watch the number of trucks on the road during summer vacation trips to get a feel for what is really happening. You can learn a lot at a truck stop.
LA Port traffic setting record highs : http://www.ttnews.com/articles/basetemplate.aspx?storyid=42266
Most of the industry has been going to short haul for decades. Look at US geography…the number of ports both inland and on the Sea plus railroads internally. Global shipping has collapsed in general over the past year I think mostly because of the catastrophic intervention into a Russian Civil War. This has driven a price collapse not seen since the Great Depression…and when it comes to shipping internally you can’t beat a railroad. The other two problems are aircraft and Uber. A 747 can move 150,000 pounds anywhere in the world and a regular morning commute has just you and a lot of vehicle. Forget taxi driving you can move an entire store front if you’re up at 4:00am and dont have to be to work until 7:30.
Once you start talking all electric and suddenly most trucking becomes intrastate….maybe three hundred miles max.
Food imports are surging which is darn peculiar if you believe in an economic recovery let alone inflation.
People are playing with fire in this equity and real estate market. A price collapse of 90% for everything would not surprise me at all.
Billion dollar skyscrapers for 250 grand, lettuce for ten cents, eggs for 25 cents a dozen, etc.
Huhh!
I guess we can expect the inventory to sales ratio to climb some more!
Ha … you beat me to it
From Shamrock’s link
….
Shipment totals through both ports this year have been distorted in comparison to 2015 due to last year’s sharp reduction in cargo volumes due to slowdowns linked to labor contract talks.
“The port’s numbers are in line with trends observed by the National Retail Federation, which reports that inventories remain high for U.S. stores and warehouses, muting demand for oceangoing trade,” according to the Port of Long Beach. “As noted by the NRF, the year-over-year comparisons to 2015 are difficult to make, given the unusual patterns last year.”
….
Trucking a different animal … more a reflection of real time demand. Shipping, on the other hand, [especially west coast ports which corresponds to trade with asia] more a reflection of 4 to 6 months ago when orders placed.
LA Port traffic setting record highs? LOL
Yeah sure, while at the same time Asian shipments to the US are down double digits for the year. Also, trucking giant Werner came out yesterday and slashed their guidance by 10%. Is anyone paying attention to the 10,000 lb gorilla in the room…credit card debt? It is now approaching $1 trillion for the first time ever. Either more Americans are comfortable with the economy and spending more or they are using credit to buy necessities.
Surprise surprise … Q2 S&P 500 earnings forecast continue to slide:
“Overall, the estimated earnings decline for Q2 2016 of -5.1% today is larger than the estimated earnings decline of -2.8% at the start of the quarter (March 31).”
https://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_6.17.16
The BEA can just pretend that service inflation is GDP. Doesn’t matter whether or not anything useful is produced.
Freight has a wingman.
WASHINGTON, D.C. – Jun. 22, 2016 – The Association of American Railroads (AAR) today reported U.S. rail traffic for the week ending Jun. 18, 2016.
For this week, total U.S. weekly rail traffic was 516,096 carloads and intermodal units, down 6.3 percent compared with the same week last year.
Total carloads for the week ending Jun. 18 were 250,748 carloads, down 8.5 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 265,348 containers and trailers, down 4.2 percent compared to 2015.
https://www.aar.org/newsandevents/Press-Releases/Pages/2016-06-22-railtraffic.aspx
Never heard of this index. I think Mish is grasping for straws in his “we are entering a recession” that he has written every week for five years.
My bet is we’re already in a recession … and revisions will bear that out.
My other bet is that once Mish proven right you will disappear with nary a word that you were wrong.
…
Since 1995, the Cass Freight Index™ has been a trusted measure of North American freight volumes and expenditures. Our monthly Cass Freight Index Report provides valuable insight into freight trends as they relate to other economic and supply chain indicators and the overall economy.
Data within the Index includes all domestic freight modes and is derived from $25 billion in freight transactions processed by Cass annually on behalf of its client base of hundreds of large shippers. These companies represent a broad sampling of industries including consumer packaged goods, food, automotive, chemical, OEM, retail and heavy equipment. Annual freight volume per organization ranges from $1 million to over $1 billion. The diversity of shippers and aggregate volume provide a statistically valid representation of North American shipping activity.
http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspx