North American freight volumes rose by 2.9 percent last month when compared to April, while expenditures stayed relatively flat, with an increase of .04 percent, according to the May issue of the Cass Freight Index Report
Compared to the same month last year, however, May’s shipment volume declined by 0.3 percent; expenditures also dropped, showing a 2.6-percent decline.
Rail, and the shipment of crude oil, had a lot to do with increased volumes in May. Crude oil shipments rose by 26.8 percent last month, helping overall rail car loadings increase by 2.1 percent. Truck shipments have also picked up following a sluggish April and have shown year-to-date growth of 5.7 percent.
The flat progression of freight expenditures is due to May’s stagnant rates, which have been seen throughout the year. With truck capacity and demand at a stable level, truck rates have caused intermodal rates to drop.
“If the economy picks up — or in July when new Hours of Service rules go into effect, reducing truck productivity and capacity — the trucking sector will increase rates to match demand,” the report noted. “This will remove some of the pricing pressure, and intermodal rates will go up as well.”
According to the report, the month-to-month change in freight shipments and expenditures accurately reflects the uncertainty of the current economy and the freight sector.
“Unemployment is declining, yet job creation is still weak. GDP growth is stronger than last year; however the manufacturing sector is slowing. Inventories are slowly eroding, but inventory‐to‐sales ratios are creeping up,” according to the report.
And even though ports have started to see increased container traffic and domestic shipping is on the rise, the report pointed out, export and import totals are lower than during the tail end of last year. - Jon Ross