Weak year-end activity put a damper on the domestic freight market, with November shipments falling by 1 percent compared to October’s numbers and freight expenditures rising by 0.6 percent in the same time frame, according to Cass Information Systems.
Cass said this is the third year running that disappointing activity has occurred during the end of the year. Nevertheless, shipments in November were up by 1.1 percent, year over year, and expenditures rose by 7.8 percent when compared to November 2012.
“Stronger–than‐ expected manufacturing activity and shipments of seasonal goods offset a general slowing of freight movements to temper the drop in shipment levels. Expenditures rose just slightly, largely because of a surge in spot market rates the last week of the month,” Cass said.
On the shipment side, exports, along with food and beverage shipments, saw gains that were erased by poor activity in the electronics, apparel and appliance sectors. Black Friday sales also didn’t help matters, with the National Retail Federation measuring the first drop in sales in seven years, a decline of 2.7 percent.
During the month, railroad shipments were inconsistent, and intermodal activity slowed after an October rise. Truck tonnage fell by 3.7 percent in October.
“Given the current high levels of inventory,” Cass said, “it is not surprising that the number of shipments is not growing — even in spite of the anticipated 3.9 percent rise in holiday sales over last year.”
The company didn’t expect a turnaround before the end of the year.
“Exports rose in recent months, but largely based on the strength of oil product exports. Container exports and imports, largely aimed at the consumer market, have trended downward,” Cass said. “Despite the better than expected third quarter GDP, the fourth quarter will not be as strong. December is likely to provide a weak finish to a relatively weak 2013 for the freight industry.”