September Cass data highlights stagnation in shipments.Spending surge

According to September data from Cass Information Systems, shipments have come at the expense of supply chain and capacity constraints, and spending as a substitute for pricing has skyrocketed.

Shipping component of Cass Freight Index (NASDAQ: CASS) According to Wednesday’s report, it has been seasonally adjusted and slid 4.9% since August. The dataset was 0.6% higher than September 2020, increasing for the 12th consecutive month year-on-year.

Part of the slowdown in cargo volume was due to hurricane Ida and a worsening semiconductor shortage.

Tim Denoyer, Senior Analyst at ACT Research, said: He believes that the crowded rail network is starting to “unleash a bit”, which could help the country’s freight flow.But he is watching Intermodal volume that remains restrained For a while due to lack of chassis and fees.

Cass’ spending sub-index rose again in September, up 32.2% year-on-year, almost 34% higher than the September 2019 reading. The growth rate comparison with 2020 was strong again the month after it peaked in June (+ 56.4%). The index declined by 2.5% sequentially (seasonally adjusted) in September, slightly off the record established in August.

September 2021 y / y 2 years Hmm m / m (SA)
shipping 0.6% -1.3% -4.1% -4.9%
Spending 32.2% 33.8% -0.4% -2.5%
TL line hole index 12.7% 8.9% 1.1% Not applicable
Table: Cass information system. SA (seasonally adjusted)

The spending index measures the total amount of money spent on the movement of cargo and is subject to changes in the number of shipments recorded each month. September shipments were significantly lower than spending. This means that fares have risen again during the month.

According to the report, if normal seasonality is maintained until 2021, spending factors could record a 34% year-on-year increase for the full year.

Estimated rates, or spending divided by shipments, rose 31.4% year-on-year and 2.6% quarter-on-quarter in September (seasonally adjusted). The monthly rise was on top of a continuous increase of 6.1% in August. Expenditures are rising due to higher fuel prices and air freight prices, and fewer rail freight in favor of more expensive trucking options.

Denoyer also pointed out the increase in excess miles “due to the disruption of all supply chains in the 2021 shortage economy.” As an example, he pointed out: “Containers are offloaded with small remote ports to avoid backlogs in LA and Long Beach, and chassis shortages push cargo from crowded rail networks to trucks, resulting in significant haul times in the largest freight market. It has become longer. “

Estimated rates increased about 500 basis points faster in September than in August.

Not surprisingly, Cass’ TL Linehall Index was up 12.7% year-on-year, up 1.1% from the previous quarter. Linehole fares (excluding fuel and valuations) will be indexed even higher, but will have longer haul periods and lower average fares per mile.

September levels mark a record high for the Line Hall Index. Ectenia of headwinds faces capacity.. “Cargo demand is clearly still strong, supply challenges continue to grow, and there is upward pressure on tariffs,” Denoyer added.

Chart: (Sonar: TSTOPVRPM.USA)... 7-day average rate per mile of van spot load (including fuel). For more information on FreightWaves SONAR, click here..

“Skeptics may see flat volumes and record rate increases and shout” stagflation! “, But we disagree,” continued Denoyer. “Cargo demand is not stagnant, it is caged by supply constraints and can peak with the seasons.”

He believes supply chain easing can occur in the fourth quarter. The volume between modals has “increased over the last few weeks,” he said, suggesting improvements in the rail business, and a power outage in China could keep the supply chain catching up with container ship backlogs. Said there is.

But he is watching Low stock And the Chinese New Year, which starts on February 1, as a catalyst for the increase in import demand toward the beginning of 2022.

“While demand-tight capacity dynamics” won’t last indefinitely, “U.S. consumer balance sheet firmness, inventory replenishment, and industry sector record orders, Denoyer said. Freight demand fundamentals remain strong as we struggle to grow into. Infrastructure stimulation is probably on the way. “

The data used in the Cass index is taken from the fares paid by Cass, the provider of payment management solutions. Cass processes $ 26 billion of unpaid cargo on behalf of more than 8,000 subscribers annually. September Cass data highlights stagnation in shipments.Spending surge

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