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Cass: freight shipment volume, expenditures slump in April

Truckload line haul rates fell 1.3 percent from February to March, Cass said, compared to an average month-to-month decrease of about .6 percent. Year-over-year, rates are up 3.9 percent. (The Trucker file photo)

The Trucker Staff

5/2/2013

North American shipment volume and overall freight expenditures both slumped in April, following strong showings in April, according to the just released Cass Freight Index Report.

The drops are not unexpected given the slowing state of the economy overall, the report said, and follow the pattern the industry has become accustomed to in the last several years - a strong surge raising expectations followed by an erosion of the gains.

“This month’s declines are significant because once again both the number of shipments and dollars spent have fallen below same month 2012 levels, and the number of shipments is even lower than the April 2011 level,” the report said.

Freight shipment volume for all modes dropped 3.5 percent from March to April, enough to reverse much of March’s gains, the report said.

April shipments were 1.3 percent below 2012 figures, and 1.2 percent below 2011 levels.

Revisions to the American Trucking Association’s Truck Tonnage Index have reduced the differences between the shipping trends shown by the Cass Freight Index and the ATA’s tonnage index over the last several months.

January and February figures from the ATA were both revised downward,  in January from a 2.4 to 1.0 percent gain and in February from a 0.6 increase to a 0.7 decrease.

The ATA’s index for March, the latest month currently available, says tonnage was up 0.9 percent from February while Cass reported a 5.8 percent increase in the number of shipments.

However, the Cass data includes all domestic freight modes, not just trucking.

Businesses have been drawing down inventories for the last two months based on expectations that the economy will be lethargic, the Cass report said.

April freight expenditures declined 1.6 percent in April and are 0.5 percent below last year’s level for the same period, Cass said. The drop in the number of shipments precipitated most of the decline in dollars spent. The strong increase in March increase is the only thing keeping the year-to-date dollars spent 0.8 percent higher than end of year 2012 and fuel prices have declined for eight straight weeks, which has had the effect of lowering total costs slightly because of reductions in fuel surcharges.

Despite the ever-tightening truck capacity and worsening truck driver shortage, truckload and LTL rates overall have remained as flat as the economy.

The last few weeks have seen more indicators of weakening economic growth, the report said.

Manufacturing activity, as measured by the Institute for Supply Management’s PMI, while still expanding, has slowed its rate of growth for the fifth consecutive month, the report said, but on a promising note, however, noted that new orders and backlog of orders rose again in the United States. Exports fell 2.0 percent and imports rose 1.0 percent. China’s economic growth rate slowed unexpectedly, falling to 7.7 percent in the first quarter 2013 from 7.9 percent in the fourth quarter 2012.

Private employment took a hit in April, coming in much lower than expected and representing the weakest hiring month since September 2012, the report said.

According to the payroll processing firm ADP, manufacturers cut 10,000 jobs, while construction added 15,000. The largest decline occurred in small business hiring, likely because of healthcare reform measures kicking into effect, the report said.

The ADP report includes only the private sector and does not reflect the government jobs that are affected by the sequester.

Truckload line haul rates fell 1.3 percent from February to March, Cass said, compared to an average month-to-month decrease of about .6 percent. Year-over-year, rates are up 3.9 percent.

Supply and demand seem to remain relatively balanced, Cass said, noting that while truck tonnage was up year over year each quarter of 2012, it “grew at a slower rate in each quarter,” according to analyst Donald Broughton.

Broughton added that “although tonnage has rebounded modestly to start 2013, we believe the effects of contractionary fiscal policy are likely to weigh on demand” for at least the first half of 2013.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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