ST. LOUIS — The number of freight shipments and the dollars spent on freight have been in a typical seasonal decline since September 2015, Cass Information Systems has reported.
The Cass shipment index opened the year just 0.2 percent below last January, while the expenditures index is down 1.4 percent.
The economy grew much more slowly in the second half of 2015, so January freight shipments are down 11.6 percent and dollars spent are down 11.5 percent from the June 2015 high, according to an analysis by Rosalyn Wilson, senior business analyst with Parsons.
The declines in the fourth quarter and again in January are normal seasonal trends and are not necessarily signs of further weakening, she said.
Year-over-year, freight shipments were essentially flat from last year, just 0.2 percent lower than last January.
Sequentially, January was the fourth month in a row that the number of freight shipments declined.
The freight payment index fell 1.9 percent in January from December, and is 1.4 percent below the January figure in 2015. The decrease in January 2016 is much less than the December to January drops of 5.7 percent in January 2015 and 5.1 percent in January 2014. The decrease can be mainly accounted for by the drop in the number of shipments and the mix of commodities moved, Wilson said. Generally speaking, rates were stable in January because available capacity was not a problem.
The Institute of Supply Management’s (ISM) monthly PMI Index Report in January showed that although the PMI Index remained below the 50 percent threshold — indicating that manufacturing is contracting — the index rose for the first time in four months. The 0.4 percent increase is a sign that manufacturing may be reawakening. The Production Sub-index rose 0.6 percent, along with a healthy 5.5 percent increase in the New Order Sub-index. If manufacturing continues to grow—and it should—freight levels will return, Wilson said. Although factory employment has been hit hard by weak exports, job hires were up 29,000 in January.
The Cass Freight Index represents monthly levels of shipment activity, in terms of volume of shipments and expenditures for freight shipments. Cass Information Systems processes more than $26 billion in annual freight payables on behalf of its clients. The Cass Freight Index is based upon the domestic freight shipments of hundreds of Cass clients representing a broad spectrum of industries. The index uses January 1990 as its base month.
For more information, visit www.cassinfo.com/frtindex.html or call (314) 506-5500.
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