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Shipment volumes decline 1.4% for October, reports Cass Freight Index

Expectations of improved freight conditions because of the holidays were dampened by Hurricane Sandy on top of the already weak economy and high inventories, and — the report added — “the normal holiday surge has not yet materialized.”

The Trucker News Services

11/6/2012

Shipment volumes declined 1.4 percent in October, erasing most of September’s gains, reports Cass Information Systems Inc. in its Freight Index Report for October.

September’s increase was attributed to the rescheduling of freight deliveries in anticipation of a possible ILA strike on the East and Gulf coasts, which didn’t materialize because federal negotiators negotiated an extension of the Oct. 1 deadline until the end of the year.

Expectations of improved freight conditions because of the holidays were dampened by Hurricane Sandy on top of the already weak economy and high inventories, and — the report added — “the normal holiday surge has not yet materialized.”

The powerful storm system that inundated the Eastern Seaboard is predicted to impact numbers in the region for at least the rest of the year, with the Port of New York and New Jersey sustaining substantial damage, necessitating re-routing of freight to other East Coast reports.

Railroads have just restarted their routes into the New York area.

The good news was that “After this sharp and sudden drop, freight volumes will rise quickly in the region as emergency supplies and construction materials are moved in to support reconstruction efforts,” the report predicted.

However, the decrease in October shipments put volumes in line with mid-year trends: relatively flat shipping volumes because of the economy’s anemic growth, with retail sales and manufacturing dropping off in recent months, causing significant growth in manufacturing inventories.

Freight shipments year-to-date are only 1.2 percent higher than for the same 10 months of 2011.

This past October’s freight volume is 5.4 percent higher than last October’s but 2011 October was the beginning of a significant downward trend in shipments, the reported noted.

Comparatively, September 2011 was the holiday peak month and saw the highest freight volumes since before the recession. Since then, however, there have been 132 straight months below that level and volumes have been depressed across transportation modes.

Intermodal shipments have had modest upward gains a few commodities, such as petroleum products and chemicals, have surged on the rails.

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Truck volumes were steady in October but freight expenditures rose for the second straight month, increasing 1.6 percent.

Coal shipments, the single largest commodity carried by rail, were down significantly, even compared with last year’s lower levels.

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

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