As we analyze the latest data from the Cass Freight Index for September 2024, several key indicators suggest that we may be approaching a phase of price stabilization in the freight market. Below, we break down the findings and their implications for shippers and carriers.
Cass Freight Index Overview
Shipments
September 2024: The shipments component of the Cass Freight Index registered a decline of 1.7% month-over-month (m/m), following a slight increase of 1.0% in August. Year-over-year (y/y), shipments decreased by 5.2%.
The trend reflects ongoing challenges in the market, despite a notable jump in Class 8 tractor sales in Q3, indicating that private fleet insourcing is still ongoing.
Expenditures
The expenditures component saw a 2.4% increase m/m in September, despite declining fuel prices. Year-over-year, expenditures fell by 6.6%, an improvement from 9.0% in August.
This suggests that the increase in expenditures is driven by higher rates, which were up 4.2% m/m, indicating a potential upward shift in pricing.
Inferred Freight Rates
Inferred freight rates decreased by 1.4% y/y in September but rose 4.2% m/m, reflecting a rebound from a cycle low, primarily influenced by a changing mode mix and ongoing fuel pressures.
Truckload Linehaul Index
The Cass Truckload Linehaul Index experienced a modest increase of 0.3% m/m, marking the first uptick after four consecutive months of decline. However, y/y, the index remains down by 3.5%.
While spot rates have shown signs of recovery, contract rates are still facing competitive pressures.
Freight Market Dynamics and Future Outlook
One of the defining trends over the past year has been the insourcing of freight from the for-hire market to private fleets, contributing to a prolonged soft freight cycle. As owner-operators continue to demonstrate resilience, we expect that upcoming regulations may further impact the market dynamics.
A significant regulatory change from the FMCSA, effective November 18th, could lead to downgrades for thousands of CDL holders. This may result in both safer roads and higher truckload rates as fleet capacity tightens.
Conclusion
While the freight market faces ongoing challenges, the signs of price stabilization and potential improvements in service levels provide a cautiously optimistic outlook. As we head into 2025, maintaining flexibility and staying informed will be essential for navigating this evolving landscape.
At Gain Consulting, we are dedicated to helping you understand these market dynamics and their implications for your supply chain strategies. Whether you need assistance with rate negotiations or inventory management, our team is here to support you. Let’s work together to position your business for success in the coming months.
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