Cass Freight Index For May Suggests a Long Recovery Road Ahead

Cass Information Systems released their Transportation Index Report for May 2020 providing a unique look into the health of the industry’s economy.

• Domestic shipment volumes increased 1.6% in May compared to April, but still lag significantly in relation to previous years

• Freight Expenditure lowered again in May, down another 5.7%

• June shows signs of continued rebound, albeit from a particularly weak base line

In analyzing the shipment trend data, David G. Ross, CFA, author of the Cass Freight Index explains that, “volumes dropped 23.6% vs. year-ago levels, slightly worse than the -22.7% year over year change in April.”

While modest, there was a 1.6% increase in shipment activity between April and May. This, as the Cass research team note, “shows, in our view, a continued severe weakness in the U.S. economy that is counter to the stock market surge we saw from mid-May.”

Regarding freight expenditures, the Cass Freight Index is down 21.2% year over year, the worst reading since the global financial crisis, falling a further 5.7% relative to April.

The good news is that there are small but consistent increases in intermodal volume through May and into the first week of June. The gains appear to be powered by improved INTL volume through US ports and offer hopes for a domestic ripple effect for the month of June.

Mr. Ross summarizes the month’s data by offering, “the Cass Shipments Index likely bottomed for this cycle in April, May was not as strong as anticipated. June readings should be better and, like many other things right now, will depend on how quickly the economy re-opens and how quickly the very high unemployment levels can retreat.

Source: Cass Freight Index - May 2020