Surface Transportation www . joc . com pricing was down 6.5 % from a year ago in March and 21.6 % lower over two years .
The less-than-truckload ( LTL ) US PPI was up 0.5 % from February to March and 2.5 % year over year . The LTL PPI has risen 3.9 % since December .
Cass did see signs of growth amid year-over-year declines in volume and pricing .
The shipments portion of the index rose about 2 % from the fourth quarter of last year through the first quarter in seasonally adjusted terms , although not before adjustment . That indicates volumes were higher than Cass expected .
In its index report , Cass said for-hire freight demand is “ broadly consistent ,” falling only 0.2 % from February to March before seasonal adjustment . The shipments index jumped 7.3 % in February after a frigid January put a damper on freight demand .
That demand is higher than for-hire data alone suggests , Cass said .
Increased use of private fleets by shippers masks the extent of overall demand as shippers use their own
US manufacturing output returns to expansion in Q1 2024
Seasonally-adjusted world , US , Asia , China and EU manufacturing Purchasing Managers ' Indexes ( PMIs )
PMI
58
56 54 54
52 30 50
48 46 44 42
L Jul Jan 2023 Jun , 2023 Jul Jan 2024
World US Asia China EU
Notes : Index reading above 50 indicates growth from previous month Source : S & P Global
© 2024 S & P Global
No major increase forecast for truckload , LTL rates
TD Cowen / AFS Truckload and LTL indexes , measures of changes in rates compared to a January 2018 baseline
Index
80 %
60 %
40 % -10% 20 %
0 %
-20% L Oct , 2019
2020 2022
2024
Source : AFS Logistics
TL index LTL index
© 2024 S & P Global
L equipment to move freight rather than tendering shipments to carriers . The true level of demand is “ still hard to see amid ongoing private fleet growth ,” Cass said .
A deflationary year
Rates also remain depressed on an annualized basis but are beginning to climb . The Cass Inferred Rates index rose 0.2 % from February to March before seasonal adjustment . Seasonally adjusted inferred rates rose 1 % month over month .
The year-over-year decline in Cass ’ s inferred rates , which are based on the rates imbedded in the shipment and expenditures portions of the index , was 15.4 %, down from 16 % in February and 18.1 % in January .
“ Even if rates begin moving higher from here , as is increasingly likely , freight will very likely remain deflationary this year ,” Cass said .
Cass ’ s freight index includes shipments handled by all domestic transportation modes , as well as truckload , LTL , rail and parcel pricing .
The more narrowly focused Cass Truckload Linehaul Index increased 0.2 % sequentially in March after a 0.1 % gain in February but was down 4.7 % from a year ago .
Still , trucking companies are adding jobs in anticipation of higher volumes from manufacturers and retailers . Data released by the US Bureau of Labor Statistics ( BLS ) April 5 showed that for-hire motor carriers added 6,100 jobs in March before seasonal adjustment , a 0.4 % increase from February , when trucking employment hit a 12-month low . That increase in employment was nearly six times the number of jobs the BLS expected , a 5,100 seasonallyadjusted gain showed .
Those additional drivers will be needed if forecasts for higher retail imports prove true .
The National Retail Federation ( NRF ) on April 9 said it now expects US imports for the first six months of the year to increase 11 % over the year-ago period , up from a March forecast of 7.8 %.
Ocean carriers have signaled their belief that US consumer buying will remain strong into the second half of the year by announcing the launch or restart of 11 services involving the trans-Pacific and north-south trades .
However , the potential for higher demand has yet to affect much change in surface transportation rates , at least in the truckload market .
The TD Cowen / AFS Logistics Freight Index for the second quarter , released April 9 , forecasts truckload rates will drop to 4.8 % above their 2018 base in the second quarter from 4.9 % in the first quarter . In comparison , the index placed truckload rates 25.7 % above their 2018 base in the first quarter of 2022 .
“ As truck capacity continues to adapt to lower demand and sustained high interest rates , it will inevitably drive rates up ,” AFS Logistics wrote . “ However , the crucial question remains when the adjustment will occur .”
AFS and TD Cowen expect less-than-truckload rates to remain elevated in the second quarter , at 59.4 % above their 2018 base level , a 2.4 % year-over-year increase .
email : bill . cassidy @ spglobal . com
May 6 , 2024 | Journal of Commerce 35