12 months-over-year (y/y) declines in freight shipments and spend continued to taper during December, in line with data compiled within the Cass Freight Index.
December shipments outperformed normal sequential seasonal changes, up 2.1% seasonally adjusted. That followed a 0.3% sequential increase in November. In comparison with a yr ago, volumes captured by the information set were off 7.2%, which was 170 basis points higher than the speed of decline in November.
Stripping out seasonal adjustments, December was weak with the shipments index at its lowest absolute level since July 2020 and 10.8% lower than it was in December 2021. If normal seasonal patterns hold, volumes are forecast to say no 8% y/y in January.
December 2023 | y/y | 2-year | m/m | m/m (SA) |
Shipments | -7.2% | -10.8% | -1.6% | 2.1% |
Expenditures | -23.7% | -26.9% | -3.0% | 0.1% |
TL Linehaul Index | -6.1% | -4.5% | 0.4% | NM |
The expenditures subcomponent, which measures all dollars spent on freight (including fuel surcharges and accessorials), was down 3% from November but principally flat when seasonally adjusted. The info set was 23.7% lower y/y, marking the seventh straight month of mid-20% declines.
For all of 2023, expenditures were down 19% y/y, but that change rate followed increases of 23% and 38% in 2022 and 2021, respectively. The index is predicted to be down a further 14% in the primary half of 2024.
Netting the decline in shipments from the decline in expenditures implies actual freight rates, or “inferred rates,” were off roughly 18% y/y. Inferred rates are expected to say no 11% y/y in the primary half of the yr.
Spending on truckload shipments accounts for greater than half of all dollars recorded in Cass’ expenditures index.
Cass’ TL linehaul index provides a cleaner take a look at TL rates as changes in fuel and accessorial charges are excluded. The index inched 0.4% higher from November to December, which was just the second sequential increase in 19 months. The index was down just 6.1% y/y, the smallest decline since February.
Cass’ linehaul rates have continued to stabilize, with the index now on par with August and just 1% lower than May. The index captures each spot and contract rates.
“With spot rates regular over the past several months, downward pressure on the larger contract market is lessening, with some instances of contract rate increases bucking the downtrend of late,” stated ACT Research’s Tim Denoyer within the report.
![](https://www.freightwaves.com/wp-content/uploads/2024/01/16/spot-rates-1200x399.jpg)
While rates are stabilizing at lower levels, truck capability stays high. But carrier exits are increasing.
Carrier exits totaled 4,860 in December, which was 52% higher than the common monthly level of closures recorded during 2023, in line with data from fleet solutions provider Motive. Recent registrations were down for a fourth straight month at 6,503. That put December registrations 18% lower y/y and 43% below December 2021.
Total recent registrations in 2023 were 21% higher than in 2019, which was also a down yr for the industry.
![](https://www.freightwaves.com/wp-content/uploads/2024/01/16/tender-rejections-1200x400.jpg)
“Destocking and declining goods consumption have been key features of the freight recession, but each cycle drivers appear to be beginning to reverse course,” Denoyer said. “Real retail sales recently turned positive after a yr of declines, and after 18 months of destocking, a restock is approaching, likely spurred by ocean risks — [conflict in the Red Sea and low water in the Panama Canal].”
Data utilized in the Cass indexes is derived from freight bills paid by Cass (NASDAQ: CASS), a provider of payment management solutions. Cass processes $44 billion in freight payables annually on behalf of consumers.
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