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Freight volume drops in December and rates become firmer

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Freight volume drops in December and rates become firmer

The Cass shipment index ended 2024 down 4.1% year-over-year, after falling 5.5% in 2023. (Photo: Jim Allen/FreightWaves)

December data from Cass Information Systems showed a significant drop in freight traffic as expenses fell by a smaller amount, implying freight rates rose higher during the month. Scheduled truck freight rates continued to improve from August lows, a report showed on Tuesday.

Freight volumes measured by the Cass Freight Index fell 7.3% from November and were down 6.5% year over year. Even excluding the typical seasonal dip from November to December, the index fell 3.1%, wiping out November’s sequential gain of 2.8%.

This was the biggest year-on-year decline for the transportation index since January 2024 and the lowest index reading since June 2020. However, there was some noise throughout the month. Midweek holidays may have exacerbated the seasonal slowdown. Also, some shippers have brought forward freight deliveries throughout the fall to avoid a possible dockworkers strike on January 15.

December 2024
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m/m (SA)ShipmentsExpenditureTL Linehaul Index

Volumes are also slowly picking up in January, but winter storms are widespread and some trade policy indecision lingers ahead of President-elect Donald Trump’s inauguration on Monday.

The Cass Freight Index is a truck-focused data set where more than half of captured spend is related to truckloads. Less than truckload, rail and parcel shipments largely make up the rest.

The report states that “continued capacity expansions are keeping pressure on the rental market.” Cass’s January forecast expects volumes to decline 6% year-on-year, assuming normal seasonal trends.

The index ended 2024 down 4.1% year-on-year, after falling 5.5% in 2023.

SONAR: Contract Load Accepted Volume Index for 2025 (blue shaded area), 2024 (green line) and 2023 (pink line). The index measures accepted loading volumes under contract and excludes rejected quotes. Click here for more information about SONAR.
SONAR: Outgoing Tender Rejection Index for 2025 (blue shaded area), 2024 (green line) and 2023 (pink line). A measure of truck capacity, the Outbound Tender Reject Index, shows the number of loads rejected by carriers. Current tender rejections are outperforming the low levels of January 2024 and January 2023, and are approaching market equilibrium. Click here for more information about SONAR.

The freight expenditure index, which reflects total freight expenditure including fuel, fell 2.6% in December (up 0.5% seasonally) and was down 3.4% year-on-year. Diesel prices fell by approximately 12% year-on-year during the month (approximately 1% sequentially).

If we balance the change in shipments against the change in expenses, this means that actual freight rates are likely up 3.3% year over year this month. That was the first implicit annual rate increase since November 2022.

The derivative interest rate index is expected to be positive on an annual basis in January and throughout 2025.

The expenditure index ended 2024 up 11% year-on-year, after falling 19% in 2023. The index rose 38% and 23% in 2021 and 2022, respectively.

The Truckload Linehaul Index, excluding fuel and additional surcharges, rose for the fourth month in a row in December, with a sequential increase of 1.2%. A 0.4% year-on-year decline was the smallest since late 2022.

The index includes changes in both spot and contract freight and “is now poised to turn positive for the first time in two years, possibly in January,” the report said.

The index fell 10% year-on-year in 2023 and 3% last year.

SONAR: The National Truckload Index (linehaul only – NTIL) for 2025 (blue shaded area), 2024 (green line) and 2023 (pink line). The NTIL is based on an average of booked dry loads of 250,000 lanes. The NTIL is a seven-day moving average of spot rates for scheduled transport, excluding fuel. Click here for more information about SONAR.

“Winter weather is driving significant spot market activity in January, but the supply response in recent months has been interesting,” the report concludes. “While the lower Class 8 supply in recent months supports a return to rate increases in 2025, the coming capacity additions will be significant.”

The data used in the indexes comes from freight bills paid by Cass (NASDAQ: CASS), a provider of payment management solutions. Cass processes $38 billion in freight payables annually on behalf of clients.

More FreightWaves articles from Todd Maiden:

After freight volumes plummeted in December, the rates first appeared on FreightWaves.

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