Shipment volumes and expenditures in April 2016 grew 0.6 percent and 0.2 percent, respectively, compared with March, but both remained well below 2015 levels, according to the latest Cass Freight Index Report.
North American shipment volumes and expenditures in April 2016 grew 0.6 percent and 0.2 percent, respectively, compared to the previous month, but both remained well below 2015 levels, according to the latest Cass Freight Index Report.
Despite the slight improvement from March, shipments were still down 4.9 percent compared with April 2015, while payments fell 8.3 percent year-over-year.
The logistics payment solutions provider said the “meager” increase in shipments during the month was in keeping with the trend seen in January, February and March, but noted that first quarter figures “were a departure from the more robust growth we’ve seen in the same period for the last five years.”
“May is usually a relatively strong month for freight shipments, but given the high inventories with ever slower turnover rates and the decline in new production orders, May could be another soft month,” added Cass.
Cass noted railroad shipments dropped 21.1 percent in April, all but reversing the 22.2 percent increase in carloads from February to March. April intermodal shipments followed suit, declining 17.8 percent after a 19.2 percent gain in March.
The tepid growth in freight payments in April “indicates that rates are very soft,” the company said, adding that ample capacity available across the modes increasing competition for loads, which in turn is holding rates down.
The U.S. economy decelerated in the first quarter of 2016 due to “the continued decline of the global economy; the reticence of the consumer sector to increase its buying; the loss of jobs and income from the plunging oil costs (which shut down the fracking business and cut back on coal shipments); very high inventory levels across the entire supply chain; and poor export figures due to both the strength of the U.S. dollar and a decline in worldwide demand,” said Cass.
“Eyes are on the Chinese economy, which has been extremely unstable and can have a big effect on world economies if it continues to falter,” it added. “Based on the trends of many economic indicators, it appears the economy may get worse before it gets better.”
North American freight market remains below 2015 levels
