Cass index shows freight spending hit a record in March 2021

In April 2021, Cass Information Systems released its freight index report for March, and it showed a freight market running hot as the U.S. economy reopened.

Volumes bounced back from the February freeze

The shipments component of the Cass Freight Index was 1.196 in March. That was 10.0% higher than March 2020 and well ahead of February's 4.1% year-over-year gain, which had been held down by the polar vortex.

Shipments rose 5.8% from February, or 3.4% after seasonal adjustment. That more than made up for the weather-driven decline in February. On a two-year basis, March shipments were 0.1% below March 2019, essentially back to pre-pandemic levels.

Spending set another record

The expenditures component, which tracks total dollars spent on freight, was 3.379. That was up 27.5% from a year earlier and the third all-time high in four months.

Seasonally adjusted, expenditures rose 6.5% from February. Report author Tim Denoyer of ACT Research said the gain came about evenly from higher volume and higher rates. Rates embedded in the index, calculated by dividing spending by shipments, were up 15.8% from a year earlier.

Truckload pricing hit a new high

The Cass Truckload Linehaul Index, which measures per-mile truckload linehaul rates, was 143.1 in March. That topped its previous record of 142.4 from October 2018. The index was 10.1% higher than a year earlier and up 2.0% from February, its ninth straight monthly increase.

Denoyer said record-low driver availability and parts shortages limiting new truck production were keeping capacity tight. He expected linehaul pricing to keep rising in the near term.

Risks to watch

The report flagged supply chain problems that could spread. Semiconductor shortages were expected to cut vehicle production at least through the second quarter, and the Suez Canal blockage in late March had added to the strain. Denoyer noted that new chip plants typically take 18 to 24 months to build, so equipment supply could stay limited.

He also cautioned that year-over-year comparisons would look extreme in the following months because spring 2020 was the shutdown period. He suggested watching seasonally adjusted month-to-month trends instead.

What it meant for carriers

For truckload carriers, the March data confirmed a strong pricing environment, driven by consumer demand and a short supply of drivers and trucks. The same shortages that lifted rates also made it harder and more expensive to add equipment and hire drivers to take advantage of them.