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U.S. Shipment Volumes and Shipment Expenditures Declined in July

On Tuesday, the Cass Freight Index Report was released, providing a snapshot of the freight logistics sector for the month of July; below are some of the highlights:

“The freight logistics sector slowed in July, following a seasonal trend, with both freight shipments and freight payments down 3.9 percent from the previous month.  This drop was consistent with previous summers’ drops, so should not be seen as a start of a decline in freight for the second half of 2014.”

Shipment Volumes

“After five months of increases, shipment volumes decreased 3.9 percent in July, still coming in 4.2 percent higher than shiment activity a year ago.”

Freight Expenditures

“On the expenditures side, the July freight expenditures index fell in tandem with freight shipments, dropping 3.9 percent from June figures.  July 2014 payments for freight are 6.7 percent higher than the corresponding month a year ago.”

“Retailers are still sitting on higher inventories and being cautious about the orders they are placing for new stock. The turnaround in China’s PMI index for Export Orders and the continued growth in the U.S. manufacturing sector indicate that freight shipments should be strong in the last four or five months of 2014.”

“The softness in the freight transportation market in July should not be seen as part of a longer-term trend downward. Even prior to the recession, the summer months were slower before the season rise for the holidays. Retailers are still sitting on higher inventories and being cautious about the orders they are placing for new stock. The turnaround in China’s PMI index for Export Orders and the continued growth in the U.S. manufacturing sector indicate that freight shipments should be strong in the last four or five months of 2014. The first estimate of second quarter GDP was a growth rate of 4.0 percent, a significant turnaround from the 2.1 percent contraction in the first quarter. Corporate profits are strong, while consumer sentiment and household wealth are rising, putting both groups in a position to spend more this year.”

>> Click here to read the July 2014 Cass Freight Index Report.