Largest Shipping Decline Since 2009 And That's Before Coronavirus

The January Cass Freight Shipping Index is more bad news for the global economy.

The Cass Freight Shipping Index is down 9.4% year-over-year, the largest decline since 2009. And this is for January, before the Coronavirus disruption.

The turn of the calendar didn’t leave the bad news in 2019, as the Cass Freight Index showed continued weakness in the U.S. freight market. Both the shipments and expenditures components of the Cass Freight Index worsened sequentially and showed decelerating y/y growth. According to the broader stock market levels, there is still optimism out there, but the freight trends have yet to turn. And the Covid-19 coronavirus case count continues to grow, creating uncertainty around containment and eventual impact on global supply chains. Some Chinese factories resumed operation this past week, but they are still not close to 100% production levels. Others have pushed re-opening back to March 1.

Shipping Volumes

Cass Freight Index

Even before the coronavirus issues have any impact on the U.S. transportation market, the freight market is weak, partially due to elevated inventories.

Cass Air Freight Demand

Cass Truckload Linehaul Index

The Cass Truckload Linehaul Index, measuring per-mile linehaul rates, takes a look at the largest (and most fragmented) market in the domestic transportation landscape, and it showed a y/y decline of 6.3% in January (a big step-down from the -3.3% in December), as capacity loosened after a tight holiday shipping period.

Consumer Confidence

On the plus side, going into 2020, the sentiment index for consumer confidence remains high. This is why the freight (and industrial) data has not translated into worse news for the broader economy yet. If this trend continues, it will provide support for the economy and likely guarantee the President a second term in office.

Consumer Confidence Silliness

That's more than a bit nonsensical.

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James Goldstein 1 month ago Member's comment

So if the decline started before the #coronavirus outbreak, what IS causing the decline?

Moon Kil Woong 1 month ago Contributor's comment

Transportation is a better indicator of future events than consumer confidence.

Michelle Bell 1 month ago Member's comment

Why is that?

Moon Kil Woong 1 month ago Contributor's comment

Because it is used for actual demand and due to shipping times implies real future expectation for goods. It is a issue of putting your money where your mouth is. Those shipping product have put money into the belief they will sell whereas consumer confidence is more theoretical.

Michelle Bell 2 weeks ago Member's comment