What It Measures
The Cass Freight Index measures the number of freight shipments across North America. It is derived from Cass Information Systems' freight payment database, which processes over $60 billion in freight transactions annually for hundreds of large shippers.
- The index covers:
- Truckload and less-than-truckload (LTL) shipments
- Rail shipments
- Intermodal shipments
- Air freight
The index is seasonally adjusted and expressed relative to a base period (January 1990 = 1.000).
Why It Matters
Leading Economic Indicator: Freight volumes typically lead GDP by several months, as goods must be shipped before they can be sold.Supply Chain Pulse: Provides real-time insight into supply chain activity and inventory movements.Consumer Demand Proxy: Rising shipments often indicate strengthening consumer and business demand.Manufacturing Confirmation: Helps confirm or contradict signals from manufacturing surveys like ISM.
How to Interpret
Year-over-Year Changes: Focus on YoY changes to identify trends independent of seasonal patterns.Index Level: Values above 1.0 indicate shipping volumes above the January 1990 baseline.Expenditures Index: The companion Cass Freight Index for Expenditures shows total spending on freight, which can diverge from volumes if rates change.Trend Direction: Several months of consistent increases or decreases are more meaningful than single-month moves.
Key Levels to Watch
| Level | Interpretation |
|---|---|
| Above 1.200 | Strong freight demand, economic expansion |
| 1.100-1.200 | Healthy freight volumes |
| 1.000-1.100 | Moderate freight activity |
| Below 1.000 | Below-baseline activity, potential weakness |
Historical Context
The Cass Freight Index plunged during the 2008-2009 recession and the COVID-19 pandemic (April 2020). It reached all-time highs during the 2021 supply chain crisis as demand surged while capacity was constrained.
Limitations
- The index has some limitations:
- Based on a sample of large shippers, may not capture small business activity
- Does not include pipeline, waterborne, or parcel shipments
- Seasonally adjusted data may not fully capture unusual patterns