Freight rates rose another 2.9 percent in April, according to the latest Cass Freight Index report, as the cost of global logistics continues to rise.
Year-over-year, rates were up 31.3 percent compared to April 2021. While still a significant jump, that was a slightly smaller increase than the 32 percent year-over-year rise in March. However, Cass notes there is reason to be optimistic that rate increases will decelerate in the coming months. Spot rates, which are short-term pricing that reflect the real-time supply and demand for freight, have fallen, indicating that the rest of the market could follow. Further, driver availability has improved while freight demand has slowed. “This is a deflationary combination, though it will take several months to filter the spot market into contract rates,” Cass Information Systems said.
As a result, the information company now expects overall freight increases for 2022 to be lower than the 23 percent seen in 2021.
The shipments component of the index fell 0.5 percent year-over-year in April, down from a 0.6 increase in March. The trend was even more noticeable on a month-to-month basis, falling 2.6 percent. Cass explained that this month-to-month decrease was 0.9 percent below the normal seasonal pattern, and that the possibility of a freight recession is now “considerable” as inflation slows spending.