IPFS News Link • Business/ Commerce
June Shipments Decline: Latest Cass Data Shows Volumes Weaken, Costs Hit New High
• https://www.zerohedge.com, By Todd MaidenOn a year-over-year comparison, the monthly volumes data set was down for the fourth time in the first half of 2022.
The Cass Freight Index continued to moderate during June alongside macroeconomic data points. With a cooling in consumer spending and new highs in inflation (9.1% annualized, according to June data released by the Bureau of Labor Statistics on Wednesday), the freight industry appears to be on the downside of the freight cycle as the back half of 2022 begins.
Many retailers were chasing inventory throughout the pandemic, often pulling forward merchandise spend well ahead of normal buying patterns to avoid supply chain bottlenecks and ultimately stockouts. However, the trend has reversed course recently with a couple of retail heavyweights signaling margin pressure as they are now carrying too much stock or inventory that is out of season.
"Inventory has shifted from a major tailwind for freight demand to more of a neutral factor currently, with potential to become a considerable headwind if goods demand continues to decline," ACT Research's Tim Denoyer stated in the June Cass report.
Cass reported that the shipments index dipped 2.3% y/y in the month, following a 2.7% decline in May. While the index continues to moderate from 2021 levels, it was still 23.9% higher than the level recorded two years ago and 1.9% higher than June of 2019.
Assuming normal seasonality holds in the back half of the year, the shipments index is forecast to see y/y declines of 1% in the third quarter and 5% in the fourth quarter.