The Cass Freight Index is a statistical measurement that follows the developments in the North American shipping market. Focusing on a wide variety of industries that rely on product transportation, this index is a useful way to follow developments in the American economy. According to the results from last month, the level of freight utilization in the United States was down significantly during January.
In a report published on February 19, Cass Information Systems, the company that releases the Freight Index, reported that the amount of money spent on shipping fell 5.5 percent compared to December 2012's levels. Similarly, expenditures were down 1.6 percent in the year since January 2012. Cass officials cited substantial decreases in overall volume as the primary driver of this trend, but also noted rising gas prices and a seasonal transition period as other potential influences.
Volume plunged 4.8 percent from December 2012, which contributed to an overall annual decline of 2.5 percent. Cass noted that this is the first time since the 2007-2009 global recession that year-over-year figures fell. One of the reasons for this, the agency reported, was that falling consumer sales rates had led to higher inventory levels at stores in a variety of markets. With more goods still unsold, retailers are ordering fewer products.
"Resurgence in the freight industry is contingent on performance improvements in many sectors globally, and nothing seems poised for exponential growth. Continue to expect modest growth in freight volumes and higher shipping costs as the year progresses," the organization stated in a press release.
With shipments levels suppressed by lagging consumer demand, it's tough to predict how the U.S. economy will develop during 2013. As such, investors need to do all they can to get the most out of their portfolio, which may include looking into alternatives such as cash flow real estate. To learn more, visit GreatWealthStrategies.com and download a "Free Game Plan Report."