“We’ve been patiently waiting for the consumer.”
By Wolf Richter | 19 October 2016
WOLF STREET — This just keeps getting worse. The Cass Freight Index, tracking US shipment volumes by all modes of transportation, fell 3.1% in September from a year ago, the 19th month in a row of year-over-year declines, and the worst September since 2009!
Donald Broughton, Chief Market Strategist at Avondale Partners, wrote in the report:
After offering a glimmer of “less bad” hope in August [the index was down “only” 1.1% year-over-year], the Cass Freight Index shipments data in September disappointed, providing hindsight that August only gave us “false hope.”
September data is once again signaling that overall shipment volumes (and pricing) continued to be weak in most modes, with increased levels of volatility, as all levels of the supply chain (manufacturing, wholesale, retail) continue to try and work down inventory levels.
There were some areas of growth for shipments. Ecommerce has been reliably booming, as brick-and-mortar retailers lose their footing, a structural shift in the retail industry that will continue to play out over the years. Shipments for the auto and housing/construction industries also grew in September, but at a lower rate.
Alas, shipping for the auto sector will be getting hit further: sales declined in September year-over-year, inventories have reached worrisome levels – 95 days’ supply for F-series trucks, when 60 days is more than enough – and production cuts and layoffs are already being announced.
“Bottom line, the Industrial Recession in the US that began in March of 2015 continues to weigh on overall volumes,” Broughton writes. […]