The 2.2-percent volume increase from August reversed a two‐month downward trend, but for the second month in a row, freight volumes were still less than the same period a year ago. This has been the case several times this year, and the third quarter has closed with total year-to-date freight movements just above where they were at this time in 2011 (which was well above 2010 and 2009 levels). September's weak number is in part a function of high inventory levels. Consumer spending still remains weak and retail shelves are full, so retailers are not placing large restocking orders. This unintended inventory growth has pushed wholesale and manufacturing inventories up dramatically, creating an overall level that tops peak recession levels. Compared to the year-over-year economic improvements of the last two years - when September shipment levels were up 7.5 and 15.5 percent in 2011 and 2010 respectively - the decrease for 2012 demonstrates the weak state of the current economy. Truck tonnage is higher than in 2011, but has been relatively flat for the last few months, even declining somewhat for LTL carriers.

Seasonally adjusted, rail car loadings and intermodal volumes both declined from August to September, 0.7 and 0.6 percent, respectively. Since the beginning of the year, rail car loadings are down 2.5 percent, while rail intermodal shipments are up 3.6 percent.

Overall freight expenditures rose 3.3 percent in September after three months of declines. Much of the increase is due to the upward turn in shipments. Truck capacity remains very tight with regionalized availability problems pushing rates up slightly. In 2011, both rail and truck carriers increased their rates to recover mounting cost increases. The higher rates stuck, but carriers have not been able to gain as much ground on rates in 2012. A recent carrier poll shows that they are not anticipating more rate increases this year and, in fact, are expecting to miss revenue forecasts because of the lower demand. Compared to September freight spend a year ago, September 2012 expenditures are up 2.5 percent. Year‐to‐date, overall spending on freight has risen 7.8 percent, while volumes are up 10.4 percent since January.

Source: Cass Information Systems