Cass Freight Index
The Cass Freight Index is a monthly measurement of U.S. freight volumes and total freight expenditures compiled by Cass Information Systems, one of the largest processors of freight payment data in North America. It tracks both the volume of shipments (the Cass Freight Index, Shipments) and the total dollars spent on freight (the Cass Freight Index, Expenditures), providing a broad snapshot of the health of the American freight transportation sector. The index is based on data from hundreds of companies that use Cass's freight audit and payment services, representing approximately $30–$40 billion in annual freight spending across all modes including truckload, less-than-truckload (LTL), rail, and intermodal.
SHORT DEFINITION
The Cass Freight Index is a monthly measurement of U.S. freight volumes and total freight expenditures compiled by Cass Information Systems, one of the largest processors of freight payment data in North America. It tracks both the volume of shipments (the Cass Freight Index, Shipments) and the total dollars spent on freight (the Cass Freight Index, Expenditures), providing a broad snapshot of the health of the American freight transportation sector. The index is based on data from hundreds of companies that use Cass's freight audit and payment services, representing approximately $30–$40 billion in annual freight spending across all modes including truckload, less-than-truckload (LTL), rail, and intermodal.
WHAT IT IS
The Cass Freight Index is published monthly by Cass Information Systems, Inc., a company headquartered in Bridgeton, Missouri, that has been processing freight payment transactions since 1956. The index serves as one of the most closely watched leading indicators of U.S. economic activity because freight movement tends to precede broader economic trends by several months. When businesses are shipping more goods, it typically signals that consumer demand, manufacturing output, and retail inventory building are all on the rise — and vice versa.
The index is actually composed of two sub-indices: the Shipments Index, which measures the volume of freight shipments processed, and the Expenditures Index, which tracks the total dollar amount shippers spent on freight transportation. Both are benchmarked to a base period of January 1990, set at a value of 1.000. For context, the Shipments Index has generally ranged between roughly 0.8 and 1.3 over the past two decades, though it has spiked and dipped significantly during economic disruptions such as the 2008–2009 financial crisis and the COVID-19 pandemic. The Expenditures Index tends to run higher because it reflects not just volume but also pricing dynamics — carrier rates, fuel surcharges, and capacity constraints all push the expenditures figure upward even when shipment counts remain flat.
What makes the Cass Freight Index distinctive is its foundation in actual transaction data rather than surveys or estimates. Cass processes freight invoices for clients across industries such as consumer goods, retail, automotive, chemicals, and food and beverage. This gives the index a grounding in real economic activity that sentiment-based indicators like purchasing managers' indexes (PMIs) cannot fully replicate. The index is widely cited by economists, Wall Street analysts, and logistics professionals as a proxy for the pulse of the U.S. supply chain.
HOW IT WORKS
The mechanics of the Cass Freight Index begin with Cass Information Systems' role as a freight payment processor. When a company ships goods and receives an invoice from a carrier, Cass processes that invoice on behalf of the client — auditing it for accuracy, verifying rates, and facilitating payment. Every month, Cass aggregates the total number of shipment transactions and the total freight dollars across its entire client base. These raw figures are then normalized against the January 1990 baseline to produce the two index values.
The data is seasonally adjusted to account for predictable patterns in freight movement, such as the pre-holiday shipping surge in October and November or the post-holiday lull in January. This seasonal adjustment is critical because raw freight data can be misleading — a spike in November shipments, for example, is expected and does not necessarily signal economic acceleration. The seasonally adjusted figures are what analysts and media outlets typically reference when discussing the index.
The index is usually published within the first week of each month, reflecting the prior month's data. Along with the headline numbers, Cass often provides commentary on key trends, mode-specific breakdowns (truckload vs. LTL vs. rail vs. intermodal), and year-over-year or month-over-month percentage changes. Analysts pay particular close attention to the divergence between the Shipments Index and the Expenditures Index. If shipments are rising but expenditures are falling, it may indicate that carrier pricing power is weakening — a sign of loose capacity in the trucking market. Conversely, if expenditures are climbing faster than shipments, it suggests tight capacity and rising freight costs, which can squeeze shipper margins and eventually feed into consumer prices.
PRACTICAL EXAMPLE
Consider a scenario in which the Cass Freight Index, Shipments reads 1.15 in March and the Expenditures Index reads 1.42, both on a seasonally adjusted basis. A logistics manager at a mid-sized consumer goods company notices that the Expenditures Index has risen 8% year-over-year while the Shipments Index has only grown 2%. This tells her that the company is spending significantly more on freight even though it is not shipping dramatically more goods. The likely explanation is that carrier rates have increased due to tighter trucking capacity — perhaps driven by a shortage of qualified drivers or higher diesel fuel costs.
Armed with this insight, the manager decides to renegotiate contracts with her core carriers, locking in rates for a longer term before they climb further. She also explores shifting a portion of her westbound shipments from truckload to intermodal rail, which the Cass data shows is currently pricing more favorably. By acting on the signal from the index rather than waiting for her company's own cost reports to catch up, she saves an estimated $340,000 in annualized freight spend — roughly 6% of her total logistics budget.
WHY IT MATTERS
The Cass Freight Index matters because freight is the circulatory system of the physical economy. Virtually every product on a store shelf, every component in a factory, and every raw material at a construction site was moved by truck, train, ship, or plane at some point. When freight volumes decline consistently, it is often an early warning that a recession is approaching. For example, the Cass Shipments Index began declining in mid-2006 — well before the financial crisis became widely recognized in 2008. Similarly, the index plunged sharply in early 2020 as COVID-19 lockdowns halted economic activity, then rebounded dramatically as consumer demand surged later that year.
For investors, the index offers a real-time, data-driven signal that can inform decisions about equities in the transportation, retail, and manufacturing sectors. A sustained decline in the index might prompt an investor to reduce exposure to cyclical stocks like trucking companies or industrial manufacturers. For business leaders, the index serves as a planning tool — it can inform decisions about inventory levels, warehouse staffing, transportation budgeting, and supplier negotiations. Even individual consumers are indirectly affected, since rising freight costs eventually translate into higher prices at the checkout counter.
LIMITATIONS AND RISKS
Despite its value, the Cass Freight Index has important limitations. First, it is heavily weighted toward large and mid-sized companies that use Cass's payment processing services, which means it may underrepresent the activity of small shippers and owner-operator carriers. Second, the index reflects aggregate national data and does not break down freight activity by geography, so it cannot tell you whether freight is booming in the Midwest while declining in the Southeast. Third, the Expenditures Index can be distorted by fuel price swings — a spike in diesel prices will push the index higher even if actual shipping volumes are flat, which can create a misleading picture of freight demand.
Another common mistake is reading the index in isolation. A single month's decline in the Shipments Index does not necessarily signal a downturn; freight data is noisy and subject to revision. Analysts generally look at three- to six-month moving averages to identify genuine trends. Additionally, structural changes in the economy — such as the growth of e-commerce fulfillment networks that rely on smaller, more frequent shipments — can alter the relationship between freight volume and overall economic output over time, potentially reducing the index's predictive power.
FAQ
Where can I find the latest Cass Freight Index data?
Cass Information Systems publishes the index monthly on its website at cassinfo.com, typically during the first week of the month. Major financial news outlets such as The Wall Street Journal, Bloomberg, and FreightWaves also report on the release and provide analysis of the results.
Is the Cass Freight Index a leading or lagging indicator?
It is generally considered a leading indicator. Because businesses adjust their shipping patterns in response to expected demand changes, freight volumes tend to shift before broader economic data like GDP or retail sales figures move. Historically, sustained declines in the index have preceded recessions by six to twelve months.
How does the Cass Freight Index differ from the Dow Jones Transportation Average?
The Dow Jones Transportation Average is a stock price index that tracks the share prices of 20 transportation companies, including airlines, railroads, trucking firms, and shipping companies. The Cass Freight Index, by contrast, measures actual freight shipment volumes and expenditures based on real transaction data. One reflects investor sentiment about transportation stocks; the other reflects the physical movement of goods in the economy.
BOTTOM LINE
The Cass Freight Index is one of the most reliable and underappreciated tools for gauging the health of the U.S. economy in real time. Unlike survey-based indicators, it is grounded in billions of dollars of actual freight transactions processed each month. Whether you are an investor trying to time sector rotations, a business leader managing a logistics budget, or simply someone who wants to understand where the economy is heading, paying attention to the Cass Freight Index — particularly the relationship between the Shipments and Expenditures sub-indices — can give you a meaningful edge. The key is to look at multi-month trends rather than any single data point, and to use the index as one input among many in your decision-making process.
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Educational disclaimer: This MoneyBestPal article is for general financial education only. It is not investment, tax, legal, or accounting advice. Consider speaking with a qualified professional before making decisions based on your personal situation.
