Posted in Operations and Supply Chain Terms, Total Reads: 354
Definition: Cass Freight Index
The Cass Freight Index is a metric to evaluate and compare the monthly shipping and transportation activity of goods in trucking and other transportation methods which is monitored by Cass Information Systems. (Cass Information Systems, Inc. is a service provider which provides payment and information technology services to production, warehousing, distribution, and retail businesses in the United States of America).
Cass Information System comes up with the index to evaluate the national shipping levels. It has collaboration with more than 410 companies and manufacturers, with more than 1,220 different divisions under its observation which includes but is not limited to consumer goods, food & beverage, automotive, chemical, Original Equipment Manufacturers, retailers and heavy equipment producers. Annual volume of freight moved by a single organization starts from $1 million to more than $1 billion.
The Cass Freight Index Report which is produced each month gives valuable insights into goods movement trends as they relate to other economic and supply chain metrics and indicators and the overall economic performance in general. January of 1990 is used as the base month by the index, the same time when it was started. The index is fed periodically with monthly freight expenditure and volumes shipped from the complete Cass client base. Volumes should be of the month in which transactions are processed by Cass. It is not necessary that the month should be the one in which corresponding shipments took place. The January 1990 base point is assumed to be 1.0. The Index point provided for each following month shows that month’s volume in comparison to those of the January 1990 base.
For example the most recent Cass Freight Index (of July) represented a decline at 1.141 which was less by 1.6% from June. The reason for this fall was assumed to be the increase in inventories and the July month being a ‘holiday season’. This was also conforming to the seasonal patterns, since the last 5 years have shown similar trend during the month of July.