U.S. Bank Freight Payment Index: Compared to a year earlier, first quarter 2024 spending fell 27.9% while shipment volume dropped 21.6% U.S.

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The U.S. Bank Freight Payment Index for the first quarter of 2024 indicates a significant contraction in the U.S. truck freight market compared to the same period in 2023 and the fourth quarter of 2023. Spending by shippers decreased by 27.9% year-over-year and 16.8% quarter-over-quarter. Shipments also saw declines of 21.6% year-over-year and 7.8% quarter-over-quarter.

Bobby Holland, director of freight business analytics at U.S. Bank, noted that the challenges persisted into the first quarter, marking the eighth consecutive quarter of year-over-year volume decreases and the fifth straight quarter of spending drops.

The regional data highlights the widespread nature of the challenges across the truck freight market. Except for the Southwest, which saw a quarterly increase in volume, all regions experienced significant declines in both shipments and spending. The Northeast faced the most severe contraction, with spending dropping by 34.8% year-over-year and shipments falling by 33.9%.

Bob Costello, chief economist at the American Trucking Association, mentioned that spending fell disproportionately to the drop in volume, indicating downward pressure on rates at the beginning of the year. He emphasized the importance of monitoring the mismatch between truck capacity and freight availability throughout the year.

Here’s a breakdown of the regional data:

• West: Experienced declines in both spending and volume due to overcapacity, adverse weather conditions, and reduced consumer spending on goods.
• Southwest: Saw higher volumes quarter-over-quarter but experienced year-over-year declines, partially offset by increased cross-border freight from Mexico.
• Midwest: Witnessed drops in shipment volumes for the fourth consecutive quarter, attributed to a slowdown in auto sales and softer manufacturing activity.
• Northeast: Faced significant declines in both volume and spending, driven by severe winter storms and weaker retail sales.
• Southeast: Continued to experience sequential contraction in shipments, but had the smallest decline in volume and spending among the regions that contracted.

Overall, the U.S. truck freight market faces challenges stemming from overcapacity, adverse weather, reduced consumer spending, and softer manufacturing activity, highlighting the need for careful monitoring and adaptation within the industry.