U.S. Bank Freight Index Reveals that the Market Remains Sluggish in Q2, But a Bottom is Close
U.S. Bank The national truck freight market continued its downward trend during the second quarter. Both the U.S. Bank shipments and spending indexes contracted from the first quarter, although the declines lessened when compared with recent quarters.
Three of five regions posted sequential shipment gains from the first quarter, which may suggest that the market is nearing a bottom.
In the second quarter, the truck freight market continued to be affected by consumers spending more of their money on services, especially experiences, at the expense of goods purchases. This trend has contributed to a freight decline over the past two years. Roughly 65% of consumer spending is on services, and while this does generate freight, carriers are much more reliant on the goods economy for freight volume.
Shipper spend fell slightly faster than shipment volume did from Q1, however, the decline is likely due more to fewer shipments and falling diesel prices in the second quarter, than from freight rate decreases. For example, the national average price of diesel fuel averaged 12.5 cents less during the second quarter than during the first quarter. Diesel fuel surcharges are part of spend, which can explain why spending fell more than volume during the April through June period.
Download the U.S. Bank Freight Index to learn more about how all the regions fared, and what other factors are impacting the transportation freight marketplace.
During the second quarter of 2024, and for the eighth consecutive quarter, the U.S. Bank National Shipments Index contracted as compared with the previous quarter. Specifically, shipments declined 2.2% compared with the first quarter. The number of shipments in the second quarter was 32.3% below the final quarter in 2019, suggesting the market is well below pre-pandemic levels. National shipments were off 22.4% from the second quarter of 2023.
The U.S. Bank National Spend Index fell 2.8% from the first quarter of 2024, but as mentioned previously, it is likely that the decrease came from lower volume and falling fuel prices rather than significant freight rate cuts. Compared with a year earlier, the spend index contracted 23.5%, a slightly larger decline than in shipments over the same period. Many factors continue to weigh on the truck freight supply chain, affecting carriers and shippers. These include rising consumer spending on experiences versus goods, and slower growth in the job market.
On August 8, Bobby Holland, director of Freight Business Analytics at U.S. Bank, will join the Supply Chain Now team, along with Lee Klaskow from Bloomberg Intelligence for a LinkedIn livestream at 12 p.m. ET. They will discuss some of the factors behind an eighth consecutive quarter with declining shipment volumes and other key findings and takeaways from the Q2 2024 U.S. Bank Freight Payment Index.
