Q1 U.S. Bank Freight Payment Index sees shipment and spending declines

The first quarter edition of the U.S. Bank Freight Payment Index, which was released this week, continued familiar themes of declines for freight shipments and spending.

This report, which was initially launched in the third quarter of 2017, is comprised of data on freight shipping volumes and spend on both a national and regional basis. The report’s data is based on the actual transaction payment date, highest-volume domestic freight modes of truckload and less-than-truckload and is seasonally- and calendar-adjusted. Its historical data goes back to 2010, with a base point of 100, and its index point for each subsequent quarter marks that quarter’s volume in relation to the preceding quarter. U.S. Bank Freight Payment's business processed $46 billion in 2022 for some of the world’s largest corporations and government agencies.

The report’s first quarter shipment index value, at 87.5, was off 7.8% compared to the fourth quarter and down 21.6% annually, with the latter representing the largest shipment decline since the index has been published. Regionally, the report noted that the steepest annual shipment declines were in the Northeast (down 33.9%), followed by the Southeast (down 24.4%). Western shipments were off 23.0% annually, with the Midwest down 18.5% and Southwest down 12.8%.

First quarter shipments in nearly all regions were off sequentially, with the exception of the Southwest region, which was up 8.9%.

On the spend side, the report observed that the first quarter reading, at 194.7, fell 27.9% annually and was down 16.8%, from the third fourth quarter to the first quarter.

On a regional basis, spend out of the West was down 30.9% annually (down 19.9% sequentially, with the Midwest down 25.9% (-15.4% sequentially). The Northeast was off 34.8% annually (down 23.8% sequentially). The Southeast and Southwest saw annual spending declines of 25.0% and 29.2%, respectively, with sequential declines of 13.8% and 16.5%, respectively.

“While there was hope for a freight market turnaround to start the year, our data shows that the challenges continued,” said Bobby Holland, director of freight business analytics, U.S. Bank. “Nationally, this was the eighth straight quarter of year-over-year volume decreases and the fifth straight with a drop in spending.” 

And the report’s author, American Trucking Associations Chief Economist Bob Costello wrote that the truck freight market continued to “underperform the broader economy” in the first quarter.

“Several factors contributed to declining truck freight levels during the first three months of the year, including bad winter weather in many parts of the country,” wrote Costello. “While there are indications that freight levels rebounded slightly in February, a strong March freight market didn’t materialize as it would during a typical first quarter. While this was a tough season for motor carriers, shipper spend fell substantially during the first quarter. In the end, shipping capacity was still high compared with the amount of freight available, leading to lower spend.

And he added that as freight volumes for motor carriers saw contraction, spending for those loads fell disproportionately more than volumes, suggesting downward rate pressure in the first quarter. Diesel fuel surcharges also impacted spending, too, he explained, with the national average price of diesel fuel down 6.4%, from sequentially and 9.7% annually, according to Department of Energy data.

What’s more, Costello said, in looking at the various sequential and annual declines in spending throughout various regions covered in the report, he said it is indicative of a scenario in which “essentially, shippers had too much capacity for too little freight in the first quarter.”