Q1 U.S. Bank Freight Payment Index sees mixed results

The first quarter edition of the U.S. Bank Freight Payment Index pointed to modest annual gains for shipments and significant gains on the spending side.

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 $31.4 billion in 2020 for some of the world’s largest corporations and government agencies.

The report’s first quarter shipment index value—at 118.9—was down 2.2% compared to the fourth quarter and headed up 1.1% annually. As previously reported, for calendar year 2021, shipments fell 0.5% annually and were down 4.5% when compared to 2019.

On the freight spend side, the index—at 270.7—was up 1.2% compared to the fourth quarter and 27.5% annually.

The report’s author, American Trucking Associations Chief Economist Bob Costello observed that both the national economy, and the freight market, were affected by global issues, including COVID-19 variant cases and spiking energy prices, in the first quarter.

“The temporary closure of the Ambassador Bridge, a key trade route between the U.S. and Canada, had a significant ripple effect that impacted freight volumes in the first quarter, while consumer inflation also played a role as households spent more for necessities, reducing the total volumes of goods purchased,” he wrote. “Despite these recent challenges, the shipments index, which often slows during the first quarter due to seasonal patterns, remains at healthy levels with several economic forces keeping the demand for freight shipping high.”

Addressing first quarter freight spend, Costello noted that constrained capacity, due to what he called “an incredibly tight driver market and the difficulty for motor carriers to secure new and used trucks and trailers,” served as drivers for the spending increase.

“The major factor contributing to the increased spending in Q1; however, was the surge in fuel prices,” he stated. “According to the Energy Information Administration, diesel fuel rose to historic levels in March, and fuel surcharges, as a part of overall freight spend, also rose commensurately.”

On a regional basis, the report found that first quarter shipments were mixed, with the West up 3.0%, from the fourth quarter to the first quarter, the Midwest down 3.1%, the Northeast down 1.8%, the Southeast down 4.0%, and the Southwest down 2.1%. Annually, shipments were up 17.5% out West, down 4.3% in the Midwest, up 2.9% in the Northeast, down 2.9% in the Southeast, and up 7.0% in the Southwest.

First quarter spend was mixed, from the fourth quarter to the first quarter, with a 3.7% decline out West, matching 2.9% gains in the Midwest and Northeast, a 1.4% decline in the Southeast, and an 8.4% decline in the Southwest. Annually, spend saw a 42.2% gain out West, a 22.0% gain in the Midwest, a 31.3% gain in the Northeast, a 20.8% increase in the Southeast, and a 36.0% gain in the Southwest.