Q4 U.S. Freight Index shows shipment declines, due to services resurgence

The fourth quarter edition of the U.S. Bank Freight Payment Index, which was released this week by Minneapolis-based U.S. Bank, was mixed, to varying degrees, for freight shipments and expenditures.

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 202 for some of the world’s largest corporations and government agencies.

Fourth quarter freight shipments—at 113.0—were down 4.6% compared to the third quarter, for the largest sequential decline since the first quarter of 2021, and were down 7.1% annually, marking the largest annual decrease since the third quarter 2020. Shipments have been down in four of the last five quarters

Bob Costello, the report’s author and Chief Economist for the American Trucking Associations (ATA), wrote the shipment declines highlighted a softening trucking market, in terms of volumes. And he added spending on services have seen gains, while spending on services, which was dormant early in the pandemic, saw gains in services spending, taking away from goods spending, coupled with higher inflation influencing lower levels of goods consumption.

“In addition to less household spending on goods, a significant decline in housing activity, both in terms of new home construction and existing home sales, also had an impact on freight volumes,” observed Costello. “Furthermore, manufacturing activity also slowed during the quarter, creating another headwind on truck freight volumes.”

For expenditures, the fourth quarter reading—at 272.3—was off 0.2% compared to the third quarter and was up 1.8% annually. The annual gain represented its lowest increase since the third quarter 2020.

On a regional basis, the report found that third quarter shipments were largely down, from the third quarter to the fourth quarter. Western shipments were down 10.6%, for their largest sequential decline since the first quarter 2020, with Northeast, Midwest, and Southeast shipments down 5.8%, 6.0%, and 1.4%, respectively. The Southwest was the lone region with a sequential increase, eking out a 0.4% gain. Annually, Northeast and Southeast shipments fell 11.1% and 10.4%, respectively, while the Midwest was down 6.6%. Southwest shipments climbed 6.3% annually.

Third quarter spend was mixed, from the third quarter to the fourth quarter, with a 7.0% decline out West, a 0.1% decline in the Midwest and a 0.9% decrease in the Northeast. The Southeast and Southwest regions posted respective gains of 3.5% and 2.7%. Annually, spend saw an 7.4% gain out West, a 0.1% decrease in the Midwest, a 2.7% gain in the Northeast, a 4.4% increase in the Southeast, and a 19.6% gain in the Southwest.