Truck Freight Volume & Spending Decline by Sharpest Amount Since Early COVID-19 Pandemic

Truck freight volume and spending in Q2/23 declined by the highest levels since the early days of the COVID-19 pandemic, according to the latest U.S. Bank Freight Payment Index. Spending by shippers dropped 10.9% in the quarter compared with Q2/233, while shipment volume dropped 9%.

“Trucking is in the midst of a significant slowdown,” Bob Costello, senior vice president and chief economist at the American Trucking Associations, said. “Weaker consumer demand for goods and a slowdown in manufacturing activity and housing starts are having a major impact on the industry, especially carrier operations.”

Nationwide shipment levels in the U.S. have now decreased for five consecutive quarters. In the second quarter, volume dropped most in the Northeast (27.1%) and Southeast (12.6%) year over year. The Southwest continued to be a bright spot, with shipments increasing 14.8%.

Truck freight spending levels have now contracted year over year for two consecutive quarters. With spending reaching all-time high levels during the preceding six quarters, the recent drops brought spend activity back to its relatively strong levels of mid-2021.

The Midwest region had the sharpest spending drop in the second quarter at 18.7% year over year. The Northeast and West also experienced double-digit spending declines, dropping 10.9% and 10.2%, respectively, compared with Q2/22.

“In the spot market, we’ve been observing for a while sharp spending drops caused by lower volumes and increased capacity. This trend has now solidly penetrated the contract freight market,” Bobby Holland, director of freight business analytics at U.S. Bank, said. “Nearly every category we track — both nationwide and regionally — contracted in second quarter.”

Regional Data

Linked quarter: -2.6%
Year over year: -15.7%

Linked quarter: -9%
Year over year: -10.2%

Truck freight continued to struggle in the West region as port activity and housing starts there continued to slow. This is the lowest point for shipments in the West in three years.

Linked quarter: 2.9%
Year over year: 14.8%

Linked quarter: -6.4%
Year over year: 4.3%

Continuing to outperform other regions, the Southwest’s volume is benefiting from increased truck-transported trade with Mexico. The 14.8% year-over-year increase in shipments is the region’s highest since 2018.

Linked quarter: -0.5%
Year over year: -9%

Linked quarter: -9.4%
Year over year: -18.7%

Continued slowdowns in manufacturing likely led to year-over-year shipments dropping by the largest level in the region since Q4/21. Yearly spending also dropped by the largest amount since Q2/20.

Linked quarter: -9.2%
Year over year: -27.1%

Linked quarter: -10.9%
Year over year: -11%

The 27.1% volume contraction is the largest in the history of the Freight Payment Index. The region faces multiple headwinds, including low housing starts. However, the contraction in household consumption likely had the biggest impact for this populated area.

Linked quarter: -0.2
Year over year: -12.6%

Linked quarter: -6.7%
Year over year: -2.5%

Even though shipments contracted 12.6% year over year and slightly on a linked quarter basis, this was an improvement for the region. In the first quarter, shipments fell 16.1% year over year and 10.1% on a linked quarter basis.

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