Data released Tuesday by freight audit and payment provider U.S. Bank showed a trucking industry continuing to battle a variety of headwinds. According to the latest U.S. Bank Freight Payment Index, shipment volumes fell 4.7% from the previous quarter, marking the 10th consecutive quarterly decline. Spending by shippers also decreased, albeit at a slower rate of 2.2%.
“It’s clear there are both cyclical and structural challenges remaining as we look for a truck freight market reboot,” said Bob Costello, senior vice president and chief economist at the American Trucking Associations. “For instance, factory output softness – which has a disproportionate impact on truck freight volumes – is currently weighing heavily on our industry.”
Looking at cyclical impacts, the persistent softness in the manufacturing sector played a large role in the freight market’s continued softness. Total factory output declined between 0.3% and 0.6% from the third quarter and 0.5% to 0.9% year over year. Even such modest decreases have a disproportionate impact on truck freight volumes.
Despite the overall market contraction, there are signs of potential stabilization. The fourth quarter’s 15.7% year-over-year decline in shipments was the smallest such decrease in 2024. Additionally, the interplay between shipment volumes and spending suggests a possible tightening of capacity, as spending fell less sharply than shipments despite lower fuel surcharges.
Spot market rates, excluding fuel, rose 0.5% from the third quarter — the first sequential gain since Q1 2022. Year over year, spot rates were down just 1.9%, the best performance of 2024.
Supply chain activity accelerated in January, with the Logistics Managers’ Index (LMI) registering its fastest growth rate since mid-2022 amid rising inventory levels and transportation prices. The LMI rose to 62 in January, up 4.7 points from December’s reading of 57.3. The LMI is a sentiment index with a reading above 50 indicating expansion in the logistics industry, while below 50 signals contraction.
“This is the fastest reading of expansion in the overall index since June of 2022,” the report noted. “Movements in eight of the seven sub-metrics of this index contributed to this increasing velocity of positive change.”
Inventory levels jumped 8.5 points to 58.5, rebounding from December’s neutral 50 reading. Downstream retail respondents reported a significant jump from 33.9 in December to 56.1 in January.