US truck freight market contracts notably during Q1 2024: U.S. Bank

Spending by shippers decreased by 27.9 per cent year on year (YoY) and 16.8 per cent quarter on quarter (QoQ) in Q1 2024.

Shipments, meanwhile, dropped by 21.6 per cent YoY and by 7.8 per cent QoQ.

“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,” he said.

With the exception of the Southwest, which had a quarterly increase in volume, all regions had significant declines in shipments and spending. The most severe contraction was in the Northeast, where spending dropped 34.8 per cent YoY and shipments fell by 33.9 per cent YoY.

“Spending fell disproportionately to the drop in volume, which suggests downward rates pressure to start the year,” said Bob Costello, senior vice president and chief economist at the American Trucking Associations.

“Truck capacity remained above the amount of freight available. The degree to which this mismatch shrinks or expands will be important to watch throughout the year,” he was quoted as saying in a U.S. Bank release. 

Overcapacity, bad weather and consumers spending less on goods affected the truck freight market in the West. This was the third time since the height of the pandemic that the region had annual and quarterly declines in both spending and volume.

The only region to have higher volumes was the Southwest, where shipments were up by 8.9 per cent QoQ in Q1 2024. However, they were down by 12.8 per cent YoY. Weaker factory output in the region was partially offset by higher cross-border freight from Mexico.

Shipment volumes dropped for the fourth consecutive quarter in the Midwest. A slowdown in auto sales and softer manufacturing activity contributed to the declines.

The Northeast had an extremely difficult quarter, with the largest declines of all five regions. Bad winter storms and softer retail sales were two drivers of the major contractions in volume and spending.

The Southeast experienced its eleventh consecutive quarter where shipments contracted sequentially. However, the region had the smallest decline in volume of the four regions that contracted and the smallest decline in spending.

Fibre2Fashion News Desk (DS)