U.S. Financial institution: Truck freight volumes continued decline in fourth quarter
The quantity of freight moved by truck within the peak transport season of 2022 dropped by the biggest year-over-year stage for the reason that coronary heart of the pandemic, in keeping with the most recent U.S. Financial institution Freight Cost Index.
Fourth quarter truck freight shipments contracted 7.1% year-over-year – the biggest drop since Q3 2020 – and 4.6% in comparison with the third quarter of 2022. The slowdown was pushed by a major contraction within the West area, the place volumes dropped 8.9% year-over-year and 10.6% in comparison with the third quarter.
“A pullback in client spending on items is inflicting the truck freight market to melt,” stated Bob Costello, senior vice chairman and chief economist on the American Trucking Associations. “Greater costs for items are resulting in much less consumption of things moved by way of truck. On the identical time, financial coverage modifications are decreasing demand for large-ticket gadgets in interest-rate delicate areas like autos and houses.”
Even with the drop in shipments, spending by firms transport items didn’t decline a lot within the fourth quarter. Spending fell simply 0.2% in comparison with the third quarter and was up 1.8% over This fall 2021. Solely the West area skilled a major decline in spending, down 7% in comparison with Q3 2022 and seven.4% year-over-year.
“With shipments dropping significantly and decrease diesel gasoline costs, we’d have anticipated to see a bigger decline in spending this quarter,” stated Bobby Holland, director of freight knowledge options at U.S. Financial institution. “This means that capability is getting tighter, probably as a result of smaller carriers leaving the market as value pressures stay excessive, particularly when coupled with decrease spot market volumes and charges.”
Regional Information
Midwest
Shipments
Linked quarter: -6%
Yr over 12 months: -6.6%
Spending
Linked quarter: 0.1%
Yr over 12 months: -0.1%
The Midwest area’s 6.6% year-over-year contraction in shipments was the biggest of 2022 and eleventh straight quarter of decline. The area’s 0.1% spending contraction marked the primary year-over-year decline in spending by shippers for the reason that closely pandemic-impact third quarter of 2020.
West
Shipments
Linked quarter: -10.6%
Yr over 12 months: -8.9%
Spending
Linked quarter: -7%
Yr over 12 months: -7.4%
A high performer lately, volumes within the West area have dropped considerably in current quarters. This coincides with a drop in West Coast port exercise, the place import container volumes fell 26% in November and 23.3% in October. The 7.4% drop in spending by shippers within the area was most since Q2 2020.
Northeast
Shipments
Linked quarter: -5.8%
Yr over 12 months: -11.1%
Spending
Linked quarter: -0.9%
Yr over 12 months: 2.7%
The 11.1% year-over-year decline in Northeast area shipments follows a 7.1% drop within the third quarter. Greater family spending on companies within the Northeast throughout This fall impacted freight motion, and subsequently put stress on vacation season retail. Spending within the area dropped in comparison with the third quarter, however was nonetheless up 2.7% in comparison with the identical interval in 2021.
Southeast
Shipments
Linked quarter: -1.4
Yr over 12 months: -10.4%
Spending
Linked quarter: 2.7%
Yr over 12 months: 4.4%
This marked the sixth straight drop in quarterly shipments for the Southeast area and third straight double-digit year-over-year decline. The decline coincided with a 16.7% drop in housing begins within the area, in keeping with the Census Bureau. Suggesting a decline in capability, spending within the area was up quarterly and versus a 12 months in the past.
Southwest
Shipments
Linked quarter: 0.4%
Yr over 12 months: 6.3%
Spending
Third quarter: 3.5%
Yr over 12 months: 19.6%
The Southwest continues to be the highest area for truck freight quantity. Costello factors to the area’s vitality manufacturing, Mexican commerce, and elevated seaport exercise as contributing elements. For instance, Port of Houston container volumes have been up 7.9% in November and 19.7% in October. The rise in shipments led to a pointy year-over-year enhance in spending by shippers within the Southwest, which far outpaced different areas.
To see the complete report together with in-depth regional knowledge, go to the U.S. Financial institution Freight Cost Index web site . For greater than 22 years, organizations have turned to U.S. Financial institution Freight Cost for the service, reliability, and safety that solely a financial institution can present. The U.S. Financial institution Freight Cost Index measures quantitative modifications in freight shipments and spend exercise primarily based on knowledge from transactions processed by way of U.S. Financial institution Freight Cost . The enterprise processed $46 billion in 2022 for among the world’s largest companies and authorities businesses.
