Trucking news and briefs for Thursday, May 2, 2024:
Truck freight continued to underperform the broader economy during the first quarter of 2024, according to the latest U.S. Bank Freight Payment Index. The index, representing contract markets primarily, contracted significantly from both the final quarter of 2023 and the same quarter a year earlier.
Several factors contributed to declining freight levels during the first three months of the year, U.S. Bank said, including bad winter weather in many parts of the country.
“While there are indications that freight levels rebounded slightly in February, a strong March freight market didn’t materialize as it would during a typical first quarter,” the report noted. “While this was a tough season for motor carriers, shipper spend fell substantially during the first quarter," making it even tougher. "Capacity was still high compared with the amount of freight available, leading to lower spend.”
U.S. Bank reported that its Shipments Index was down nearly 8% in the first quarter from the fourth quarter of 2023, and down 21.6% from Q1 2023. Likewise, shipper spend is down nearly 17% from the previous quarter and 28% from a year ago.U.S. Bank
Given freight spend contractions and other indicators, the outlook for capacity, noted Commercial Motor Vehicle Consulting analyst Chris Brady, likely wouldn't start improving before the end of the second quarter, after which he forecasted "sluggish to moderate growth. ... For-hire carriers, who largely operate in linehaul applications, will initially absorb higher freight volumes by increasing truck utilization." That's been the case for owner-operators going on two years now, with miles up since mid-to-late 2022.
[Related: How owner-operators still standing have weathered big rates drops through the present]
