Q2 U.S. Bank Freight Index sees gains

The recently-released second quarter edition of the U.S. Bank Freight Payment Index saw gains, for both freight shipments and expenditures, following a mixed first quarter.

This report, which was initially launched in the third quarter of 2017, is comprised of data on freight shipping volumes and spend on both a national and regional basis. The report’s data is based on the actual transaction payment date, highest-volume domestic freight modes of truckload and less-than-truckload and is seasonally- and calendar-adjusted. Its historical data goes back to 2010, with a base point of 100, and its index point for each subsequent quarter marks that quarter’s volume in relation to the preceding quarter. U.S. Bank Freight Payment's business processed $31.4 billion in 2020 for some of the world’s largest corporations and government agencies.

The report’s second quarter shipment index value—at 121.6—was up 2.3% compared to the first quarter and essentially flat annually, down 0.9%. The report observed that shipments increased slightly above the historical average as contract freight outperformed the traditional spot market. What’s more, the report said that the level of second quarter shipments rebounded to the same levels they reached over fourth quarter of 2021.

On the freight spend side, the index—at 279.6—was up 3.3% compared to the first quarter, while also posting a 19.7% annual gain. The report said that the high cost of fuel, at record-setting levels, impacted freight outlays over the course of the second quarter, coupled with contract pricing holding steady compared to spot market rates, which it said saw significant declines in the quarter.  

The report’s author, American Trucking Associations Chief Economist Bob Costello, explained that the second quarter increase was due, in part, to a transition in the freight market versus a surge in the overall goods economy.

“During the second half of 2020 and most of 2021, shippers put more freight in the spot market than usual, to manage capacity constraints, both in terms of drivers and equipment,” wrote Costello. “Households spent more on goods in 2021 as spending on travel and services remained constrained due to the pandemic. However, the economy contracted in the first quarter of 2022, which allowed shippers to pull freight out of the spot market. This resulted in significant drops in spot market prices and volumes. More freight was moved back to their contract carriers. This contributed to the U.S. Bank freight market metrics rising during the second quarter.”

Costello added that the national freight shipment and spend numbers, for the second quarter, made it clear that there was not a significant slowdown of the entire freight market in the quarter.

And Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions, noted that while there have been bigger jumps in spending in other quarters over the past year, the second quarter increases were significant.

“Contract carriers seemed to hold their prices relatively steady but high levels of fuel surcharges likely drove up spending,” said Holland.  

On a regional basis, the report found that second quarter shipments largely saw gains, with the West down 0.7%, from the first quarter to the second quarter, the Midwest up 6.8%, the Northeast up 7.3%, the Southeast down 4.3%, and the Southwest up 2.2%. Annually, shipments were up 9.0% out West, down 0.3% in the Midwest, up 8.8% in the Northeast, down 12.1% in the Southeast, and up 2.8% in the Southwest.

Second quarter spend was strong across the board, from the first quarter to the second quarter, with a 4.3% decline out West, a 2.4% gain in the Midwest and a 2.1% gain in the Northeast, a 3.2% gain in the Southeast, and a 4.8% increase in the Southwest. Annually, spend saw a 30.2% gain out West, a 15.8% gain in the Midwest, a 17.0% gain in the Northeast, a 14.3% increase in the Southeast, and a 29.7% gain in the Southwest.