The U.S. truck freight market ended 2023 with further declines in both shipment volume and spending, according to the latest U.S. Bank Freight Payment Index.
Compared to the same period in 2022, fourth quarter shipment volume was down 15.7% while spending by shippers contracted 13.5%. The year-over-year drop in volume was the largest in the history of the Index.
All regions in the fourth quarter felt the slowdown in volume versus the same quarter in 2022, but it was most acute in the Southeast (-25.4%) and Northeast (-23.8%). Spending also dropped in all regions year over year, with the most significant in the Midwest (-17%).
“Throughout 2023, our Index has consistently revealed significant declines in spending by shippers. While spending dropped again in the fourth quarter, we are seeing indications that might suggest trucking supply is coming into balance with demand,” Bobby Holland, director of freight business analytics, U.S. Bank, said in a release.
The cause of the drop appeared to be a movement by companies to destock their pandemic stockpiles, creating less demand for freight transportation until they begin to restock.
“The truck freight market is feeling the impacts of companies reducing inventories significantly as well as consumers continuing to spend more on experiences over goods,” Bob Costello, senior vice president and chief economist at the American Trucking Associations (ATA), said in a release. “We’ll watch carefully in coming quarters if companies complete their inventory reduction efforts and begin to restock, which would help boost trucking.”
