The truck freight market continued to underperform the broader economy during the first quarter, according to the U.S. Bank Freight Payment Index.
The report revealed that the bank’s National Shipments Index contracted significantly from both the final quarter of 2023 and the first quarter of 2024.
“While this was a tough season for motor carriers, shipper spend fell substantially during the first quarter,” the report said. “In the end, shipping capacity was still high compared with the amount of freight available, leading to lower spend.”
While retail sales grew modestly in the first quarter, the report said they were “far too low” to generate significant additional truck freight.
Retail sales gains of 0.5% to 1.5% for the quarter, when adjusted for inflation, declined 1.5% to 2.5%.
“Furthermore, international trade was affected by various factors that slowed shipments, including the conflict in the Red Sea targeting cargo ships,” the report said.
The first quarter U.S. Bank National Shipments Index fell 7.8% compared with the fourth quarter of 2023, a smaller decline than the 10.9% drop during the fourth quarter.
“While many in the trucking industry are expecting the freight market to turn around, the shift did not happen during the first quarter,” the report said.
And while the report said truck shipments decreased 21.6% from a year ago, the U.S. Bank National Spend Index had a more significant drop of 27.9%.
“The price of diesel fuel has a significant impact on spend, in the form of fuel surcharges that shippers pay; during the first quarter of the year, this may have been a factor in the decline in spend,” the report said.
The national average price of diesel fuel, according to the Department of Energy, fell 6.4% from the previous quarter and 9.7% from a year earlier. In addition to lower diesel fuel prices, diminished household consumption, international trade disruption and bad weather all contributed to lower spend in the first quarter, according to the report.
There have been some increases in refrigerated freight rates in April and May, according to the USDA. The average per-mile refrigerated truck rate in May was $3.53, up from $3.40 in April and the March average of $3.36 per mile.
The May average of $3.53 per mile for refrigerated trucks was up 2% from $3.45 a year ago but down 22% from $4.52 per mile in 2022, the USDA reports.
