Recent Q1 data released by U.S. Bank as part of its Freight Payment Index painted a mixed picture of the national truck freight market, characterized by persistent declines alongside emerging signs of recovery.
The Shipments Index fell 5.8% from Q4 2024 to 75.4 points, while the Spend Index dropped 2.5% to 177.8 points. Despite these quarterly declines, the year-over-year spending drop of 8.6% was the smallest since Q1 2023, a potential stabilization signal after four quarters of declines exceeding 20%. Bob Costello, chief economist at the American Trucking Associations, attributed the ninth consecutive quarter of declines to severe winter storms, wildfires, tariff uncertainties and sluggish retail sales. Extreme weather events, including heavy snowfall in the South and Southeast and devastating wildfires in Southern California, disrupted freight volumes for weeks, though the West reported higher shipments for the quarter.
Economic factors contributed to mixed signals. Shippers and manufacturers ramped up imports and production to preempt potential tariffs, temporarily boosting freight demand in certain sectors. However, soft retail sales and cautious consumer spending on big-ticket items created headwinds. The disparity between shipment (-5.8% quarterly, -13.8% yearly) and spending (-2.5% quarterly, -8.6% yearly) declines suggests tightening industry capacity, driven by rising diesel prices and shrinking fleets as some carriers exited or downsized. Freight rates showed modest recovery, with spot rates rising 0.9% and contract rates up 0.8% from Q4, though both remained lower than Q1 2024. Fuel prices, up 2.3% quarterly but down 14% yearly, further influenced spending trends.
Regionally, outcomes diverged sharply. The Northeast led with a 3.6% shipment increase and 4.1% spending rise, fueled by robust retail sales and import volumes — its strongest performance since Q2 2022. In contrast, the Midwest and Southeast faced challenges. The Midwest saw declines due to weak manufacturing, a 30% drop in housing starts and winter weather, while the Southeast struggled with unusual snow and flat retail growth. Looking ahead, the freight market faces uncertainties from a declining housing sector, though improved factory output and potential shifts toward goods purchasing offer some hope.
Recent April Class 8 data released by ACT Research and FTR Transportation Intelligence showed the lowest order total since May 2020 during the days of COVID shutdowns. ACT Research reported 7,600 units, a decline of 52% year over year.